In the Sharing Economy, Workers Find Both Freedom and Uncertainty
nytimes.com
nytimes.com
my concern is that the value "created" by startups like uber and taskrabbit come not from displacing large and slow incumbents (e.g., taxi dispatchers & courier services) but from shifting economic risk onto disempowered individuals.
the people who pay (largely the top 20%) see value in at least two ways: (1) greater certainty of commodity products & services and (2) lower prices.
the startups themselves are shielded from market risk, particularly on the supply side (labor), because they have disproportionate power over labor, which then smooths out profit by automatically matching costs to revenues.
taskers bear all the market risk while also giving up traditional employment benefits. the value of this shift is passed on to the consumer and to the startups themselves (capital), leaving taskers in even more volatile economic circumstances.
by the way, i'm distinctly not condemning the startups here, because they're only part of larger economic trends that they have little control over. now that the structure is in place, they can't do much individually (e.g., if one tried to raise prices to raise wages, they would be competed out of the market).
Of course I think it's still possible for a small owner operator to use one of these services to gain a consistent customer base (and even get referrals from that customer base) and then cut out the big corporation that gave them the contacts in the first place. And operate on their own.
Work like this is done on relationships. I'm still using the same painter for projects that was referred to me by a realtor that sold me a property. Although there are tons of other painters I can get bids from (cheaper) I'd rather go with someone that I've used that I know can get the job done with little aggravation.
How do you get scratched DVDs from Amazon? I didn't think it was possible to scratch a DVD inside its case, without literally crushing it to splinters.
In that case, excellent online stores would sell the items in a separate category at a reduced price.
You're absolutely right it's worse than a local place. But it's predictable.
It makes the process of choice easier: I can go to McD and I know what I'm getting or I'm trying this new place, with unpredictable results.
Starbucks coffee in Japan isn't great, but it isn't fucking gross either. And it is very, very consistent.
Not necessarily having to do with the predictability of the coffee or the experience of drinking a coffee in a place.
I made a real effort to go to the local places, but they just don't offer what I need. In a Starbucks you can come in and sit for a few hours reading magazines, studying or working. Nobody bothers you. The place offers a variety of couches, chairs and tables which you can pick based on what you plan on doing. In a local cafe once you're done with your coffee or tea you get pressured into leaving by constant questions about your other orders. Local cafes offer uniform seating which often is completely unsuitable for a laptop or a stack of books.
Starbucks is a good Wi-Fi provider, worldwide.
But before this, you could see poor quality local food places on highways. McDonalds and co came in and create a price/quality floor. You couldn't be worse than them.
Efficient in money making, maybe (then again, it was those Wall Street financiers that need a trillion dollar bailout).
But not necessarily more efficient at doing what you pay them to do (i.e competent) than a local business.
On the other hand, I used to work in academia which came with accoutrements such as 'traditional employment benefits' but is incredibly exploitative because there's an absolute lock on the labor market. A PhD in biochemistry with years of experience can expect a ~35,000 salary in an expensive city. But you know, health benefits.
Of course, economic risk has always found a way to be foisted onto disempowered individuals. A history of corporate bailouts and crony deals that stretch back to the 19th century are examples of this; socialism is not really that much better, although the disempowerment is typically 'political' instead of 'economic'.
You'll have to explain to me how exactly does, say, uber, have 'disproportionate power' over labor? As a driver, I can log out whenever the heck I want and go to a job interview, and they'll never even know that they were competing for my unit of labor. Heck, I can even work for a direct competitor and seek rides from both simultaneously.
It wasn't worth it for me to continue as I value my free time from my normal job more than $20 /hr. But there are many more people who don't have that luxury. There are drivers who sunk in a lot of money to become drivers - bought cars, dropped jobs, moved cities, etc. When a company has that power to cut your wage so easily with the sending of an email or text message, that's disproportionate power.
And I do think Uber is very sketchily overestimating their driver performance in their recruitment efforts. And I think the extended line of credit for car purchases was dumb, but I didn't take it.
Also your analysis has this problem -- by your argument, drivers who are more willing to accept a slimmer margin are "more powerful" although those are exactly the "economically disenfranchised" drivers.
the disproportionate power i'm talking about is the ability of these companies to unilaterally decide the terms of the contract with labor as a whole (and really, they don't have as much choice as this makes it sound). yes, you can choose to accept or not accept, but your decision has no bearing on the market dynamics because you have no power to dictate the terms for which you'll work (e.g., you couldn't demand an extra $5/hr). part of this is because the fluidity of fractional employment means that labor supply can instantaneously fill demand--there's no longer a penalty for an employee leaving.
