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The Silicon Valley Economy Is Here. and It’s a Nightmare

87 points by smacktoward 7y ago

rb808 7y ago
I think low interest rates are a huge part of this. Rates dropped again recently and prices are taking off all around the world. Its nuts.
- nine_zeros 7y ago
  This is how all inflation and I daresay, hyperinflation, has begun in history
- born_a_skeptic 7y ago
  It's supply and demand.
frankbreetz 7y ago
I am surprised that getting rid of tipping is not a bigger political platform. It would benefit both the consumer, by being more upfront about pricing, and the workers, by being able to have a more predictable income. The only one it wouldn't benefit is the companies who use tipping to display dishonest pricing.
- davemp 7y ago
  > It would benefit ... the workers, by being able to have a more predictable income ... The problem is employers would not match what servers and other tip earning jobs currently make. When I was in high-school I made significantly more than would have been possible at any other part time job with tips.
  - lotsofpulp 7y ago
    Price obfuscation benefits the seller, but in this case, only some sellers. The restaurant benefits from not having to pay market wages. The waiters who are able to suss out higher than average tips benefit from customers overpaying and not reporting income for taxes. The waiters who aren't able to command at least an average level of tips lose out along with customers who overpay. As a buyer, I assume the cost of whatever is on the menu is 15% plus tax more than the price on the menu when deciding whether or not it's worth purchasing something, but it would be nice to not have to do that calculation.
    - leetcrew 7y ago
      servers are guaranteed to at least average the state minimum wage over a pay period. when I worked in a restaurant, my alternatives offered minimum wage plus maybe a dollar or two per hour, while everyone at the restaurant averaged more like $12-14. btw, this was definitely not a fancy restaurant. it's hard for me to believe the average/median server would be better off without tipping. ps, 15% is a pretty bad tip. unless someone was wrong with the service, 18-20% is really the minimum.
      - lotsofpulp 7y ago
        When I grew up, 15% was the standard tip for average service. Since it's already a percentage, it's already cost of living adjusted. This 18% to 20% nonsense only started after the iPads from Clover or whatever came out, who obviously have an incentive to increase tipping percentages as they make more since they take a percentage of every transaction too. I also love how some restaurants nowadays conveniently calculate tip on the post tax total of your meal for your "convenience".
        ghaff 7y ago
        The norm certainly seems to have drifted upwards over time. Way back when I agree it was something like 15% before tax. These days it seems to be more like 18-20% on the total.
        deleted 7y ago
        [deleted]
        leetcrew 7y ago
        you may be right that it's due to clover/square/whatever, but the staff definitely expects 18-20%. they will remember you if you always tip 15%. the post-tax thing is bullshit, I agree on that. tips should always be calculated from the pre-tax total.
      - JohnFen 7y ago
        In many states, the minimum wage for many traditionally tipped positions (particularly in food service) is substantially lower than the minimum wage for everyone else. > unless someone was wrong with the service, 18-20% is really the minimum. This. My default tip is 20%. If the staff did more than an average job, I'll go to 25% or more.
- ghaff 7y ago
  It's complicated. There's a good Freakonomics podcast on it [1]. (Including some really interesting info on tipping at Uber.) For restaurants specifically, it's really hard to eliminate tipping for the wait staff. [1] http://freakonomics.com/podcast/tipping/ http://freakonomics.com/podcast/tipping/
  - lotsofpulp 7y ago
    I don't think it's complicated. Waiters are betting that people will overpay, and of course, income tax is avoided if you don't declare cash tips in your income. And who doesn't like thinking they are an above average waiter getting above average tips compared to a flat wage? And of course, restaurants don't mind as any portion of wages paid directly by the customer benefit them.
    - ghaff 7y ago
      It's complicated insofar as, if you own a restaurant and don't allow tipping, it's probably going to be harder for you to hire and retain waitstaff than it will be for your competitor down the road. (Not to mention that a lot of potential customers will look at your prices and think they're relatively high even if they should do the appropriate mental calculation.) I'm not a particular fan of tipping but it's difficult for an individual business to eliminate the practice.
      - lotsofpulp 7y ago
        Yes, it would have to be a societal effort (or government banning it, but I don't think that's the right move). Actually, I'm thinking everyone paying for meals electronically and tipping electronically would go a long way as that would remove the extra incentive from evading income taxes. Once that is gone, then the below average waiters may be incentivized to demand a steady wage rather than be subject to volatile tips. Of course, in the US, even in places where all people have the same minimum wage, people still tip lest you be seen as a cheapskate.
