Sunday, 19 July 2015

Uber and the sharing economy

When it comes to the 'sharing economy', it is the taxi app Uber which immediately comes to mind:
Futures Forum: Is Uber really part of the 'sharing economy'? >>> "The whole point of a genuine p2p and sharing economy is empowerment for those directly participating in it."

And things are really hotting up:
Uber faces threat of ban in home state - FT.com
California taxis can sue Uber over ads claiming safer service, judge rules | Technology | The Guardian
Uber is becoming a big issue in the 2016 presidential race

And the debate still rages on:

The Sharing Economy versus the Centralized State 

JUNE 25, 2015 by JOHN O. MCGINNIS|2 Comments 

Taxi drivers in France rioted yesterday to prevent Uber from competing with them. They attacked vehicles on the mere suspicion that they were working for that company. They broke windows on cars carrying tourists. It was a kind of economic terrorism. Even a left-liberal rock star was upset!

France is one of the most heavily regulated and centralized states in the Western world. But Uber represents the new forces of decentralizing competition that it may ultimately be powerless to block. While the French government appeared to take the side of the violent strikers today, it will have difficulty in stopping this kind of competition without deploying coercion unacceptable in a democratic society.

As Alexis Tocqueville understood, the French Revolution was not a great victory for liberty because it replaced one centralized, bureaucratic state with another. The French today can ride the new technologies to make a more substantial advance. Aux apps, citoyens!

The Sharing Economy versus the Centralized State - Online Library of Law & Liberty

Why Silicon Valley's sharing economy needs the welfare state

SHANE FERRO Jun. 11, 2015,

Simon Rothman, a partner at venture capital firm Greylock, said something really interesting in regards to workers and worker benefits in the new tech economy.

"I think this new class of worker has to reflect this new type of work that's being done," Rothman said. "If you decouple the benefits, if you decouple the pension so it's not tied with you, think about the control you can have, going out of the networks as you wish, controlling the what and when of your job."

This is a major point. There really isn't any reason that benefits should be tied to a person's employer. The only reason we have the current system in the US is because back in the 1940s, providing health insurance for an employee was a good way to get around the World War II-era government limits on wages.
But if an employer doesn't provide these benefits, who will?

It seems like we need a large, national entity that is capable of broad-based collection of revenues, and the distribution of those revenues in the form of benefits like healthcare and retirement funds.

It's called the government, and it has the added benefit of never having the possibility of going bankrupt. Uber's Travis Kalanick previously told BuzzFeed that Obamacare was "huge" for his company and the growth of the sharing economy. 

The key to the riches of the sharing economy might just be big government.

The sharing economy needs a social safety net - Business Insider

Uber Solves the Fundamental Problem of the Marketplace

Or, Turning Strangers into “Honorary Kin”

STEVEN HORWITZ June 24, 2015

The fundamental problem of markets is the need to establish trust among strangers. In a wonderful and unappreciated book called In the Company of Strangers, Paul Seabright explores this formulation in great depth. He argues that for markets to work more fully, we need various institutions that allow strangers to be less suspicious of one another. We need to turn them into “honorary friends,” or in my own preferred version, “honorary kin.”Living out beautiful anarchy by finding ways around the state and crony-capitalist providers like cab companies requires that the alternatives, such as Uber, solve the problem of turning strangers into honorary kin. Thankfully, modern technology, such as the combination of GPS, electronic payment, and smartphones that Uber and other services in the sharing economy are using, provides effective ways of doing so and makes us willing to get in the backseats of strangers’ cars as if they were the backseat of our parents’ minivan.

Uber Solves the Fundamental Problem of the Marketplace : The Freeman : Foundation for Economic Education

Uber Delenda Est

Kevin Carson | November 30th, 2014

About six months ago, when Uber was first becoming a visible national controversy, I wrote a column (“One Cheer for Uber and Lyft” C4SS, May 16, 2014) in which I argued that Uber, despite being a genuine example of neither peer-to-peer (p2p) nor sharing, was a step in the right direction because it offered at least some competition to the medallion cab monopoly. It was doing to them something like what Microsoft’s Encarta CD-Rom did to Britannica, and would hopefully in turn suffer from a genuine p2p sharing app the same destruction that Wikipedia inflicted on Encarta. Today I’m revoking even that one star. I’d assign them a negative rating, if I could.

