Saturday, April 8, 2017

The Myth of Uber and "The Gig Economy"

Buzzwords sound cool, but they usually mean nothing or a lot less than you'd think.

The media loves buzzwords.   In fact, the word "buzzword" is a buzzword, which originated at Harvard in 1946, to describe, well, "buzzwords".  In a way, they are handy and in fact, how language originates.  Language is nothing more than symbols which we have mutually agreed have a common meaning.  Trouble often originates when two people exchange symbols (communication) but assign different meanings to the symbols.

You've seen this before - miscommunication.   You send an e-mail containing what you thought was a witty and funny sarcastic comment, but the recipient took it as a withering criticism of their person.  Trouble ensues.   Same symbols, different interpretations.

Buzzwords can be useful, I guess, when they describe a new concept or a changed concept.  They also can be used to obfuscate meaning and just confuse people - intentionally - to pull the wool over their eyes.  When used properly, a buzzword can be a compact symbol which instantly describes a complex concept, much as the terms "Entropy" and "Enthalpy" do in Thermodynamics (don't ask me to define the second one, I never did quite understand it - no one does, I think!).  A simple symbol can instantly brings to life a complex set of ideas.

"Disruptive" is one of these new buzzwords being bandied about these days, and to some extent, it has value.   We are seeing a change (the "sea change" that the dot-com people predicted in the 1990's.  This "new paradigm" is about 20 years late, though!) in how our society functions.   Much ink (again digital - another new paradigm) has been spilled about how malls are closing and Sears is on the rocks - as if we didn't see this coming in slow motion over the last decade.

Old habits die hard, and most of us went to the "store" or the "mall" for the last two decades out of habit.   It finally dawned on me a few years ago that if I wanted a specific thing to buy, I could spend about $15 in car expenses driving all over our small town visiting store after store and not find exactly what I wanted.   I would have ended up settling for what was available and paying a premium price for the privilege.   Go online, find exactly what you need, have it shipped for free, in a few days, at half the price a retail store charges.

This is pretty much an insurmountable problem for retail businesses.  You can't beat better selection, less hassle, and lower prices.   It just can't be done.   Yet many in the retail business hung on, just as folks at GM did in the 1970's, wondering when this "Japanese car fad" would die down and we could get back to business as usual.  It is hard to tell whether the head of Sears is delusional or has some super-duper secret plan to drive the company under and come out smelling like roses in the end (as the company's prime creditor, he stands to inherit whatever the bankruptcy court poops out as the remains of Sears).  But the idea that somehow Sears - or any retail chain - can recoup what it once had, is, of course, nonsense.  We're not about to all change our minds and suddenly rediscover mall shopping.

But other "disruptors" might be less a disruption and more of a business plan with a new name.   Uber and Lyft started out as ride-sharing platforms but are morphing into something else, which could be, oddly enough, their downfall.   Taxi services were already under attack in the 1980s.  In New York city, taxis refused to pick up black passengers or drive to places like the Bronx.   So "Black Cars" became popular - gypsy cabs that people would drive that you could not hail, but had to call.   A taxi, due to regulations (more on that later) had to have a medallion which were limited in number and became so valuable that some folks merely owned medallions and rented out the cabs to drivers.   Sort of like a landlord for a cab.

Anyway, New York gave in, after they realized that the cabs weren't about to serve the needs of all of the citizens of the city.  So "black cars" were allowed, but had to be called, not hailed.  You either knew the name of the driver, or called the number written on the side of the cab.   When cell phones became popular, this accelerated the trend.   

Uber Black started out as a way of hailing these "black cars" electronically.   They claimed to be an "app" and not a cab company.   But over time, Uber has morphed into something else, and it illustrates how cab companies came into existence.  Each misstep and bone-head deal Uber has made was also made over 100 years ago when the cab companies were first founded.

In the early days of the cab business, it was a wild-west.   You had a car, you had a cab.   No regulations as to fares, who drove, condition of the vehicles, or number of cabs.  The cities stepped in and set up regulations - after all the city (the people) owned the streets and not the cab companies.  A city has the right to regulate its own traffic.   So the number of cabs was regulated, who could drive was regulated, standards were set for the condition of cabs, rates were set and displayed, and so on.   That's how we got where we are today.

As Uber evolved, people complained of being robbed by Uber drivers.  So now Uber does background checks on drivers.   People complained about the condition of the cars.  So now Uber has standards as to what kinds of cars can be used, how old they can be, and they can even be inspected by Uber. People complained about being injured in accidents, so Uber provides a million dollars of liability insurance to each driver.  Uber is, slowly morphing from a "ride-sharing app" to a regular taxi company.

And then drivers started complaining about conditions.   So in some jurisdictions, they are considered "employees" and others "contractors".   With each step, Uber gets its fingers more and more into the pie, and morphs from "just an app" to the world's largest taxi company.   And as such, it becomes harder and harder for Uber to argue that it is not running an unlicensed cab company.   Over time, as they become intertwined with their drivers and fares, they will find it harder and harder to win court cases and remain in business in many markets.  This is the real risk for Uber.  Whether local jurisdictions will merely "roll over" and say, "Well, fait accompli, you've created an unlicensed cab company that is too big to fail, so we might as well let you carry on!" remains to be seen.