        7y ago
- leetcrew 7y ago
  there's not really consensus on tipping. when I worked in restaurants, we certainly didn't enjoy the variable cashflow, but my peers and I generally agreed that made more money on average than we would at nontipped jobs of a similar level. from the perspective of the customer, some people hate having to figure out what an appropriate tip is, while others like being able to essentially bid for service. I know people like to post studies that show it doesn't actually work this way, but I damn sure remembered people who consistently tipped well and I always made them a priority.
  - ghaff 7y ago
    Yes. Even if one leaves aside the difficulty of an individual business eliminating tipping... It's a near-certainty that if, say, a city banned tipping in restaurants somehow, the jobs that rely on tipping to supplement wages would pretty much all get a pay cut even if the base salary were raised somewhat.
  - xzel 7y ago
    In some European countries people still tip for good service so that could still be factor (the dynamic between increase waiter attentiveness to high tipper). Hopefully, jobs "of that similar level" could pay a better wage in general.
    - mercer 7y ago
      I always tip, and usually rounded up from at least 10%. Often even 20% if it's a small amount. Mostly because I've worked service industry jobs and the experience was awful compared to my current work. That said, there's no pressure whatsoever on tipping, and while it's common enough that the service workers aren't 'surprised', I regularly have friends making a comment about how they never tip. I do vaguely remember quite a few places having tip jars though, but my memory is fuzzy on that.
  - nabnob 7y ago
    If you don't mind me asking, how much do you think you made hourly with tips on average?
- JohnFen 7y ago
  I will only stop tipping people working jobs that traditionally get tips when their employers pay them rates that will compensate for the missing tips. I also tend to tip in cash, specifically so that the company isn't involved. A tip is between me and the people who served me.
  - frankbreetz 7y ago
    That is why it would have to be a political platform, simply not tipping people who rely on tips to make living is not making a point and is immoral. Lots of countries don't have tipping like the US, so there are plenty of models out there.
unknown_apostle 7y ago
Socialism every time the financial system needs to be bailed out with massive liquidity injections. But ultra aggressive capitalism for lower and middle class people.
- 34679 7y ago
  Socialized losses and privatized gains. It's become The American Way.
virtuous_signal 7y ago
I've had nagging doubts about this narrative ever since the first exposés about Uber were coming out. 1) What job would the subject have been working say, 4 years ago, before instacart expanded to the entire US? Would that job have been better? 2) Did Instacart destroy that other potential job, leaving Instacart as the only option? I guess these are variations on the theme of "No one forced you to take this job". I'm all for these news articles being written, and for workers banding together to demand better treatment. But at some point we have to realize that if the company is not destroying other industries and creating monopolies, then one can just choose to work somewhere else. Even better, one could try to gain the skills necessary for obtaining less contingent work.
- toss1 7y ago
  Two Issues First, the problem is described in the article but not specifically called out It is Bait-and-Switch. The initial wages are rather generous, enough to get workers to move to their platform from other potential employers. The initial rate of $22 to deliver a basket of groceries looks pretty doable, and if you can do a couple per hour, likely reasonably profitable. Now it's down to $3. Not even close to any minimum or sustainable wage. They committed to one sort of condition, and then are screwed, sunk costs, missed opportunities, etc. This has happened even worse under Uber, where drivers took out car loans assuming one pay structure, then Uber changes the deal... Second, the trope that if someone accepts a low payment, it must be OK. At a theoretical level, that might be true, but the theory makes the bad assumption that all actors in the economy have equal power in the transaction. This assumption is massively false. The vast difference in power between these workers vs the SV corps is exactly what allows the exploitation. The choice to be exploited is only marginally less horrible than the other choices. For a clearer and more extreme example, you are lost in a desert dying of dehydration, I drive by with a 5gal jug of water and a map to guide you to safety. I say: "hand over the title to your house and I'll give you both" - will you do it? Of course you will, losing your house is less bad than losing your life. Does that mean that it is a free and fair transaction? Not even close. What forces them to take the job is the paucity of other options. There's plenty of research on how poverty is extremely expensive, and these companies are exploiting that.
