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The Sharing Economy Comes to Mexico

Mexico's neoliberal reforms have created fertile ground for exploitative "sharing-economy" apps to grow.

I had a 10 a.m. interview to become an Apli “partner,” the hip new word for “employee.” The meeting would take place on Campeche Street, inside an Art Deco mansion in the hypergentrified Colonia Condesa neighborhood.

A security guard inspected my ID at the entrance. He directed me toward the reception desk, where a woman gave me precise directions to the Apli office: “After climbing the stairs, turn left and go through the door that is open.” The detail was necessary because many small enterprises have offices inside this renovated house: the Numa Startup Mansion, the first of many co-working spaces contributing to rising rents in Mexico City’s previously deteriorated central neighborhoods.

After entering the small office, a young lady handed me some papers and repeated the same phrase I would hear her say to every prospective partner: “this is your contract. It says that you are not our employee and we are not your employers. We don’t have any direct liability to you.”

While reading my contract, I talked with the other applicants. Contrary to Apli’s advertisements, none of them were students with cool haircuts who wanted to make money between classes. Instead, all were middle-aged men and women, some regularly employed in offices, others long unemployed, and most of them coming from overcrowded, suburban neighborhoods.

Apli’s business model is relatively straightforward. Job seekers register with the app. When businesses — mostly restaurants in gentrifying areas looking to reduce their costs and minimize their social and labor obligations — request a temp worker, the app offers the shift to one of its registered partners. When the partner agrees, her “service provision contract” begins. The contract, as the Apli receptionist reminded us, grants no labor rights or social security, only the payment of wages.

The contract also makes the partner’s responsibilities clear: she must take care of all the risks and associated costs of providing this temporary work. When a partner accepts an offer, she must bring her own tools and uniform, cover her transportation and lunch costs, and pay taxes on the income. To become an Apli user, partners must accept these precarious and burdensome conditions.

According to Apli, the app provides workers with flexibility and freedom, echoing the neoliberal fantasy of becoming your own boss. In practice, however, it can unplug a user after he rejects three offers. Further, in exchange for providing a service that gets cheaper everyday, Apli charges businesses 100 pesos (roughly $5) for every shift. Apli’s investors rake in these fees every time a worker accepts an offer .

Despite these obvious downsides, the app has become very popular. Although it only launched in July 2016, its founders say that 4,000 regular users have already worked more than 500 hours each. Important venture funds like ALLVP, Sonar, and BlueBox have poured more than $450,000 into the startup. The app’s popularity among users and capitalists have produced comparisons between it and the most successful examples of the American sharing economy like Uber, Airbnb, and TaskRabbit.

From the point of view of Mexico’s already precarious labor rights and social welfare provisions, however, this comparison is nothing to be proud of. The 2012 labor code — which legalized outsourcing, reduced unions’ bargaining power, and incorporated contract regimes that help enterprises reduce costs — already paved the way toward precarization. Now, as sharing-economy apps become more accepted, entrepreneurs and investors are profiting while workers keep getting poorer.

Many have written about how the term “sharing economy” rhetorically legitimizes new forms of inequality while sugarcoating them within a narrative of technological and community development. In practice, Silicon Valley has taken the utopian promise of new technologies that enable collective practices and turned it into short-term, speculative growth. Rather than building community through technological advance, corporations exploit atomized individuals and enrich themselves.

Uber promised its drivers the ability to make money off lonely car rides, but it created an informal fleet of taxi drivers who need to work long shifts in order to make up for pay cuts. Airbnb promised its users would meet new people and earn extra money by leasing out empty rooms, but now real-estate agents use the app to drive up rents.

Apli promises its partners will be able to use their free time to supplement their incomes. Instead it will end up managing an army of underemployed workers forced to take any precarious job in order to make ends meet.

A screenshot of the Apli app.

It is no wonder that the sharing economy has become successful in a world of constant economic recession, dominated by an ideology that defends unregulated markets and individual entrepreneurialism while demonizing every attempt at grassroots political organization. As capitalism fails to live up to its promises, the sharing economy offers a temporary and ephemeral solution to unemployment, thus delaying a systematic critique of the system. Mexico offers fertile ground for the kind of precarity legitimized by this globalizing language to take root and grow.

Since the 1980 fiscal crisis and the subsequent neoliberal reorganization, real wages in Mexico have plummeted. Most of the younger labor force, composed of people between twenty and twenty-nine, earn the minimum wage, at less than $450 per month. Mexico City was particularly devastated by the shift from a protected economy to the neoliberal order: deindustrialization cost more than 100,000 workers their jobs and drove the unemployment rate up to 12 percent.

Now, thanks to policies designed to attract capital flows, the city’s economy depends on the service and real-estate sectors. The construction of this global city has created greater inequality among classes: the upper echelons of business and government earn ever-growing wages while the labor market gets more and more informal to sustain the elite’s consumption and living standards.

The 1 percent have been reluctant to accept minimum-wage increases; they have rejected laws that strengthen labor rights; and they have refused policies that direct public spending toward the goal of full employment. Instead, they have sanitized the informal labor market and profited off working people’s need to juggle multiple, underpaid jobs.

For years, Carlos Slim — Mexico’s richest man and one of the biggest world oligarchs — has proposed shortening the workweek to three days and delaying the retirement age. This plan, which Slim views as a philanthropic crusade, simply normalizes the fact that most workers in Mexico have two jobs and work until old age anyway. Now initiatives like Apli  — businesses that profit off the growing precarization under neoliberalism — appear as a panacea.

Meanwhile, people on the other side of these apps, the ones doing the hiring, hear that they are engaged in a philanthropic enterprise.

Before Apli, a highly racist and exploitative venture had already appeared in Mexico City. Aliada — the name is the Spanish word for ally, in its feminine form — allows middle-class professionals to hire an independent domestic worker. According to the webpage, Aliada offers security, easy payments, and flexibility. Every ally is screened before joining the service; payments are made through the app, so users don’t have to have cash handy or directly interact with their “allies”; and, because there are always workers willing to take a shift, you can get your home cleaned when it’s convenient for you.

But the website also touts the app’s social impact. By using Aliada, you are making the world a better place by offering opportunity to an impoverished woman. It may not come with labor rights or stability, but it’s an opportunity nonetheless.

Aliada’s founder Rodolfo Corcuera — who raised $800,000 in seed money for his app — amplifies this narrative, presenting himself primarily as a philanthropist:

In Mexico City, public transportation is complete shit and these women live on the outskirts of the city, they have to travel four-and-a-half hours a day for work. . . . Now, they can decide the areas they want to work, and the time they want to work.

Aliada does allow its workers to choose where they work — although locations are limited to hip central boroughs — but it doesn’t allow them to earn enough money to move out of the city’s distant and overcrowded suburbs. You have to dig into their web page, full of happy-looking, brown-skinned cleaning women, to discover that the company takes 30 percent of payments.

Apli’s founders Vera Makarov and José María Pertusa also say that they decided to found the app because they wanted “to do something good for the world.” In order to fight low wages and offer better opportunities to underemployed workers, they created Apli. But their app contributes to the problems it supposedly wants to solve: it may offer higher wages and more flexibility, but it both normalizes and profits from the waning labor rights, state disinvestment, and increasing class inequality.

During my month on Apli, only one job offer came through: a fourteen-hour shift at El Desván, a restaurant and bar in Insurgentes Sur. The wage was 400 pesos ($20) plus a punctuality bonus. Admittedly, the pay is much higher than the daily minimum wage — eighty pesos — but the working time was longer than what is legally allowed. Additionally, I had to bring my own clothes, as well as a lighter and corkscrew. I politely declined.