The Gig Economy’s False Promise

https://www.nytimes.com/2017/04/10/opinion/the-gig-economys-false-promise.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&pagewanted=all

by kawera • 9 years ago

136 180 9 years ago

nytimes.com

exogeny• 9 years ago

I think a better discussion is how almost none of them appear to understand the correlation between negative unit economics and writing a bullshit, "At least I tried!" failure-disguised-as-success Medium post about how your company failed.

tarr11• 9 years ago

It seems several of them are now failing. Like you say, it's basically a miscalculation of unit economics over time, but being able to reduce staffing costs by 20% or more certainly gave them more runway.

Hard to say if the others have fixed their economics (eg, Instacart) or are simply better at fundraising.

Here's a list from 2015 [1] showing some of these companies that are trying to switch to W-2.

Munchery Stiffs Early Backers and Cuts Staff in a Bid for Survival [2]

Luxe Valet shuts the door on two more markets [3]

[1] http://www.web-strategist.com/blog/2015/07/30/collaborative-...

[2] https://www.bloomberg.com/news/articles/2017-03-29/munchery-...

[3] https://www.axios.com/luxe-valet-2219230863.html

ChrisPodlaski4• 9 years ago

Nobody said the transition would be easy, and nobody said what we have now is the gig economy... The gig economy we were promised is made up of decentralized enterprises built on protocols like ethereum, not market companies.

qyv• 9 years ago

The gig economy is not build upon technology ideas, it is built on disposable and expendable labor.

coldtea4• 9 years ago

Meet the new economy, just like the old economy.

coldtea4• 9 years ago

Nobody said the transition would be easy

Actually many said it -- Uber for one.

ChrisPodlaski4• 9 years ago

Actually I believe they said something like "You people are just placeholders until we can create a viable autonomous vehicle"

techterrier• 9 years ago

It's been a patent scam from the get go.

skynode• 9 years ago

What isn't a scam these days? Scams have only become more modular and probably smarter; so there are scams targeted at simpletons (e.g. the Nigerian Prince Plot, which apparently still works af), the middle class (e.g. the importance of working hard at your 9-5 job so you can move up the ladder, probably pay off that mortgage and send your kids to college, both of which have a low chance of occurrence especially in SF & co.) and the elite (e.g. investing your money in 2/20 hedge funds, attributing more value to expensive wines, etc.)

At different points in your social and economic development, different modules of the scam program are working to deceive you and emphasize unimportant details rather than big picture perspectives.

moonka• 9 years ago

Since workers for most gig economy companies are considered independent contractors, not employees, they do not qualify for basic protections like overtime pay and minimum wages.

It concerns me how eager we are to be to roll back the hard won protections that our forefathers fought for. Time and again we see that the vast majority of businesses only look towards maximizing the short term, and exploit any loopholes that allow them to.

brudgers• 9 years ago

My great grandmother worked in a Manhattan button factory at age 8. It made her mean.

It's more than just overtime and minimum wage.

cm2012• 9 years ago

Sorry to hear that, meanness and hate reverberates through generations.

dkarl2• 9 years ago

And we often allow ourselves to be distracted by hypothetical future policies when discussing whether to allow current protections to be undermined.

mljoe• 9 years ago

I can't imagine that 1099 contractors were ever envisioned to be used in the manner they are being employed by these companies. These employees (err.. I mean contractors) are long term, often full time and core to the business of the gig companies. I think that is incentive enough to make sure they aren't using 1099 payments as a loophole to abuse people or to pay less then min wage. Companies get punished for this all the time, and even if you are a big company with good lawyers you don't want the IRS as a plaintiff, ever. I think we'll see law that puts some bright policy lines on the gig economy, but as is the case politics is a lot slower to catch up.

intended5• 9 years ago

Funnily enough, HN is, every so often, the bastion of this line of thought.

Post 2008, the pendulum has been swinging the other way, but regulations were often argued as negative value. Of course people weren't assanine about it, and argued as best as they could on both sides.

bkeroack• 9 years ago

"In reality, there is no utopia"

Shocking! It almost leads one to the conclusion that the only route to a successful happy life is hard work and persistence, regardless of whether you do gigs or a 9-5.

coldtea4• 9 years ago

If only everybody had such starry eyed optimism.

