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The Secret to the Uber Economy Is Wealth Inequality
- sighsigh 12y agoBombastic click bait morality. IPhones are affordable because of wealth inequality. Oil is cheap because of wealth inequality. Organic food is purchasable because of wealth inequality. Hipster clothes can be owned because of wealth inequality. And yet, none of these goods are targeted because those who use them are susceptible to pro-union shilling. Stop the painfully forced guilt complex from this out-of-touch middle class white perspective. I wish I could have easily sold my spare time for more money when I first moved here with P2P labor systems like Uber... but I had to wait for a central bank's liquidity push to eventually intice small business hiring, some union to not bump a new guy for someone's seniority, or some corporation wonk to figure out a new growth market. Oh, yes, I just felt so equal in that system of waiting for people "smarter" than me to justify needing me. People should have access to the means to sell their time and labor where ever and when ever they want. Period.
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- uptown 12y agoIt's fine to believe that. It promotes an economy that essentially looks like this: "Change in median net worth 1983-2013" Upper income families $321k Middle income $2k Low -$2k Source: https://twitter.com/conradhackett/status/545260970256252929 https://twitter.com/conradhackett/status/545260970256252929
- sighsigh 12y agoAre you going to factor in China and India from the same time period?
- dropit_sphere 12y agoI don't know why this keeps being brought up. Do China and India cheer when the economy picks up in the U.S., for reasons other than the increased demand they'll experience? Does GE include Microsoft's performance in its reports to shareholders? I mean, fewer people starving is always awesome. But it is not the question being asked.
- refurb 12y agoConsidering that the time period of 1983-2013 catches the tail end of the worst housing crash in recent history kinda skews the numbers.
- sp332 12y agoI don't know how you missed the recurring outrage about the wages and conditions of iPhone workers. And the article isn't against your last point. In fact the article isn't even blaming Uber for the problems. It's just pointing out that Uber (and other services like it) only work where inequality is pervasive.
- sighsigh 12y agoGlobalism works due to inequality. Nationalism works due to inequality. Tribalism works due to inequality. The dirty secret of civilization is that someone has to dig the graves. Why pretend it's an evil from your middle class morally righteous soap box instead of allowing people the means to participate as simply as possible?
- sp332 12y agoWhy don't I pretend it's an evil from the bottom of someone else's grave I just dug?
- sighsigh 12y agoBecause that would make you... a believer of an out-of-touch white middle class moral framework that has failed to predict anything.
- samman 12y agoSo, I'm kind of ambivalent about this thread so far, but it sounds like you have thought about this a bit. What sort of moral framework do you find preferable over the 'out-of-touch white middle class' one?
- sighsigh 12y agoA simple one that can be summarized as "Survival first. Then morality." Equality is a social construct. It don't actually exist in the universe at any scope whatsoever. The quantum, molecular, biological, ecological, sociological, planetary, and galactic scopes are in a permanent state of disequilibrium as per the second law of thermodynamics. Drawing a border within that entropic flow and defining it as a closed system works... until an unexplored dependency fails. That process of constantly drawing lines has been civilization's primary activity: "These are the valid social roles/scientific possibilities/moral ranges/emotional perceptions and here's how people fit into them... and here's how to punish those who do not!" Those who define these symbols and convince others to believe in them bestows power to the author... ergo, the phrase AUTHORitarian. Compound this activity over thousands of years with millions of authors, and you don't end up with one agreed upon metric of how to categorize moral structures... what you actually have is an ecosystem of symbol authors vying for larger and larger fan clubs, mostly through conversion, interrogation, humiliation, aggression, and other manifestations of emotional extortion. However, even within that activity, an implied metric of categorization does exist. It's just unspoken: All moral systems share the exact same threshold for synthesis. Meaning, If moral system X exists as a response to, and in opposition of Y, then it's threshold is at Y and Y-like things. The moral system will only synthesize with similar symbols. Take the moral system of humanism, which is the preference of the material concerns of humanity over symbols and spirituality. Here is a system that exists to defy symbols themselves as if they are proudly above symbols, yet, even this system generates and relies upon symbols. (Potential value of human contribution is absolutely measured in the symbolism of socioemotional hand-waving and/or GDP projection) By establishing that all moral systems are just a frameworks of symbols seeking similar symbols and avoid dissimilar symbols, all you are actually explaining is the public interfaces of competing systems. Christians and their social justice derivatives use guilt, Islam and ancestor worship uses tribal identity, capitalists use greed and ambition... they are just different interfaces for moral systems that scoop up people who are already culturally, emotionally, and/or neurologically predisposed to find certain interfaces of morality easier to use than others. (Think of operating system preference with low-information consumers) And since we are now talking about human participation, we are now actually talking about power, which is what these symbol systems are all about: material domination. Therefore, when discussing any moral systems and their efficacy, we can simplify the question to be "Which symbol system gathers the most amount of stupid people to do the author's bidding?" And I find that question to be totally pointless because no symbol system actually promises survival within the material domain... only domination of it on behalf of the author and associated scribes. Not even environmentalism is exempt because it fixates on ecoconservation, which means nothing in the face of light-speed blackholes ramming into your planet. Therefore, until someone solves the question of survival in a meaningful way, all moral systems are just masturbatory political revenge fantasies, which discredits all of them for all time. I see no problem with making it easier for people to survive since they exist on a planet consumed with symbol conflict and their petulant authors, floating about in a universe that is ultimately ambivalent about their presence to begin with. If I had any spiritual authority, I would expend all of it with a simple message, "You and your ancestors are forgiven. Just try better this time."
