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The sharing economy is creating a Dickensian world

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The sharing economy is creating a Dickensian world

http://www.marketwatch.com/story/the-sharing-economy-is-creating-a-dickensian-world-2016-10-20?link=sfmw_tw

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The sharing economy benefits its creators, but this may be at the expense of those who do the work or provide the service — as well as the broader economy.

The real reasons for the sharing economy are simple.

The existing industries targeted by these platforms are frequently inefficient. Over time, regulations have accreted, evolving to serve narrow interests rather than to maintain service standards and protect users. Competition has fallen, and development has been impeded.

Proponents argue, with justification, that sharing-economy competitors frequently provide a superior product. This highlights the need to reform existing regulatory frameworks. It is not self-evident that replacing the existing system with non-professional service providers and substituting a new monopoly for an existing one is the optimal response.

The sharing economy has developed in response to weak economic growth and a depressed labor market. Workers unable to find work or needing supplemental income use these platforms to earn additional income...

 

 

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..The sharing economy is part of the trend to contractual and temporary work, which masks the real health of the employment markets. It is also part of a global process of reducing overall labor costs.

The development affects both unskilled and skilled work. Professionals, such as engineers, radiologists and designers from Eastern Europe, Asia, Africa and Latin America, are undercutting peers in advanced economies. It is what financier Jay Gould once envisaged: “hire one half of the working class to kill the other half.”..

 

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A young relation of mine does this with great success.He simply puts on Facebook he is doing "lifts" that day/night.Texts come in,can you take me here,there etc.They hand over a fiver,tenner,around half the price of a taxi,everyones happy.Not illegal to give people lifts is it.The more who avoid the system the better.

 

 

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1 hour ago, durhamborn said:

A young relation of mine does this with great success.He simply puts on Facebook he is doing "lifts" that day/night.Texts come in,can you take me here,there etc.They hand over a fiver,tenner,around half the price of a taxi,everyones happy.Not illegal to give people lifts is it.The more who avoid the system the better.

 

 

I would have thought it was illegal as he's a taxi with no insurance, so driving with invalidated  insurance. If there was a crash it could get very nasty  

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12 minutes ago, Saving For a Space Ship said:

I would have thought it was illegal as he's a taxi with no insurance, so driving with invalidated  insurance. If there was a crash it could get very nasty  

Doesn't that just highlight the difference in mentality between HPC type folk and pretty much everyone else. We focus on the catastrophic while they take it a day at a time completely blase, and most of the time they will be absolutely fine.

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As most would agree time is money so sharing time, no money need pass hands. For most would take some getting used to but very doable.......you scratch my back I scratch yours. ;)

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49 minutes ago, hotairmail said:

'The sharing economy',  'the gig economy' .....the Financial Times loves to use these hip terms to colour them as offering 'freedom', 'choice' etc. Well, they would, wouldn't they.

It used to be known as the misery of the peripatetic existence where you didn't know where your rent and money would be coming from, one moment to the next. Unable to plan, unable to have a proper family life. Reliant on a responsive State to help you when you need it.

 

The other problem with the sharing economy - as eluded to in the article - is that it is creating monopolies. AirBnB, Uber, Deliveroo etc have virtually no competition. Their 'agents' i.e. The people actually delivering the service, are in competition, but the middlemen are monopolies, so they set the price of their commission. It's not yet clear if some of these services are cheaper because they are genuinely more efficient, or whether they are just able to sidestep labour laws in a way their non-sharing economy predecessors cannot.  

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Having herded us all from the countryside into towns and cities, we've come full circle. The certainty of a job in a factory with predictable hours and income have been replaced by a new kind of precarity. Whereas the agrarians of old would have lived with the uncertainty of climate and crop failures, the post-industrial generation must now live with the volatility in demand for services. The zero-hours contract and the ebay-uber economy will eventually become the norm as automation and technology render humans increasingly surplus to requirement. It's ironic that Uber is also proposing to make its "fleet" driverless. That makes it less of an egalitarian earning platform and more of a machine for the stealth replacement of human drivers.

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As a consumer, I really like Uber, seems a lot better than a traditional cab company, which has not attempted to improve its service offering (and in many cases has gone backwards by using any dodgy driver).  I would lay the blame as to why we are get poorer at the door of successive governments, not a company with ideas that make the economy more productive.

