The advent of the information age has created countless new types of jobs and careers. It has also fostered new types of labor freedom for earners, including the ability to work from home, the ability to contract tech services from the other side of the world, and to engage in a new form of commerce that has been dubbed the “gig economy.”
One of the most obvious manifestations of this gig economy has been in individual transportation. Peer-to-peer ridesharing is supplementing, and in many cases supplanting, more traditional for-hire car services. The big boy on the block is Uber, with Lyft its most visible rival, and these and other technology-based services enable anyone who wants to put in a modicum of start-up effort to engage in at-convenience work and earning. The technology also does wonders for consumers, making the process of getting a car easier, quicker, more transparent, and in many ways more accountable.
Uber et al have flooded major metropolitan areas, and in doing so have disrupted the traditional services (which were often protected by government). In New York City, famous for its draconic restriction on street-hailing to 13,587 “medallion taxis” (a restriction established in 1937, unamended until 1996, when they added about 2000 to achieve the current total). Thanks to that regulation and restriction, the price of a medallion soared to over a million dollars. Artificial scarcity created an asset bubble, even as artificial scarcity enabled terrible business practices and apathy on the part of fleet owners and drivers (e.g. drivers start/end their shifts between 5 and 6 PM, the height of rush hour, thus making it a nightmare to try and get a car at that time).
That bubble was burst by Uber, Lyft, and their tens of thousands of drivers working the streets of NYC, with medallion prices dropping to under $150,000 today. Many medallion owners, having borrowed heavily to buy them at or near the peak price, are in deep, almost irrecoverable debt, and a few, sadly, have committed suicide.
While we can easily sympathize with the plight of these people, it is a reality that their plight is the result of government heavy-handedness, not the advance of technology, and it is by no means unique in history. Businesses become obsolete all the time, and the people who engaged in those businesses do suffer losses. Part of entering business is taking risk, a fact that’s lost on scolds who decry the successful.
That’s a reality of the gig economy – and of any innovation. Successful innovations are “better mousetraps,” they’re ways to provide consumers with a product that is better than their existing options, and the providers of those existing options must either adapt to the new competition or perish. The aggregate benefit to society (and innovations produce benefit, to consumers and to new producers/providers) far outweighs the losses incurred by the disrupted, and while we can, as I noted, empathize with the disrupted, it is wholly wrong to oppose innovation because some get disrupted. Were we to think that way, we’d still have buggy whip makers, ice truck fleets, steno and typing pools… heck, we’d still have 90+% of the labor force engaged in farming, rather than 2%.
The gig economy is merely another in a very long line of innovations that benefit society, and, having spontaneously arisen via capitalism’s relentless pursuit of improvement, it should be welcomed with open arms. People looking to work full-time have new options open to them, and people looking to put a few extra bucks in their pockets have an easier time than ever.
Furthermore, the gig economy enables more efficient use of assets – after all, a car that’s sitting idle means that other cars must be manufactured to fill the demand for transportation. Those of an environmental bent should applaud this aspect.
Unfortunately, many of today’s progressives, who one might expect to embrace both the individual empowerment and the environmental benefit aspects of ride-sharing (and other gig economy job sectors), are on the front lines of obstruction.
Cue New York City and its more-progressive-than-thou Mayor Bill De Blasio. The city, “alarmed” by the proliferation of Uber cars, just voted to impose a one year moratorium on TLC licenses. People can still look to become drivers, but they’d have to drive cars that have already been granted commercial plates.
Why?
The claim is that ride-sharing cars are the primary cause of the ever-worsening congestion in the city (well, in Manhattan, but that’s what the pols care about). Folded in is some sub-text about the aforementioned plight of medallion owners, but anyone who thinks that the city could possibly restore the former value of those medallions via further meddling in the market is delusional, making the gesture a futile token.
The reality is that the congestion in the city is both desired and caused by the government. Rather than engage in traffic engineering and other actions (e.g. enforcement of don’t-block-the-box) that will help cars move more easily, the city has, for years (since Mike Bloomberg’s tenure as mayor), been working to make Manhattan more hostile to cars, in order to drive (pun intended) people to use public transportation and non-car personal transportation (e.g. bicycles). This is archetypical progressive social engineering: the forced modification of people’s behavior via heavy-handed government.
And, it’s a big part of the reason the Left is showing dislike for the gig economy. It mucks up the desired outcome. It also exposes their failure to provide quality service in the transportation forms they desire we all use, as evinced by the worsening mess of the NYC subway system. If the NYC subways were a more pleasant experience, fewer people would pay the premium to order a car.
It also exposes the Left as shills for deep-pocketed existing businesses and sectors. Sure, Uber and Lyft spend tons of money lobbying politicians, but they’re actually late to to the game, with the old guard, who are desperate to protect their favored status, dumping piles of money on politicians. We see this, as well, in the short-term rental market, where AirBnB is the big player. And, like good little lap dogs, the politicians in New York and other places are responding to the disruptive effect of people renting out or sharing space in their apartments by engaging in government regulatory warfare.
Also distressing, to statists of a progressive bent, is the loss of centralized control. Subways, buses, and commuter rail services, with their fixed, established routes and schedules, dictate people’s residences and movement. Furthermore, the definition of economic fascism includes tight government control over privately owned business, which is the essence of what today’s ‘democratic socialists’ actually want, and the individual liberty and disruption of old, established (and well-controlled) businesses created by the gig economy runs counter to that model. The gig economy also represents an end-around the Left’s long-running efforts to tip the scales of employer-employee relations ever-further in the direction of employees – or at least, what they think employees should want. Contractor relationships with employees can work around mandated wages, mandated benefits, and tight regulatory control of how workers work – and undermine unions’ ability to infiltrate where workers may not desire.
With the loss of centralized control comes a loss of leverage on the private sector, which itself hurts the campaign coffers. Who’s going to spend millions on lobbying if there’s less that the lobbied can do for the lobbies?
Finally, there’s the dangerous message sent by the gig economy: that free enterprise and free markets can and do make economies better and stronger, without the oh-so-wise interventions of the Best-and-Brightest in government. How can they convince us to give them power to save us, if we manage to do well for ourselves without them?
Sure, the politicians will wrap themselves up in “protect-the-public” righteousness as they look to stifle enormously popular innovations, but lets be honest here. What they’re really protecting is their phony-baloney jobs, the old-guard power brokers upon whom they rely, and the power they so desperately need to wield in order to keep themselves relevant.
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I’ve got the answer, Uber needs to expand and include cycle rickshaw/PediCabs,
I’ve only been to NYC once so I’m not sure how well these would navigate the streets there.
Pedicabs were a big thing a few years ago, and they were a bit of a “wild west,” in that some ‘drivers’ took advantage of tourists (demanding exorbitant fares after-the-fact). The usual activists lobbied in their favor, ignoring the usurious in favor of some “they need the work” arguments. The city eventually imposed some rules on them, but I think that they’ve mostly gone away of late.