Are companies like Uber and Airbnb “taking major parts of our economy backwards to pre-New Deal conditions” as Steven Hill contends in his new book, Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers? That’s the question Washington Monthly editor Matt Connolly tackles in the latest issue of the magazine.
[The] ghost of Franklin Delano Roosevelt hangs over all of Hill’s warnings about the “economic singularity.” For him, it offers a perfect contrast to the trends today: good, accessible jobs with benefits (and not an app in sight). The original promise of the freelance economy seemed to break out of this old-fashioned way of doing things. What if instead of answering to a boss as an office drone, you could be your own boss and help companies all around the country from your home office? What if instead of working at your grueling factory job, people could buy your products from you directly? But as Hill explains, these original assumptions were based on the most talented and entrepreneurial workers setting out on their own. Instead, it’s low-income workers with little other choice who are being hired as contractors, or plying their trade for as little as possible for a service like Uber or TaskRabbit. Rather than offering freedom and flexibility, the commitment-free schedule is instead a curse, requiring workers to head to jobs on short notice or risk wasting an hour or two with no pay.
For Connolly, one of key problems with regulating these new companies is that our legislators have no clue about cutting edge technology. They simply aren’t experienced enough, knowledgeable enough or tech-savvy enough to have a prayer of getting out in front of companies that seem designed to defy regulatory oversight.
It’s hard to conceive of government, especially local government, as anything more than reactive. Airbnb shows up, property owners start kicking low-income tenants out of buildings in order to use them exclusively for short-term rentals, the city council realizes what’s happening, and (ideally) tries to stop it. But imagine a world in which a city implements stronger tenant protection before Airbnb gets big, or passes ride-sharing regulations before Uber becomes the norm. It’s a case not just for bigger government, but for more experienced government. This would require bureaucrats to be familiar enough with the tech sector to identify trends and make recommendations to lawmakers. With members of Congress so in the dark that they’re turning to Silicon Valley entrepreneurs to help them make heads or tails of the start-up economy, we’re unlikely to see that anytime soon. But focusing on strengthening government’s ability to proactively regulate is still more useful than focusing on why companies should be more magnanimous.
I don’t know if you should feel too guilty to avail yourself of Uber or Airbnb. Maybe after reading Connolly’s piece, you can decide for yourself.
OT:
Higher Education only for the elite?
https:/www.washingtonpost.com/news/education/wp/2015/11/24/college-enrollment-rates-are-dropping-es
pecially-among-low-income-students
That’s an excellent way to dumb down a society. Limit the educated professional classes to dumb kids spawned by elites.
All these faux entrepreneurial operations are just other ways to mask economic weaknesses and transfer more profits to a few. And the average person is so illiterate about accounting and finance that they can’t properly evaluate the proposals.
(A few years ago the Sis decided to turn her little jewelry making hobby into a cottage industry. She didn’t even have a clue as to the materials costs that went into each piece. She gave up on it after I organized the accounting and did most of the design work and then I refused to hawk the stuff. There’s a limit to how much “pro bono” jewelry making I’m willing to participate in.)
It’s not impossible to be a good consumer, but it requires so much work and additional expense that it’s not a working proposition for most people.
You can ask the same question about so many things – Can you be a good person and wear clothes made in Malaysia? Shop at Walmart? Order from Amazon? Eat beef, pig, poultry or fish from most sources? Use products with palm oil? Buy tech products made in Chinese factories?
Most people I know do most of those things, and it would take significant effort and some expense for them not to. The same people, as a group, love Uber and Lyft and tell me they’re a significant improvement over traditional cabs. Same with Airbnb vs traditional hotels – cost aside, it’s just nice to rent a real living space.
The trend in general is still negative for worker compensation, and for environmental and wildlife protection. Uber and Lyft get a lot of attention, but that probably speaks more for the power of traditional cabs to generate publicity than it does for the importance of Uber in the overall spiral. Best case it’ll serve as a general wake-up call.
Same mindset that destroyed “main street” in favor of Walmart superstores. If there’s a problem with taxis, demand better administration by the local public utility authority. (And taxicab moguls should never have been allowed to come into being.)
Cheaper anything in mature industries is always at someone’s expense, often the actual consumer. Given the amount of time Americans spend “shopping” and glued to their smart phones hardly think they don’t have the time to be better consumers.
I don’t think there’s a regulatory problem with taxis, unless some of the regulatory structure already in place keeps them from competing with the services that Uber offers.
