Thursday, April 2, 2015

Uber-like App Services for Prostitution Lead to Rise of “Trick Economy” and New Employment Concerns

SAN NARCISO, Calif. (Bennington Vale Evening Transcript) -- The success of Uber, the app-based personal transportation service, has renewed the demand for independent contractors. It’s also ushered in an emerging freelance marketplace called the “gig economy.” While the model may be great for business, labor advocates say it’s horrendous for workers and the wider economy. Pushing employees to sell their services independently weakens their security, cripples their long-term financial stability and depletes their purchasing power. Employees are, after all, consumers. But with the announcement Wednesday of an app-based call service for prostitutes -- the result of a partnership between Google Maps and Unter, a heavily funded startup by a conglomerate of savvy pimps -- labor regulators worry that the rise of this new “trick economy” will wreak further damage on millions of housewives and moonlighters who are seeking part-time opportunities to strengthen their household incomes.

Uber’s dramatic profits and low overhead have inspired other companies to follow suit, and not just within the same industry. The situation, according to economist and former U.S. Labor Secretary Robert Reich, has signaled a race to the bottom: “Once one business cuts costs by making its workers ‘independent contractors,’ every other business in that industry has to do the same -- or face shrinking profits and a dwindling share of the market.”

Gainfully employed camp followers, concubines, escorts, courtesans, streetwalkers, harlots and other ladies of pleasure may soon find themselves freelancing for unsavory pimps -- toiling without benefits or even basic human rights in the burgeoning joy divisions that have sprouted from the seeds of this new trick economy. Contract sex workers and their blinged-out pseudo-employers may also become tangled in costly litigation arising from employment misclassification claims.

Turning Obscene Tricks and Obscene Profits

Analysts predict that the much-hyped gig economy could generate close to $10 billion this year. And it covers more than shuttle platforms like Uber and Lyft. There’s also the cleaning service Handy, the grocery delivery offering from Instacart, courier solutions from Postmates and many others. With the introduction of the trick economy, adult service providers such as Unter and Handies (no affiliation with the cleaning service, although the ads feature pictures of French maids, spills and plugs) could hasten the “race to the bottom,” a term ironically used by Unter in its advertising.

A company like Handy, for example, can run with 20- to 30-percent lower operating costs than its competitors, which still employ direct-hire workers. So Molly Maid must front the expenses for the equipment, vehicles and facilities its employees use, cutting into its margins. A legitimate brothel faces the same dilemma: their sexperts are W2 employees who enjoy the benefits of clean work spaces, healthcare, tools and managerial support. Handies’ prostitutes, on the other hand, are responsible for their own transportation, penicillin, motel fees and supplies (lubricants, marital aids, carnal apparatus, costumes, birth control and condoms).

Like Uber and Handy, Unter and Handies are also exempt from the payroll taxes and benefits that full-time employers must bear. The big difference between a Molly Maid and Handy, or GM and Uber, is the profit margin.

GM is worth close to $60 billion and has over 200,000 employees. On average, its workers earn between $19 and $28.50 per hour. Uber is valued at around $40 billion and has 163,000 drivers, whose average hourly wages range between $17 and $23 across the country. Here’s the big departure: Uber employs only 850 workers. The company classifies all of its drivers as independent contractors.

Now consider a trick economy company like Unter. It currently grosses upward of $400 million, with an additional $250 million in funding. And yet Unter employs only four people, all pimps in leadership positions: Crybaby, Li’l Chuy, Fresh Beast Machete-Slim and Glide Richy. All of Unter’s Corn-Shuckers, Dollymops and Cream Jessies, as the girls are variously titled by service level, are free agents.

How Do Trick Economy Apps Work?

Let’s look at Unter as the flagship example. Currently, its apps are patterned after a combination of Tinder and Uber software. Hobos (what Unter calls customers, “‘cause they looking to hop a quick ride”) download the apps and register. They’re asked to provide a legal name, mobile phone number, email, language spoken and billing information, all of which are kept private. Prostitutes see only the Hobos’ profile details, similar to the Tinder interface.

Hobos enter their pseudonyms, their geographic range for travel and their preferences: desired race, weight, gender, age, hair color and any perversions or predilections that will help the system’s algorithms determine a close match. Li’l Chuy, one of Unter’s co-founders, originally wanted the profile to include mandatory details of medical and criminal histories. His partners felt that demanding such disclosures would drive higher-paying customers away.

“Besides,” Glide Richy said, “they ain’t our hos, they independent. They gots to screen their own customers. Plus, every Hobo gotta sign liability terms, which says ain’t nothing they catch, lose, get cut off or swallow is our fault.”

Once everything is set up, Hobos can access the app, which is integrated and powered by Google Maps, pick their “makes and models” and, as Unter’s marketing declares, “wait for their rides.” After an encounter, each Hobo is encouraged to use the app’s rating system to review the girl and the sex acts she rendered. Crybaby explains that it helps with quality assurance.

Employment Misclassification and IRS Concerns

Despite the convenience of the system, the massive profits and the long list of users signing up for trick economy services, critics have accused entrepreneurial pimps of misclassifying their sexual talent as independents to cut payroll costs and bolster profits. They’re not employees, but they’re not strictly independent contractors. They represent a new class of free agent, or quasi-employee; they have autonomy but not complete control.

Pimps set their ladies’ prices based on subjective formulas, which are calculated using either per-hour, per-minute, per-session, per-fetish or per-mounting rates, with some proposing a la carte fares for niche services. Genuine independent contractors negotiate their rates directly with clients. The pimps in leadership roles at Unter and Handies (titled CHOs, or chief ho officers) are also dictating the service areas and suite of offerings their professionals are allowed to provide, a move that seasoned strumpets say stifles their earning potential and innovation.

“I applied hoping to make some extra money at night,” said one Unter worker who asked to be referred to as Buttercups McMuffet. A single mother of two who works full-time as a loan officer for Wells Fargo, Buttercups makes only $42,000 annually. She also hasn’t received a pay hike in her three years with the bank, but her hours and responsibilities have increased. Her salary barely covers rent and bills, let alone groceries and transit.

“The ad said I could get an additional $100 to $1,800 per night,” she added. “But that figure doesn’t account for the money I have to spend on motels, bus fare, toys, work clothes and rising health costs. It doesn’t factor in the apps and mobile devices I have to purchase in order to get work. And unless you’re promoted into the levels that take care of premier services -- like becoming a Dollymop or Cream Jessie, you’re not eligible for payouts above $300. Even with Obamacare, my medical bills are spiraling out of control. I keep getting sores, rashes and various leaks all over my body. I nearly ended up with collapsed trachea last month after a clammy rutting choker went terribly wrong. And with the therapy my kids need now, I don’t see how this will work out.”

Even worse, trick economy firms like Unter and Handies mandate the use of their proprietary tools, just as Uber does. Prostitutes incur monthly subscription charges for them, but they can’t accept assignments without the dedicated apps, phones and tablets.

And just this week, responding to pressure from new competitors marching into the space, Unter and Handies lowered fares and instituted a variety of gimmicky commissions that are difficult, if not impossible, to attain.

“You can’t physically accommodate eight sessions of simulated home invasion gangbangs in one night,” Buttercups explained. “I tried to last month, just to get the ‘$50-a-head’ bonus, and I ended up in urgent care. I never thought the expression ‘tear you a new butthole’ could be literal, but apparently it is.”

2015. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License. See disclaimers.