Rather it leads to the conclusion that "forget 9-5, the new "gig" reality will be closer to indentured servitude, and forget "successful happy life" while you're at it too, it will just be a living, if you're lucky. Oh and those other 9-5/non-gig jobs? They're on the wane...".

enraged_camel• 9 years ago

The Gig Economy represents the decline of the American Middle Class, as people who would have been able to find white-collar work or stable and well-paying blue-collar work 15-20 years ago now have to enter the service economy and perform low-level jobs, many of which require little or no specialized skills.

For some reason we celebrate this trend as a society and laud its positives (e.g. being able to determine one's own work schedule), but in a decade or two the problems will become obvious and hard to ignore, as many gig workers find themselves too old to work but with no retirement savings, for example.

EliRivers3• 9 years ago

e.g. being able to determine one's own work schedule

This is, of course, something of a Hobson's choice. They can't work their own schedule; they have to work to the schedule of the temporary employer. The choice they have in this is to simply not work at time X, rather than move their work to time X.

malandrew19• 9 years ago

Or they can learn some skills and work for a different employer or start their own business. The options are always going to be limited for those with the least skills that aren't learning new skills. It's 2017. Never before in the history of mankind has so much knowledge been accessible for so many at such a low cost (typically just the cost of a computer and internet access).

mahyarm3• 9 years ago

Can you give an example? I'm trying to think of how that would apply to the typical Uber driver. Do you mean they would be working during surge time more because they get paid more?

pnathan9• 9 years ago

Why does everything that might be flawed about the economy have to tie into the "American Middle Class". It seems almost this fabulist's position of Things Were Better Back Then, And Can't We Make America Great Again?

subliminalbrad• 9 years ago

Because it's one of the only politically acceptable ways of discussing capitalist exploitation.

alejohausner• 9 years ago

Things were better "back then". Wages for bottom 90% have not risen, in real terms, since the 1970s. Income for the top 10% has gone up a lot, by contrast.

Union jobs raised wages for everyone: even though only a third of private-sector jobs were unionized, the threat of unionization pushed most employers to pay well.

In the 1960s, one person could get a blue-collar job and keep a family going in a suburban house, with a car. This was all due to unions.

We have been subjected to thirty years of propaganda about how unions kill jobs, how regulation is bad for jobs, how you should have "freedom to invest your money" (ie a 401-k rather than a company pension). This propaganda is now taken as gospel, and we don't realize it's just a ploy by those with inherited wealth to get a bigger share of the wealth.

BTW, that's how we ended up with Trump. Yes, he's a narcissistic windbag, but people who voted for him had real grievances.

dkarl2• 9 years ago

The "middle class" is political code for people being materially comfortable yet obligated to be economically productive. Once upon a time, there was only an "upper class" that was sustained by existing wealth and a "lower class" where people had no wealth. Both of these classes were discordant with the American Dream. The "upper class" had no pressing need to work, and the "lower class" had little ability to produce or accumulate wealth. Therefore nothing good happened or ever could happen. Enter the middle class! The middle class is able to produce and accumulate wealth, but it cannot ever comfortably stop working. Finally society can exist and people's lives obtain meaning through harmony with the laws of economics.

malandrew19• 9 years ago

The gig economy would likely exist even if the middle class wasn't declining. In fact, there would likely be even greater demand for gig economy work if the middle class were thriving.

WalterSear• 9 years ago

This isn't about demand: this is about labour supply, and how the lack of opportunity makes gig economy business models possible.

fullshark• 9 years ago

We laud(ed) this largely because most are consumers and are enjoying a nice consumer surplus from the development. Also for some workers, it's been a nice way to turn spare time + depreciating capital into short term income. In a vacuum it looks like a clear win for all involved.

The larger trend is where it looks worrisome, and that's basically what we're considering as some time has passed.

5thaccount2• 9 years ago

So without this trend, the world would have had more middle class and lower unemployment? My question more specifically is whether this trend is the cause or the effect? I'm not convinced in either direction BTW, I'm genuinely asking (the ether).

prostoalex4• 9 years ago

now have to enter the service economy and perform low-level jobs, many of which require little or no specialized skills

have to implies there's a wealth of "white-collar work or stable and well-paying blue-collar work" out there but people are forced or coerced to act against their best interests.