My friends don’t use Uber instead of a taxi – they use Uber in situations when they would never bother with a taxi. There is no phone call, no dispatcher, payment is already taken care of, and the ride shows up super fast. You don’t even need an address – I had a friend picked up off a median in DC just using GPS.
I’m not advocating for Uber – I get the problems. But from a consumer standpoint my impression is that the taxis aren’t competing at all. If people didn’t have Uber they’d make other arrangements.
Yeah, I don’t understand why taxi dispatchers can’t use some kind of uber-like app to schedule pickups, so they can compete more directly with them. I guess its probably too expensive for them to develop the app or something.
I’ve never used Uber myself, but thats just because I’m old and in the habit of using cabs. Also, I don’t have a smart phone. I spend enough time staring at screens all day.
Reportedly 80% of SF taxi cabs use a ride-sourcing app. The limitation may be the historically highly restrictive sale of taxi medallions. In part to increase profits for the owners. (Which may have been okay to make cabs an economically viable component of the public transportation mix, but that has likely been abused for decades (forever). At one time it may also have been to maintain decent wages for the drivers, but that seems to have gone along the wayside as cab owners have been allowed to classify the drivers as “independent contractors.”
There is always a problem when government acts to protect the profits of individual companies instead of the general welfare. Government should be the referee, not the advocate for particular companies. Of course, our system of campaign finance is geared just the opposite way.
“General welfare,” what a quaint concept. How fantastic was it that our government developed the internet and opened it up to the world? Pisses me off that all those that have made their fortunes due to the existence of the internet, resent and avoid taxes. Computers as well. And those that have pushed intellectual property, patent, etc. protections to absurd limits.
TPP makes it even worse. I’m sad that TarHeelDem’s diary with the link to the text has seemingly been met with apathy here.
Not apathy — opposition to it here seems to be at or near 100%. But little is to be gained for individual time and effort to dig into the weeds on it.
I hope you are right. I recall posts along the lines of “I’m sure it can’t be that bad or Obama wouldn’t endorse it”. You and I prefer to think for ourselves, but many prefer to let experts do it for them. Possibly, it’s a failing of our educational system. Fortunately, when I was in grade school I could see that some of what we were being taught was untrue, so I became a skeptic at an early age.
I often let experts do the thinking and provide me and others with the explanation for a layperson. My task is merely to evaluate the credentials of experts and recognize when they are in or out of their zones of expertise when I listen.
I’m not so much a skeptic as I am somewhat skilled at detecting lies and obfuscations and not hesitant to call them out for what they are. I also have no tolerance for lazy or sloppy thinking.
They need an advertising budget too….
Last weekend – cab ride from the Whitney to 66 and 5th.
Number of near accidents: at LEAST 4.
No, I do not feel guilty using someone who does not put me in fear of my life.
NYTimes That Wild Taxi Ride Is Safer Than You Think, a Study Says
Another report I was able to find said that new and part-time drivers have a higher accident rate. However, good statistics on taxi cab safety are difficult to obtain. And unless the insurance companies make the effort to collect data on the unregulated sector, we’ll never see that (the insurers will just quietly raise the rates). So, consumers will never have any opportunity to be informed.
You knocked that one out of the park. Well answered.
I can be a bit of a nervous nellie, but the comment I was responding to reminded me of a few wild SF taxi rides, but throughout those rides, there was never a moment when I doubted that the driver was fully in control and what to me might have looked like a near miss, wasn’t even close to a miss for the driver.
I remember driving in SF. You people must get brake jobs every six months.
From your article, accidents in taxis are far more likely to be serious than other drivers.
I have no intention of paying someone to drive like they do if I do not have to.
I was a NY resident for years – and it is a common joke how they drive.
I now have a choice – and I will take it.
There is such a thing as customer service – it is why uber is kicking ass in New York.
I keep thinking of the woman who claimed she was raped by an Uber driver. It looks like no one vets these people. They should have background investigations and bonds.
Uber etal. do claim to vet their drivers. And apparently a portion of employed taxi cab drivers failed the Uber vetting process.
Insurance, which they do have, is a better product for this risk than bonds.
“…seem designed to defy regulatory oversight?” It is their only purpose; predatory, parasitical destruction of a society that whelped the selfish, narcissistic, smart-asses who can’t be bothered contemplating their own origins or history.
