The Sharing Economy – Including the @$$holes
A friend of mine who has made it into his sixth decade without ever sullying himself with gainful employment is now doing deliveries, shared-economy style. (Packages, not people via Uber or Lyft.) I thought he was going to rail against the system when he described what is new in his life, but his attitude surprised me. Transcribed, to the best my of my recollection, his comments were:
So I went down for orientation. There were a bunch of people just like me. Basically, @$$holes who don’t deal well with people. @$$holes who don’t want a job, and couldn’t keep a job if they could get one. What I love about the shared economy is that it allows @$$holes like me to participate. I work when I want, and I’m getting somewhat regular income for the first time in my life.
Obviously, not everyone in the sharing economy is an @$$hole. I’ve met some nice people while taking Lyft, for instance, or staying somewhere through airBNB. And my wife is a superhost on airBNB. I’d be afraid to call her an @$$hole. On the other hand, the only person with whom I have an acquaintance who regularly drives for Uber and/or Lyft has a personality that is best described with words like “volatile” and “belligerent.” In any case, I don’t think he is capable of holding down an actual job but he doesn’t seem to have a problem driving strangers around on short trips.
So maybe one unexpected benefit of the sharing economy is that it has made some otherwise unemployable people into productive citizens.
Update: 10/22/2017, 4:57 AM – corrected first sentence by changing word “fifth” to “sixth.”
Uber pays something like 60/40 (40 for the driver) — traditional in the cab business until leases mostly took over — started out at 60/40 in a car service in the Bronx in 1976.
But Uber subsidizes the price of the ride by as much as 40 percent — meaning the driver gets $24 where traditionally he got $40 — meaning legit taxi owners are being forced out of business by a Standard Oil type monopoly — that’s Uber’s plan anyway; most don’t think Uber can pull it off while driving everyone else (drivers and taxi owners) to ruin.
But, if yuppies like the service, working people and small owners can go to hell — laws and regulations can go to hell. Only cure — my one note tune: rebuild labor union density so the country can be run again for the people.
The search for cheaper and more convenient service has gone on since barter began. In our society, people buy Amazon because its cheaper and more convenient than department stores. Before that, people bought at Sears because the Sears catalog was more convenient than the local stores. Etc., etc. And its true across all industries. Its where the Model T came from, and the Honda Civic.
Part of the reason we aren’t living the lifestyle of 14th century peasants is because people are always looking to make a buck by coming up with an alternative that is cheaper, faster, or more convenient. Not all advances are positive, however, and even the ones that we view as positive today generated winners and losers. Often those who lose are ordinary people trying to make a living. I’m not sure what the solution is, but all of us today are better off that Henry Ford put a heck of a lot of buggy whip makers out of business.
Once we have autonomous vehicles, both traditional and Uber-style drivers will be out of a job. It’s called “progress”.
Henry Ford also decided to pay his workers better so that they could afford his cars.
I have a small mental list of BS that has to be discussed with my son as he gets older. Thank you for reminding me of the Henry Ford paycheck thing. I will add it to the list.
The story has some obvious BS elements. Here’s the History channel version:
There’s the truth, there’s the whole truth, and there’s the “nothing but the truth” bit. A bit of reasoning tells you that paying employees more to buy his cars isn’t a viable financial strategy (If you pay your employees collectively $x million more in wages, they will not spend $x million more in vehicles), though it can make good business sense (reducing voluntary turnover which, it seems, was sky high despite widespread unemployment) and no doubt it did. But having reached that conclusion, you start wondering what else is wrong.
Here are weekly wages for a couple of other unionized jobs in NYC in the same year. I imagine that Detroit would be comparable – Detroit then was not Detroit now.
What that shows is that assembly line work was clearly considered unskilled work. For example, in eight hours a bricklayer made $6., which is a buck more than the new, improved, more than doubled wage Ford paid. And the bricklayer worked more hours per day- but then being a bricklayer is not mind numbing work, and Mr. Ford’s assembly line no doubt was. But then a bricklayer was a skilled occupation. It is unlikely that very many people on the Ford assembly line were viewed as qualified to be a bricklayer. If they were, they would be bricklayers.
Today, Uber and Lyft and whomever it is my friend is delivering for are doing some of the same thing. They aren’t hiring people whose alternative employment is as a skilled tradesperson. If my friend is to be believed, these services are hiring a lot of people whose alternative until now was something other than earning money. Perhaps due to personality, skills, inability to pass a drug test, need for a flexible schedule, etc. To go a step farther… many of them are people who would not have qualified for a job on Henry Ford’s assembly line.
Uber, Lyft, AirBnB, and the rest are also generating the same spin as Henry Ford. They talk up the benefits of how they are freeing up people to work at their pace, etc. And it is true. My antisocial friend is clearly benefiting. But he benefits at the expense of the people who would otherwise work for FedEx.
Is that good or is that bad? It depends who you want to benefit. What the sharing economy companies have done is simply change the rules of who does benefit.
Enhanced wages can help qualify them for loans which allow them to buy vehicles that they otherwise would not have bought at all. So there’s that. Interestingly that would allow them to spend more than the xmillion dollars in increased wages on cars. Just speculating, of course. Ford did say that was his reason but why should we believe him? Generally wage increases for the poor circulate immediately and improve the overall economy rather than discriminating in some sense against skilled wage earners.
Actually Ford raised pay to keep his workers…and save himself expenses.
Strikes me that both objectives are consistent with the raise.