[P2P-F] Fwd: [Networkedlabour] Fwd: [WSF-Discuss] The Uber economy: taking advantage of wealth inequality

Wed Jan 14 04:55:43 CET 2015

---------- Forwarded message ----------
From: peter waterman <peterwaterman1936 at gmail.com>

   1.

From: Brian K. Murphy <brian at radicalroad.com>
Date: Tue, Jan 13, 2015 at 12:47 PM
Subject: [WSF-Discuss] The Uber economy: taking advantage of wealth
inequality
To: worldsocialforum-discuss at openspaceforum.net

 http://qz.com/312537/the-secret-to-the-uber-economy-is-wealth-inequality/
*UBER + PIKETTY = 2014*
*The secret to the Uber economy is wealth inequality*
*There's no Uber for this.*

by Leo Mirani, New American Economy, December 16, 2014*  | Quartz*

Of the many attractions offered by my hometown, a west coast peninsula
famed for its deep natural harbor, perhaps the most striking is that you
never have to leave the house. With nothing more technologically advanced
than a phone, you can arrange to have delivered to your doorstep, often in
less than an hour, takeaway food, your weekly groceries, alcohol,
cigarettes, drugs (over-the-counter, prescription, proscribed), books,
newspapers, a dozen eggs, half a dozen eggs, a single egg. I once had a
single bottle of Coke sent to my home at the same price I would have paid
had I gone to shop myself.

The same goes for services. When I lived there, a man came around every
morning to collect my clothes and bring them back crisply ironed the next
day; he would have washed them, too, but I had a washing machine.

These luxuries are not new. I took advantage of them long before Uber
became a verb, before the world saw the first iPhone in 2007, even before
the first submarine fibre-optic cable landed on our shores in 1997. In my
hometown of Mumbai, we have had many of these conveniences for at least as
long as we have had landlines-and some even earlier than that.

It did not take technology to spur the on-demand economy. It took masses of
poor people.
 *Silicon Valley catches on*
In San Francisco, another peninsular city on another west coast on the
other side of the world, a similar revolution of convenience is underway,
spurred by the unstoppable rise of Uber, the on-demand taxi service, which
went from offering services in 60 cities around the world at the end of
last year to more than 200 today.

Uber's success has sparked a revolution, covered in great detail this
summer by Re/code, a tech blog, which ran a special series about "the new
instant gratification economy." As Re/code pointed out, after Uber showed
how it's done, nearly every pitch made by starry-eyed technologists "in
Silicon Valley seemed to morph overnight into an 'Uber for X' startup."

Various companies are described now as "Uber for massages," "Uber for
alcohol," and "Uber for laundry and dry cleaning," among many, many other
things ("Uber for city permits"). So profound has been their cultural
influence in 2014, one man wrote a poem about them for Quartz. (Nobody has
yet written a poem dedicated to the other big cultural touchstone of 2014
for the business and economics crowd, French economist Thomas Piketty's
smash hit, Capital in the Twenty-First Century.)

The conventional narrative is this: enabled by smartphones, with their GPS
chips and internet connections, enterprising young businesses are using
technology to connect a vast market willing to pay for convenience with
small businesses or people seeking flexible work.

This narrative ignores another vital ingredient, without which this new
economy would fall apart: inequality.
 *The new middlemen*
There are only two requirements for an on-demand service economy to work,
and neither is an iPhone. First, the market being addressed needs to be big
enough to scale-food, laundry, taxi rides. Without that, it's just a
concierge service for the rich rather than a disruptive paradigm shift, as
a venture capitalist might say. Second, and perhaps more importantly, there
needs to be a large enough labor class willing to work at wages that
customers consider affordable and that the middlemen consider worthwhile
for their profit margins.

Uber was founded in 2009, in the immediate aftermath of the worst financial
crisis in a generation. As the ride-sharing app has risen, so too have
income disparity and wealth inequality in the United States as a whole and
in San Francisco in particular. Recent research by the Brookings
Institution found that of any US city, San Francisco had the largest
increase in inequality between 2007 and 2012. The disparity in San
Francisco as of 2012, as measured (pdf) by a city agency, was in fact more
pronounced than inequality in Mumbai (pdf).

Of course, there are huge differences between the two cities. Mumbai is a
significantly poorer, dirtier, more miserable place to live and work. Half
of its citizens lack access to sanitation or formal housing.

Another distinction, just as telling, lies in the opportunities the local
economy affords to the army of on-demand delivery people it supports. In
Mumbai, the man who delivers a bottle of rum to my doorstep can learn the
ins and outs of the booze business from spending his days in a liquor
store. If he scrapes together enough capital, he may one day be able to
open his own shop and hire his own delivery boys.

His counterpart in San Francisco has no such access. The person who cleans
your home in SoMa has little interaction with the mysterious forces behind
the app that sends him or her to your door. The Uber driver who wants an
audience with management can't go to Uber headquarters; he or she must
visit a separate "driver center."

There is no denying the seductive nature of convenience-or the cold logic
of businesses that create new jobs, whatever quality they may be. But the
notion that brilliant young programmers are forging a newfangled "instant
gratification" economy is a falsehood. Instead, it is a rerun of the oldest
sort of business: middlemen insinuating themselves between buyers and
sellers.

All that modern technology has done is make it easier, through omnipresent
smartphones, to amass a fleet of increasingly desperate jobseekers eager to
take whatever work they can get.

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