spamizbad 7y ago
I'm normally critical of SV culture where it's merited but this article is just blaming SV for stuff it doesn't like 1) Silicon Valley isn't to blame for the fact that in the 90s landowners tightly constrained the construction of new housing in an effort to maintain the housing stock as an investment vehicle for existing homeowners. And while supply/demand doesn't perfectly explain the housing market, the fact is the United States no longer has the political will to build housing units where demand is, because of entrenched landowner interests. You can't build "dense" housing because it will "ruin" the character of a neighborhood. You can't build subsidized affordable housing because it will "attract crime". So you get nothing... well, that's not true: You're priced out, but maybe you can buy a 2800sqft home in an exurb that's a 90 minute drive from your job. Too big, too expensive, or too far for you? Too bad! 2) Scooters are good, actually: When we had them in Chicago were shown to connect people between public transit access points. Unlike Uber/Lyft, which cut into public transit utilization, e-scooters seem to actually encourage public transit use. 3) The gig economy is a symptom, not the cause, of a larger economic shift away from general prosperity. The social contract used to at least hint at the idea that if you worked hard and did an honest days labor you would at least be entitled to a roof over your head, food in your belly, and the ability to support a family. There was a marked shift away from this in the 1970s, in the name of "meritocracy" to allow higher earnings for those who "deserve" it in exchange for lower wages for those don't. The late Paul Volcker is said to have carried around a card containing auto worker wages in his pocket as a reminder of this so-called injustice. Basically: the college-educated workforce should be entitled to higher wages at the expense of workers who don't. A somewhat tragic view now in an age where your barista may hold a graduate degree. I think this thinking was more widespread among elite babyboomers and (thankfully) hasn't been adopted by millennials or zoomers, but the social stigma around the trades still exists.
- virtuous_signal 7y ago
  The concept of scooters is indeed great, but two (fixable) problems the article touched on were real: the mess it creates on sidewalks, and the charging jobs not being "good enough". The first has been addressed in other cities by requiring scooters to be dropped off in certain geographical locations. The second is debatable as a problem. Driving-around-charging-scooters is an entirely new class of jobs; it (probably) didn't displace other kinds of jobs; and people could choose other industries until Lime were forced to offer higher wages.
hprotagonist 7y ago
The Deliverator used to make software. Still does, sometimes. But if life were a mellow elementary school run by well-meaning education Ph.D.s, the Deliverator's report card would say: "Hiro is so bright and creative but needs to work harder on his cooperation skills." So now he has this other job. No brightness or creativity involved -- but no cooperation either. Just a single principle: The Deliverator stands tall, your pie in thirty minutes or you can have it free, shoot the driver, take his car,file a class-action suit. The Deliverator has been working this job for six months, a rich and lengthy tenure by his standards, and has never delivered a pizza in more than twenty-one minutes.
- me_me_me 7y ago
  Oh wow, we are close to Snow Crash being near future. That's a really good point.
  - Areading314 7y ago
    Neal Stephenson is probably my #1 suspect for being a secret time traveller
    - hprotagonist 7y ago
      the self-reference gags can be pretty good. There's a little aside somewhere in REAMDE where developers are wondering about google earth: "oh, wasn't it inspired by some old sci-fi book?"
- adamwong246 7y ago
  This book was so prescient, it even predicted the rise of a media tycoon joining forces with American religion to rule the world through memes.
  - hprotagonist 7y ago
    Somehow i preferred a parody of ted turner to hobby lobby...
stanferder 7y ago
> ...forces unleashed by Silicon Valley—rising housing costs, choked infrastructure. Housing costs and choked infrastructure were unleashed by policies designed to deter population growth. What wasn't anticipated is that the incumbent residents would have less economic power than the new arrivals almost overnight, putting them on the "deterred" side of the bargain unless they'd already locked in their housing costs by buying. The unfortunate thing is that the incumbent residents least likely to benefit from anti-growth policies, i.e. long-time renters and paycheck-to-paycheck workers, are the first to bear the brunt of the shortages.
- freewilly1040 7y ago
  Incumbent renters are disadvantaged relative to new residents, while incumbent land owners get to extort the new residents.
- DataWorker 7y ago
