New systems need new protections, lest the businesses get the frosting, and the workers the baked-on crusts and crumbs.
Uber looks like a grand way for someone to pick up extra cash, but only if they already have the resources that allow them to step in. A reliable, insured car and good personal health are just the beginning. In the moment, the drivers seem to make a lot of money, but illness, accident, and retirement aren't covered, and any downturn in the taxi market means their job is gone like snow in Death Valley.
The "sharing economy" can only work equitably if there is a wide level of security, and enough shared prosperity that people can afford to provide their own cars, houses, experience, tools and so on in the service of their employers. Who can truly afford all that right now? Only four types of people -- the moderately well-to-do, young people who have the support of a family, retired people with a pension or other income, and people who have been, up to now, well off enough that they still have legacy resources like a car and decent health, but won't have them much longer.
To make a true sharing economy work, businesses have to be willing to share downwards, or else citizens need to learn to circumvent their business toll gates and truly share with each other, avoiding the middlemen.
Uber looks like a grand way for someone to pick up extra cash, but only if they already have the resources that allow them to step in. A reliable, insured car and good personal health are just the beginning. In the moment, the drivers seem to make a lot of money, but illness, accident, and retirement aren't covered, and any downturn in the taxi market means their job is gone like snow in Death Valley.
The "sharing economy" can only work equitably if there is a wide level of security, and enough shared prosperity that people can afford to provide their own cars, houses, experience, tools and so on in the service of their employers. Who can truly afford all that right now? Only four types of people -- the moderately well-to-do, young people who have the support of a family, retired people with a pension or other income, and people who have been, up to now, well off enough that they still have legacy resources like a car and decent health, but won't have them much longer.
To make a true sharing economy work, businesses have to be willing to share downwards, or else citizens need to learn to circumvent their business toll gates and truly share with each other, avoiding the middlemen.
20
I am a frequent user of Uber and I always ask - why did you decide to drive for Uber. It runs the gamut from - college graduates biding their time until the figure out what to do or find a job to a single mom earning extra money in addition to her full time to job to a driver who has realized Uber offers him a way to make enough money without joining the rat race. Tyler has an interesting hypothesis. Would love to see him do field research and post his findings.
9
Outside of the highly competitive and lucrative market of New York City, taxi service sucks. If it's so great and wonderful, why does it suck? Cabs are dirty and unsafe. Drivers are distracted and unsafe. They're not available. Half the time, you're pretty sure you are funding a criminal enterprise. Yesterday, I was less than an hour outside Providence RI but there was no cab service. An Uber driver picked me up in 15 minutes. They're providing better service, period.
16
What schooling is required to be a taxi driver without any proper protections for his passengers?
8
Inspired by Professor Cowen, I've invented a new app ideal for the Freelance Sharing Economy:
The Dickens -- Can't get a loan because you've gone bankrupt before? Feel like you have no collateral to offer? Don't be so unimaginative! You still have something to put on the line: your physical freedom. In this disruptive twist on the old tried and true motivational technique of debtor's prison, your banker permanently straps your GPS-equipped smartphone to your ankle. If you are late on a payment, your lender activates it and you simply never leave your house until your debts are paid off by your relatives. (When you think about it, don't they owe you?) Comes with a HuluPlus subscription so you can catch up on your Binge TV watching. (What happens if you try to sneak out? That's for us to worry about.)
The Dickens -- Can't get a loan because you've gone bankrupt before? Feel like you have no collateral to offer? Don't be so unimaginative! You still have something to put on the line: your physical freedom. In this disruptive twist on the old tried and true motivational technique of debtor's prison, your banker permanently straps your GPS-equipped smartphone to your ankle. If you are late on a payment, your lender activates it and you simply never leave your house until your debts are paid off by your relatives. (When you think about it, don't they owe you?) Comes with a HuluPlus subscription so you can catch up on your Binge TV watching. (What happens if you try to sneak out? That's for us to worry about.)
18
I think we still need to go through a lot of socialization of the idea. It is important that Main St. learns to work in the new economy and to depend less on the hand-outs of the Welfare State. It ain´t easy to metamorphosize from being a parasite and turning oneself into a FreeLancer. PLUS, as Aristotle liked to put it: One shall strive to become virtuoso in that that he or she feels is good at doing. That´s where real happiness lies.So, not everybody is cut for this kind of living, thank God! But in the mean time, itps gonna be difficult to cope and filter out those that are more virtuosos at being employees instead of empresarios.
1
No one seems to care that people need jobs.We are all linked. We need people to buy the stuff others make, an they have to be able to make money to do that. All the comp usas , all the blockbusters, barnes and nobles 's , were places to work. Now people can't find work.