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- wozniacki 12y agoCould someone tell me what's going on with HN submissions and if changes had been made to how duplicates are handled. Submitted this article a whole day ago, here: https://news.ycombinator.com/item?id=8757053 https://news.ycombinator.com/item?id=8757053
- sp332 12y agoLooks like this person just added a # to the end. https://hn.algolia.com/?q=http%3A%2F%2Fqz.com%2F312537%2Fthe-secret-to-the-uber-economy-is-wealth-inequality%2F%23#!/story/forever/prefix/0/http%3A%2F%2Fqz.com%2F312537%2Fthe-secret-to-the-uber-economy-is-wealth-inequality%2F https://hn.algolia.com/?q=http%3A%2F%2Fqz.com%2F312537%2Fthe...
- NickPollard 12y agoThe main thesis here - that an Uber-like service requires people who will work for less money than customers are prepared to pay for - is a truism, and probably the #1 principle of any business. There's a definite relevance that the current inequality leaves people with less other choices for work; I'm sure a lot of Uber-drivers would not be Uber-drivers if they had other, better paying work, but similarly, a lot of Supermarket checkout staff, or bartenders, or waiters, or other low-paying jobs, would not be doing those jobs if other jobs were available. In the current age, driving is unskilled labour, and so the supply pool of workers is very large. It is not surprising that driver wages are low. The bigger issue with Uber is one of monopoly effects and competition. The interesting part of Uber - the middle-man part run by Silicon Valley technologists - is the ride allocation part, which by virtue of network effects probably tends towards monopoly. If Uber gains too strong a market share, which it looks like it might be doing, that is when the real problems begin. In a way, the best thing might be if the cities themselves licensed and ran the ride-ordering technology, as a public good.
- ctdonath 12y agothe best thing might be if the cities themselves licensed and ran the ride-ordering technology, as a public good. Isn't the inevitable problems therewith, as exemplified by NYC's taxi regulation system, exactly what led to the rise of Uber?
- dllthomas 12y agoTo my understanding, cities never did dispatch...
- wozniacki 12y agoYes. This. Municipalities everywhere are notoriously inefficient at running anything sensible that isn't burdened by politicking, group-pandering, graft and ultimately riddled with short-sighted reactive decision-making. Perhaps we should ask why our governmental - local or federal - bodies are prone to these kind of malaises. Could it be that our best minds are increasingly not wanting to serve in the public sector? [1] [1] 'Pro-Government' Millennials Take Government Jobs, Discover They Suck, Move to the Private Sector http://reason.com/blog/2014/12/17/millennials-take-government-jobs-discove http://reason.com/blog/2014/12/17/millennials-take-governmen...
- percept 12y agoIt's built on the backs of the drivers, and their willingness to expose themselves: https://www.quora.com/How-much-money-does-an-average-Uber-or-UberX-driver-earn-in-a-day-What-about-people-that-drive-full-time-for-Uber/answers/3934880 https://www.quora.com/How-much-money-does-an-average-Uber-or... (Not unlike freelance programming marketplaces.)
- MSM 12y agoHe isn't getting paid well, I agree with him there. However, factoring your car payment and car insurance into your hourly wage just because you happen to work from your car is kind of silly. If I work from home do I factor my house payment into my hourly wage?
- dismal2 12y agoAre you serious? Imagine if you are a programmer but your computer takes an obscene amount of maintenance (like a car: tires, oil changes, preventative maintenance) to keep it running so that you can keep freelancing as a programmer. If you didn't factor this into your costs of being a "freelancer" you would be an idiot.
- MSM 12y agoEveryone needs a car. If my car breaks down I would likely have to take a sick day to get it to the shop. No one factors that into their pay. I need to wear pants when I go into the office, do I get to allocate pants into my wage? A car is something almost everyone needs. He's going to end up factoring it into his hourly wage and then getting a car for free.
