Online Talent Platforms — A Boon for Workers or Digital Sweatshop?

September 7, 2016

Online companies such as Amazon’s Mechanical Turk, UpWork (previously oDesk/Elance), TaskRabbit, Fiverr and other companies that match digital workers with online or real-world jobs offer individuals easy entry into the burgeoning workforce of freelancers. With active users around the world and more than 53 million Americans participating, these platforms are attracting a lot of attention among businesses and individuals. It seems like a win-win situation for everyone, yet the ethics of this unregulated workforce are often questionable.

These platforms give workers the ability to get paid for simple tasks or tasks that require skill but can be done at home. Some people even use these services to acquire additional skills that can help them transition to new careers. Best of all, this free market work-for-hire system is offered in an informal online platform that is easy to learn and navigate.

At the lower-paying end of these organizations are businesses such as Mechanical Turk. This company employs more than 500,000 people, with more than190 countries represented. Although some of these workers live in developing countries, at least half are from the United States. Even here, many people benefit from working at MTurk. Orlando, a 26-year-old from California, wrote, “Since beginning to work on Mechanical Turk, I’ve only made $500, but to me sir, that means a lot. It means paying for three weeks of daycare; it means groceries for the month; it means car and health insurance premiums.”

At first blush, this sounds great. But some feel these services may be preying on the desperation of workers needing employment, encouraging them to join a workforce without proper representation. Trebor Scholz, author, educator and Associate Professor of Culture and Media at The New School where he is chairing The Politics of Digital Culture conference series has that concern. He worries that “The shift away from employment to freelancing, independent contract work and other emerging forms of labor is an affront to one hundred years of labor struggles for the 8-hour workday, employer-covered health insurance, minimum wage, workplace harassment and many other protections that were established under the New Deal to foster social harmony and keep class warfare at bay.”

The average pay for digital labor underscores these worries. In 2009, the estimated hourly wage for Turkers was $2.30 per hour, far below the U.S. minimum wage of $7.25 per hour. One Turker, Rachel Jones from Minnesota, was able to reach just beyond minimum wage only after several years and completing 110,000 jobs. When asked about her experience, she admitted that she’d like higher wages, but fears a significant increase could destroy the world of crowdworking, which is what allows her to stay home with her children. That’s a chance she said she doesn’t want to take.

However, while Mr. Scholz rightly points out the relative lack of regulation and legislation in place to protect employees in the digital workplace from exploitative issues such as depressed wages, he leaves out the fact that 30 to 45 percent of working-age individuals around the world are unemployed or employed part-time. At the same time, many business sectors, notably skilled trades and technology, struggle to fill positions. Online talent platforms such as UpWork or Task Rabbit have provided one way to connect qualified, job-seeking employees with companies or individuals that need help. James Manyika, the Director of McKinsey Global Institute, said the free-market aspect of the system should eventually take care of the wage problem: “There is a strong correlation between labor market fluidity and an increase in wages.”

Despite fears of low wages, evidence shows that people can and do make decent money through these sites. While some use it to supplement other income, others make a living from online tasks alone. Leah Busque, the former IBM software engineer who created theTaskRabbit platform, confirmed that many people make up to $60,000 a year on the site. She wrote, “We are enabling micro-entrepreneurs to build their own business on top of TaskRabbit, to set their own schedules, specify how much they want to get paid, say what they are good at, and then incorporate the work into their lifestyle.” Megan Williams, a content strategist and the owner of Locutus Health Communications, claimed she earns $100 per hour on UpWork. She even details her experience with the platform on a blog for writers, with the intention of helping others achieve similar results. One man on TaskRabbit said he earns $2,000 per week on the site and boasted that he gets to spend half his time enjoying life on his boat in Napa, California. And one clever mom, Regina Aguilar, said she earns $400 per month on TaskRabbit to supplement her income so that she can stay home with her children.

A few years ago, I signed up with oDesk (now UpWork) so I could take a few gigs when times were slow. At times, I worked for less than I would have made otherwise, but I didn’t take any extremely low-paying jobs. However, one job ended up landing me an article assignment for the Huffington Post. That’s a fantastic item for my resume, and it was instrumental in bringing me writing work the more traditional way. Since clients tend to share experiences with one another, I found myself getting consistently higher paying jobs as client connections joined the oDesk work platform.

