The sharing economy is creating a Dickensian world

[dgul]

Quite a nice piece on the gig economy from the FT.

https://ftalphaville.ft.com/2016/12/12/2181219/ft-alphaville-exclusive-inside-the-gig-economy/

(FT journo gets job working as a deliveroo driver, etc)

[200p]

^Ah but you have to pay to read it... good on them or they will have to be working for deliveroo for a bit longer.

 

Edited December 12, 2016 by 200p

[dgul]

10 minutes ago, 200p said:

^Ah but you have to pay to read it... good on them or they will have to be working for deliveroo for a bit longer.

 

FTAlphaville - so free to read.

(or, at least, free to register for the alphaville site, which is then free to read)

Edited December 12, 2016 by dgul

[goldbug9999]

On 10/22/2016 at 8:10 AM, Toast said:

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.

I think that ultimately blockchain based smart contracts will replace the various proprietary market makers but were talking 10-15 year timeframe.

Quote

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!

You've been reading too much wonderpup. Markets gravitate to an equilibrium of utility to the buyer and viability to the seller - if cab drivers starve and die they cant be cab drivers anymore creating a higher price floor among those remaining.

[billybong]

.

Edited December 12, 2016 by billybong

[billybong]

The all in it together economy?

[Little Frank]

On 10/21/2016 at 6:04 PM, 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.  

It's not clear to me that these 'new' providers are anything other than a very short-term regulatory/tax dodge. 

We'll see what happens when Uber, for example, goes bust. A re-run of the dot.com debacle looks to have reasonable odds. Scaling up only works if a business is profitable, most of these aren't & probably never will be. 

[XswampyX]

3 hours ago, Little Frank said:

It's not clear to me that these 'new' providers are anything other than a very short-term regulatory/tax dodge. 

Uber is just the software for driverless taxis... the human drivers are the short-term anomaly.

[wonderpup]

Quote

You've been reading too much wonderpup. Markets gravitate to an equilibrium of utility to the buyer and viability to the seller - if cab drivers starve and die they cant be cab drivers anymore creating a higher price floor among those remaining.

Hey-I've become a mini meme!

But to maintain my memeness I must-of course-disagree here. Uber or it's non profit clone need not provide a living wage to survive, that is not their offering- what they provide is a way for the casual driver to pick up few quid here and there- but in the meantime the traditional cab driver may well starve as he watches his former customers drive away in their Uber cars.

So it's not a case of the market for cab drivers reaching a new and stable equilibrium, it's more a case of relatively stable cab driving jobs being replaced by an army of casuals who do not require Uber to offer a living wage because driving for Uber is not their only or main source of income.

 

[durhamborn]

Nobody in the UK needs any wage at all to survive if they have children.They need real,or if self employed,made up 16 hours a week work.Tax Credits and Housing Benefit kick in.

Over time less and less employers can compete against their competition unless they go down the same route.

Ironic,but a party supposed to exist to protect the interests of "Labour" brought about the biggest destruction of the bargaining power of that Labour in history.The real sharing economy is the sharing of the income through taxation of a smaller and smaller full time waged middle.

[goldbug9999]

7 hours ago, wonderpup said:

Hey-I've become a mini meme!

But to maintain my memeness I must-of course-disagree here. Uber or it's non profit clone need not provide a living wage to survive, that is not their offering- what they provide is a way for the casual driver to pick up few quid here and there- but in the meantime the traditional cab driver may well starve as he watches his former customers drive away in their Uber cars.

So it's not a case of the market for cab drivers reaching a new and stable equilibrium, it's more a case of relatively stable cab driving jobs being replaced by an army of casuals who do not require Uber to offer a living wage because driving for Uber is not their only or main source of income.

 

 

If its it more efficient for the market to provide certain services as casual fill-ins/top-ups for other jobs or combinations of say delivery and cab services rather than dedicated specialists then so be it - its a net gain in the long run. If the costs of moving people and things around are reduced then this is a massive gain for the economy as a whole.

 

Edited December 13, 2016 by goldbug9999

[Bear Goggles]

On 12/12/2016 at 8:58 PM, Little Frank said:

It's not clear to me that these 'new' providers are anything other than a very short-term regulatory/tax dodge. 

We'll see what happens when Uber, for example, goes bust. A re-run of the dot.com debacle looks to have reasonable odds. Scaling up only works if a business is profitable, most of these aren't & probably never will be. 

Yes, this is likely, and Uber is the likely candidate. Not now, but in a few years' time. 

On 13/12/2016 at 0:08 AM, XswampyX said:

Uber is just the software for driverless taxis... the human drivers are the short-term anomaly.

That's the meme, but you have to understand that this is NOT Uber's current business model. Currently the taxi drivers themselves own the cars, so take the capital risk (they are responsible for the car loans) they also take all the risk from void periods due to quiet days, maintenance, illness, accidents etc. (or related insurance costs). Uber themselves own minimal assets. That's kind of the point of the so-called sharing economy - the big players are the intermediaries, the middlemen, and the workers are "partners" and bear the capital risk.

There are currently about 1 million Uber cars worldwide, so if Uber want to start rolling out driverless cars, they'll need to raise 1m x the cost of a driverless car $50k? - and take on all the capital risks and ongoing running/ replacement costs. So $50Bn+? You can do the sums, but we're talking billions of additional capital into a company that has already scaled, yet is making no profit, and has struggled to get a foothold in high-growth emerging markets.

We'll see, but I won't be putting my money on them pulling it off.

[Even Keel]

3 hours ago, Bear Goggles said:

Yes, this is likely, and Uber is the likely candidate. Not now, but in a few years' time. 

That's the meme, but you have to understand that this is NOT Uber's current business model. Currently the taxi drivers themselves own the cars, so take the capital risk (they are responsible for the car loans) they also take all the risk from void periods due to quiet days, maintenance, illness, accidents etc. (or related insurance costs). Uber themselves own minimal assets. That's kind of the point of the so-called sharing economy - the big players are the intermediaries, the middlemen, and the workers are "partners" and bear the capital risk.

There are currently about 1 million Uber cars worldwide, so if Uber want to start rolling out driverless cars, they'll need to raise 1m x the cost of a driverless car $50k? - and take on all the capital risks and ongoing running/ replacement costs. So $50Bn+? You can do the sums, but we're talking billions of additional capital into a company that has already scaled, yet is making no profit, and has struggled to get a foothold in high-growth emerging markets.

We'll see, but I won't be putting my money on them pulling it off.

There's no indication Uber want to actually own any driverless cars, they would still just be an intermediary.  Instead of driving my car into work and paying for parking, my car would drive me into work and I would then send it off to earn a bit of extra money as an Uber.  So long as it makes enough to cover the additional running costs I'm quids in.

Of course I would then probably spend the next couple hours having to clean crap off the seats since I can't imagine passengers treating them well, but there will probably be some other app on my phone that lets me find someone else to do that for me before it comes back to take me home.

This ideal Uberized world may not actually happen though, especially if they go spectacularly bust.

[wonderpup]

Quote

If its it more efficient for the market to provide certain services as casual fill-ins/top-ups for other jobs or combinations of say delivery and cab services rather than dedicated specialists then so be it - its a net gain in the long run. If the costs of moving people and things around are reduced then this is a massive gain for the economy as a whole.

I take your point but  I am becoming skeptical about the idea that we can simply aggregate the gains of technology, do a quick cost benefit analysis in terms of wages saved and efficiencies improved and then declare a win.

Increasingly the question becomes- a win for whom? Yes, in theory , if a large percentage of full time jobs were automated or disseminated out to an army of low paid casual workers this would produce some big winners- mainly those whose IP rights or ownership of the means of production leave them well placed to capture most of the gains- but is it a win for all those people whose jobs or job security are demolished in the process?

Cheap taxi rides and cheap electronic gizmos are great- but people still need to pay the rent or the mortgage, plus energy bills and other costs that do not seem to following the downward price trend we see in the consumer goods area.

What I am waiting for is the app that ensures that the gains from new technology are more fairly distributed around the economy, rather than being captured by a smal number of super wealthy individuals or corporations, most of whom are monopoly operations thanks to first mover advantage.

It's true that outfits like Uber and Facebook are in theory highly exposed to new entrants, given the relatively low barriers to entry for a software based business- but in practice this rarely happens- the benefits of being first on the scene seem even more overwhelming in the online space than they are in the offline space- though why this should be is not entirely clear- except perhaps that the very viral nature of the online environment leads to such a rapid  dissemination of brand identity that competing models simply never get the chance to establish a foothold before being overwhelmed?

And of course once you become a big beast in the online environment you take care to absorb and digest any potential threats to your dominant positon by buying them out and adding their distictiveness to your own.

Is it time to commit the heresy of begining to question the idea that innovation is always and everywhere an unalloyed good? Might there be a significant amount of downside buried somewhere in this shiny new technological paradise that we are assured the technologists are building for us?

From a purely technological perspective the future in many ways looks great- but like Disneyland the magic is only going to be accessible to those with the means to afford the price of entry- the rest will be on the outside looking in- for them the future looks not so great.

 

Edited December 14, 2016 by wonderpup

[zugzwang]

On 13/12/2016 at 1:19 AM, wonderpup said:

Hey-I've become a mini meme!

But to maintain my memeness I must-of course-disagree here. Uber or it's non profit clone need not provide a living wage to survive, that is not their offering- what they provide is a way for the casual driver to pick up few quid here and there- but in the meantime the traditional cab driver may well starve as he watches his former customers drive away in their Uber cars.

So it's not a case of the market for cab drivers reaching a new and stable equilibrium, it's more a case of relatively stable cab driving jobs being replaced by an army of casuals who do not require Uber to offer a living wage because driving for Uber is not their only or main source of income.

 

Economists use the term 'equilibrium' in at least half a dozen contexts, all of them wrong. The smoothly intersecting supply and demand curves of the Marshall cross are only ever seen in the pages of economics textbooks. In the real world these curves are step functions and can take any shape provided they don't self-intersect. In his book the Death of Economics Paul Ormerod could identity only one market example of a smoothly downward-sloping demand curve: cornflake sales in British supermarkets.

[Bear Goggles]

4 minutes ago, Even Keel said:

There's no indication Uber want to actually own any driverless cars, they would still just be an intermediary.  Instead of driving my car into work and paying for parking, my car would drive me into work and I would then send it off to earn a bit of extra money as an Uber.  So long as it makes enough to cover the additional running costs I'm quids in.

Of course I would then probably spend the next couple hours having to clean crap off the seats since I can't imagine passengers treating them well, but there will probably be some other app on my phone that lets me find someone else to do that for me before it comes back to take me home.

This ideal Uberized world may not actually happen though, especially if they go spectacularly bust.

There's no point in any individual private ownership of self-driving cars. Why wouldn't you just rent one whenever you want to go somewhere? Uber have invested in self-driving technology, but someone has to own the cars. Who? The car company? But they are also investing in their own self-driving technology, so why wouldn't Ford (or whoever), just have their own hail-a-ride app?

Basically, it's all unclear how this is going to play out. The only thing that is clear that Uber aren't yet making a profit, they've already burnt through a shedload of VC cash, scaled to 1 million cars, they can't get a foothold in emerging markets (like China), and they're under fire from governments and regulators around the world for exploitation of workers. I'm pretty sure that within 50 years we'll all just have autonomous cars picking us up and dropping us off where we want to be. But how we get there from here is unclear right now.

[Austin Allegro]

One thing that hasn't been mentioned is that we are unlikely to become 'Dickensian' because even the poorest westerner has access to life-enhancing resources that the wealthiest Dickensian could only have dreamt of. For example, the internet has made it much easier  to live outside the 'work-consume-borrow-work' cycle. Thanks to the internet I no longer need to work full time and pay high prices for rent/mortgage near my office; thanks to the internet I have a couple of extra passive income jobs which can support me if my main job fails; thanks to the internet I can research and compare things like insurance, savings and investments etc to optimise my income, thanks to the internet I can save huge amounts of money by utilising knowledge, eg learning to repair things from Youtube videos instead of paying a tradesman. 

[Even Keel]

2 hours ago, Bear Goggles said:

There's no point in any individual private ownership of self-driving cars. Why wouldn't you just rent one whenever you want to go somewhere? Uber have invested in self-driving technology, but someone has to own the cars. Who? The car company? But they are also investing in their own self-driving technology, so why wouldn't Ford (or whoever), just have their own hail-a-ride app?

Basically, it's all unclear how this is going to play out. The only thing that is clear that Uber aren't yet making a profit, they've already burnt through a shedload of VC cash, scaled to 1 million cars, they can't get a foothold in emerging markets (like China), and they're under fire from governments and regulators around the world for exploitation of workers. I'm pretty sure that within 50 years we'll all just have autonomous cars picking us up and dropping us off where we want to be. But how we get there from here is unclear right now.

I'm not sure I agree with you about private ownership.  Rush hour is not going away even in a self driving world, and it may still make sense for those who will need to use the cars at peak times when rentals would be highest to actually own the vehicles to guarantee they will get a ride to work.  But then if every car that is used for a rush hour commute can become a taxi for the rest of the day (and night) the difference between peak and off peak prices will be orders of magnitude, making the gains for renting the car out at off peak times pretty marginal.

Personally I suspect Uber will go spectacularly bust at some point and most self driving cars will be bought on finance and spend 95% of their time parked just like good old fashioned cars do now. Though I also suspect the law of unintended consequences will make rush hours twice as long and congested as people send their cars home again to avoid city centre parking fees.  Not everyone wants to share...

[Diver Dan]

There are a number of different things which would be simpler to implement than a 100% self driving car.

http://www.thetruthaboutcars.com/2016/12/no-fixed-abode-five-amazing-things-easier-invent-autonomous-car/

[wonderpup]

Quote

There are a number of different things which would be simpler to implement than a 100% self driving car.

Which perhaps explains why Google seem to want to get into the automobile business- perhaps they really don't.

Maybe the whole self driving car thing is actually  more about picking a particularly hard problem in order to push the development of AI in a more generic way?

 

[zugzwang]

12 hours ago, Austin Allegro said:

One thing that hasn't been mentioned is that we are unlikely to become 'Dickensian' because even the poorest westerner has access to life-enhancing resources that the wealthiest Dickensian could only have dreamt of. For example, the internet has made it much easier  to live outside the 'work-consume-borrow-work' cycle. Thanks to the internet I no longer need to work full time and pay high prices for rent/mortgage near my office; thanks to the internet I have a couple of extra passive income jobs which can support me if my main job fails; thanks to the internet I can research and compare things like insurance, savings and investments etc to optimise my income, thanks to the internet I can save huge amounts of money by utilising knowledge, eg learning to repair things from Youtube videos instead of paying a tradesman. 

Just as long as the poorest Westerners continue to have affordable access to resources like electricity, healthcare and food. Life enabling rather than life enhancing. Millions currently live outside the 'work-borrow-consume' cycle you describe but in a way none of us would seek to emulate.

Edited December 15, 2016 by zugzwang

[scepticus]

On 12 December 2016 at 8:58 PM, Little Frank said:

It's not clear to me that these 'new' providers are anything other than a very short-term regulatory/tax dodge. 

We'll see what happens when Uber, for example, goes bust. A re-run of the dot.com debacle looks to have reasonable odds. Scaling up only works if a business is profitable, most of these aren't & probably never will be. 

Quite. Some kind of shake-out is likely before AI/ML/Big Data moves on from being used primarily to spawn new unicorn start-ups based on the concept of mechanically recovered workforces. So I think we need to kind of look through this gig economy thing somewhat to what comes after; we are right at the beginning of all this, and any shake-out coming is probably the first bear trap on the famous bubble curve. 

[XswampyX]

Yeah, but who will be getting the shake down, Uber? I don't think so....

Quote

A growing number of disillusioned savers are choosing to put ‘non-traditional’ investments into their Self-Invested Personal Pension (SIPPs) and car park spaces are among the more left-field examples.

The rationale behind the idea is that as the number of cars increases – motor organisations say there will be 39 million more vehicles on British roads alone by 2030 – demand for parking will soar. However, as there is only a finite amount of space in urban areas for car parks, demand is expected to handsomely outstrip supply.

Investors can take advantage of this trend by purchasing an individual parking space and leasing it out to a tenant for a period of time. Often this tenant is a management company which then sub-leases it to customers on an annual basis.

Car park spaces can typically be purchased with a minimum investment of £25,000 for a six year lease and most offer a guaranteed rental yield of 8% for the first two years.

How much is a self driving car going to be, £25,000? I think you underestimate the number of greedy b'stards in the world today. 

From 2015 :- http://www.yourmoney.com/investing/investing-in-car-parks-a-good-vehicle-for-income-seekers/

[Little Frank]

11 hours ago, scepticus said:

Quite. Some kind of shake-out is likely before AI/ML/Big Data moves on from being used primarily to spawn new unicorn start-ups based on the concept of mechanically recovered workforces. So I think we need to kind of look through this gig economy thing somewhat to what comes after; we are right at the beginning of all this, and any shake-out coming is probably the first bear trap on the famous bubble curve. 

We were right at the beginning of it in late 90s too. 2 decades on we're right at the beginning of it again. In another 2 decades....and so on....

Caveat Emptor as they say in Spain Rodders!

[scepticus]

7 hours ago, Little Frank said:

We were right at the beginning of it in late 90s too. 2 decades on we're right at the beginning of it again. In another 2 decades....and so on....

Caveat Emptor as they say in Spain Rodders!

Not this time. Be there or be square.