  What anti-growth policies? And how greedy should we be in terms of the growth target? Would you be ok with 1% or 30% in a decade? Serious question, what level of growth do you think we should shoot for? Can you think of any reasons we would want to slow down growth if it gets out of pace? Do you understand basic economics on the matter because it seems to me like growth isn’t being set via policy levers, it’s the job market which seems to thrive despite or at least orthogonally to local public policy choices. In fact that’s the real problem.
  - helen___keller 7y ago
    > Can you think of any reasons we would want to slow down growth if it gets out of pace? Do you understand basic economics on the matter because it seems to me like growth isn’t being set via policy levers, it’s the job market which seems to thrive despite or at least orthogonally to local public policy choices. In fact that’s the real problem. I'm assuming GP is referring to policy that affects population growth specifically - such as antiquated zoning restrictions that were made under postwar suburban growth mindset and a lack of expansion of high quality public transit. Superstar regions tend to be quite pro-growth with regards to jobs, almost by definition. Can you imagine if starting a new business in the bay area was as onerous as starting a development on a new apartment building? Your entire seed round would go to hiring lawyers to appeal the zoning board for an exception, and your series A to fight off subsequent legal challenges by the community.
sschueller 7y ago
Are these e-scooters profitable yet? At what point will the VCs pull their money out?
rbranson 7y ago
Oh brother. Silicon Valley deserves to be dragged for a lot of garbage... truly... but calling the whole SoftBank funded clusterfuck the “Silicon Valley Economy” is just nakedly intellectually dishonest. Does the contemporary New York Economy connect people around the world and put all the worlds knowledge at your fingertips? Oh no, they just wreck the economy as a whole and feed us garbage like how they create value through “liquidity.” How about the Washington DC economy? You know, the old joyful military-industrial complex that sucks in taxpayer money and converts it into dead civilians in the Middle East. Or maybe the other geographically centralized titan of the US, The Texas Economy? You know, the one responsible for many of the major geopolitical conflicts in recent history that is also a huge part of what is turning the only planet we have into an unlivable hellscape. And as far as I can tell the whole SoftBank funded fake tech masquerade thing is starting to melt down, so?
- hybrids 7y ago
  Where does the article mention SoftBank specifically?
  - borski 7y ago
    It doesn’t, and that is parent’s point. The companies it mentions and the “gig economy” it lambasts is largely the result of insane amounts of funding from SoftBank, causing those companies to make profit at any cost.
    - CydeWeys 7y ago
      And to really connect the dots here, SoftBank is Japanese and its Vision Fund is mostly Japanese and Saudi money.
      - aguyfromnb 7y ago
        >SoftBank is Japanese and its Vision Fund is mostly Japanese and Saudi money. Does that money exist in a vacuum? No, it's invested in American companies, for the most part. SoftBank has set absurd valuations, which other VCs have benefited from.
specialist 7y ago
The Gig Economy is the concessionaire business model. Concessions are pay to play, and the host grants you a meager allowance for the privilege of making them rich. Say you run a hotdog stand in a stadium. You provide the capital. You pay rent. Aramark sells you the supplies (cups, buns, etc). Aramark provides the labor, that you pay for. You pay for any spoilage. You eat any losses to theft, returns, bad bookkeeping. There is no appeal. The host is the law, their word is final. Not franchisees, not contracting, not share cropping, not debt bonded, not MLM, not small business owner. No, it's worse. None of these other arrangements fully capture the entirety of the power imbalance. (I'm embarrassed it took me this long to correctly identify this pathology.)
- virtuous_signal 7y ago
  You're going to need to expound a lot if you're going to convince anyone that (say) Instacart shopping is worse than debt bondage. In particular how do you address the fact that the Instacart shopper can just decide not to be a part of that system? And if you are an aspiring grocery deliveryperson, why can't you make your own platform to sell your services?
  - specialist 7y ago
    I don't know anything about Instacart. This story makes them sound like Doordash. As a driver for Uber, the gig economy exemplar, you provide the capital. With debt bondage, the land lord (lender) provides the capital. On very unfavorable terms, sure. But Uber is stealing your savings. Transferring wealth from your past vs future self. I didn't say anything about shoppers (consumers). But since you mentioned it, in the concessionaire model, the host controls the choices. Sure, you can opt out or smuggle your own stuff in. But sometimes you want a cold beer and a hot dog. Sure, you can always go solo. Try to keep more of the surplus (profit) for yourself. Try to succeed in your own marketplace of one. Many jurisdictions make that hard. But some manage it.