What's the alternative? Let's say the government decides to step in and make a structural change by changing the rules on W-2 employee vs 1099 contractor treatment. Will this lead to a resurrection of the American Middle Class?

Apocryphon4• 9 years ago

The ideal solution would be to decouple the crucial benefits offered by W-2 jobs from those jobs. For instance, good health insurance- the government should offer a public option for that, instead. Given that medical debt is a crippling problem for many Americans, getting that resolved would go a long way towards recovering the Middle Class.

acchow• 9 years ago

as people who would have been able to find white-collar work or stable and well-paying blue-collar work 15-20 years ago now have to enter the service economy and perform low-level jobs, many of which require little or no specialized skills.

Anecdotally, I've met a number of Uber/Lyft drivers that told me driving allowed them to quit their past shitty job and choose a flexible schedule that worked well with raising their kids.

Also, drivers that quit their jobs to pour energy into their family business with some extra cash from driving when needed.

cheez• 9 years ago

Next time ask how long they've been doing Uber. For the most part, I've only heard longer than 1 year a handful of times.

mahyarm3• 9 years ago

The fact the gig economy job exists does not take away from the high paying job. If it didn't exist, these people would not be working or working at their local retail/restaurant store instead.

The social problems of the low-income job lifer is not new.

smsm4210• 9 years ago

Is there any evidence that people participating in gig economy are former blue-collar workers with 15-20 years of experience forced into it because they were unable to find any other jobs?

My personal experience haven't been so - most "gig" services I've got were from people for which is was complementary income and which never intended to hold a full-time blue-collar job. Some of them could have 15-20 years of past blue collar experience only if they joined the ranks of workers straight out of kindergarten.

But my perspective is necessarily narrow and accidental - so I wonder, are there any data on it?

perform low-level jobs, many of which require little or no specialized skills.

These jobs need to be performed. So who should be performing them?

many gig workers find themselves too old to work but with no retirement savings, for example.

You are assuming these people would always hold these jobs until they retire. Why? Most people that drive for Uber or do gigs on taskrabbit or fiverr do not see it as a lifetime career, as far as I know. Just as a teenager getting min wage in McDonalds does not plan to do the same until she's 65. So asking "how can you retire on McDonalds salary?" doesn't make a lot of sense.

5thaccount2• 9 years ago

Is there any evidence that people participating in gig economy are former blue-collar workers with 15-20 years of experience forced into it because they were unable to find any other jobs? ... so I wonder, are there any data on it?

JIC you missed it: http://www.pewinternet.org/2016/11/17/gig-work-online-sellin...

http://www.pewinternet.org/2016/11/17/gig-work-online-sellin... shows that 18-29 year olds are most likely to be a part of the gig economy, as a percentage of an age range, and VERY few over 50 year olds participate (4%), so I'm not sure the data supports that specific view at all.

On the data, IMHO (and it is just an opinion) where there is data, it is going to be incomplete because as a new phenomenon, there is nothing to compare it to historically, and the current situation will not be indicative of future performance. As an example, the demographics of internet usage have changed dramatically from 1995 to today, as now the vast majority of people on the web are not white, but instead live in Asia (the top 10 here http://www.internetlivestats.com/internet-users-by-country/ includes only the US, UK and Germany, which are dwarfed by China and India).

BTW: that NY Times article is a great example of using data really selectively, if not downright misleadingly. Examples:

* "In New York City, an Uber drivers group affiliated with the machinists union said that more than one-fifth of its members earn less than $30,000 before expenses." OK, but is that BECAUSE of Uber, or the reason they drive for Uber? i.e. without Uber would they have more or less income? How many hours do they drive for Uber? Are they full or part time? And really, how is employing poor people anything but a positive thing? The mind boggles!

* I absolutely LOVE how having a large number of minorities was presented as a negative. "Company employs 47% blacks and minorities" would seem to mean it is a really progressive company, however the NYTimes article takes this as evidence of how bad a company it is. I can only assume that is because them there my-norities are too stupid to see how they are being ripped off by these evil corporations, unlike the oh so clevery smart Whitey White-White-McWhite-Whites. I could have the tone wrong there, but man, it comes off to me as really patronising to these minorities.

