Only the World of Charles Dickens Would Make Seattle’s App-Based Delivery Corporations Happy

In recent days, we have seen app-based corporations on the offensive. They are blaming rising costs and slagging business on a “Seattle City ordinance designed to give food delivery app drivers a more livable wage.” In the post, “No, the Minimum Wage for Gig Workers Is Not ‘Backfiring,'” Hannah Krieg made it clear that “DoorDash, Uber Eats, GrubHub, and InstaCart” are, in this instance, an empty wagon that’s making a lot of noise. Or, put more visually than sonically, a cowboy who is all hat and no cows. What’s really at issue? Not so much the wage bill itself but the power that’s lost with wage standards.

For obvious reasons, app-based corporations want to operate in a low regulation regime. A minimum wage only diminishes the power to control workers. And what’s the nature of this power? The app itself. It can be turned on or off with the press of a button. Increased government management of this market would make it harder and harder to punish or reward its labor. And all of this is more sordid when one considers that app-based corporations have very low fixed-capital costs. How is it possible they can blame workers for rising costs when, indeed, the workers own much of the fixed capital? Why do we never talk about this absurdity?

I’d be curious to learn more, but it appears as if an SF Waymo tried to drive through a parade on Chinese new year and was appropriately destroyed.

— Jeff Speck (@JeffSpeckFAICP) February 11, 2024

One of the key debates in the robot-car industry has been: can the technology become cheap enough to replace gig workers, who are more and more troublesome? The CEO of Waymo John Krafcik believes it can if the fixed capital of the car itself is excluded.     

Krafcik to Forbes:

“Let me paraphrase it like this: If we equip a Chrysler Pacifica Van or a Jaguar I-Pace with our sensors and computers, it costs no more than a moderately equipped Mercedes S-Class. So for the entire package, including the car – today…” 

In short, his company is designing a car. It’s designing a driver. What is this signaling? What exactly is he selling? A future where app-based cab and delivery corporations remove labor while maintaining low fixed-capital costs. What I don’t want to get into in this post is how Krafcik’s science fiction will play out in reality. What I do know is that, today, the fixed-capital costs are comparatively low for the masters of the gig economy. And this fact raises a question that’s almost never asked in local and national papers: Why, if such is the case, are rising costs blamed on the group, workers, who own and incur the costs of maintaining much of the fixed capital?

Many may not know this, but pro-business economists have spent a great deal of energy and time defending the revenue claimed by capitalists, profit. Many, particularly between 1870s and the 1910s, asserted that it’s the price of waiting or, to use moralistic language, abstinence. Much of this waiting was caused by the transformation of liquidity into hard things like buildings, productive machines, transportation and communication technologies. Workers could only supply what Marx called “labor power.” That’s all they had. The capitalist provided the rest, the “means of production,” which included variable capital (the wage bill) and fixed capital (machines, factory, tools, and so on). This concept was not Marx’s alone. It was accepted by most classical economists, including David Ricardo, a speculator who, after making a fortune on the market, decided to spend what remained of life thinking about economics.

“The produce of the earth,” Ricardo wrote in Principles of Political Economy and Taxation, “all that is derived from its surface by the united application of labour, machinery and capital is divided among three classes of the community, namely, the proprietor of the land, the owner of the stock of capital, and the labourers by whose industry it is cultivated.” Ricardo was a conservative. Nothing commie can be found in the pages of his masterpiece of bourgeois  reasoning. And so this order of things (capital provides the fixed-capital and workers the labor power of production) was taken as a given in his time. Even the neoclassical school that has dominated economics since the 1970s describes capital and labor as the key factors of production. 

But something crazy happened with the gig economy. The factors of production were transferred to the worker but with none of the benefits capitalists enjoyed with this form of ownership.  What does the gig capitalist now own? Just the app, whose value is found more in the brand than the technology itself. One would expect a revolution of this kind (the capitalization of the “consumption-fund”—domestic tools, appliances, automobiles and so on) to reduce costs in general: cabs should be cheaper, food delivery cheaper. But not at all. It has become more expensive for consumers and repressed the wages for workers, who must now suffer not only their cost of biological maintenance but that of their machines.

Nothing like this existed even in the raw days of capitalism. Where is the waiting? Where is the physical or real-world investment? How can a thinking person honestly blame rising delivery fees on labor?