Still, it’s clear these platforms have inherent weaknesses. According to a McKinsey Global Institute study, they can restrict women’s social and economic empowerment due to gaps in gender access to digital technology in developing countries. And Mark Graham, a fellow at Oxford University’s Internet Institute pointed out that while some online workers do make more than their office-going brethren, there is a higher risk associated with working online. “Almost all of this work is precarious in some way as there isn’t much stability or security for these workers as it’s just as easy to fire them as it is to hire them,” said Graham. “It allows the clients of businesses hiring these workers a risk-free strategy—instead of taking the risk of taking these workers on more secure stable contracts, they are putting this risk onto workers themselves.”

Workers’ risks increase when platforms change operating systems and algorithms or merge with one another. The TaskRabbit community, a group of individuals offering to do small jobs such as shopping and small home repairs, recently went through an upheaval that left many employees angry. The company moved from a bidding system, which allowed Taskers to bid on jobs they liked and would fit into their daily schedules, to a system that assigns tasks via computer. Now, if a Tasker can’t commit within 30 minutes, the task is moved to someone else. This change was met with candid dismay as shown in comments on Reddit and Facebook, including this one: “I used to work every day, several tasks. I haven't received any tasks since the change. My availability is completely open, I am highly rated and have been a Taskrabbit for a year (level 16). My rates are as low as possible, setting a task to $18/hour to be competitive means a take home pay of only $14.40. I wasn't huge on bidding but I did do quick assign tasks all day long. Now there are no tasks to do :(.”

The organizational makeup of the platform carries even more risks because it protects the anonymity of employers through the platform’s auspices. When workers have little or no information about who’s offering the job, it makes it difficult for them to react to exploitation and band together to fight inequalities. As Trebor Scholz  .” If you now take into consideration that this milieu that is marked by anonymity is also transnational, then the challenges to traditional unions become clear.”  Also of concern is that employers can impact a freelancer’s rating and potential income with unwarranted bad reviews and by “reporting” the freelancer to the platform’s management. This risk of bad reviews causes some freelancers to refund dissatisfied clients rather than risk a hit to their ratings.

Detractors point out how unfair the system’s lack of accountability is to its employees. Amazon, the owner of Mechanical Turk, can deactivate Turkers’ accounts without providing a reason. One worker from India claimed, “There have been numerous cases of workers losing their accounts without any fault of their own. Workers are left with little to no support from Amazon.” And Amazon’s 5,000-plus-word Terms of Use agreement has a clause that allows employers to reject an employee’s work at any time, with no questions asked. As noted by Verlene Jones, the Western Regional Director of the United Association for Labor Education, the more convoluted the system is, the less it protects employees: “The concern is accountability,” Jones said. “This sounds like an opportunity for major abuses to happen to workers.”

Digital talent platforms clearly offer benefits across the board to individuals in both developed and developing nations. These platforms give inexperienced and entry-level workers ways to work or gain experience while pursuing an education, with jobs that can grow into thriving businesses through persistence. They offer skilled workers casual work opportunities that fit their lifestyles. They provide a way to switch careers by gaining experience through part-time work and give stay-at-home parents a way to earn supplemental income without sacrificing their children’s care. But these benefits often times come at the expense of employees’ rights.

Legislation, regulation and, importantly, oversight is necessary to protect digital workers from exploitation by both potential employers and the platforms themselves. At the very least, there should be requirements for standard minimum wages, even if these vary from our current definitions. Regulation must be sought at a global level to grant protection across the world, and should direct particular attention to refusing to shield participating employers with the veil of anonymity.

Digital labor is here to stay. Each year, more talent platforms are added as the business community sees the advantage of this eager, inexpensive new workforce. Like some predicted during the Industrial Revolution when new forms of production caused an upsurge in cheap labor, workers will have to rebel against poor working conditions and exploitation to effect a change in the largely unregulated policies currently governing the online workforce.

Nikki Williams is a bestselling author based in Houston, Texas. She writes about fact and fiction and the realms between, and her nonfiction work appears in both online and print publications around the world. Follow her on Twitter @williamsbnikki or at nbwilliamsbooks.com.