87 points by smacktoward 7y ago

I think low interest rates are a huge part of this. Rates dropped again recently and prices are taking off all around the world. Its nuts.

nine_zeros 7y ago
This is how all inflation and I daresay, hyperinflation, has begun in history
born_a_skeptic 7y ago
It's supply and demand.

frankbreetz 7y ago

I am surprised that getting rid of tipping is not a bigger political platform. It would benefit both the consumer, by being more upfront about pricing, and the workers, by being able to have a more predictable income. The only one it wouldn't benefit is the companies who use tipping to display dishonest pricing.

davemp 7y ago
> It would benefit ... the workers, by being able to have a more predictable income ... The problem is employers would not match what servers and other tip earning jobs currently make. When I was in high-school I made significantly more than would have been possible at any other part time job with tips.
- lotsofpulp 7y ago
  Price obfuscation benefits the seller, but in this case, only some sellers. The restaurant benefits from not having to pay market wages. The waiters who are able to suss out higher than average tips benefit from customers overpaying and not reporting income for taxes. The waiters who aren't able to command at least an average level of tips lose out along with customers who overpay. As a buyer, I assume the cost of whatever is on the menu is 15% plus tax more than the price on the menu when deciding whether or not it's worth purchasing something, but it would be nice to not have to do that calculation.
  - leetcrew 7y ago
    servers are guaranteed to at least average the state minimum wage over a pay period. when I worked in a restaurant, my alternatives offered minimum wage plus maybe a dollar or two per hour, while everyone at the restaurant averaged more like $12-14. btw, this was definitely not a fancy restaurant. it's hard for me to believe the average/median server would be better off without tipping. ps, 15% is a pretty bad tip. unless someone was wrong with the service, 18-20% is really the minimum.
    - lotsofpulp 7y ago
      When I grew up, 15% was the standard tip for average service. Since it's already a percentage, it's already cost of living adjusted. This 18% to 20% nonsense only started after the iPads from Clover or whatever came out, who obviously have an incentive to increase tipping percentages as they make more since they take a percentage of every transaction too. I also love how some restaurants nowadays conveniently calculate tip on the post tax total of your meal for your "convenience".
      - ghaff 7y ago
        The norm certainly seems to have drifted upwards over time. Way back when I agree it was something like 15% before tax. These days it seems to be more like 18-20% on the total.
        deleted 7y ago
        [deleted]
      - leetcrew 7y ago
        you may be right that it's due to clover/square/whatever, but the staff definitely expects 18-20%. they will remember you if you always tip 15%. the post-tax thing is bullshit, I agree on that. tips should always be calculated from the pre-tax total.
    - JohnFen 7y ago
      In many states, the minimum wage for many traditionally tipped positions (particularly in food service) is substantially lower than the minimum wage for everyone else. > unless someone was wrong with the service, 18-20% is really the minimum. This. My default tip is 20%. If the staff did more than an average job, I'll go to 25% or more.
ghaff 7y ago
It's complicated. There's a good Freakonomics podcast on it [1]. (Including some really interesting info on tipping at Uber.) For restaurants specifically, it's really hard to eliminate tipping for the wait staff. [1] http://freakonomics.com/podcast/tipping/ http://freakonomics.com/podcast/tipping/
- lotsofpulp 7y ago
  I don't think it's complicated. Waiters are betting that people will overpay, and of course, income tax is avoided if you don't declare cash tips in your income. And who doesn't like thinking they are an above average waiter getting above average tips compared to a flat wage? And of course, restaurants don't mind as any portion of wages paid directly by the customer benefit them.
  - ghaff 7y ago
    It's complicated insofar as, if you own a restaurant and don't allow tipping, it's probably going to be harder for you to hire and retain waitstaff than it will be for your competitor down the road. (Not to mention that a lot of potential customers will look at your prices and think they're relatively high even if they should do the appropriate mental calculation.) I'm not a particular fan of tipping but it's difficult for an individual business to eliminate the practice.
    - lotsofpulp 7y ago
      Yes, it would have to be a societal effort (or government banning it, but I don't think that's the right move). Actually, I'm thinking everyone paying for meals electronically and tipping electronically would go a long way as that would remove the extra incentive from evading income taxes. Once that is gone, then the below average waiters may be incentivized to demand a steady wage rather than be subject to volatile tips. Of course, in the US, even in places where all people have the same minimum wage, people still tip lest you be seen as a cheapskate.
      - 7y ago
leetcrew 7y ago
there's not really consensus on tipping. when I worked in restaurants, we certainly didn't enjoy the variable cashflow, but my peers and I generally agreed that made more money on average than we would at nontipped jobs of a similar level. from the perspective of the customer, some people hate having to figure out what an appropriate tip is, while others like being able to essentially bid for service. I know people like to post studies that show it doesn't actually work this way, but I damn sure remembered people who consistently tipped well and I always made them a priority.
- ghaff 7y ago
  Yes. Even if one leaves aside the difficulty of an individual business eliminating tipping... It's a near-certainty that if, say, a city banned tipping in restaurants somehow, the jobs that rely on tipping to supplement wages would pretty much all get a pay cut even if the base salary were raised somewhat.
- xzel 7y ago
  In some European countries people still tip for good service so that could still be factor (the dynamic between increase waiter attentiveness to high tipper). Hopefully, jobs "of that similar level" could pay a better wage in general.
  - mercer 7y ago
    I always tip, and usually rounded up from at least 10%. Often even 20% if it's a small amount. Mostly because I've worked service industry jobs and the experience was awful compared to my current work. That said, there's no pressure whatsoever on tipping, and while it's common enough that the service workers aren't 'surprised', I regularly have friends making a comment about how they never tip. I do vaguely remember quite a few places having tip jars though, but my memory is fuzzy on that.
- nabnob 7y ago
  If you don't mind me asking, how much do you think you made hourly with tips on average?
JohnFen 7y ago
I will only stop tipping people working jobs that traditionally get tips when their employers pay them rates that will compensate for the missing tips. I also tend to tip in cash, specifically so that the company isn't involved. A tip is between me and the people who served me.
- frankbreetz 7y ago
  That is why it would have to be a political platform, simply not tipping people who rely on tips to make living is not making a point and is immoral. Lots of countries don't have tipping like the US, so there are plenty of models out there.