Part of a real taxi service is insurance, inspections, etc. Uber doesn't supply that.
Uber is just another company created by self important millennials, to get rich off the backs of others
Part of a real taxi service is insurance, inspections, etc. Uber doesn't supply that.
Uber is just another company created by self important millennials, to get rich off the backs of others
36
"No one seems to care that people need jobs."
Uber is hiring 50,000 new drivers a month. To people who either didn't have a job or had a less rewarding or fulfilling job previously.
Uber is hiring 50,000 new drivers a month. To people who either didn't have a job or had a less rewarding or fulfilling job previously.
8
They are providing a service others want to use
2
You're incorrect - Uber drivers are insured and inspected. They also have better customer service and ore convenient booking. That's why customers prefer Uber to traditional taxis.
You're also incorrect when you say that all people need jobs. No, they don't. The all need to earn a living and be self-supporting, perhaps. But many, many people manage to accomplish that without a traditional "job", and many prefer to be self employed, or freelancing, or independent contractors, or in business for themselves.
You're also incorrect when you say that all people need jobs. No, they don't. The all need to earn a living and be self-supporting, perhaps. But many, many people manage to accomplish that without a traditional "job", and many prefer to be self employed, or freelancing, or independent contractors, or in business for themselves.
8
Fortune favors the venture capitalists who fund Uber, the investment banks that package the IPO, and the small number of programmers and senior management (and venture capitalists and investment banks) when Uber goes public and they cash out. It does not favor anyone else.
33
Fascinating thoughts from a full-time tenured professor.
55
The article mentions that Uber pays better, and that their drivers are more likely to have college degrees. I think that the reason why Uber drivers are more likely to have college degrees may well be the startup cost.
Uber requires you to have your own car in the first place whereas you don't need a personal vehicle to start working if you drive an yellow cab in New York City. IMO, it's not crazy to estimate that the lower your educational level, the less likely it is that you have a car, also, the less likely it is that your car is one of the newer models (which Uber requires) because of your financial situation.
This hypothesis also goes hand in hand with my personal observation that at least where I am, pretty much all yellow cab drivers have accents whereas Uber drivers are much more likely to be American and dressed better.
Given the fact that you need to take care of your own car as an Uber driver, is the pay still better than that of a cab driver's even after you take in consideration the extra depreciation of your car's value and maintenance that Uber'ing incurs?
Uber requires you to have your own car in the first place whereas you don't need a personal vehicle to start working if you drive an yellow cab in New York City. IMO, it's not crazy to estimate that the lower your educational level, the less likely it is that you have a car, also, the less likely it is that your car is one of the newer models (which Uber requires) because of your financial situation.
This hypothesis also goes hand in hand with my personal observation that at least where I am, pretty much all yellow cab drivers have accents whereas Uber drivers are much more likely to be American and dressed better.
Given the fact that you need to take care of your own car as an Uber driver, is the pay still better than that of a cab driver's even after you take in consideration the extra depreciation of your car's value and maintenance that Uber'ing incurs?
38
Total rubbish. It's all about how you set the rules. We can go back to the horse-and-buggy days and make the same claim about "fortune favoring the freelancer". It's just a question of how the cards are stacked. Nothing more.
20
How has self-employment + an app or web marketing platform come to represnt the "sharing economy?" Nothing here is shared except the app. The conceit of the sharing economy lies in the sharing of a tangible good between owner and renting customer. Airbnb qualifies for this definition.
What you're talking about is an app creator generating revenue for services while taking very little responsibility for a significant cost center: the employees, or actual service providers.
"Sharing economy" has quickly gone from a feel-good, innovative style of capitalism to a watchword for irresponsible ownership of a business that's nothing more than a website. Expect this bubble to first just like the first non-value creating internet bubble of the late 90s.
What you're talking about is an app creator generating revenue for services while taking very little responsibility for a significant cost center: the employees, or actual service providers.
"Sharing economy" has quickly gone from a feel-good, innovative style of capitalism to a watchword for irresponsible ownership of a business that's nothing more than a website. Expect this bubble to first just like the first non-value creating internet bubble of the late 90s.
43
"But all things being equal, because this training costs something to the company, worker wages will be lower."
H'mmm - When I worked for Nordstrom, they gave me very extensive training in an area that most people would have no interest in attaining on their own. (In a none-sales field.) Once I showed mastery, which took a year, the company paid me MORE money. Presumably, it was worth their while to invest in me, and to pay me more once I was more valuable to the company.
Real life is different than Micro-Economics 102, and most of the time it is not a zero-sum game.
H'mmm - When I worked for Nordstrom, they gave me very extensive training in an area that most people would have no interest in attaining on their own. (In a none-sales field.) Once I showed mastery, which took a year, the company paid me MORE money. Presumably, it was worth their while to invest in me, and to pay me more once I was more valuable to the company.
