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How Estimates of the Gig Economy Went Wrong
- deleted 8y ago[deleted]
- momentmaker 8y agohttp://facebook.com/l.php?u=https://www.wsj.com/articles/how-estimates-of-the-gig-economy-went-wrong-11546857000 http://facebook.com/l.php?u=https://www.wsj.com/articles/how...
- _Microft 8y agoDoes Facebook as referrer get around other paywalls as well? It would lend itself as 'quick search' (i.e. by using a keyword from the adress bar) in that case.
- tomrod 8y agoAre outline urls still welcome? https://outline.com/rmXDJa https://outline.com/rmXDJa
- gumby 8y agoNot in submissions but welcome (and helpful!) in comments, it seems. I assume this is because otherwise every link would seem to be hosted (in the parenthetical trailer) by outline.com or other depaywaller instead of wsj.com, ft.com, et al.
- lixtra 8y agoBetween favorite and discuss there should just be a "cached" link going to a paywall-free and reliable copy.
- el_cujo 8y agoThanks for this, if anything it's these paywall'd links that shouldn't be welcome.
- austincheney 8y agoFail. A more simple way of looking at this is sustainability of the end product. Can an Uber driver earn a practical income and benefits equivalent to the taxi driver they are replacing? Is that Uber driving willing to work in that field/position as long as the taxi driver they are replacing? Sometimes you don't need to be a math genius to see that major economic shifts incur cost restructuring that caps growth/penetration.
- disishhsha 8y agoSeems to me Uber has led to a huge increase in the number of hired rides. So in most cases, the Uber driver isn’t replacing anything, except perhaps the passenger driving themselves for free.
- gamblor956 8y agoParking and gas. Uber has basically replaced parking and gas costs.
- PakG1 8y agoIf you want to look at it that way, I think it's unfair to not consider the startup costs of operating a taxi. A medallion in New York is no longer over a million dollars, but it's still pretty expensive. https://nypost.com/2018/06/09/139-taxi-medallions-will-be-offered-at-bankruptcy-auction/ https://nypost.com/2018/06/09/139-taxi-medallions-will-be-of... Becoming an Uber driver has comparatively much lower startup costs (buy a car). In the short-term, Uber drivers will have a much better cash flow, and potentially in the long-term too. Taxi drivers would see their cash flow significantly drop, but that's due to competition. Uber artificially has lower prices in most locations except when surge pricing kicks in. If their prices were not artificially low, I think you'd actually see a bit of parity. Yes, taxis would see lower cash flow, but it would not be a race to the bottom like it can be if Uber is artificially pricing lower. Paywall, so I can't read the whole article and see if they address this.
- austincheney 8y ago
- genidoi 8y agoThe estimates here were wrong because there was nothing to estimate at all - gig economy is a marketing buzzword for an unusually isolated yet reasonably substantial unemployment bracket. The upper bound of the bracket being the sub-minimum wage compensation that Uber pays their drivers[0] and the lower bound being the amortized cost of the cheapest vehicle that Uber lets drivers utilise for their 'gig'. That's a really small demographic who would fit both criteria. Recently unemployed people and students come to mind. Importantly - Uber knows this fact very well and are doing everything they can to survive until fully autonomous self driving cars reach mass production. [0] https://www.chicagotribune.com/business/ct-biz-uber-driver-wages-20180518-story.html https://www.chicagotribune.com/business/ct-biz-uber-driver-w...
- toufiqbarhamov 8y agoUber betting everything on self driving cars may be their only hope, but it should be clear by now that their runway is shorter than the time required to bring lvl5 to market. We’re not even into the real edge cases yet, and automation is still really hard to get right. Maybe the tools being applied are simply not up to the task, or if they are, decades away from the maturity required. All of which is to say that Uber is in trouble, and having been such a notoriously bad actor, will be kicked down the hill at every step.
- sschueller 8y agoThey already killed one person. How many before execs at Uber are held accountable for all their crimes?
- geezerjay 8y agoThis comment is sheer idiocy. Do you also expect taxi execs to be guilty of any crime if someone dies in a traffic accident involving one of their taxis?
- kakarot 8y agoThe entire point of a corporation is arbitrating responsibility away from a company if one employee isn't doing the job they were paid for.
- tomrod 8y agoRelated: https://www.businessinsider.com/jp-morgan-chase-institute-study-uber-gig-economy-poverty-wages-2018-9 https://www.businessinsider.com/jp-morgan-chase-institute-st...
- aitrean 8y agoGlad that moronic speculation is over with. On to the next one!
- kopos 8y agoWeWork ;)
- mrdoops 8y agoThe Gig Economy hasn't even started yet. We've yet to solve Identity (Who is this?) and Merit (Is this person qualified/competent?). Hell, we've only barely started decentralized finance let alone scalable-decentralized-organizations. Uber/Lyft/Taskrabbit/Fiverr are low-hanging fruit compared to the complex workflows most services entail. I expect we're going to see more niche gig-economy businesses being built around more complex workflows with higher skilled labor. Lots of B2B and B2C potential when you break up services into smaller tasks that can be fulfilled. Success is providing the benefits of scale without the challenge of doing it yourself.
