Tag: Uber

Disrupt the Citizen by Nikil Saval

In the wake of Travis Kalanick’s ouster at UBER, Nikil Saval writes about the incompatibility of democratic principles with Silicon Valley’s “disrupt culture.”

 

“The taxi system was and is an exploitative one, in which drivers were often classified as independent contractors. But ride-sharing is incalculably more exploitative. In regulated markets, taxi companies are at least required to maintain, acquire, and insure all the cars in a taxi fleet. Ride-sharing companies are not. This means for example, as Quartz reported recently, that Uber can force its drivers into “deep subprime” loans to acquire their vehicles, leaving them drowning in debt.”  Read full article here.

Would Bernie’s supporters let him take on Silicon Valley?

If Bernie Sanders became president and was then tough on the growing power of the Internet industry, would the progressives currently singing his praises still support him?  With this post, I am neither endorsing nor indicting the candidacy of Senator Sanders himself, but as his campaign is built on a theme of holding Wall Street and corporations accountable, I have to wonder if his supporters have contemplated the idea that, as president, if he were to wield Teddy Roosevelt’s sledgehammer, this means Silicon Valley and its capitalists, too.

After all, Google alone is among the largest corporate tax dodgers in the country; it now consistently ranks as in the top ten biggest lobbyists; it is among the federally subsidized; it has wriggled out of anti-trust investigations and paid its way out of criminal indictments for its executives; part of the businesses strategy is based on invading your privacy; the company is racing toward a trillion-dollar valuation without being profitable while its top execs live among an elite fraction of the one percent; it doesn’t employ very many people; and the company built a considerable portion of its market share by exploiting other people’s labor without permission.  Google isn’t the only Internet company to resemble these remarks—they’re just the biggest and most pervasive.

But we’ve seen what happens when the government tries to tell the Internet industry what to do, haven’t we? The industry rallies the masses by scaring the hell out of everyone with messages about free speech and a broken Internet and the end of democracy itself. And you’re right in the middle of a Candy Crush game, dammit! (On a side note, watching this particular campaign season, the idea that the “Information Age” has been a boon to democracy is a very tough sell.  If it really is possible to break the Internet, somebody show me how.)  Okay, back to the point …

I’m not at all surprised that Sanders’s message is popular with a lot of 18-29-year-old progressive voters.  Like the humane antithesis of Trump’s cultish message of intolerance, the Sanders campaign is certainly about being fed up—fed up with the fact that the system is rigged—and this frustration cannot be denied.  But how holistically this political base is willing to look at the rigging is another matter. When Sanders says “Wall Street”, how does that translate among his supporters?  Does it consider the networked economy of the 21st century?

Given the extent to which the sanctity of the Internet is hugely important to this same demographic, is anyone paying attention (including Bernie?) to the fact that the industry which has accelerated wealth consolidation, which has produced paper billionaires out of the most speculative—and often predatory—investments, and which evangelizes an ethos of operating above the rule of law is led by Google, Amazon, Facebook, Apple, Uber, Spotify, etc.  Like it or not, many of the same people who say they want a guy like Sanders to take the fight to Wall Street are trapped in a dichotomy in which simply sharing that message on social media is telling Wall Street to keep doing exactly what it’s doing. Or consider another example …

With an infusion this January of $2 billion in private equity from China, Uber is now valued at over $60 billion, making it bigger on paper than Dow Chemical, General Motors, or Time Warner.  Although there are many drivers currently operating, the company technically employs almost nobody, and it has recently invested some of its VC money in the future of driverless cars.  In fact, in recent announcements, Uber founder Travis Kalanick has stated that if they can eliminate the driver altogether, the price of using services like Uber will become cheaper than owning a car. In theory, he may be right; but that statement alone implies a dramatic, multi-decade transformation to our economy and our infrastructure. This may include ground-transportation services consolidated down to just one or two dominant companies by the same mechanisms that enabled Amazon to become the category killer in product fulfillment. But what exactly do we think that sixty-billion-dollar speculation is about, a ride-hailing service? Yeah. So, when Bernie says he wants to tax Wall Street and pay for infrastructure, how does the current capitalist bet on Uber’s future change that conversation?  We’ll “tax” Wall Street to pay for a public subsidy of a ground-transportation paradigm that is still owned by the 1%?

What the tech-utopian promise and the Sanders campaign have in common is that they both reflect frustration with the status quo, and both will frame issues in the language of democratization; but where the agendas differ is considerable and seems to highlight the two opposing streams in which the millennial generation in particular is standing.  Sanders voters want to make college free and healthcare more affordable while the Internet industry wants to make doctors and professors, to a certain extent, obsolete.  Sanders voters want to level the playing field while the Internet industry wants to own the field, the ball, the bat, and the photos you took while you were playing.  Sanders voters want to make America less corporate, the Internet industry is the ultimate corporatization (see networking) of everything.  Sanders voters talk about American jobs while the tech-utopian’s rhetoric has confused the mantra of “disruption” with Schumpeter’s creative destruction.  Sanders voters cannot possibly say they want any president to go after Wall Street today and not include the hugely speculative bets on the technological future this same constituency says it wants in the palm of its hand.

It’s not that we cannot or should not have the best future technology can provide, but if a Bernie Sanders (or even Hillary Clinton) were to take this economic agenda to the doorstep of Silicon Valley, and that industry responds with its standard barrage of messages that the Internet and our rights are “under attack”, will this segment of the electorate keep faith with its stated mission, or will they get fooled again?