Real life is different than Micro-Economics 102, and most of the time it is not a zero-sum game.
29
Uber is just another idea dreamed up by people lacking in the ability to create something positive [say like Jonas Salk or Henry Ford] and of course their armies of bankers, lawyers and investors looking for a quick buck; at some point it will occur to everyone that this shortsightedness of stealing the other guys cheese is not a sustainable business model; producing only a world of extremes of wealth and poverty and lots of unhappy people. America is tragically racing to the bottom as evidenced by the violence in poor communities that results from no jobs and no hope. In the wealthy communities the increasing fear for their safety is becoming a major issue, as it well should; unfortunately most of the "Disruptive" generation of entrepreneurs have no sense of history or don't seem to care how badly these periods of inequality end, they might reflect on the French or Russian revolution or what resulted in W.W.II when you had a starving German population and a minority of people with great wealth; it can get really ugly; the French cabdrivers are just the beginning.
38
Making transportation for more abundant and less expensive for millions of people is pretty transformative.
Americans will need to live on less and less. There is a global labor glut. Better get used to it. The way Americans lived 1945 - 1970 / 80 was a historic and economic anomaly. Things are reverting to the norm of subsistence livings. How most the world lives and always have lived.
Americans will need to live on less and less. There is a global labor glut. Better get used to it. The way Americans lived 1945 - 1970 / 80 was a historic and economic anomaly. Things are reverting to the norm of subsistence livings. How most the world lives and always have lived.
12
Uber is providing a valuable service others want
4
This article doesn't explain the big picture. Uber means more little people competing for less money. A little bit of the savings goes to the customer, but most of it goes to Uber.
That's the Walmart model and every other big company.
That's the Walmart model and every other big company.
55
Uber is making billions. And they are winning legal challenges brought by regulatory agencies. My city is currently fighting them and they recently backed off the insurance coverage issue. Regulated drivers are required to have way more insurance to drive. Totally unfair.
22
The consumer wins. And actually the customers get most of the savings. Uber costs about 1/2 of what taxis costs.
7
The consumer wins--until he's injured in a car wreck and then learns he isn't covered. This is no different from the 20's-something who skips health insurance and thinks he's smart. (Not gonna happen to me.)
6
Cities set the rules which govern the taxi industry. These rules are entrenched and quite draconian. The requirements to drive a taxi are numerous: mandatory training, licenses, insurance, regular car inspections, criminal background checks, etc, etc. Uber figured out a way to bypass those rules (for the most part) and flood the already overcrowded market. Taxi drivers were rioting in Paris this week over this issue! The market value of taxi plates has seriously declined and it is having a detrimental effect on many drivers who have few other job prospects.
13
"Draconian"? Only in America are regulations that protect consumers characterized that way.
I want my taxi driver to be trained, have a license, have insurance, have his cab regularly inspected, and -- most definitely -- a criminal background check.
Can you imagine riding with a driver with any of those safeguards missing? Oh, wait. I can. It's called Uber.
Uber: Russian roulette rides (RRR).
I want my taxi driver to be trained, have a license, have insurance, have his cab regularly inspected, and -- most definitely -- a criminal background check.
Can you imagine riding with a driver with any of those safeguards missing? Oh, wait. I can. It's called Uber.
Uber: Russian roulette rides (RRR).
14
This op-ed only cites studies sponsored by the companies themselves. I appreciate that the author makes this clear, but why should we trust company-sponsored studies that uncover how much these companies are benefiting American workers as a whole, and in particular those in the middle class?
43
What a nice, polite, sanitized way of stating the One-Percent view that "college is a waste of money".
Let's just be honest. Wall Street, American corporations, businesses, and Washington DC have abandoned the American worker. So Silicon Valley is saying, "How can we make money off of the huge group of over-educated people who are finding there are no jobs in the U.S. for them? Solution? Servant jobs!"
Yes, this op-ed sales over the fact that 48 percent of Uber drivers have a college degree or *higher* as if it's not a HUGE problem in America. Is that not the real story here? That our ruling elites are letting the richest country in the world slowly dissolve into a two-class system (filthy rich and filthy poor) in the name of inhumane "efficiency"? That the minds of American born children are being allowed to go fallow?
Yes, in a completely free-market economy, the most efficient form of labor *IS* slavery.
The solution is to force corporations who do business in America to pay their fair share of taxes and invest in infrastructure, research, education, and social services. But no, the brains behind this blog can only see value in investing in business, business, business and money-making schemes.