- petra 8y agoHooray! Now we'll have to have a 5-star rating to get a temp job, one that probably won't pay well. Ah an it will be all be tied to your identity. Forever. That's awesome ! And who will rate us ? Our temporary boss. Hooray for the power dynamics ! Great!
- dazc 8y agoDon't forget to give your boss a 5-star rating at the end of your gig, nobody is going to employ you otherwise.
- thatoneuser 8y agoGod black mirror is too real...
- groestl 8y agoThere go your Hackernews Meowmeowbeenz. Meta enough to be totally worth it, though.
- mrdoops 8y agoThat's the issue. How do you solve merit without an Orwellian system monitoring everything everyone does? Without some kind of capability for privacy-respecting decentralized systems - solving for Merit is a function of dystopia.
- RestlessMind 8y agoGig economy can be a victim of its own success if it starts accounting for a significant portion of the labor force. Because of the inevitable political backlash about its business model. Once you see too many successful companies with workers scraping by, you will also see political demands to treat these as full time workers instead of mere contractors. At that point, gig economy's business model would stop working and these companies will have to live with far lower margins of the traditional industries they are disrupting.
- r00fus 8y agoUnless the end goal is to become irreplaceable (TBTF) and therefore insulated from political pressure. You can see they knew this by the lobbying effort that Uber did to even get where they did so they could ignore laws without immediate consequence.
- mschuster91 8y ago> You can see they knew this by the lobbying effort that Uber did to even get where they did so they could ignore laws without immediate consequence. In the US that worked (simply because US politicians can be bought off via Super PACs etc, which is absurd in itself), but in other markets (esp. Europe) they got quite a beating from regulatory agencies.
- gaius 8y agothey got quite a beating from regulatory agencies Not really, the British regulators and courts keep finding against them but there’s zero enforcement, Uber continue operating as normal. The Mayor Of London is weak.
- mschuster91 8y agoUber Pop (=private drivers) got banned in Germany, France, Italy, Spain and Belgium [1], Uber Black (=cars for hire, with pro driver) got banned in Germany [2]. Given that Germany, France, Italy and Spain are the Top 5 EU economies by BIP (with the half-exception of UK where Uber simply ignores court rules), I'd say "took a beating" is the most civil way to write what really happens. [1] https://www.handelsblatt.com/unternehmen/handel-konsumgueter/eugh-urteil-uber-verliert-prozess-frankreich-darf-fahrdienstvermittler-verbieten/21157952.html?ticket=ST-574798-CePbhxFdqIrGwojlzDsh-ap5 https://www.handelsblatt.com/unternehmen/handel-konsumgueter... [2] https://www.rbb24.de/wirtschaft/beitrag/2018/12/bundesgerichtshof-berlin-urteil-uber-black-limousinen-service1.html https://www.rbb24.de/wirtschaft/beitrag/2018/12/bundesgerich...
- thatoneuser 8y agoMaybe predictions were off for reasons the article says, but the article woefully misses the biggest factor in why the “gig economy” (cringe) won’t be as big as we originally thought - you can only pay sub minimum wage for so long before people say fuck it and walk away flipping you off. These companies provided very little as far as tech revolution. They mostly rely on cutting wages and offputting risk/liability/taxes/benefits onto the workers. That’s a business model that’s doomed to fail. The word we’re looking for is “greed”.
- frankydp 8y agoThe entire model is labor arbitrage, with any employer obligation/cost removed. When nonprofits pop up to help gig workers determine if they are actually making any income, the business plans seems pretty obvious.
- jfoutz 8y agoIt seems like you're leaving out a bit about information asymmetry. maybe multi billon dollar companies don't have any extra facts that aren't available to somebody in the 'gig economy' but this [1] keeps ringing a bell. [1] https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons
- thatoneuser 8y agoOh totally. Hell, lyft and Uber straight up withhold information for the explicit purpose of coaxing workers to do work they wouldn’t otherwise do.
- ithinkinstereo 8y agoA hallmark of a scam is unnecessary obfuscation and complexity in the business model (i.e., how you get paid).
- Pristina 8y agonot the company's problem, the gig workers cannot into maths.
- abakker 8y agoI always loved the corporate euphemism “contingent labor” more than gig economy. It contains all the cynicism you need, right in the semantics.
- rozenmd 8y agoThe two terms reflect different segments of the market though. You'd be hard pressed to find a freelance Management Consultant willing to self-identity as a gig economy worker.