A lot of negative material has come out since I wrote that last column — much of it just in the past few weeks — about the crappy way Uber treats its customers, its drivers, its competitors and critical journalists. This is not what a p2p alternative does. A p2p sharing app would be about drivers and customers organizing horizontally, as equals, to meet their mutual needs outside the legacy taxicab monopoly. To the extent that this horizontal organization exists, it is the host organism on which Uber has parasitically attached itself, and from which it leeches out the blood.

To repeat, the whole point of a genuine p2p and sharing economy is empowerment for those directly participating in it. It enables participants to reduce the overhead of daily living and the income stream required to service it, and to increase their independence by deriving incomes from the spare capacity of underutilized capital assets they already own. Uber makes its “independent contractors” more fragile and dependent from two directions at once: By encouraging them to take on debt that requires a higher regular income to service, and at the same time making them vulnerable to being fired (er, “deactivated”) at the whim of an employer. So is Uber an employer or a sharing app that’s just used by drivers? Well, if it walks like a duck and quacks like a duck…

... in the words of Reason‘s Nick Gillespie, “bedding down with regulators to screw over competitors”: “After spending years antagonizing would-be regulators, Uber is now working with them to hammer out agreements that will let the company flourish even as less-connected competitors face tougher regulations.” Uber has hired former Obama adviser David Plouffe to negotiate regulations with local governments, and has said it “needs to be regulated.” The kind of needful regulations he has in mind, it goes without saying, are those that raise the cost of entry and make it harder for little guys to compete with Uber. A good example of the specific regulatory model they have in mind is the recent ride-sharing regulations passed by Washington, D.C. — which Uber and Plouffe have applauded — that includes $1 million in liability insurance and registering with the DC cab commission.

But anyone who either defends or attacks Uber as an example of the “free market” is a damfool. Uber and Lyft are not genuine sharing services. And they’re sure as hell not “free market” or “laissez-faire” operations, Reason‘s and Pando’s agreement to the contrary notwithstanding. The proprietary, walled-garden app they use to enforce the toll-gates between riders and drivers is every bit as much a state-enforced monopoly as the legacy taxicab industry’s medallions.

“I’ve got his number on my phone. Now we bypass Uber, call the guy and hear if he’s available to pick us up, and pay him cash.” This is something home care aides working for temp agencies do on a regular basis: cut out the middleman and make a deal directly with the customer that benefits both parties. Since, rather than being a genuine p2p service that empowers drivers and passengers to collaborate with each other, Uber has become a glorified temp agency that sets up a toll gate between driver and passenger, it should get the same treatment.

Center for a Stateless Society » Uber Delenda Est

Not the People’s Uber


Most American workers haven’t had a raise since the 1970s and have seen their benefits and labor protections erode.

Whether it’s cut-rate Facebook content moderators toiling in Southeast Asia, millions of people submitting free restaurant reviews to Yelp, or TaskRabbits lowering their prices in a race to the bottom, today’s most celebrated companies are built to extract maximum value from vast networks of worker-bee users at minimum cost. In this arrangement, free or discounted labor isn’t an accidental byproduct; it’s a main catalyst for growth.

Its very name, Uber Technologies, Inc., reflects its determination to be seen as something other than a transportation outfit.

Were Uber to prioritize background checks, insurance, training, benefits, healthcare, or stable pay for its workers, it would not be the $40 billion industry darling we know today. This is how you get to be the biggest, most valuable startup in history. 

Of course, Uber does have bona fide employees. They’re just not the drivers who provide the company’s main service and source of revenue. These programmers, executives, marketing reps, accountants, and city coordinators make good livings while earning all the benefits of being employed at a rich, fast-moving tech company. They enjoy their luxuries thanks to the slim margins of Uber’s drivers.

This scheme may not be sustainable. A startup is essentially a product of shared hallucination, and Uber’s profitless mirage depends on courting regulators, disseminating propaganda of libertarian economic empowerment, and finessing its way around local laws. That’s why Uber is investing heavily in its public policy, communications, and legal departments. If they fail to win on those fronts, Uber might finally have to do what some of its critics have begged all along: own up to its sprawling force of underpaid workers.

Not the People’s Uber - The Baffler

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