Last point and I'm done, from the Pew Data I love how it is a shock that people earning < $30K are more likely to take part in the gig economy than those making $75K. It is almost like people rationally choose to engage only when the marginal return from their time is best spent on the gig economy vs some other task ...

cmahler72• 9 years ago

let them eat cake

(delivered by grubhub)

lithos• 9 years ago

I really do like to bash on the gig economy, and while I don't expect much from the editorial section... The article uses insufficient data to make any strong arguments, Two anecdotes and the actions of one minor company.

teej• 9 years ago

I'm surprised they mentioned the $30,000 number multiple times in the article. How much someone makes without the context of how many hours they drive is meaningless.

malandrew19• 9 years ago

Or the cost of living wherever they live.

vkou• 9 years ago

And does it count the depreciation, extra maintenance expenses, etc, of their vehicle?

Or the write-off, when Uber decides that their vehicle no longer qualifies to be on the platfrom?

xanderstrike2• 9 years ago

What's weird to me is the addictive qualities of "gig economy" jobs. I have friends who had real jobs and could have them again, but continue to drive full time for uber/lyft/postmates/whatever because they insist it's better. They're working 80+ hour weeks and still never have money for anything, but that's okay because they don't have time to go out either. Being able to set which hours you work is meaningless if all you can do with your time off is sleep.

FilterSweep• 9 years ago

Have you asked them over other intangibles that may be driving them to choose 80 hours of lower pay over 40? Some may find the corporate environment so emotionally taxing that the alternative is still a better solution.

gutnor• 9 years ago

Being your own boss and not a wage slave anymore, having the chance to make it big. The 9-5 worker has been demonised in the media - but in the Gig Economy you can be proud to be a hard worker. You are part of the next revolution, you are the future of work, pioneers, ...

carsongross• 9 years ago

Work stimulates the reward regions of the brain for many people, as it gives a sense of purpose and progress towards a goal. Jordan Peterson says that one of his first recommendations to depressed people who are unemployed is to get a job, any job.

rhapsodic• 9 years ago

What's weird to me is the addictive qualities of "gig economy" jobs. I have friends who had real jobs and could have them again, but continue to drive full time for uber/lyft/postmates/whatever because they insist it's better.

Maybe "addictive" is more apt than you realize. Just spitballing, but maybe driving for Uber has the same reward mechanism that makes gambling addictive. Each big win, no matter how infrequently it might occur, keeps the gambler chasing the next one through loss after loss. Perhaps an Uber driver gets such a rush when he makes $60 for a short trip during peak demand that he can't help but endure long slow hours behind the wheel waiting for the next big score.

pnathan9• 9 years ago

It would be prudent for the policy-inclined among us to work with the state houses to develop a third category besides contractor or employee. As Homejoy's founder correctly pointed out, a gig worker coordinated by a central company falls in the cracks.

It's incredibly important to get law to properly regulate this space in a sane way that levels the playing field and guarantees worker protections.

mpweiher2• 9 years ago

Why a third category? Just classify them as employees.

pnathan9• 9 years ago

They aren't employees. They provide their own materials, they set their own schedule.

Spooky232• 9 years ago

In the construction trades, the unions fill this role.

pnathan9• 9 years ago

Can you talk more about how that works out? In my interactions with the trades, there were no trade unions in the area, so most people were either 100% contractor or employee, no union intermediary.

Karrot_Kream• 9 years ago

Honestly, I think unionizing would be a fantastic solution in this space. It saves the government from stepping in and allows gig services to exist without feeling as if they are exploiting workers. If gig workers unionize too, they can stop the brutal competition that exists in this space where underpaying your supply can help you crush your competition.

s73ver7• 9 years ago

No. There's absolutely no need for it. Just because a handful of companies can't properly classify their employees doesn't mean they need to be catered to.

malandrew19• 9 years ago

I find it funny that the news media treats working for yourself as a new relatively phenomena fueled by a few companies when Daniel Pink (and others) were thoroughly documenting the shift from salaried to self-employed as far back as 2002.

http://www.goodreads.com/book/show/165415.Free_Agent_Nation

All the current crop of companies did is reduce the transaction costs low enough to democratize working for yourself just about anything can participate. Once anyone can participate, it's a natural outcome that earnings in these markets will deflate and stabilize around the price that the least skilled/educated are willing to work for.