"Too big to fail" - another "buzzword" that turned out to be, well not to big to fail. 

But now you understand why Uber is putting all its eggs in the self-driving cab basket.   If they can come up with autonomous cabs, they can eliminate those pesky drivers and maybe make a profit for the first time.   Even using PsyOps techniques on their drives via smart phone, the drivers have this weird idea that they want to go home and sleep sometime, or maybe make more money doing something else.   As a result, turnover is huge and shortages of rides can be a problem at peak times.

The problem is, of course, who owns those self-driving cabs?  Does Uber rely on free-agent contractors to buy and run them and still act as an "app" steering business their way, or do they own these cabs outright and toss away the last shred of pretense that they are not a cab company?

Who knows, maybe the present Uber model is just a distraction.   They are driving down the cost of medallions in New York City for the first time - maybe they are snapping them up in secret and holding them for the day of the self-driving cab.   Now that would be evil!

But getting back to the second part of this posting, another buzzword that is quite popular these days is "gig economy".   We are told that all millennials (every single one of them because they are all alike) is working "gigs" to pay off their hellish student loan debt.  This is, of course, not true, and I detest the term "Millennial" as it is such an inaccurate label of a diverse generation which has been expanded to include multiple generations at this point.

Yes, more people work as "contractors" these days, or at part-time jobs.  This is a natural result of making employment so expensive and toxic that no one wants to do it anymore.   I'm as liberal as the next guy, but I understand, as a former employer, that being an employer sucks, as your employees have more rights, fewer responsibilities (if any) and often make more money than their employers - at least traditional full-time employees.

One problem with Obamacare is that it made employee health insurance far more expensive, as it covered far more conditions such as mental health, sex-change operations, and so forth.   Maybe you think these are nice things, that's fine.   But someone has to pay for them.   So it is easier to use two loopholes to avoid paying health insurance:  Make employees part-time, or make them contractors.

Either way, they qualify for a near 100% subsidy under Obamacare through the "markets" and thus you are not being evil and denying them healthcare - you are just shunting it off onto the government.  And like food stamps, section-8 housing, or any number of welfare-type programs, these subsidies end up being wage subsidies to employers as much as they are subsidies to workers.  Why do you think there is a work requirement to get food stamps in the first place?

What is interesting to me, is how the cell phone is used to program people into this "gig" economy mode.  There is an actual site called "gig" and they send me SPAM e-mails all the time.   But getting back to Uber, a recent article illustrates how the Skinner-box of the cell phone is used to morph behavior amoung Uber drivers to get them to drive more (read: sit around waiting for customers) and stay on the road longer - and not quit the whole thing.

Maybe there is a common denominator to this "Millennial" label that defines them as a generation - they were born with smart phones in their hands.   And the smart phone has turned out to be more addictive than opiates.   You've seen the type, usually young, usually female, obsessively texting on the phone and ignoring all else.   And you've seen them drive.   One 20-something apparently killed off an entire church-bus filled with elderly people by hitting them head-on with his quad-cab dually pickup - apparently while texting.

The smart phone is so ingrained into the lives of people today - particularly young people - that it makes the perfect subliminal mind-programming machine.   You can get people to do your bidding with a text or a tweet.  Why do you think our President tweets so much?   No one reads extensive text anymore  No one does independent research.  They just read 140 characters and assume whatever it is said must be true.

Sea changes.  New Paradigms.  Disruptors.   I mentioned before how the radio brought on the era of the great dictators, by allowing speeches to be broad-cast to millions, where as before a speaker could, at best, be heard by dozens, maybe hundreds.  Television was the next disruptor, bringing compelling images into everyone's living room - the riots in Chicago, bodies piling up in Vietnam.   Both are small potatoes compared to social media and the Internet, which itself is dwarfed by the smartphone - a hand-held brain programming machine that can drive people crazy - and get you to do their bidding.

And not surprisingly, just as radio brought on the era of the great dictators in the 1930's, today we have our own slew of new dictators and tyrants to deal with, all tweeting and communicating directly to the masses with their messages of hate.  Narrow-casting to individuals turned out to be even more powerful than broad-casting to the masses.

So what's the point of all of this?   I dunno.  Other than maybe we are missing the bigger picture.   We obsess about Uber being a "change maker" when it really is quite a conventional company becoming more conventional all the time.  We obsess about buzzwords like "gig economy" but fail to see that the real "Sea Change" is how our smart phones can be used to program us to whatever purpose others want us for - drive for Uber, suicide bomb for ISIS, self-investigate a pizza shop, start a race war, or elect a President.

We are at-risk of being a nation of reactors rather than actors.   Of responding to stimuli rather than creating our own.  We swallow up normative cues at a rate far faster than ever before, without thinking of what they really mean or where they come from.   We confuse consumption with living, having things with having happiness.

Getting away from television is only a first start.  Unplugging from all the media, or at least limiting contact with it - and being skeptical of what is being said - I think is the next step.  Sadly, most people would read this and say, "Yes, I agree with you!  Have you tried this site called Infowars?"

Oh, bugger!