What do Uber, Airbnb, Lyft and a host of other “gig” economy companies have in common?
If that was your answer, I agree – but maybe not in the way you think.
Just ask Uber and Lyft, which, despite spending a boatload of money and expending a ton of influence, and according to many pure intimidation, lost a critical vote in Austin, Texas, by a huge margin.
While the Proposition itself might have seemed confusing, the underlying principle was simple: Is all regulation really a barrier to innovative disruption, or is a big part of the disruption merely the fact that so many of these companies have used the lack of regulation, the absence of accountability, the loosening of standards as ways to make immense amounts of money for themselves and their investors simply because they are not held to the same financial and societal standards as their so-called old-fashioned competitors?
And what makes Austin, in my opinion, so important is that the public transportation infrastructure is woefully lacking and both Uber and Lyft served a serious and important function as cost-effective ride-sharing options. Yet. Yet…the market voted against them because the community, society…accountability…People First…were seen as more important.
The nay vote on Proposition 1 is all the more crushing for Uber and Lyft considering the lopsided amount of money they spent in favor of it. The companies invested a combined $8.7 million to support the proposition via their lobbying committee, Ridesharing Works for Austin, an unprecedented sum in Austin local politics. That dwarfed the $132,000 that Proposition 1’s opponents strung together from about 500 individual contributions, according to campaign finance filings….
“Uber, I think decided, they were going to make Austin an example to the nation,” said David Butts, a local political consultant who helped coordinate the campaign against Proposition 1, according to a report in the Austin American-Statesman. “And Austin made Uber an example to the nation.”
And now they will leave Austin and no one really wins.
As I have written before…I love Uber…in fact, I just got out of an Uber car returning with my wife from a Mother’s Day get together with our daughters. But…while technology enables them – it’s a short-term advantage – service and cost and security (yes, security, growing ever more important in our tech world) will be the ultimate competitive advantage and that costs.
Bradley Tusk who runs regulatory issues for Uber has made the battleground clear: “You can’t keep eating the world without pissing people off.”
And, Eric Schneiderman, the Attorney General of New York State, has a very clear answer for him: “No company or individual no matter how powerful or well financed is above the law.”
Truth is, there is a lot at stake here, and despite the digibabble desire to make us all believe that we are in unchartered waters, I’d argue strongly that we are rehashing old arguments and fighting old battles.
For today, let’s begin with the gig economy and the growing number of lawsuits plaguing its leaders. Fast Company has articulated the argument well:
What’s at stake with these lawsuits and protests? The very definition of “employee” in a tech-enabled, service-driven 21st century American economy. Gig economy companies do not own cars, hotels, or even their workers’ cleaning supplies. What they own is a marketplace with two sides. On one side are people who need a job done—a ride to the airport, a clean house, a lunchtime delivery. On the other are people who are willing to do that job. If Uber and other companies are going to be as big as some claim, a new deal has to be brokered, one that squares the legal rules governing work with new products and services. What benefits can you expect from a quasi-employer? What does it mean to be both independent and tethered to an app-based company? The social contract between gig economy workers and employers is broken. Who will fix it, and how, will determine the fate of thousands of workers and hundreds of millions of dollars.
Were my grandmother still alive, I think she could help shine a bright light on this subject. What is an app-based company? An app is only an efficiency tool. Back in her day the “app” was a guy who stood at the docks as new immigrants arrived or floated through the tenements and linked people who needed a job with manufacturers that needed laborers. Many were employed in the same way that gigs are today – they worked by the piece, had no insurance, no safety net – no one had any accountability for them. And in a world that didn’t have Uber ride sharing, she walked miles a day to save the pennies that public transportation cost.
The upshot was unions and regulations, which were meant to protect and, by the way, to deliver better products as well. And while over time the system was abused and overused, its basic construct was to protect all.
Bottom line, in the words of a recent TIME article, commenting on the California Labor Commission ruling in favor of a San Francisco Uber driver who claimed to be an employee and not an independent driver and, therefore, was owed expenses by Uber:
It could set a binding precedent for a multi-billion-dollar question plaguing the booming on-demand economy: Do such companies have employer-employee relationships with tens of thousands of American workers?
And will the end result be as Fast Company says: “The Gig Economy Won’t Last Because Its Being Sued to Death.”
I certainly hope not as there is so much potential, and yes, innovative thinking is also at stake here – but again…as The Guardian has pointed out: “The Silicon Valley buzzword [“disruption”] has the aftertaste of a sucked battery. It doesn’t even mean anything anymore…”
Yet what truly bothers me more is the “Do No Evil” philosophy that helped usher in our digital age and the often-cited “truth” that millennials transcended the “me” generation; that they actually care enough to frequent businesses that care about people and the world.
Hard to reconcile that with companies that profess to “eat” that very world and with lawsuits like the following from just a few weeks ago:
Turned down a total of nine times since March last year.
“I just find it humiliating because anyone should just be able to call a taxi, jump in and go to wherever they want.
I should not be having these problems just because I’ve got a disability, just because I’ve got a guide dog.” – JADE SHARP
Today Jade and her parents arrived at court for the fifth time, to face the latest driver.
Ratnasingam Thayaparan is the driver who last June, refused Jade.
He was found guilty and ordered to pay a fine.
Cities like mine have been fighting discrimination by taxi drivers with legislation for years…help me understand why allowing it helps so-called disruption.
I believe it’s time to wake up to the reality. Uber, Lyft and others in the gig economy are not tech marvels; they are not developers of life-saving technology…in fact, they are not tech companies at all…anymore than my dry cleaner is a tech company because I use their app to request a pickup, ask for special services and ultimately pay.
What they have done is brilliantly utilize and apply technology to solve supply and service problems, but in doing so many have conveniently forgotten that, in the end, many services are still ultimately fulfilled by humans…who can actually do the work better, more efficiently and with stunning results while we still keep true to the social contract…and therein lies the real competitive edge.
Simon Mainwaring is a brand consultant who works with some serious companies to help them articulate their humanity…Listen:
Everyone living under the social contract we call democracy has a duty to act responsibly, to obey the laws, and to abandon certain types of self-interested behaviors that conflict with the general good. Simon Mainwaring
And there you have it. Not a diatribe but a fear of what might really get disrupted. Austin and others have shown that heavy-handed “eating” comes at a price, and I for one don’t want that price to be a slowdown in real innovation for the sake of false disruption.
PEOPLE FIRST. What do you think?
Next week – autonomous cars and other such innovations — is that also really new territory to regulate?