The biggest irony is that without these companies, a lot of the people doing this kind of would probably be unemployed or underemployed. There was a LOT of latent demand that went unsatisfied.

Transportation network companies haven't just taken away some of the demand from existing options like taxies and livery companies, but have increased the size of the market by at least one other of magnitude in terms of rides and miles driven. AirBnB enabled people to capitalize on under-utilized real estate assets that they own or rent with a little administrative overhead as the only labor input.

The real failure isn't the gig economy, but government economic policy that drives some aspects of living costs higher while real income drops. The biggest culprit here are housing costs. Deflation in real income isn't a problem if there is a corresponding deflation in cost of living expenses as well.

cmahler72• 9 years ago

I agree, gig economy is just a symptom. College grads aren't working as baristas and Uber drivers by choice, it's because the economy is absolute garbage and has been for nearly a decade now.

smsm4210• 9 years ago

Or because they got a garbage degree because they bought into an idea that getting an overpriced useless degree is the only entry way to the job market.

clairity2• 9 years ago

"AirBnB enabled people to capitalize on under-utilized real estate assets that they own or rent with a little administrative overhead as the only labor input. The real failure isn't the gig economy, but government economic policy that drives some aspects of living costs higher while real income drops. The biggest culprit here are housing costs."

~~~~~~~~~~~~~

you praise airBnB for unlocking economic value yet demonize housing costs. the discordance here is that airBnB encourages rent-seeking behavior which will worsen housing costs, as that rental value gets priced into the cost of the home over time.

for economic stability's sake, we should favor labor over asset ownership in our economic policy.

sixQuarks• 9 years ago

The "Gig Economy" may have started off with good intentions, but it's obvious to me that its really just a "Transition Economy". Almost all of those jobs are on the front lines when it comes to automation.

malandrew19• 9 years ago

One interesting thought experiment is to imagine how "rough" that transition would be if we didn't have these gig economy companies bridging the gap between labor and automation in a variety of markets.

Instead of less desirable work options, they likely would have few if any work options.

balozi• 9 years ago

Maybe the idea of an everlasting supply of stable white-collar and well-paying blue-collar work was a mirage in the first place.

okreallywtf• 9 years ago

The alternative being what? I think this might be trues simply becase we work for the economy and not the other way around.

To me, we've been sold (though many of us don't believe) this notion that the economy is some kind of natural system that we simply have to accept. I'm not advocating communism necessarily but yes, the economy as designed and implemented may not create a stable middle class world for us to live in naturally, but does that have to mean there cannot be one? I think those who are accumulating the vast majority of the wealth would be happy to see it as natural selection but I think the system is much more artificial than that.

The economy has been tweaked and tuned to favor the wealthy even if it also naturally would do the same thing. Tweaking the system to maintain or increase the standard of living for the society is much easier than convincing said society that it should be done for some reason I have yet to figure out.

AJ0072• 9 years ago

Mass affluence seems to be a historical anomaly. Most would agree it has been very hard on the earth's ecosystem. Following that, it may not be sustainable no matter which economic policy choices are made.

Apocryphon4• 9 years ago

Maybe we need access to more resources. Colonize space?

paulpauper• 9 years ago

In reality, there is no utopia at companies like Uber, Lyft, Instacart and Handy, whose workers are often manipulated into working long hours for low wages while continually chasing the next ride or task. These companies have discovered they can harness advances in software and behavioral sciences to old-fashioned worker exploitation, according to a growing body of evidence, because employees lack the basic protections of American law.

The gig economy is feedback-based, meaning those who get a lot of good feedback can possibly generate a decent self-sustaining business from it, but the wages often still don't pay well relative to the amount of work involved, especially for Americans on Fiver who have to compete with workers from developing countries, and feedback means gig employees are 100% accountable for whether they succeeds or not.

This is good for the economy and the consumer because it means more efficiency, lower prices, and better service, but harder for the gig workers. For non-gig jobs, the entire company bears the costs of sub-100% productive employees, but gig workers bear full responsibility, thus any sloth directly impacts gig workers instead of being redistributed among an entire company (like Dilbert, where all the employees but Dilbert and Wally are kinda incompetent).