- dismal2 12y agoa. not everybody needs a car. b. the amount you drive even with a lengthy commute is nowhere close to what a person driving 8 hours a day 5+ days a week does. the amount you spend on gas alone is huge never mind maintenance and having the right insurance for driving that many miles (many drivers don't and can get totally screwed over if anything happens and the insurance company finds out they don't have the right coverage).
- michaelt 12y agoTo be fair, it's not just wealth inequality that makes these services affordable (although that certainly plays a big part) - there's also subsidy from investors who think they're investing in the next big thing.
- yummyfajitas 12y agoFrom the article: In my hometown of Mumbai, we have had many of these conveniences...This narrative ignores another vital ingredient, without which this new economy would fall apart: inequality. Only one problem with the narrative: India (Gini 33.9) has considerably less inequality than the US (Gini 48). https://en.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.wikipedia.org/wiki/List_of_countries_by_income_eq... Oops!
- TazeTSchnitzel 12y agoIndia is less unequal than the US, yes. But it has a lot more poor people.
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- Retric 12y agoWhich points out that income inequality is not useful on an absolute scale. In other words if you make 1M a year and your neighbor makes 2M a year your lifestyles are very similar. However, if you make 10$/day and your neighbor makes 20$/day your lifestyle can be very different.
- tormeh 12y agoJust because a number is useless on its own does not mean that it's useless in all circumstances. Generally, we know both inequality and average income.
- refurb 12y agoOnly one problem with the narrative: India (Gini 33.9) has considerably less inequality than the US (Gini 48). You point out the problem with measuring inequality using the Gini co-efficient. A country where everyone is equally poor has a lower (better) Gini co-efficient than a country where few are poor and few are very rich.
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- 100k 12y agoMassive wealth inequality combined with few jobs leads to servants. Servants more-or-less stopped being a job in the US after the last Gilded Age with the rise of the middle class, but with Uber and other service apps, they are back, fractional reserve-style. There's a corollary to this, which is that if the economy starts growing again (for regular people, not just programmers) people now doing 1099 piecework employment are going to find better options, and these services are going to have to increase their prices to attract workers. The cheapness of Uber has been subsidized by investors and made possible by desperation.
- rayiner 12y agoWhen my family lived in Bangladesh, we had servants, and never managed to get comfortable with the arrangement. I have a deep and visceral reaction to anything like that arising in the U.S., but I fear that increasing wealth inequality might lead to that outcome. I'd rather have lower GDP, less money in my own pocket, etc, than go back to living in that kind of society.
- _craft 12y agoThis is bogus. Imagine how much more valuable Uber would be if 100% of people could afford to ride them on a regular basis.
- zellyn 12y agoYour comment is bogus. Imagine how much more valuable Learjet would be if 100% of people could afford to buy their own jet airplane!
- _craft 12y agoIncome equality helps businesses and the economy grow. Consider the extreme case of inequality where all the wealth is concentrated in just a few people... there'd be no market for Uber.
- michaelochurch 12y agoI don't like Uber or its founder, but I find it fascinating. I'm starting to think that technological growth's self-limiting dynamic might be the generation of cheap labor. Ultimately, technical progress isn't needed if labor is cheap. You're not going to find much audience for modern agriculture in countries where farm laborers can be paid $5 per day. Sure, there are things that the very rich might theoretically want (just as Henry VIII would have had a better life with antibiotics) but since they tend to measure prosperity and status in relative terms, they don't have the imagination to push anything forward. Instead, elites retrench and block progress. It's only when labor is expensive (or in a war, which will make labor expensive if it carries on for long enough, due to depopulation) that anyone in power is willing to fund technology. Of course, those with the resources would rather find cheap labor overseas if that's an option; excluding a small set of celebrity visionaries who are less than 1% of the elite, they only invest in technical growth as a last resort. Uber isn't at fault for the abundance of cheap labor that has made "the Uber Economy" possible, but poorly managed technological progress is. If technological progress slows in the 21st century (I don't expect it to halt or regress, but it could slow to an uninspiring crawl and give us a disappointing "lost century") it will be due to the demotivation of investment encouraged by an abundance of cheap labor. For all the complaint about "talent shortage" by Silicon Valley executives, the fact is that no such thing exists; there are plenty of unemployed or underemployed PhDs out there. If there were a real talent shortage, the classism and sexism and ageism that characterize the contemporary VC-funded culture wouldn't be affordable, and you'd see all sorts of people (currently below a ceiling) getting coveted opportunities. In an ideal world, we'd stop this from happening by training people up, out of the jobs no longer needed, in order to be ready for the new jobs created by technology. In practice, this doesn't seem to be what's happening. Laid-off factory workers in Detroit (and Ferguson, MO) aren't being sent to school and trained for the new jobs; they've just been abandoned. Uber seems to capture the next phase of the Silicon Valley society. There's no basic research or fundamental innovation, but we're seeing new ideas around what to do with the abundance of dislocated and unemployed or underemployed people. Zynga's another one: capitalizing on middle-class ennui. Ultimately, this might explain, in part, the increasing dislike of Silicon Valley that we've seen in the past five years. Silicon Valley isn't singularly or even mainly responsible for deindustrialization and cultural decay, but the modern incarnation seems to be most strongly oriented toward profiting from it.
