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.