unknown_apostle 7y ago

Socialism every time the financial system needs to be bailed out with massive liquidity injections. But ultra aggressive capitalism for lower and middle class people.

34679 7y ago
Socialized losses and privatized gains. It's become The American Way.

virtuous_signal 7y ago

I've had nagging doubts about this narrative ever since the first exposés about Uber were coming out. 1) What job would the subject have been working say, 4 years ago, before instacart expanded to the entire US? Would that job have been better? 2) Did Instacart destroy that other potential job, leaving Instacart as the only option? I guess these are variations on the theme of "No one forced you to take this job". I'm all for these news articles being written, and for workers banding together to demand better treatment. But at some point we have to realize that if the company is not destroying other industries and creating monopolies, then one can just choose to work somewhere else. Even better, one could try to gain the skills necessary for obtaining less contingent work.

toss1 7y ago
Two Issues First, the problem is described in the article but not specifically called out It is Bait-and-Switch. The initial wages are rather generous, enough to get workers to move to their platform from other potential employers. The initial rate of $22 to deliver a basket of groceries looks pretty doable, and if you can do a couple per hour, likely reasonably profitable. Now it's down to $3. Not even close to any minimum or sustainable wage. They committed to one sort of condition, and then are screwed, sunk costs, missed opportunities, etc. This has happened even worse under Uber, where drivers took out car loans assuming one pay structure, then Uber changes the deal... Second, the trope that if someone accepts a low payment, it must be OK. At a theoretical level, that might be true, but the theory makes the bad assumption that all actors in the economy have equal power in the transaction. This assumption is massively false. The vast difference in power between these workers vs the SV corps is exactly what allows the exploitation. The choice to be exploited is only marginally less horrible than the other choices. For a clearer and more extreme example, you are lost in a desert dying of dehydration, I drive by with a 5gal jug of water and a map to guide you to safety. I say: "hand over the title to your house and I'll give you both" - will you do it? Of course you will, losing your house is less bad than losing your life. Does that mean that it is a free and fair transaction? Not even close. What forces them to take the job is the paucity of other options. There's plenty of research on how poverty is extremely expensive, and these companies are exploiting that.