- abakker 8y agoThat's true, but if you were at conferences for SuccessFactors or Workday about 4 years ago, you'd have heard lots of presentations about the rise of contingent workforce and the gig economy. In fairness to management consultants, most of them are not "contingent labor". Most of them are employed by companies. I think the major distinction is that "gig economy" tends to reflect contracting individuals only, while contingent labor includes both gig workers and those who are contracting through some kind of corporate entity like an LLC.
- adinobro 8y agoEveryone focuses on driving which in the long run is probably going to go away as self-driving cars come onto the scene. The best example I've seen of the gig economy is jobs that were already contract based but where it was hard to find and connect contractors with customers. Walking dogs, small home renovation, etc. I've seen these apps make a massive positive change in the market where people are able to find more work than they code before (at roughly the same rate) and customers can find contractors willing to do the work and they are rated by past customers rather than just word of mouth.
- thatoneuser 8y agoYeah, the problem with the driving apps is the damn greed. They could have made an improved taxi service where people still payed a fair amount and in exchange you get a pleasant, on demand taxi (without the credit card machine being “broken”). But they didn’t just want to compete with taxi. They wanted more. They wanted everyone to use their service. How do you do that? Offer it cheaper and pass the responsibility to the driver. If Uber and Lyft has stayed humble they could have had profit, happy workers and happy riders. Instead they wanted billions.
- JumpCrisscross 8y ago> They could have made an improved taxi service where people still payed a fair amount and in exchange you get a pleasant, on demand taxi This was what Uber was. Then Lyft launched its product and, to Uber’s shock, didn’t get any regulatory pushback. (Most people in most American cities had horrible cab experiences. Also, the tech backlash hadn’t yet begun.) Uber probably improved the pay laws for New York’s taxi drivers by bringing light to their plight. It also improved quality across the board. This isn’t a simple “they got greedy” story.
- m-ee 8y agoUber originally was a black car service. Sidecar was the first company I was aware of to use the model that Lyft and UberX currently follow.
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- goelakash 8y ago"About a third of what passengers pay goes to Uber for commissions and booking fees." Holy shit. That's way too much commission for a company that uses software and not actual labor to connect drivers to riders.
- deleted 8y ago[deleted]
- selestify 8y agoAnd yet they're still losing money fast.
- TeMPOraL 8y agoRapid expansion and getting away with illegal behaviour by staying inside legal system's OODA loop cost money.
- mschuster91 8y agoHmm. Not an Uber user myself as we have cheap and reliable taxis in Germany, but how is payment handled? Does Apple take their usual 30/15% cut as with Netflix, Spotify and friends?
- kranner 8y agoThe 30% cut is only for digital products sold via native apps. That's why the Amazon iOS app lets you buy physical products but e.g. Kindle ebook purchases are not supported in the app.
- TulliusCicero 8y agoI'm an American in Munich, and while taxis here are indeed reliable, I wouldn't call them cheap. Ballpark, I'd say they're about twice as expensive as the Uber/Lyft trips I've taken back in the States.
- mschuster91 8y ago
- k5hp 8y agohttps://outline.com/7RG8ps https://outline.com/7RG8ps
- dbuder 8y agoLyft and Uber will IPO this year and not a single driver will receive any shares. Uber in particular is in violation of a whole host of laws in every country it operate. My only hope is that there is some movement towards class action lawsuits once Uber is a public company and is subject to public reporting.
- skynode 8y agoIt appears the gig economy will be remembered as the last stand of humans before the machines took over.
- neolefty 8y ago[1] https://en.wikipedia.org/wiki/Industrial_Revolution https://en.wikipedia.org/wiki/Industrial_Revolution
- deleted 8y ago[deleted]
- Dowwie 8y agoThe study used for this article can be found here: https://scholar.harvard.edu/lkatz/publications/understanding-trends-alternative-work-arrangements-united-states https://scholar.harvard.edu/lkatz/publications/understanding... "Gig Economy" is a new label on an old practice. Take, for instance, nurse staffing in the United States. In unregulated, non-unionized states, nurses are staffed as-needed. Hospital administrators partner with nursing agencies, who manage relationships with nurses and contract short-term work. This market of nurses enables work-life flexibility and pays fairly well. Yet, the costs and risks continue to rise for nurses. If hospital census (# of patients) is low, shifts are cancelled up to minutes before work is scheduled to begin. Further, hospital administrators have dramatically increased the burden on nurses, increasing nurse-to-patient coverage and demanded more and more of them without assistance. Staffed nurses play the role of scapegoats, too, blaming them for mistakes and shifting risk from the hospital. There are more problems and risks for staffed nurses than ever. Yet, despite its Gig-like behavior, nurse staffing seems to elude journalists and academics. This is only one example. There are others. Again, the gig economy isn't a new phenomenon. It's just spreading to other sectors now because of technology innovation. We must learn what works well and what doesn't, for all involved parties. Academics and journalists are thus far failing to learn what works by ignoring legacy business activities.
- brianmcc 8y agoInsecurity wrapped and sold as "flexibility".