Well, the regulatory oversight of cab drivers usually doesn’t benefit either the cab driver or the customer. It only benefits the medallion owners.
This is not to say there aren’t problems with Uber or that the larger issues raised by the author are irrelevant, but circumventing the medallion system isn’t a problem that concerns me very much, as most cab drivers are also considered independent contractors.
Yes but rather than argue the merits or liabilities of the medallion system (which is the misdirection our disruptive entrepreneurs constantly employ) lets defend the regulatory mandate in the abstract and fix the regime after the besieging barbarians have been sent packing.
There are, for example, specific medallions reserved for owner-operators.
I’ve used it, but sparingly. Usually when I’m stuck at my friend’s house and the metro isn’t running. Think like 3-4 AM. If it’s a weekend I’ll just stay over and take the metro in the morning.
Other than that, I walk/metro/bus, or someone else drives. I understand the app appeal, but as noted above I don’t know why cabs don’t have something similar. My bus on campus got an app my last year and it made taking the bus a lot easier.
They’ll all soon have ride-sourcing apps.
That doesn’t touch on the underlying problem. The drivers get screwed regardless if they work for a taxi cab company or Uber, Lytf, etc. Regulated, unionized, driver co-ops could resolve this.
Oh for sure. When I do use it, I usually talk to the driver to ask how they feel about Uber, if they’re getting a fair shake, thought of it through a labor organizing opportunity, etc. Not to go all Tom Friedman, but I can’t say I’ve heard much negative. However, this is in comparison to what? Unemployment? One of them is a bus manager by day (used to drive them) and an Uber driver by night. Older guy though, clearly approaching retirement. All this lack of negativity on an anecdotal basis also ignores the fact that many might only see the positives because they haven’t got any rough patches yet, whether through health/sickness/unemployment benefits etc.
Can we clone you? If most of your generation were like you, I’d be far more optimistic about the future.
He may fear that you are a company spy.
Yes, that’s another thing. He may have not wanted to diss the company for whatever reasons he might have. Maybe I’d give a negative rating if he said “man f*** this job”.
I wonder if none of that is an issue yet because many Uber drivers are doing it to make extra money not as their primary job so the downside of no benefits doesn’t really touch them. Are there any statistics on what percentage of Uber drivers use Uber as their primary or only job?
Takes a lot of wisdom, probably more than any of us have, to determine the ideal blend of stability and entrepreneurship in a given society. Each new creation has winners and losers. Consumers like services like Uber or they wouldn’t hold the promise of returning profits for the investors. The losers are traditional cab drivers and, even more so, their medallion-owning overlords.
The should always be protections in place for workers and the environment. And then there should be oversight, at least after the fact — though it’s hard to determine the net effect of a new paradigm. Most of us would agree that Walmart is a net drain on communities. But what about Costco?
Innovate or die. What people seem to like most are the apps. Why don’t traditional taxis adopt them too?
I would have no problem with Uber if the drivers had chauffeurs licenses (now called something else -professional driver’s license?) and the drivers were organized and negotiating.
When the robot cars take over it wont matter anymore
Every day on the road I pray that it comes soon. Illinois drivers used to just speed. Then they started ignoring red lights and stop signs. Now they don’t care which side of the road they dive on or if it’s both sides (left wheels hanging over the double yellow line).
Enforcement of the law about cell phones is a joke too.
Even a poorly performing robot system is safer than most Illinois drivers.
I can’t speak on Uber, but my daughter worked on the campaign to regulate Air BnB in San Francisco. Air Bnb was in FAVOR of the regulations. She called thousands of homeowners, business people, and politicians trying to get support for the regulations. She had elderly homeowners who could only afford San Francisco because they would rent out their homes for a night or two each month. She was highly impressed with the company’s willingness to be fair and the fantastic way they treated their employees.
Not all of these new companies are inherently bad. Let’s not judge them unfairly.
I’m guilty as charged because their business model still says otherwise. If I were them I would have invested heavily in PR recently too and been willing to concede a few tactical issues just to win back public opinion. We’ll see.
To take the devil’s advocate position: the reason why Airbnb and Uber were able to grow so quickly is that local governments were so far behind the will of the populace (zoning laws in the case of Airbnb and taxi medallions in the case of Uber).
Kicking lower income tenants out for Airbnb rentals is pretty shitty; but is it any shittier than kicking out lower income tenants to promote gentrification? Because that’s happening everywhere on a much larger scale.