InsightaaS: Regular Across the Net readers are aware of the regard we have for Internet/IT philosopher Nicolas Carr of “IT Doesn’t Matter” fame; we consider his Rough Type blog to be required reading for those (including us!) who are trying to stay current with not just IT developments but their meaning.
The post featured today provides a stark perspective on the “sharing economy.” There are many benefits (and many explanations of these benefits) to the sharing approach: it has positive ecological impact (for example, with shared use of automobiles) and allows for alternative capitalization and customer engagement methods (through crowdfunding). In recent weeks, though, commentators have taken a more jaundiced view of the labour implications of sharing economy services like Uber. The New York Times ran a feature entitled “In the Sharing Economy, Workers Find Both Freedom and Uncertainty” in mid-August, and in his piece, Carr quotes observations from MIT’s Andrew McAfee (another Across the Net favorite). Using McAfee’s Uber experience with a driver who was trying to pay off the cost of his master’s degree in IT project management by renting himself out as a driver as a point of departure, Carr notes that he “would guess the driver is paying a high opportunity cost in spending so much time driving a gypsy cab in order to make his school loan payments.” Carr goes on to observe that “there’s a deep current of cynicism running just under the surface of the sharing economy” – the companies that operate the services “skim the lion’s share of profits from the aggregate transactions,” while workers “don’t qualify for the extensive and expensive benefits and protections provided by law to regular employees.” Using quotes from a book by Airbnb global head of community Douglas Atkin entitled “The Culting of Brands: Turn Your Customers Into True Believers” as support, Carr opines that “cults provide excellent models for marketers looking to establish a deep bond of loyalty with customers,” adding – with supporting text from another blog – that “this is the marketing strategy that underpins the sharing economy.”
In “How Uber Explains Our Economic Moment,” MIT’s Andrew McAfee describes a short trip he recently arranged with the big ride-sharing company:
My driver said he’d been with Uber ever since he’d graduated from his master’s program in IT project management last year. This profession was, according to him, going through hard times. In the wake of the great recession steady jobs had been replaced by short-term contracts, and there weren’t even a lot of these to be had. As a result he was now competing against much more experienced people for each new gig that came up, and he hadn’t had a lot of success since graduating.
So to cover his monthly fixed costs of student loan payments (on more than $100k in debt), rent, and health care he was driving for Uber. A lot. He estimated that he spent more than 60 hours a week behind the wheel. This allowed him to pay his bills, but not to build up any real savings.
McAfee emphasizes the bright side of this poignant tale:
To which I say good for him, and for Uber. This is a guy who could be sitting around waiting for the dream job he’d gone to school for, collecting unemployment, defaulting on his loans, and/or dropping out of the labor force for good. Instead, he was working hard at a job that was available.
That’s true, and worth noting, though I would guess the driver is paying a high opportunity cost in spending so much time driving a gypsy cab in order to make his school loan payments. It seems like a tough squeeze, and as McAfee goes on to point out, the ongoing automation of sophisticated jobs, including much of the traditional work done by IT departments, doesn’t exactly brighten the guy’s career prospects…