spamizbad 7y ago

I'm normally critical of SV culture where it's merited but this article is just blaming SV for stuff it doesn't like 1) Silicon Valley isn't to blame for the fact that in the 90s landowners tightly constrained the construction of new housing in an effort to maintain the housing stock as an investment vehicle for existing homeowners. And while supply/demand doesn't perfectly explain the housing market, the fact is the United States no longer has the political will to build housing units where demand is, because of entrenched landowner interests. You can't build "dense" housing because it will "ruin" the character of a neighborhood. You can't build subsidized affordable housing because it will "attract crime". So you get nothing... well, that's not true: You're priced out, but maybe you can buy a 2800sqft home in an exurb that's a 90 minute drive from your job. Too big, too expensive, or too far for you? Too bad! 2) Scooters are good, actually: When we had them in Chicago were shown to connect people between public transit access points. Unlike Uber/Lyft, which cut into public transit utilization, e-scooters seem to actually encourage public transit use. 3) The gig economy is a symptom, not the cause, of a larger economic shift away from general prosperity. The social contract used to at least hint at the idea that if you worked hard and did an honest days labor you would at least be entitled to a roof over your head, food in your belly, and the ability to support a family. There was a marked shift away from this in the 1970s, in the name of "meritocracy" to allow higher earnings for those who "deserve" it in exchange for lower wages for those don't. The late Paul Volcker is said to have carried around a card containing auto worker wages in his pocket as a reminder of this so-called injustice. Basically: the college-educated workforce should be entitled to higher wages at the expense of workers who don't. A somewhat tragic view now in an age where your barista may hold a graduate degree. I think this thinking was more widespread among elite babyboomers and (thankfully) hasn't been adopted by millennials or zoomers, but the social stigma around the trades still exists.

virtuous_signal 7y ago
The concept of scooters is indeed great, but two (fixable) problems the article touched on were real: the mess it creates on sidewalks, and the charging jobs not being "good enough". The first has been addressed in other cities by requiring scooters to be dropped off in certain geographical locations. The second is debatable as a problem. Driving-around-charging-scooters is an entirely new class of jobs; it (probably) didn't displace other kinds of jobs; and people could choose other industries until Lime were forced to offer higher wages.

hprotagonist 7y ago

The Deliverator used to make software. Still does, sometimes. But if life were a mellow elementary school run by well-meaning education Ph.D.s, the Deliverator's report card would say: "Hiro is so bright and creative but needs to work harder on his cooperation skills." So now he has this other job. No brightness or creativity involved -- but no cooperation either. Just a single principle: The Deliverator stands tall, your pie in thirty minutes or you can have it free, shoot the driver, take his car,file a class-action suit. The Deliverator has been working this job for six months, a rich and lengthy tenure by his standards, and has never delivered a pizza in more than twenty-one minutes.

me_me_me 7y ago
Oh wow, we are close to Snow Crash being near future. That's a really good point.
- Areading314 7y ago
  Neal Stephenson is probably my #1 suspect for being a secret time traveller
  - hprotagonist 7y ago
    the self-reference gags can be pretty good. There's a little aside somewhere in REAMDE where developers are wondering about google earth: "oh, wasn't it inspired by some old sci-fi book?"
adamwong246 7y ago
This book was so prescient, it even predicted the rise of a media tycoon joining forces with American religion to rule the world through memes.
- hprotagonist 7y ago
  Somehow i preferred a parody of ted turner to hobby lobby...

stanferder 7y ago

> ...forces unleashed by Silicon Valley—rising housing costs, choked infrastructure. Housing costs and choked infrastructure were unleashed by policies designed to deter population growth. What wasn't anticipated is that the incumbent residents would have less economic power than the new arrivals almost overnight, putting them on the "deterred" side of the bargain unless they'd already locked in their housing costs by buying. The unfortunate thing is that the incumbent residents least likely to benefit from anti-growth policies, i.e. long-time renters and paycheck-to-paycheck workers, are the first to bear the brunt of the shortages.

