“This on-demand or so-called gig economy is creating exciting opportunities and unleashing innovation, but it’s also raising hard questions about workplace protections and what a good job will look like in the future.” – Hillary Clinton, July 13, 2015
“Big government liberals fundamentally can’t embrace digital innovation because it threatens the way they govern. They see car-sharing services as a threat to the local government taxi cab cartels. They see food trucks and Airbnb as a threat to urban planning and the tax and fee racket that they’ve imposed on brick and mortar restaurants and hotels.” – Jeb Bush, July 16, 2015
How come one of the hottest IPO candidates, $50 billion estimated market-value Uber, has suddenly become a political piñata?
Maybe we should give Uber a break? The company has not even commenced its roadshow to sell shares of Uber to the public, and yet it is caught in the middle of partisan crossfire.
Hillary didn’t even mention Uber and its $1 billion in annual revenues by name; she didn’t need too. Three days later, Jeb purposefully rode Uber around San Francisco to check out start-up Thumbtack, an on-demand provider via mobile technology for those looking for professionals from interior designers to dog walkers. Don’t worry: Jeb will not carry San Francisco, if he is the Republican nominee.
As The Economist described the issue here is the on-demand economy matching people with money and no time with people with time and no money. This is also a question of consumer choice between a cab and a private driver at a similar or even lower price. This is a question of deciding between a relatively expensive restaurant or a line of tempting food trucks (e.g., downtown Portland, Oregon), each specializing a particular cuisine for a reduced price. This is also the question of whether to stay in a standard hotel or motel or accessing Airbnb to find a guest room.
For the service provider, she or he can do the work they want, when they want to do it. The on-demand economy allows them to monetize an unused/underused asset (i.e., car, extra room, cooking talent). Does the on-demand economy make music for everyone? No, but conceivably it works for students wanting to supplement their income, young mothers needing a part-time job or the semi-retired wanting to re-engage in the marketplace and make some legal tender on the side.
The unifying characteristic of the on-demand economy is the ubiquitous smart phone used by 2 billion around the globe now, and expected to reach 4 billion users by the end of this decade or a brilliant device for more than half of the planet.
Translated: Potential customers with smart phones summon on-demand service they want, when they want it. They need a ride; they contact Uber or Lyft or Sidecar. Uber, a 2009 privately held start-up (now in 53 countries around the world), does the rest. Want a doctor within two hours, click on Medicast. Need a lawyer? Axiom is at your service. How about a contractor for a remodel? The Handy app is easy to find.
Uber: Net Plus or Net Minus?
“Uber, a perfect example of how a disruptive technology can improve a formerly noncompetitive market, serves a real need in cities where taxis have taken advantage of riders for years.” – Washington Post lead editorial, July 20, 2015
“Bashing Uber has become an industry in its own right; in some circles, though, applying its business model to any other service imaginable is even more popular.” – The Economist, There’s an app for that, January 3, 2015
Despite the positive features of this winning destructive technology, there are those in Washington D.C. and other bastions of the static quo that are threatened. According to The Economist, the number of temporary workers has doubled from 1.0 million to 2.0 million in the past 15 years, while private sector union membership has plunged from 12 percent in 1990 to about 6 percent now.
And there lies the rub for Hillary. Unions for obvious reasons are not thrilled with Uber and its on-demand economy, business-model followers. At the same time, Uber and its ilk appeal to Millennials, who realize the old rules don’t apply. They instinctively know this by examining the literally millions of desultory SOL Baby Boomers, who cannot or will not think out of the box.
The business model of the rust-belt factory with its long-term employment followed by a guaranteed company pension is broken. There is a life-and-death struggle underway between education and technology. What is needed to compete in the 21st Century economy is educational know-how/smarts to keep up and make technology your friend.
There are those who have services to provide and skills to offer and they use mobile technology to participate in the on-demand economy. There are an equal amount of consumers who want alternatives. On-demand companies do not offer perfection, but they do provide choices.
One of the two major parties will be pro-choice when it comes to destructive technologies, exploring and opening up new employment opportunities, particularly those with a young outlook on life. The other will look to the power of Big Brother to fight-off the relentless power of ones and zeroes of binary code.
When it comes to relentless destructive technologies: You can run, but you can’t hide.