Edited by reddog

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17 minutes ago, Bear Goggles said:

The other problem with the sharing economy - as eluded to in the article - is that it is creating monopolies. AirBnB, Uber, Deliveroo etc have virtually no competition. Their 'agents' i.e. The people actually delivering the service, are in competition, but the middlemen are monopolies, so they set the price of their commission. It's not yet clear if some of these services are cheaper because they are genuinely more efficient, or whether they are just able to sidestep labour laws in a way their non-sharing economy predecessors cannot.  

Uber are subsidising every ride with venture capital money at the moment, once they become a monopoly we'll probably see them start price gouging.

I did the back of a fag packet numbers on deliveroo's business model once and am convinced its just some scam by the founders to steal VC money.

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The whole digital/automation economy is based on these principles, where one the elite needed the plebs on-side for example after the Black Death, during the Industrial Revolution, WW1, WW2 and the rise of communism now they technically do not. The rise of automated weaponry such as drones, cruise missiles, no-fly zones, is technically making military personel and their vagaries obsolete to the point where TPTB do not them need to placate a large troublesome population any more.

As the elite create their dickensian world it will be increasingly tempting for them to clean it up, especially when all the nice places in the world are rapidly being spoilt by the masses.

Edited by ChewingGrass
grammar

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It is, unfortunately, a familiar story. As the siicon valley "entrepreneurs" (wall-street funded monopoly capitalists) can afford to invest heavily in advertising and etching their names into the brains of millions. Tesla even borrowed money from the US government to start its business. The actual technology behind all of these services - ebay, paypal, amazon, uber, airbnb, google, facebook etc. isn't rocket science. Anybody could have done it but would they have the right connections to carry out the mass virtual leaflet drop?

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14 minutes ago, gibbon said:

Uber are subsidising every ride with venture capital money at the moment, once they become a monopoly we'll probably see them start price gouging.

I did the back of a fag packet numbers on deliveroo's business model once and am convinced its just some scam by the founders to steal VC money.

I've met one of the VCs backing them. They've very happy with Deliveroo. 

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2 minutes ago, Pindar said:

It is, unfortunately, a familiar story. As the siicon valley "entrepreneurs" (wall-street funded monopoly capitalists) can afford to invest heavily in advertising and etching their names into the brains of millions. Tesla even borrowed money from the US government to start its business. The actual technology behind all of these services - ebay, paypal, amazon, uber, airbnb, google, facebook etc. isn't rocket science. Anybody could have done it but would they have the right connections to carry out the mass virtual leaflet drop?

That's a massive over simplification. And to be honest it's wrong. Anybody can do it, that's the point. You don't need the right connections other than the ones you go and make yourself as part of your business. The technology isn't rocket science although I work in the blockchain space and that's rather more tricky.

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Just now, miggy said:

I've met one of the VCs backing them. They've very happy with Deliveroo. 

I'm sure they are due to all the positive press and ubiquity means there's no doubt a good chance the current VCs will be able to find a greater fool in the next series of funding they go for to unload the stinking turd onto. Interesting article here by the CEO of Belgian version of Deliveroo which recently went bankrupt: https://medium.com/@adrienroose/from-0-to-1-000-000-to-ecb4e2f863c7#.nnw33irsr guy basically admits the business model doesn't work when you run out of greater fools to give you tens/hundreds of million

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What is needed is an open source way of distributing these services so that there is no parasitic middleman acting as a giant virtual travel agent, skimming off money for nothing. Bit torrent illustrates what can happen when a technology is powerful enough and the will is there to educate and promote without the giant machinery of google et al. The internet is a network and we only have one phone book. Peer to peer is the future and if properly harnessed, could make the dinosaur middlemen redundant.

Edited by Pindar

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7 minutes ago, miggy said:

I've met one of the VCs backing them. They've very happy with Deliveroo. 

 

As I commented to a couple of people in A16Z a while back Deliveroo looks good until you remember JustEat and Hungry House have captured the European takeaway market. Deliveroo is just fighting over a small posh bit.

 

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1 hour ago, ChewingGrass said:

The whole digital/automation economy is based on these principles, where one the elite needed the plebs on-side for example after the Black Death, during the Industrial Revolution, WW1, WW2 and the rise of communism now they technically do not. The rise of automated weaponry such as drones, cruise missiles, no-fly zones, is technically making military personel and their vagaries obsolete to the point where TPTB do not them need to placate a large troublesome population any more.

As the elite create their dickensian world it will be increasingly tempting for them to clean it up, especially when all the nice places in the world are rapidly being spoilt by the masses.

I've thought before that this explains a great deal of the current political situation.  The Western proletariat is simply superfluous to the needs of the elite these days (or so they think).  The elite in London are more than perfectly happy to see the British working class replaced en masse by a cheaper, more subservient model.  Having lost their colonial servants after WWII, they simply chose to import them into the home country.

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A young relation of mine does this with great success.He simply puts on Facebook he is doing "lifts" that day/night.Texts come in,can you take me here,there etc.They hand over a fiver,tenner,around half the price of a taxi,everyones happy.Not illegal to give people lifts is it.The more who avoid the system the better.

Not a problem if he never gets sick, or old or needs any kind of long term stability in his life.

But how compatible are the precariat worker and the reliable debt slave? It seems to me that the 'system' is generating a real problem going forward here- our model of debt is based on a 19th century concept of 'the employee' who works 9 to 5 for one employer his entire life, while the actual reality of employment is becoming more insecure and unstable as time goes by.

I don't see how a system that runs on debt works if it's borrowers have no idea what their future employment looks like beyond the short term.

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The gig economy only works - as a primary source of income at least - if there are similarly flexible demands for money from your bank, landlord, utility company etc.  Or if you are a highly paid consultant.  

Add in a citizen's income - and to a lesser extent tax credits - and it looks viable, perhaps even desirable.  Particularly relevant as Uber's long term goal is to ditch the driver and maximise transport resource utilisation across the board.  

The biggest problem I have with them is tax.  So far many of the big technology companies have proved less than willing to pay a fair share (and governments have failed to address it). That will have to change. Either you have a viable business capable of paying tax, or get lost and let someone who can contribute to wider societal costs take over. We don't need parasitic businesses.  

VCs are happy because the money is being used to harness network effects to create a monopoly.  I'm not sure they will succeed like eBay has managed to.  Already there are rivals to Uber in the US which promise a fairer deal to drivers.  But maybe like fair trade, the rivals will end up being niche players. 

I do think the term sharing economy is in danger of being abused. For me, it is about maximising resource utilisation. Most of our stuff sits idle most of the time and it could be used better. Cars are notoriously bad for this. They spend around 95% of their time doing nothing, and most of the rest being occupied by one passenger. It's this which the likes of Uber ultimately seek to tackle, providing a taxi service is a non-intuitive middle step.  What Uber ultimately wants us to do is say: here's my car in my work carpark, make use of it while I'm not using it - but make sure it's there when I want it back (or equivalent).  That'll probably mean us retrofitting some form of automated/remotely operated device to our car.  Wear and tear? Covered in the fee. Damage? Covered by Uber. 

It's an interesting experiment at least - cf landlords changing long term rents to AirBnB (and in Edinburgh at least discovering the demand doesn't exist). 

I love the example of the young relative advertising and charging on Facebook to ferry people around. In one US city this is exactly what happened when Uber was banned.  What we now need is for the insurance company to spot the opportunity - Oh, you need extra insurance on the occasional Friday night - sure that'll be an extra £1 for 4 hours - and don't worry, it's pay as you go.  That's a true win win for both parties - and even the HPC doomsayers are happy. 

Similarly, we aren't re-capturing the full value of the goods we own in other ways. When my cheap toaster breaks down due to an inaccessible piece of plastic snapping, recycling it is a massive waste of value.  It could be returned to the original manufacture and the useful bits reused - or the pieces find a new life in another device if we had a proper circular economy in place.  A better option that might be that is if I paid for a monthly bread toasting service from the likes of Kenwood etc. Or if my toaster was internet enabled I could pay per slice toasted. That would incentivise them to create reliable devices, and also recapture any residual value if it breaks.  Sounds bizarre but aircraft engines have been leased like this for many years. 

Edited by StainlessSteelCat

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Aren't there two problems with all these social-network based businesses:

(1) BG is right. The dynamics forces each sector to be a monopoly. If there are two competing companies - an Uber and a Lyft, the slightly larger one will provide the better service, and will drive the smaller to extinction. This is the uniformity of the internet. Sure, anyone can set one up, but the only way to compete is to have some unique seling point (or a huge marketing budget), and if you win, you become the next monopoly.

(2) It commodifies the “employees” - they all compete in a frictionless, equal manner. The one thing you want as a worker is to have some unique ability that gives you some leverage and therefore pricing power or security over your employer or the competition. If you are a barber, you want to set up some distance away from the other barber shops, and if you can't, you're always eyeing them suspiciously to see what they're doing. In a world where there is excess labour, commodification and all-out competition drives all workers to the point of starvation and lets the monopoly owner capture all value.

I really hope that Pindar is correct, and that if an open-source Uber were created and was successful, that would solve the problem, because there would be no monopoly owner to capture all the profits.

So, who would capture the profits in this scenario? In a world of excess labour and no regulation, I think it might be the passengers: you still have starving drivers, but also really cheap rides. Please someone, tell me this isn't true, and we could have a sustainable, high-quality, peer-to-peer, open source taxi service that creates real and decent employment!

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18 hours ago, Saving For a Space Ship said:

I would have thought it was illegal as he's a taxi with no insurance, so driving with invalidated  insurance. If there was a crash it could get very nasty  

 

Isn't it uber without an app?

His insurance may have something to say in the event of an accident.

Edited by SarahBell

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2 hours ago, Toast said:

Aren't there two problems with all these social-network based businesses:

(1) BG is right. The dynamics forces each sector to be a monopoly. If there are two competing companies - an Uber and a Lyft, the slightly larger one will provide the better service, and will drive the smaller to extinction. This is the uniformity of the internet. Sure, anyone can set one up, but the only way to compete is to have some unique seling point (or a huge marketing budget), and if you win, you become the next monopoly.

(2) It commodifies the “employees” - they all compete in a frictionless, equal manner. The one thing you want as a worker is to have some unique ability that gives you some leverage and therefore pricing power or security over your employer or the competition. If you are a barber, you want to set up some distance away from the other barber shops, and if you can't, you're always eyeing them suspiciously to see what they're doing. In a world where there is excess labour, commodification and all-out competition drives all workers to the point of starvation and lets the monopoly owner capture all value.

I really hope that Pindar is correct, and that if an open-source Uber were created and was successful, that would solve the problem, because there would be no monopoly owner to capture all the profits.

So, who would capture the profits in this scenario? In a world of excess labour and no regulation, I think it might be the passengers: you still have starving drivers, but also really cheap rides. Please someone, tell me this isn't true, and we could have a sustainable, high-quality, peer-to-peer, open source taxi service that creates real and decent employment!

Not within the current system. Under CI, maybe.

Uber's current adverts for drivers seem to be aimed at people needing a bit of pin money - to pay off mortgage quicker / have a better holiday etc.

We do actually have a CI of sorts - it exists for those that play the system. Become a pro single mum and bingo - you get a CI of £20k + p.a.

Be a single woman on your own and you get nothing. But the single mum with her CI can work for a very low amount as it is just a top up. As can the early retired fireman / teacher with their cosy pension. The person working to pay their way has a pay floor that they cannot go below.  I guess this is part of the reason that the traditional economy had to have a minimum wage. Without it, wages would sink to a level that EVERYONE would have to become a benefits system player to survive.

The sharing economy bypasses the minimum wage regulations. It exists to reduce wages and further destroy the lives or working people.

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To continue, I think calling this the sharing economy is trying to make something that is potentially very damaging sound all nice and friendly. We all like sharing, right? - we are told from very young that we must learn to share. Sharing is good!

A true sharing economy cannot be monetarised in the conventional way. 45 years ago, my mother was part of the local babysitting group. There was a list of 50+ mums in the area. You earned 'credits' for sitting for someone (2 credits after midnight!) and when you wanted to go out you just called a few people on the list until you found someone that was free and transferred your credits. It worked brilliantly. The advantage was that is was a closed loop system so you could not be undercut and it could work in perpetuity with no 'friction' removing a percentage of the value of anyone's time.

That to me is a sharing economy for the benefit of all.

 

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58 minutes ago, CunningPlan said:

Not within the current system. Under CI, maybe.

Sorry to show my slowness in a public forum, but does this mean that the central function of CI is remove people from the workforce (without the use of genocide / war / pestilence) to the point where workers once again have bargaining power?

If so, this shows exactly who will be lined up against the introduction of CI, to wit: all the businesses who are in support of the immigration of cheap labour.

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