brettproctor5• 9 years ago

If only we could somehow prevent Uber from forcing people to drive for them, we could solve this problem once and for all...

I really just can't understand the mentality of "These people are too stupid to realize they're being taken advantage of, let's write opinion pieces to enlighten these poor simple minded masses to the errors of their ways."

It just feels so condescending and elitist to me to take this viewpoint.

If it really is a bum deal, people will figure it out and quit. Uber will either go out of business or work harder to retain drivers. Or if customers get too upset at always having a new driver they'll seek other options.

peacetreefrog6• 9 years ago

Agree, bottom line: if you think gig economy jobs are a rip off, don't get one. It's as simple as that.

maxxxxx• 9 years ago

It's not that easy if more and jobs are like that. It's pretty condescending to tell somebody who doesn't have much choice that he should do something else if he doesn't like it.

earthtolazlo• 9 years ago

Or not, because the economy for the lower and middle classes is garbage and most people doing these jobs are doing them out of necessity.

AJ0072• 9 years ago

It would seem that up until this point, Uber+Lyft has represented the transfer of billions of dollars from very wealthy individuals and organizations, to the lower working class.

There is another paradox here, that poor people use Uber+Lyft too. Most municipalities within the US do not have a functional, cheap public transportation systems.

killjoywashere• 9 years ago

Most municipalities within the US do not have a functional, cheap public transportation systems

Partially brought about by the oil companies buying up electric trolley systems and dismantling them. Partially brought on by the subsidized post-war housing boom, which fostered suburban expansion, making the last mile a difficult problem for public transit to conquer. And partially brought on by the rise of the automobile itself. The exuberance of the post-war US allowed a lot of people to be blinded to what was happening.

untog2• 9 years ago

I really just can't understand the mentality of "These people are too stupid to realize they're being taken advantage of, let's write opinion pieces to enlighten these poor simple minded masses to the errors of their ways."

The good news is that you don't have to understand that mentality, because no-one has it. At no point does the article suggest that Uber drivers are stupid. It suggests that they have fewer options than other Americans, and are driven into these jobs by a lack of alternative. The article even mentions an effort by these drivers to unionize - hardly the actions of a bunch of stupid idiots. They know what they are doing, but their unionization effort was blocked by a federal judge.

It just feels so condescending and elitist to me to take this viewpoint.

Frankly, to me, the condescending and elitist viewpoint is the one that assumes no-one really needs employee protections (while you enjoy them) and assumes that jobs are so plentiful that anyone doing a job they don't like is surely a fool who can't take control of their own life. Or that "the market" will fix all of this, when we now have decades of evidence showing "the market" failing to do so.

brettproctor5• 9 years ago

"Uber losses expected to hit $3 billion in 2016 despite revenue growth" https://techcrunch.com/2016/12/21/uber-losses-expected-to-hi...

So Uber lost ~$3 billion in 2016, yet in 2017 they're supposed to start paying drivers more or providing more benefits? You know what happens to businesses that are losing money when they're required to start spending more money? They lose even more money. And the rate of loss has only been increasing for them, not decreasing.

If you want to impose more cost on them, it might help some drivers in the short run but in the long run it will kill jobs and likely kill the company, assuming the company doesn't already implode on its own.

We all need to remember no one is forcing anyone to be an uber driver. If we impose restrictions on a company that is already hemorrhaging money, it is absolutely going to kill jobs. If these people had a better alternative to uber they'd be doing it already, so when the uber jobs are gone they'll be forced to take even worse jobs.

If these folks really are being underpaid, another company can come in, pay them better, have better drive retention and satisfaction, and beat uber at their own game. Assuming that isn't happening, then drivers are in fact being paid the correct price, and any action to alter that price will lead to job options being reduced.

I think that is the ultimate elitist mindset, that these jobs are simply too wretched for anyone to do voluntarily. And for those poor souls that are being "forced" to do them, we should protect them from their terrible decisions by imposing extra costs. This makes people feel good by claiming to look out for those less fortunate, while ignoring the economic reality that it will reduce options and opportunities.

malandrew19• 9 years ago

But how are the companies providing these job opportunities in any way shape for form to blame for these people having fewer options?

The real culprit here are conditions both systemic and on the individual level that led these individuals to have fewer options. Blaming the companies that are at least providing an option is misplaced and misguided.

surfaceTensi0n• 9 years ago

Sometimes you have to take a bum deal, even if you know you're being exploited. This article isn't about telling Uber drivers that they're being exploited (the article references a number of cases where the drivers have sued Uber over it).

Paul-ish4• 9 years ago

To establish a reference point, would you say this about labor laws in general? ie get rid of any labor laws and let the market sort itself out.

brettproctor5• 9 years ago

Yes. Labor laws in general reduce options for those who need them most. It prevents people from making decisions for themselves and is condescending in assuming individuals are incapable of deciding what is best for themselves.

I acknowledge most people will say this is callous and uncaring, and these people need our protections, but I think that argument ignores the economic reality that by imposing these laws they remove options for people.

It mostly boils down to the idea that we shouldn't ban voluntary actions in general. And doing so violates individuals basic rights to make decisions for themselves.

To be clear we should still have liability laws where an employer should be liable if their negligence causes injury etc.

arkis222• 9 years ago

The only thing Uber did is create taxi drivers without artificial medallion limits.

Why are there expectations for a taxi dispatching service to be the savior of the middle class?

The gig economy may make "false promises" about how happy their workers are to get more, but I would consider that marketing.

People need to check their assumptions and expectations.

s73ver7• 9 years ago

Uber also was a pioneer in this trend of making everyone "independent contractors" who are clearly employees.

malandrew19• 9 years ago

False. The taxi and livery industries pioneered that model. The TNCs just inherited it.

arkis222• 9 years ago

Independent contractors are not new. Their use has been rising for years before Uber

payne92• 9 years ago

This analysis, like many others, compares gig economy workers to their full-time equivalents and therefore misses a lot of the positive aspects.

The flexibility has huge value that is difficult to quantify, especially for folks that are augmenting an existing job, a school commitment, retirement, family obligations, or some other constrained situation.

Consider the same at work in two different arrangements: one with a very rigid schedule that pays X dollars per hour, and the other with a completely flexible schedule that pays Y dollars per hour. What's the ratio of X to Y?

peacetreefrog6• 9 years ago

Exactly. The National Bureau of Economic Research just did a paper on this:

http://www.nber.org/papers/w23296

and found twice the supplier surplus compared to more inflexible working arrangements. They estimate that if drivers had to work at the same rates, but for inflexible hours, they'd reduce their hours worked by 2/3s.

prostoalex4• 9 years ago

Agree, my most recent Lyft ride was a [by choice] stay-at-home father whose wife was working full time, which enabled him to moonlight in the busy 6-10 pm hour.

Anecdotal evidence, but still. Not many job opportunities are available at weird hours and the ones that are (e.g. bartending, retail) usually require more rigid and unpredictable schedule than driving for a ride-sharing network.

olivermarks• 9 years ago

A previous generation of the 'gig economy' hype was 'Free Agent Nation', a 2002 Daniel Pink book that extolled the virtues of being your own boss. The economy was cratering and in reality it became a game of musical chairs for what work was available.

https://www.amazon.com/Free-Agent-Nation-Working-Yourself/dp...

This all promotes a race to the bottom for least pay and lack of benefits IMO. Given that medical costs are a cynical for-profit business in the USA it's odd there is such enthusiasm in some quarters for these ideas.

I do know several people who fly around the word making money hand over fist speaking about the joys of this brave new era...presumably lots of people are showing up to hear the dream...

peacetreefrog6• 9 years ago

"Since workers for most gig economy companies are considered independent contractors, not employees, they do not qualify for basic protections like overtime pay and minimum wages."

"Most [drivers] said the money they earned from online platforms was essential or important to their families."

What do you think would happen to the average driver if the government or labor organizers came in and mandated that these workers receive overtime pay, minimum wage or other benefits? Would ride costs be the same? Would Uber be able to hire the same number of drivers? The space is competitive, it's not like Uber has a monopoly. They make 19 cents a ride on average and lost a bunch of money last year.

If anything, Uber should be celebrated for the fact it allows low skilled people without many other alternatives to be productive. Or would it be better if these people without many alternatives had... one less alternative?

1_2__3• 9 years ago

The counter argument would be that we learned many decades ago the societal consequences of employment that does not cover basic needs. We can't pretend a human can survive in many parts of America on that kind of wage without government assistance. So we either pay it for the Uber rides, or we pay it in social welfare, or we pay it in the consequences of insufficient social welfare. You're just complaining that it's Uber riders who would have to pay for the externalities caused by Uber's business practices.

malandrew19• 9 years ago

So the alternative is having no employment options, which naturally cover none of a person's basic needs.

Performing a job that meets some basic needs is strictly better than no basic needs being met because there is no job. We have welfare and other options to aid with unmet needs. Without these options, individuals who need welfare end up being a 100% burden on the system instead of a partial burden. Furthermore, those that remain unemployed for an extended period of time are increasingly likely to remain unemployed indefinitely. Having a job, even if it doesn't meet all needs, can at least serve as a more likely stepping stone to one that does.

With that said, these jobs are meeting basic needs.

They may not provide enough income to support a family, but they certainly do provide enough income to support an individual. And before anyone claims otherwise, realize that the economy has always had jobs that have only ever provided enough income to support individuals, not families. Such low-paying entry-level jobs are not a new phenomenon. We've always had them. We just have a lot more of them now. The problem isn't the existence of these jobs and the companies that offer them, it's the lack of other jobs that pay better.

There are hundreds of thousands of people doing this kind of work, and many have been doing this kind of work for several years. That's a clear sign that these jobs are meeting needs. There is a big difference between "Are you happy working for company X?" and "Would you be better off if company X did not exist?". Even people with jobs considered good jobs by most may be unhappy working that job. Even if they don't like the job, it doesn't mean that the arrangement isn't mutually beneficial.

These companies are not at fault for the current job market. Most people here are simply using them as a convenient scapegoat for other other problems.

s73ver7• 9 years ago

I fail to see why Uber's poor business model should be praised. If they can't take care of their employees, that's their problem, no one else's.

peacetreefrog6• 9 years ago

Whether the employees are "taken care of" or not is subjective. What does that mean? The drivers are free to do something else, presumably where they feel more taken care of. The fact they aren't means Uber is their best option. Take it away (either by banning it, e.g. Italy/Austin or by passing regulations that make it too expensive to operate as is) and Uber drivers will have to go to their next best option, which must be worse otherwise they'd already be doing it.

And again, Uber has come up with a business model that allows people without many good alternatives (whether that's because they need flexibility, don't have as many skills, don't have connections etc) to be productive and make money. And that's a good thing.

LordHumungous• 9 years ago

Techno-utopianism has always been a smoke screen for good old fashioned unfettered capitalism. It's the same system that's been trying its best to screw over workers since the dawn of industrialization. The more things change, the more they stay the same.

dlwdlw• 9 years ago

In a way, cushiness was forcefully taken away via democritization. Just as a rich father may gives his son a sinecure, a rich country gives its citizens sinecures out of excess wealth.

Competition amongst people though rapidly reduces the sinecure to no longer be sinecures. Taxi cabs may have had a monopoly, and people were willig to work for less to driver ubers (eg poor college students) but they did not have a sinecure. Many were struggling to make ends meet.

And they had been struggling for years. And so did not have the energy to pursue, say, learning Haskell.

Just as there are laws to prevent olympic atheletes from taking a super drug, breaking all records, and then dropping dead, what governs society should have rules to prevent people working themselves to death.

Unions were once the answer, but their major drawback is reducing competitiveness. In attempting to keep sinecures sinecures, you become less competitive. Meanwhile, the peasant rice farmer is saving every penny to buy his kids a better education and even beating them when they get too low of a math score.

An american who is used to runnning water, electricity, and all night raves who is struggling to pass his college algebra class has nothing on the poor farmers son who grew up in a mud hut and was forced into learning calculus in high school at belts end.

Who deserves the cushy job? The college student example may outwardly express a desire to have a fairer world, but also may resent the poorer peasant racing them to the bottom and the more educated peasants rapidly surpassing them in salary, (eg they get a tech job).

The Gig Economy’s False Promise

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