Yesterday shoppers are estimated to have spent almost £500,000 every minute buying Christmas presents online, on what has been dubbed ‘Manic Monday’. Internet technologies are challenging not just commerce, but also employment practices. Amazon provides a ‘crowd employment platform’ that disrupts traditional employer-worker relationships and creates a new class of freelance worker without employment rights, explain Debra Howcroft and Birgitta Bergvall-Kåreborn.
Amazon is the world’s largest online retailer and its brand is identified with online retailing. But Amazon is also a market leader as a provider of online labour auction services, through which participants bid for work.
This process is operated through Amazon’s digital platform. ‘Mechanical Turk’, or AMT, is an example of a ‘crowd employment platform’ that allow firms to source cheap labour and expertise using Internet technology. Organizations can outsource functions once performed by internal employees to an undefined pool of digital labour using a virtual network.
The AMT system is heavily geared to the needs of the requester of work, who does not legally become the employer and on whom there is no time limit for payment. Requesters can reject performed tasks without justification, yet ownership of the work is retained by the requester. Once they have agreed to fulfil a task, workers must complete it within the timeframes specified by requesters.
Firms use AMT to access a flexible, low cost, workforce, for which they have no responsibility. They can scale up and down according to their immediate needs and can call upon a broad range of skills and experiences. The workers operate outside traditional labour laws and regulations, often paid at rates well below national minimum pay rates and with the micro-tasks of ‘clickwork’ being tedious and repetitive.
Amazon entered the retail market in 1995 as a low cost book seller, but the firm evolved to broaden its product range and moved to a sales and service model. Within this model, Amazon operates as a broker, levying commission charges and licensing use of its digital platform to third party companies. The platform serves as a co-ordinating hub that facilitates the sourcing and hosting of a range of products and services.
Initially AMT was an in-house service to support data processing and the outsourcing of piecemeal tasks to contractors. When the service was expanded for use by external businesses, Amazon’s CEO Jeff Bezos remarked: “You’ve heard of software-as-a-service. Now this is human-as-a-service.”
The Amazon brand offers a robust digital infrastructure with global reach, enabling it to dominate the market as a micro-work crowd employment platform. Amazon takes on the role of financial intermediary, reimbursing workers through its online payment service, while extracting a 10% service fee from requesters.
Early adopters of crowd employment platforms were typically small firms with limited resources, but as platforms became more sophisticated the services have increasingly been used by medium and large firms. As crowdsourcing becomes more and more popular there is an increased likelihood that existing industries such as data entry, audio transcription, technical support and software development will move onto crowdsourcing platforms.
When AMT was initially launched, payments were only available to workers with a US bank account and so the service was almost universally used by workers with US internet accounts. The users were mostly people who were seeking supplementary incomes, including women with caring responsibilities, students, the underemployed and unemployed.
Subsequently, AMT has become internationalised and offers payment in Indian rupees. This has led to large numbers of young, highly educated, male workers from India signing-up. Research has shown that workers are typically paid an hourly rate of around $2. If workers do not wish to be paid in US dollars or Indian rupees, Amazon offers remuneration in its own website gift certificates which function as a global currency.
Workers perform services as independent contractors and not as employees. Amazon has no responsibility for the transactions between requesters and workers, with both told that they use the service at their own risk. The Participation Agreement clearly states that workers are not entitled to holiday pay, sick leave, health insurance or compensation benefits in the event of injury. The terms and conditions offer no social protection for workers and there is no commitment to meet national minimum pay rates.
Supporters of AMT and other crowdsourcing systems argue that workers are free to choose to participate, but choice has to be understood within the wider context of job insecurity, rising unemployment and underemployment. Economic problems mean that some people have little option other than working well below the minimum wage.
For firms using AMT, managing a workforce that completes micro-tasks is not without its challenges. For these firms, their continued use of AMT is based on ensuring that the benefits of using a low-cost and low commitment workforce are not negated by the effort required to set up tasks, communicate with workers, inspect the quality of their output and authorise payment. With this in mind, Amazon promotes various support services to assist requesters with managing projects, through its Mechanical Turk Partner Program.
Amazon has been widely criticised in Europe for the working conditions in its ‘fulfilment centres’, where items are packed and despatched. There is far less awareness of the working conditions within AMT, despite it being one of the most successful examples of crowd employment platforms. The scale of operation is significant and entails a global base of workers and requesters, yet the operational practices and processes are determined entirely by Amazon as the platform owner. The firm’s brand and market position means that it plays a crucial role in establishing the market conditions for crowd employment generally.
AMT and other crowd employment platforms provide an opportunity for organisations to radically change traditional employment relationships. If the platforms are widely adopted, their impact could be substantial.