Let's just be honest. Wall Street, American corporations, businesses, and Washington DC have abandoned the American worker. So Silicon Valley is saying, "How can we make money off of the huge group of over-educated people who are finding there are no jobs in the U.S. for them? Solution? Servant jobs!"
Yes, this op-ed sales over the fact that 48 percent of Uber drivers have a college degree or *higher* as if it's not a HUGE problem in America. Is that not the real story here? That our ruling elites are letting the richest country in the world slowly dissolve into a two-class system (filthy rich and filthy poor) in the name of inhumane "efficiency"? That the minds of American born children are being allowed to go fallow?
Yes, in a completely free-market economy, the most efficient form of labor *IS* slavery.
The solution is to force corporations who do business in America to pay their fair share of taxes and invest in infrastructure, research, education, and social services. But no, the brains behind this blog can only see value in investing in business, business, business and money-making schemes.
62
All of this can be laid at the feet of free trade agreements which push wages and benefits down. It also maximizes profits. Many taxi drivers have no benefits or pension and now Uber is undercutting their wages as well. This is so wrong.
25
"That’s where some of the problems come in. Uber drivers are much more likely to have a college degree than are taxi drivers or chauffeurs, according to the Hall and Krueger study. It found striking differences between the two groups: 48 percent of Uber drivers have a college degree or higher, whereas that figure is only 18 percent for taxi drivers and chauffeurs."
So this model will allow highly educated workers to take more jobs away from everyone else, even if the education they have is not really 'needed' for the job. An uneducated guy can give you the same ride, but riders prefer a nice fellow from their own social class.
So what are the uneducated guys, particularly those who are not self-starters, going to do for a job?
So this model will allow highly educated workers to take more jobs away from everyone else, even if the education they have is not really 'needed' for the job. An uneducated guy can give you the same ride, but riders prefer a nice fellow from their own social class.
So what are the uneducated guys, particularly those who are not self-starters, going to do for a job?
36
The uneducated guys are now superfluous to the wealth enhancement of the well-to-do, so they must be forgotten.
21
Re short term rentals, this is never an issue for those renting out their spaces. It's only an issue for those of us living next to those spaces. I'm living this nightmare here in Toronto. Entire condo wall is shared with a couple who rents out their unit as a short term rental and I never know who my neighbours will be from one week to the next.
Doors slam at 1am, music/tv goes on until 2am and I get up for work at 6am. They are making a fortune and whine that they need to pay their mortgage. I do too but don't break the condo rules. Board has given them legal notice, which they ignore and keep renting. Board doesn't go after them again since it costs tons in legal fees.
I keep telling other unit owners to complain - it may only be the one in the building now, but wait until someone turns the unit next to YOU into a short term rental and you'll be living what I am now. Pan Am games are on here in Toronto and it's mayhem with the renters. I have to wait a full year to sell otherwise I incur special taxes for flipping a property which I'm not doing. I just want to move and get out. My entire life savings have been put into this unit.
So those who see nothing wrong with renting your units, please put yourselves in our shoes. Signed: utterlysleeplessinToronto
Doors slam at 1am, music/tv goes on until 2am and I get up for work at 6am. They are making a fortune and whine that they need to pay their mortgage. I do too but don't break the condo rules. Board has given them legal notice, which they ignore and keep renting. Board doesn't go after them again since it costs tons in legal fees.
I keep telling other unit owners to complain - it may only be the one in the building now, but wait until someone turns the unit next to YOU into a short term rental and you'll be living what I am now. Pan Am games are on here in Toronto and it's mayhem with the renters. I have to wait a full year to sell otherwise I incur special taxes for flipping a property which I'm not doing. I just want to move and get out. My entire life savings have been put into this unit.
So those who see nothing wrong with renting your units, please put yourselves in our shoes. Signed: utterlysleeplessinToronto
62
In actual fact, quite the reverse. Companies like Uber and Air serve little purpose other than enrich a few opportunist business-men, armed with databases and apps, peddling wares at the cost of up-ending, or trying to up-end,mdecades long systems that for the most part work quite well. Better-educated taxi-drivers? Sounds like educated unemployed who much rather have a regular job. Happier consumers? Maybe, maybe not. Social costs? Huge.
Fact is these businesses are not economically efficient. What they do is shift costs out of their domain, on the sly, for free. Government gets to carry most of the bag but others do too, like SleeplessInToronto. However big difference this time is the emergence of a groundswell, a backlash if you will. Everyone, it seems, is speaking out. Irony is we've been through this before with Detroit in the 80s. Back then Michael Moore was the solo voice against. Admirable and entertaining but too little too late and the American worker, sadly, lost.
But this time things are different, the bubble is leaking from all sides. Even local and state governments are acting. More people are willing to call a spade for what it really is, an ax. Taxi!