freewilly1040 7y ago
Incumbent renters are disadvantaged relative to new residents, while incumbent land owners get to extort the new residents.
DataWorker 7y ago
What anti-growth policies? And how greedy should we be in terms of the growth target? Would you be ok with 1% or 30% in a decade? Serious question, what level of growth do you think we should shoot for? Can you think of any reasons we would want to slow down growth if it gets out of pace? Do you understand basic economics on the matter because it seems to me like growth isn’t being set via policy levers, it’s the job market which seems to thrive despite or at least orthogonally to local public policy choices. In fact that’s the real problem.
- helen___keller 7y ago
  > Can you think of any reasons we would want to slow down growth if it gets out of pace? Do you understand basic economics on the matter because it seems to me like growth isn’t being set via policy levers, it’s the job market which seems to thrive despite or at least orthogonally to local public policy choices. In fact that’s the real problem. I'm assuming GP is referring to policy that affects population growth specifically - such as antiquated zoning restrictions that were made under postwar suburban growth mindset and a lack of expansion of high quality public transit. Superstar regions tend to be quite pro-growth with regards to jobs, almost by definition. Can you imagine if starting a new business in the bay area was as onerous as starting a development on a new apartment building? Your entire seed round would go to hiring lawyers to appeal the zoning board for an exception, and your series A to fight off subsequent legal challenges by the community.

sschueller 7y ago

Are these e-scooters profitable yet? At what point will the VCs pull their money out?

rbranson 7y ago

Oh brother. Silicon Valley deserves to be dragged for a lot of garbage... truly... but calling the whole SoftBank funded clusterfuck the “Silicon Valley Economy” is just nakedly intellectually dishonest. Does the contemporary New York Economy connect people around the world and put all the worlds knowledge at your fingertips? Oh no, they just wreck the economy as a whole and feed us garbage like how they create value through “liquidity.” How about the Washington DC economy? You know, the old joyful military-industrial complex that sucks in taxpayer money and converts it into dead civilians in the Middle East. Or maybe the other geographically centralized titan of the US, The Texas Economy? You know, the one responsible for many of the major geopolitical conflicts in recent history that is also a huge part of what is turning the only planet we have into an unlivable hellscape. And as far as I can tell the whole SoftBank funded fake tech masquerade thing is starting to melt down, so?

hybrids 7y ago
Where does the article mention SoftBank specifically?
- borski 7y ago
  It doesn’t, and that is parent’s point. The companies it mentions and the “gig economy” it lambasts is largely the result of insane amounts of funding from SoftBank, causing those companies to make profit at any cost.
  - CydeWeys 7y ago
    And to really connect the dots here, SoftBank is Japanese and its Vision Fund is mostly Japanese and Saudi money.
    - aguyfromnb 7y ago
      >SoftBank is Japanese and its Vision Fund is mostly Japanese and Saudi money. Does that money exist in a vacuum? No, it's invested in American companies, for the most part. SoftBank has set absurd valuations, which other VCs have benefited from.

specialist 7y ago

The Gig Economy is the concessionaire business model. Concessions are pay to play, and the host grants you a meager allowance for the privilege of making them rich. Say you run a hotdog stand in a stadium. You provide the capital. You pay rent. Aramark sells you the supplies (cups, buns, etc). Aramark provides the labor, that you pay for. You pay for any spoilage. You eat any losses to theft, returns, bad bookkeeping. There is no appeal. The host is the law, their word is final. Not franchisees, not contracting, not share cropping, not debt bonded, not MLM, not small business owner. No, it's worse. None of these other arrangements fully capture the entirety of the power imbalance. (I'm embarrassed it took me this long to correctly identify this pathology.)

virtuous_signal 7y ago
You're going to need to expound a lot if you're going to convince anyone that (say) Instacart shopping is worse than debt bondage. In particular how do you address the fact that the Instacart shopper can just decide not to be a part of that system? And if you are an aspiring grocery deliveryperson, why can't you make your own platform to sell your services?
- specialist 7y ago
  I don't know anything about Instacart. This story makes them sound like Doordash. As a driver for Uber, the gig economy exemplar, you provide the capital. With debt bondage, the land lord (lender) provides the capital. On very unfavorable terms, sure. But Uber is stealing your savings. Transferring wealth from your past vs future self. I didn't say anything about shoppers (consumers). But since you mentioned it, in the concessionaire model, the host controls the choices. Sure, you can opt out or smuggle your own stuff in. But sometimes you want a cold beer and a hot dog. Sure, you can always go solo. Try to keep more of the surplus (profit) for yourself. Try to succeed in your own marketplace of one. Many jurisdictions make that hard. But some manage it.