Keep in mind that uber and lyft aren't so powerful that they can force drivers to drive pro bono.
[0]sidecar lets drivers effectively set their own rates, so the effects of being too entitled about what you're owed become clear pretty rapidly if you're counting on it for a steady income.
you have no power to dictate the terms for which you'll work (e.g., you couldn't demand an extra $5/hr)
That's right. And if there is zero market on the passenger side, you can't demand squat. Maybe Uber and Lyft should unilaterally raise their rates to $10/mile and $100/hour for the benefit of their drivers. What Uber and Lyft are doing is just price discovery. Now that may seem unfair to the driver, but the flip side is if you charge too much, people don't use the service as much, and start getting into drunk accidents.
Freelancing is a luxury when you can relatively easily get a filthily well paid consulting gig. Like probably you and I could. It's an entirely different story when you have to hustle...
No, this was not about infantilising anyone.
In weak employment environment yes, but during the boom stage of an economic cycle people will trade up for better-paying jobs.
Obviously people aren't sharing these things for free, but they are sharing them nonetheless.
There's a well-established term for the thing you call "go into business sharing" and its called "renting".
Note also that sharing does not imply "for free". It simply implies more than one person using a given resource.
Sharing your car or home (whether the latter is rented or owned) is very easy without apps and people have been doing it for just about as long as cars and homes have existed. What the apps facilitate is making money from arms-length rentals to strangers. This may be a form of sharing, but even if so its a fairly specific one with its own name, its just that using an accurate and specific label rather than a misleadingly general one doesn't make as good marketing copy -- "sharing" sounds warm and friendly and positive, "rental" not so much.
I get that there's a real distinction between these new companies that facilitate peer-to-peer transactions. But I'd much prefer a term like "peer economy" than "sharing".
It's an entirely different economy out there, for most people. Average citizens would love to have recruiters as a "problem".
I think the sharing economy is a net benefit – I doubt it's preventing the creation of stable jobs. But we would do well to remember that we live in an economic bubble, a tiny pocket of prosperity amidst much harder time.
(Not a programmer personally, but I run an online business)
Well that's now, in this slice of time, and if you have the skills that are hot at the given moment. If not, assumes that a programmer can easily pick up the new thing and get a job (with age bias) which I don't think is necessarily the case.
Is there a hot job market for perl programmers? That was the big thing in the 90's when I first went online. Can a 50's perl programmer learn the next new thing and be in high demand?
(Edit: More of a statement than a question as I think "probably not an easy task")
A programmer who can't learn the next new thing in their 50s, probably couldn't learn the next new thing in their 20s, likely just learned the first new thing and never deviated.
That seems unlike the government, they've done nothing to address the shrinking of the middle class, the dismantling of unions and the shift from stable employment towards mcjobs, so why would they do anything about the uberization of the workforce?
Most of these startups try to create a monopoly at the level of the platform, but force workers to compete against each other, undermining solidarity between them that facilitates an unfair exchange
This is a function of the strength of the Australian economy and labour market.
The basic idea is that it should be easy to hire/fire people ("flexible labor market", vs. the traditional less-flexible European model), but social policy should smooth out some of the economic uncertainty that produces.
Quick example, unemployment used to be at 75% of net income (give or take). Then they changed it to 70, then 65%. Then they capped it at 1600 euros, then 1200. Now it is capped at 1000 euros for the first 6 months, and then 900 afterwards (and the length has also been shortened).
Doesn't matter if you were earning 10,000 euros a month or 2,000, now you both get max 1000 euros unemployment, even thou one of you paid 5 times as much in social security payments.
(quick note, values are approximate as I remember this from 2 years ago).
The uncertainty of not having enough money for food, shelter, medical care, education, raising children, and so on is a huge limitation on freedom.
We see this very explicitly in concepts such as tenure: certainty = freedom.
The conflict between freedom and certainty is real. Having enough money for food, shelter and medical care means having the ability to command other people to grow food for you, build a shelter for you and provide medical care for you. These people do what you want them to do instead of doing what they would like. Your safety is improved. Your providers' freedom is reduced.