It was on a sunny afternoon in March, on the back patio of San Francisco’s best bar, when I first encountered the difficulties of virtual labor organization in meatspace. With a beer in my belly and another in hand, I was chatting with a pair of entrepreneurs who said they’d recently sold their company and were brainstorming startup ideas. They asked if I had any suggestions.
I gave them an impromptu pitch for the ‘Uber of collective bargaining,’ sketching out the existence of a pain point in the labor market and some brief ideas for eating them with software. For a moment they seemed on board.
“But wait, how is that even a company?” asked one.
“I don’t think anybody is going to fund that,” said the other. They then moved on to develop an idea for a photo sharing and editing app.
This timorous twosome confirmed me in my suspicion that such an app is antithetical to the Silicon Valley brand of progress. Union membership continues to decline, the cadres of atomized 1099 ‘entrepreneurs’ to expand, but that’s probably no accident, and not a concern that resonates too loudly on Sand Hill Road. The general idea seems to be to ride out any HR troubles until the robots are ready to usurp the workstations.
And then, early this month, I received a pitch from Arize Nwosu, 33, an Uber driver in LA who’s launched an app to connect his co-contractors. It might be the closest thing I’ve seen to an app designed to help labor to organize in the sharing economy…
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Yesterday, in a windowless, former “Italian men’s club” in San Francisco’s North Beach, flanked by strip clubs on all sides, the “On Demand Conference” was held to address the surging on-demand economy.
All our favorite, “established” on-demand services companies sent reps, from Lyft and Uber to Postmates. Also present were the next wave of companies, tackling food-delivery and valet and shipping and laundry and all the other supposedly excruciating aspects of adult life. There were thought-leaders and journalists and would-be entrepreneurs.
For some reason Pando was not invited to the event, which was hosted by former TechCrunch columnist and angel investor Semil Shah and, according to the even’t site, featured Uber co-founder Garrett Camp, Uber investor Shervin Pishevar, Uber API lead Rahul Bijor, plus a raft of representatives from Lyft, Shyp, Munchery, Postmates and all the other major sharing economy players (disclosure: Pishevar is also an investor in Pando).
(Camp was identified on the event’s website not as a co-founder of Uber, but as the CEO of his “startup studio,” Expa. Even his bio photo on the site saw him cunningly disguised as Semil Shah…)
Update: Since this article was published, Camp has now mysteriously vanished from the site altogether.
The invitational oversight meant I only found out about the event only once it was well underway. Luckily, I was able to slip past its lax security and catch the final panel and the happy-hour mingle.
The adjacent parking lot was a Jets v. Sharks style scene of valet-app workers clad in either pink or blue blazers competing for business and visibility, but inside their bosses mixed cordially and drank little plastic cups of flavored water as they awaited the final panel.
“It’s been a long day, but if anything can get us through the five-o’clock hour it is this next panel of investors. If you’re involved in the on-demand economy, you’re going to want to listen to what they have to say,” said a man on stage.
As Homebrew’s Satya Patel, Greylock’s Simon Rothman, RRE Ventures’ Steve Schlafman and Trinity Ventures’ Patricia Nakache settled into their chairs on that same stage, about 300 attendees put their networking on hold and settled down to learn. Minds were made receptive to the issuance of the many-headed oracle.
The overall message was one of cautious optimism for the future of the on-demand space. Uber was repeatedly invoked as providing the playbook for on-demand services companies, but the four VC’s were quick to point out that they felt the next waves of on-demand success would benefit from diverging from the Uber model in substantive ways. Patel advised heeding the wisdom of Aesop’s tortoise when considering a growth strategy. Schlafman availed himself of automotive analogies to make a similar point:
“Everyone seems to approach growth with a land grab mentality. But I think you should take your foot off the gas. Being first to market isn’t winning, for investors who understand the market.”
The four were largely in agreement that there is nothing wrong with being the second or third company into a space, but that being the sixth company was pointless. They discussed just how narrow a niche could be to accommodate a successful on-demand business. “Is it a niche, or is it a wedge, that is the important question,” said Rothman. “I think that our phones have become mobile remote controls for the whole world, so you need to look at the service sector as this big group of professionals that are up for grabs,” said Patel.
Much of the panel’s time was consumed by discussion of the on-demand economy’s labor structure — the sudden emergence of fleets of branded contractors has lately triggered both legal and business concerns about the practice of 1099ing the workforce. Three of the four encouraged companies to find a way to grant full employee status to their workers. Patel even went so far as to assert it as an ethical responsibility.
“We shouldn’t just think of this responsibility in terms of whats legal. We should think of the responsibility in terms of what is right … the on-demand economy is getting this wrong,” he said. “Those workers are your interface with your customers, and if you take care of them they will stick around, and you’ll have a better chance at a successful business, because churn is becoming a big problem.”
Greylock’s Rothman was less than convinced.
“I think the 1099 framework is broken, and comes from a model of giant corporate employers. There needs to be a third type of worker, where benefits are decoupled from corporations. I think a third class of workers is inevitable,” Rothman said. “It’s easy and nice to say [that you want to make workers full employees] but the on-demand economy has given people the control to work when they want, and paying them better than the alternatives. I’m not sure that people want the old structure in exchange for that control.”
When Uber’s vehicle-leasing program was raised, Schlafman didn’t mince words. “For the record,” he said, “I’m against indentured servitude.”
Still, none of them seemed to have followed the rabbit all the way to the brilliant idea I recently and freely shared in these very pages: the collective-bargaining app. At least not publicly.
Event co-host Semil Shah, also from Homebrew, closed the day’s proceedings with some take-home musings and a slide show. His thesis: the on-demand economy is great, but downloading and registering and opening phone apps is too difficult. He proceeded to ask some thought provoking questions. What if Uber had beacons at the door that could automatically call you a ride? What if you had a button on your dashboard to initiate a valet service pickup? What if you could hail an Uber from directly within your company’s Slack channel? And what if the wisdom of the on-demand economy could be brought to bear on government services?
“In fact, we have someone here today from the Swiss postal service, who wanted to see what the world would look like if the Swiss postal service was disrupted.”
Oh brave new world, that has such people in’t!
During the happy hour session, I met a few more of the on-demand innovators. A guy with a startup that matches Prius leases with prospective Uber drivers, another who hopes to parlay the negative publicity from his reprehensible dating app into exposure for his on-demand medical evaluations app. One savvy attendee had a startup that prints and ships high-quality startup t-shirts. He said he had acquired a lot of leads.
* * * *
Upon leaving, I found my Lyft among the rideshares queued on the busy street. After spending a few hours in a room full of entrepreneurs hell-bent on limiting the amount of time people have to spend among strangers on sidewalks and busses and in laundromats, cafes and grocery stores, my single-serving convo with the Lyft driver helped ease my reintegration into reality. Amazingly, there is still no on-demand service for gaining perspective.
My driver lived in Oakland and just finished a masters in music. I told him a bit about the event, and he said his dad worked in the startup world.
“Did they use a lot of words like ‘agile’ and ‘seamless’ and ‘interface’?” he asked. Yes, they did.
“My dad always says shit like that and I have no idea what he’s talking about.”
He went on to explain how he has started driving for Munchery, where he is a full employee and gets paid (by law) for gas and expenses. He said he was considering working full time for Munchery, the only drawback being the utter lack of human interaction during those shifts.
“It’s all through the app. You wouldn’t believe the percentage of people who just say ‘leave it on the door handle.’ I know that not all of those people are naked. Like, c’mon, you can’t come to the door to just say Hi and Thank You like a human being?”