Adapt to What? – An Open Letter

Dear Millennials:

Once upon a time (in the 1970s), the actor you might know as Steve Martin was a rising star in stand-up comedy.  One of his jokes began with the premise that he would tell you how to earn a million dollars and never pay taxes.  The real laugh in the bit came when Martin would say, “Ok, first get a million dollars….”  See? That’s funny.  And the reason I mention the joke here is that it seems to me quite a few peppy pundits out there are telling you a version of this joke, only they’re not kidding. They’re not saying “First, get a million dollars.”  Instead, they’re saying things like “Adapt to the market you’re inheriting,” which, in many cases, is an unfortunate euphemism for “Just become a star.”  Because if you don’t become a star in the market presently being transformed as you’re trying to enter it, you might be basically screwed.

No question it was very cool of Taylor Swift, who is obviously a superstar, to stand up to Apple on behalf of professional musicians, who will never be superstars. But as this indie artist points out, all the non-superstars (who, by the way, make most of the music you probably love) are still hosed because the streaming model is not yet sustainable, no matter whose service leads the market. And these music professionals are likely to remain hosed because we may have devalued work (not just music, but work) past the tipping point of sustainability. And you should be angry about this, even if you helped feed the problem.  This article by Rebecca Smith for Fortune explains why, for instance, the Uber business model can be a universal job killer.

“Today, as the super-rich have amassed ever greater shares of wealth, the connection between working for a living and being able to earn a decent living from work has disintegrated. Perhaps nowhere is this disparity more evident than in the growing “on-demand” economy. Companies like Uber, Lyft, Crowdflower, Homejoy, and others in transportation, delivery, hospitality, home improvement, domestic service, technology and elsewhere have adopted business models that pass the costs of doing business onto workers themselves and move the wealth their service provides upwards. The on-demand economy has already created its share of billionaires – Uber’s co-founders are worth around $5 billion each, while those who drive for Uber receive meager pay.”

So, what the “adapt” mandate implies here — again echoing Steve Martin — is “First, go invent Uber.” But there’s like 80 million of you millennials in America, and the digital-age market only has room for one or two (usually one) major player in any category at a time.  So, in terms of realistic ratios, even if a million of you might invent killer apps or become YouTube stars, neither of those enterprises will create and sustain real jobs for the  the other 79 million.  As Smith points out, and as supported in this essay by Umair Haque entitled The Servitude Bubble, the devaluation of labor and general shift toward a market of ad hoc pieceworkers, livery drivers, servants, and craftspeople all working too cheaply for a wealthy minority is not limited to any particular business sector.  As many of of my colleagues have been saying for some time, what the tech industry and free-culture consumers did to music is now manifest in other areas of the market. Smith projects your future as follows:

“Our new grad might sit down to her computer every day, wondering whether she will get enough work to make it through to tomorrow, doing mind-numbing tasks like matching names to photographs and matching the word “blue” with the color “blue,” and she’ll compete with 500,000 workers across the world who are hungry for the same micro-jobs. One researcher has found that 70% of the tasks on [Amazon’s] Mechanical Turk are worth 5 cents or less, yielding an hourly wage of less than $5.”

Maybe that prediction is more dire than necessary. I hope so.  But read between the lines in any number of trends and we see a hyper-efficient, data-centric view of the world, of culture, and of market value that appears to be fueling the growth of monopsonies empowered to dictate terms to every kind of worker from book authors to carpenters to truck drivers. And it occurs to me that for all its fluffy futility, OWS demonstrated that many of you were on the right track. You should be pissed off at the 1% and angry as hell at Wall Street.  But I’m sorry to say that the business models of the digital age are not the antidote to Wall Street; they are its worst intentions on speed.  It is insane that a company like Uber, which has yet to prove itself, which creates no real jobs, which functions like a pyramid scheme, and which could evaporate overnight is valued in the tens of billions by “the market.”  This should piss you off, not only on its own terms, but because major business owners in many sectors seem to be learning from these tech-based models how to take advantage of your talent, your time, and your costly educations for pennies on the dollar. They know the more that labor is devalued across multiple sectors and the more desperate your circumstances become, the more bargaining power they have. And it doesn’t even have to be malicious. If these economic forces drive the value of work down and the global market is flooded with millions of talented, educated people, it becomes untenable for even the most generous, well-intentioned employer to offer more than a meager going rate for your services.

But here’s a solution, at least part of a solution, as I see it:  you are the market. Right now, you’re the consumer everybody wants. Of course, because the big players figured out how to monetize your attention without asking you for any money, you won’t notice right away that you’re actually paying for the present with your own future value. (And how ironic is it that your time has been turned into a commodity pegged to advertising when studies show you will avoid advertising at all costs?)  It may not occur to you that it is contradictory to hate on Wall Street and then order up an Uber car or pirate a movie or a book, and the VCs whose names you don’t know are counting on you not to notice. You get the concept that “buying local” is an economic driver for your community, but the studies and the pundits all say you won’t even buy a digital download from your favorite band because when you were kids, some adult told you that you shouldn’t pay for music.  But that adult is a billionaire now, and he hasn’t even bothered to build a company where you might get a decent job.

Here’s an experiment I am sure won’t catch on, but what the hell:  stop pirating media; if you can, buy one extra album or video or book or something each month in a local, retail environment; get a subscription to a legal streaming service; and most of all, refuse to patronize or work for a businesses that wants people to work for free or is looking to turn valued labor into freelance, micro-tasks. Then, watch what happens. You’re the market. Let the damn billionaires adapt.