The Uber-Style Servant Economy

Farhad Manjoo, writing in 2015 in the New York Times:

The larger worry about on-demand jobs is not about benefits, but about a lack of agency — a future in which computers, rather than humans, determine what you do, when and for how much. The rise of Uber-like jobs is the logical culmination of an economic and tech system that holds efficiency as its paramount virtue.

“These services are successful because they are tapping into people’s available time more efficiently,” Dr. Sundararajan said. “You could say that people are monetizing their own downtime.”

Think about that for a second; isn’t “monetizing downtime” a hellish vision of the future of work?

Manjoo, again, in a 2016 piece in the Times:

But Uber’s success was in many ways unique. For one thing, it was attacking a vulnerable market. In many cities, the taxi business was a customer-unfriendly protectionist racket that artificially inflated prices and cared little about customer service. The opportunity for Uber to become a regular part of people’s lives was huge. Many people take cars every day, so hook them once and you have repeat customers. Finally, cars are the second-most-expensive things people buy, and the most frequent thing we do with them is park. That monumental inefficiency left Uber ample room to extract a profit even after undercutting what we now pay for cars.

But how many other markets are there like that? Not many. Some services were used frequently by consumers, but weren’t that valuable — things related to food, for instance, offered low margins. Other businesses funded in low-frequency and low-value areas “were a trap,” Mr. Walk said.

Another problem was that funding distorted on-demand businesses. So many start-ups raised so much cash in 2014 and 2015 that they were freed from the pressure of having to make money on each of their orders. Now that investor appetite for on-demand companies has cooled, companies have been forced to return sanity to their business, sometimes by raising prices.

In a fantastic article published today, Alexis C. Madrigal of the Atlantic assessed over a hundred Uber-for-x companies and found that, while there were mixed economic results with the companies themselves, the analysis revealed a deeper common truth about this style of company:

The inequalities of capitalist economies are not exactly news. As my colleague Esther Bloom pointed out, “For centuries, a woman’s social status was clear-cut: either she had a maid or she was one.” Domestic servants—to walk the dog, do the laundry, clean the house, get groceries—were a fixture of life in America well into the 20th century. In the short-lived narrowing of economic fortunes wrapped around the Second World War that created what Americans think of as “the middle class,” servants became far less common, even as dual-income families became more the norm and the hours Americans worked lengthened.

What the combined efforts of the Uber-for-X companies created is a new form of servant, one distributed through complex markets to thousands of different people. It was Uber, after all, that launched with the idea of becoming “everyone’s private driver,” a chauffeur for all.

The pitch for these kinds of services is that our cars are usually stationary, our spare bedrooms are usually empty, and we might have some spare time to deliver tacos in our neighbourhood. But this isn’t what has been happening. Ride-sharing drivers were once able to make a modest living driving full-time for a single service; now, they’re making half what they used to, so they drive for multiple services and for longer hours — still without the benefits of true full-time employment. Meanwhile, wealthy people buy up multiple properties for Airbnb, which may skirt or even break commercial lodging regulations.

This is an unfair economy which, because it is still so dependent on venture capital funds, is also unsustainable in its current form.