(The Big Disrupt) Uber: Uber’s Californian nightmare

With Uber closing down operations in France and two of its executives being held under arrest, it’s surely time for the Google backed car hailing company to review its ill-advised strategy of getting under the skin of governments and taxi drivers across the planet.

Uber has been harassed, harangued and protested by governments and taxi drivers against in just about every country it’s operates in as the company has launched operations in countries with the truly naïve notion that the disruptive and regulatory implications of their service wouldn’t garnered them the attention of both governments and taxi drivers despite the vitriol and legal drama the company has faced wherever it went.  

Governments and taxi drivers have been all over Uber like a hot rash for a number of reasons but the main contention has been over Uber’s reluctance to be pinned down as a taxi service and therefore avoid dealing with the burdensome regulations that come with it. Uber have consistently described themselves as an app service which largely doesn’t wash with either governments or taxi drivers who have to compete with a popular and cheaper service that’s not beholden to the regulations they are.

Taxi drivers everywhere have cried foul over Uber’s ability to flout regulations and have taken to the streets as the California based company represents an extinction level event to their industry. While characterizing Uber as an extinction level event for the taxi industry might sound hyperbolic, tell that to French taxi drivers whose protests against Uber turned violent as, according to The Hamilton Spectator, “100 Uber drivers ha(d) been attacked, sometimes while carrying customers”[1].

Taxi drivers and fleet around the globe would probably take Uber’s disruption on chin if Uber played but rules of the road but Uber, intent on arguing its status as merely an app service that simply connects consumers with drivers, have other ideas. The reason Uber make this argument beyond actually seeing themselves as an app service is that Uber don’t want to insure their drivers as doing so will make insurance costs one of the company’s largest expenditures and fast. It’s why Uber has had to brave legal battles, bans, and protests in every country it operates in and the bad press that comes with it as Uber simply doesn’t want to take on a very large liability.

So far, it’s been Uber’s drivers taking on the insurance liability forcing drivers to lie to their car insurance providers who’ll likely raise their rates or potentially drop them altogether. However, Uber will no longer be able to have their cake and eat it in California at least as thanks to recent changes in the law, Uber now have to cover their drivers from the moment they use Uber’s app to the moment drivers turn it off.

Insurance company executives must be jumping for joy in their boardrooms upon hearing the news of the California law change as it part of a growing trend of states in the US changing their laws to make sure that Uber insures their drivers. Uber executives however are likely to have their heads in their hands wondering why California of late has been tough on them as the Californian labor commission ruled that Uber drivers were employees as opposed to contractors.

It’s one thing that states are pushing to make Uber insure its drivers but recognizing their drivers as employees is literally Uber’s worst nightmare as insurance is merely a drop in the pool compared to the costs the company will incur if its drivers are ruled as employees as rulings like this “opens Uber up to higher costs, including Social Security, workers’ compensation and unemployment insurance”[2]. Should more states in the US and countries across the globe make similar rulings, Uber’s business model will be seriously hobbled by onerous obligations and raise driverless cars a rungs up Uber’s corporate agenda from a far flung ambition to the organizations top business priority.

In sum, Uber, despite the bad press, protests, and legal battle have largely had their own way but with the double whammy served up by their home state in making them cover their drivers and, more importantly, recognizing them as employees, Uber could find themselves in real trouble should other states and countries follow the Californian example.

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[1] The Hamilton Spectator, 2015, French taxis strike after weeks of rising tension over Uber, http://www.thespec.com/news-story/5695185-french-taxis-strike-after-weeks-of-rising-tension-over-uber/

[2] C. Johnson, 2015, Uber drivers are employees not contractors, California rules, http://www.theguardian.com/technology/2015/jun/17/uber-drivers-are-employees-not-contractors-in-california-ruling

(The Big Disrupt) Sharing Economy: The Sharing Economy is Bullshit

Bullshit has always been rife in the world but this sharing economy bullshit is unconscionable. Needless to say, the sharing economy has nothing so with sharing and everything to do with a sluggish economy and a gang of tech companies exploiting a second market in goods people already have.

Sharing is caring but people doing their best to profit from a secondary market on shit they already own has fuck all to do with sharing. Sharing to me and anybody who isn’t retarded is someone being in possession of a good and because you’re not an asshole, you allow other human beings to use that good but this not what’s happening. What’s happening is people who have goods but can’t pay for them rent them to people who can’t own them.

 The sharing economy is the latest bullshit being hawked by tech companies with silly names that has nothing to do with people sharing what they have but people trying their best to make a return on it. In truth, what we’re really witnessing in the sharing economy is really a new subletting economy where almost anything can be rented for the right price. There’s really no problem with this on the face of it except that it has and will piss off primary market operators such as landlords, hoteliers and taxi cab drivers who are getting their lunch eaten under their nose.

People make the argument that companies like Airbnb and Uber offer a service to a generation that are more likely to rent a good than buy it outright but this argument reveals the pernicious nature of the so called sharing economy for what it really is as they won’t tell you why people can’t own these goods in the first place . The sharing economy exists not because there been a revolution in social relations between people but because a handful of companies have figured how to get rich off a generation that have become accustomed to renting goods because they can’t own them.

I’m not against sharing and I’m not even against subletting but what I am against is companies worth billions trying to tell me that exploiting a generation with shitty job prospects and lean banks accounts has anything to do with sharing. In truth, if they were in the business of increasing sharing among people they would be facilitating a barter economy rather than opening a new facet of the increasingly exploitative gig economy.

In sum, companies like Airbnb and Uber aren’t full of shit because they making money off a generation who can’t own but because they’re using one of the best elements of human nature, our tendency to share, as a tool to market a growing secondary market in goods people already own.