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- dnautics 12y agoThe article is filled with loaded terms but misses the consequence that is very important. The end effect is wealth transfer from the wealthy to the poor. Let's rephrase the thesis in this way, based on my personal experience. My secret of ridesharing is that I was once part of an exploitative, hierarchical, socialist organization (academic science) that kept me in a cycle of poverty[0] intended to depress my wages, limiting my growth opportunities and discouraging out-of-the-box thinking. I then quit my job, and began working for 'ridesharing'. First, lyft, then uber - and gave myself an immediate runway to launch a nonprofit science organization to cure cancer. Not only did it afford me the independence to pursue this, but I also gave myself a pay raise and began investments. Then, I moved from San Diego (which has an economic climate that makes ridesharing difficult in the 'equilibrium' condition, which had been reached) to San Francisco (where drivers are in high demand and low supply) and gave myself even more of a pay raise (almost 2x) affording me even more of a safety net and more free time to work on the science. Hell, I even have investments. [0] spam the populace by telling them they ought to get degrees in STEM, create an oversupply of PhDs, which lets you pay them 30k to work 80 hours in a lab, and then restrict their ability to be promoted to professor so they're constantly struggling.
- bravo22 12y agoI think what the article is also saying is that you need an imbalance for this new "model" to work. I agree that there is a slight net effect of wealth transfer but if the gap was smaller to begin with then there would be no need for the wealth transfer.
- dnautics 12y agoI'm not disputing that either. On the other hand, it's not only the rich that use Uber (and certainly not Lyft), so the OP's argument is a bit hyperbolic. There is this very interesting effect that DUIs have a disproportionately negative consequence the poorer you are; and the price point for both services is low enough that it makes using those services very attractive for people outside the top income bracket.
- abandonliberty 12y ago
- VLM 12y agoNobody is commenting on the middleman insight? Something I don't understand about uber is it sounds like a dating service. If I met my wife on a dating service, I'd pay for the privilege at that time, but I wouldn't continue paying the dating service a piecework fee every time we have sex after 14 years of marriage. Likewise whats the middleman solution to "Oh thanks for the ride, I'll pay uber $10 and you say they pay you $5... well how about you come by my house exactly a week later and I'll drop you personally $7 cash tax free and heres my phone number to coordinate and ..." The middleman cannot be avoided in top 40 pop music 99 cent song downloads, but it seems pretty easy to work around for taxi-like service.
- thinkling 12y agoThe interesting bit of this article comes right at the end: in the comment on how middlemen like Uber create a barrier-of-entry for workers who want to become small business owners. The easiest place to see this is in house cleaning services, where capital investment to start a business is low. The path from worker to small business owner is one that allows (allowed?) one to build some equity and entry into the middle class. To the extent that technology-based middlemen like Uber create a barrier to this, they may worsen income inequality.
- abandonliberty 12y agoMiddlemen provide value because they manage reputation, which puts them in a strong position to manipulate the market if there is lack of competition.
- 100k 12y agoParticularly galling is Uber's contention that it helps its "partners" run their own small business. Yeah, right. A small business that Uber can take away from you at any time for any reason. Uber drivers are employees in all but name and tax treatment.
- dlwj 12y agoTechnology also allows 1 person to do the work of 10 creating a larger supply of unemployed people. Since right-to-live-well is tied to "productivity" and holding a job, technology in the abstract has also enabled this large pool or workers indirectly. The part about middlemen is interesting. IMO uber is a better/smaller middleman than the previous one with taxi medallions. The technology that uber provides is connectivity at large scale due to low cost. The article is correct in that if there is nothing to connect, the business doesn't work. It's still comparatively better though, and that's how improvements are made, step by step as people want better and better.
- thebiglebrewski 12y agoCan anyone else literally not load this article, getting continually redirected to other articles based off of Quartz's facockta ad mechanisms and scrolling to get to new URLs?
- known 12y agoSocial issues cannot be solved with technology. http://india.blogs.nytimes.com/2012/10/16/as-india-responds-to-latest-rapes-the-unanswered-question-is-why/ http://india.blogs.nytimes.com/2012/10/16/as-india-responds-...