Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Facebook CEO Mark Zuckerberg is seen on stage during a town hall at Facebook's headquarters in Menlo Park, California September 27, 2015.


You have heard about the gig economy, the odd jobs market that keeps the wolf from the door for young people and a lot of not-so-young people. It's precarious, often part-time, poorly paid and intermittent work: cleaning, driving, repairing stuff.

It's not new – it used to be called freelance. What has changed is that these small pieces of work or tasks can now be assembled digitally on the Internet. It's called a platform and these are controlled by large, sometimes colossal corporations.

It's a neat idea – an electronic platform where any writer can reach a reader (Facebook, Twitter); where a seller can find a buyer (Amazon, eBay) or a driver with a car can find a paying passenger. That was Uber's wizard scheme: to make money from millions of taxi journeys without actually employing a single driver or even being part of the transaction. It was about making money from the gig economy without doing a single gig.

Story continues below advertisement

Unfortunately for Uber's investors, an employment tribunal in London reckons that Uber's proposition – that it employs no drivers – is false. Indeed the tribunal judges, who had to consider a claim from several Uber drivers for the minimum wage and holiday pay, found the company's defence of its purported business model to be not just incredible but also amusing.

"The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform' is to our minds faintly ridiculous," the tribunal wrote. Its ruling found the drivers to be "workers" in the employ of Uber, entitled to the minimum wage and paid holidays.

The question before the tribunal was who controlled the business of selling rides to consumers – Uber or its drivers. A cursory investigation reveals that Uber recruits the drivers who have no control over choice of customers, fares or routes travelled. Uber also subjects the drivers to a rating system that amounts to a disciplinary procedure. Clearly, this is not just an electronic marketplace, transacting invisibly over our heads; it is a system that manages and controls a work force.

Uber is not the only platform business that pretends to be something it isn't while denying its real nature. Mark Zuckerberg, Facebook's founder, was caught at an event in Rome over the summer, masquerading as the boss of a technology company. In response to a straight question from his audience about the role of Facebook as "an editor in the media," Mr Zuckerberg was at pains to insist that Facebook was not a media company, that Facebook did not produce content, but merely "exists to give you the tools to curate and have the experience to connect with the people and businesses and the world that you want."

What Mr. Zuckerberg says is untrue. Facebook is editing and making content. Facebook is paying millions of dollars to celebrities and other media organizations to make videos for Facebook Live.

More important, the social media company is constantly editing its website, banning, deleting and restricting content that falls foul of its rules, sometimes with ludicrous results. In September, Facebook provoked a storm of protest when its editors deleted content showing the famous Vietnam War photograph of the naked girl fleeing an American napalm attack.

It's easy to see why Mr. Zuckerberg is anxious to suppress the notion floated by the young skeptic in Rome. It's partly about hubris: If Facebook were to become a media company, its stock would lose the prized "technology" rating and be relegated to the more prosaic valuations accorded to mere media conglomerates. But there is a more profound reason the "media" and "editor" tags cause him to wince.

Story continues below advertisement

If Facebook were to admit that its activities fell into the category of editing, it would soon find itself labelled a publisher. Instead of washing its hands of the material that appears in postings by Facebook users, it could find itself liable for material that might range from the mildly offensive to the defamatory or even potentially criminal.

Facebook is not a technology company. Facebook runs an electronic platform that manages, packages, monitors and controls writing and images posted by contributors. Facebook makes money by selling space to advertisers. Most people would call that publishing, a labour-intensive business with an elevated cost structure that Mr Zuckerberg would prefer to avoid.

You have heard about the gig economy, but I would call this the puppet economy. It's masquerade. It's a performance where you don't see the real people – the operators, the directors who hire the performers and control the marionettes by pulling strings from behind a curtain.

Slowly but surely, the curtain is being opened and the masks are being removed. It will not be a pretty spectacle.

Carl Mortished is a Canadian financial journalist based in London.


Story continues below advertisement

Banks' post-IPO profits from trading Facebook Inc. stock are safe

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley need not forfeit their estimated $100-million (U.S.) of profit from trading Facebook Inc. stock soon after underwriting its May, 2012, initial public offering, a federal appeals court said on Thursday.

By a 3-0 vote, the 2nd U.S. Circuit Court of Appeals in Manhattan rejected a claim by Facebook shareholder Robert Lowinger that "lock-up" agreements forbade the sales because the banks and selling shareholders together formed a "group" owning more than 10 per cent of the social media company's stock.

The lawsuit was one of dozens targeting Facebook, the banks and others after the Menlo Park, Calif.-based company's $16-billion IPO suffered from technical glitches and its stock price slid 54 per cent within four months.

Mr. Lowinger accused Facebook of concealing pessimistic internal growth projections from the public even as it quietly alerted the banks, who then passed the news to top clients and bet successfully against the stock. He sought to force the banks to turn their profits over to Facebook.

U.S. District Judge Robert Sweet in Manhattan dismissed the lawsuit in May, 2014, saying the lock-up agreements restricting insiders from selling stock were standard in the industry. Upholding that ruling on Thursday, Circuit Judge Ralph Winter said subjecting bank underwriters to similar restrictions would "complicate" their role, add millions of dollars of legal exposure and reduce the number of companies going public.

Story continues below advertisement


Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies