06.24.14
Uber Screwus Alles
Ah, good old PARIAH magazine, a perfect series of send-ups for our time. Coulda been great but nobody would share it. Not enough clickability in the Culture of Lickspittle.
Anyway, economist Dean Baker has been thrashing Uber recently, two pieces — one at the Guardian and one at TruthOut — strongly criticizing the disruptive and innovative ride-sharing/amateur taxi cab operation in the last ten days or so.
What’s packaged as disruptive innovation isn’t really that. Uber is just the use of iOS application, the convenience of smartphone and free-lance drivers to evade regulations or costs that others who do the same thing have had to pay.
If we go the route of ending the requirement that taxies need medallions, there is also the question of what we do about the sunk costs for people like my cab driver, who is currently out $250,000 from buying a medallion. On the current path, these medallion owners will just be out of luck. Their life savings will be made worthless by young kids who are better at evading regulations than immigrant cab drivers; so much for the American Dream.
It is worth considering this issue in light of the larger issue of the growing inequality we have seen over the last three decades. Uber, like Amazon, has allowed a small number of people to become extremely rich by evading regulations and/or taxes that apply to their middle class competitors …
This is a pretty simple story. In a country where rules are enforced or not enforced to benefit the rich and screw the middle class, you will have increasing inequality and a middle class that is seeing few of the benefits of economic growth.
The unfairness is stark. They key word is evasion,, tech-enabled.
You have the traditional cab driver who has had to take out a quarter-million dollar loan, an expensive mortgage — if you will, to be able to operate a yellow cab in the center of our big cities. This, in addition to the payment of additional regulatory costs put in place by civil society.
It’s a considerable investment in money and middle class livelihoods. And if regulating agencies make a choice which enables technology to throw that away for a poorer service that merely brings the convenience of a smartphone, it is economically maiming the lives of people in the traditional infrastructural regulated service.
Which is what makes Uber odious.
It’s smartphone-driven swarm of amateurs delivering rides in in a generally poorer fashion. (If you click the Uber reviews on Yelp for Los Angeles, you will also see the company isn’t above putting in astro-turf.)
Uber’s innovation, if you want to call it that is little more than a semantic trick. The company passes off the fancy that it’s not a transportation business like cab companies. It doesn’t own cars and is just an app that puts drivers together with rides.
A government, or regulating agency, can choose to ignore such tricks.
Baker adds that if people had all this explained to them, then maybe we’d see more real drive for “rules that treat people equally.”
Instead, he notes, as this blog has sometime in the past, we have a propaganda fog generated by economist cheerleaders and tech columnists for such things, one delivering the message that any badness is just a trivial consequence on the road to the future. Then, he continues, “millions of professional types” get to bemoan inequality without ever explaining or doing something about the big rig job driving it.
The New Yorker blog has just published a bit on Uber. An excerpt:
Startups like Uber argue that technology can transform the casual driver into a professional. With G.P.S., anyone can navigate efficiently. Real-time passenger feedback means that drivers who consistently receive low ratings can be dropped from the service. “Tech tools have changed the whole environment,??? Josh Mohrer, the general manager of Uber’s New York office, told me. The upstarts can provide a range of ride options at different price points, improve driver efficiency by matching drivers with rides more quickly, and weed out bad drivers.
This graph, based on the say-so of an Uber worker, is easily exposed as bullshit. That is, if you read these Yelp reviews on the service in the Long Island/NYC area, linked above.
The rest of the New Yorker piece, brief, is worth a quick scan.
Summarizing, like all the innovation in the sharing economy, the basic application is the use of technology to flood a service with under-priced amateurs and part-timers trying to earn some extra money in a crippled economy.
In other words, it’s the mobilization of an underpaid workforce of temps and free-lancers in an austere economy in the liquidation of service employees in the middle class who earn more, with the pie then appropriated by the owners of the app.