The trouble with forcing Uber to make up for a poor social safety net
The economy is becoming a very uncertain place: as automation wipes out entire industries and supercharges the pace of change, the idea of working full-time for one company our entire lives is becoming an outdated concept [PDF]. Intuit estimates that 40% of Americans will be freelancers by 2020.
As a result, it seems shortsighted to force each corporation to shoulder the responsibility of America’s lackluster safety net, by offering their own retirement benefits, maternity leave, healthcare plans or workers compensation packages to full-time employees.
As a deliciously timely example, Kashmir Hill at Fusion wrote a wonderful piece about a workers rights lawyer trying force companies like Uber to provide full-time benefits to their drivers. At present, like most sharing economy workers, drivers are classified as “independent contractors” and, therefore, do not get any special benefits if they work 2 hours/week or 100.
While activists are well intentioned, they clearly don’t understand the sharing economy model or how it gives us a glimpse into the future of work.
As one driver told me less than 24 hours ago, “I’d rather have the flexibility, because of the freedom,” he said. He described job “security” as being able to job hop between multiple companies, as he fears being fired or laid off more than not receiving benefits.
For him, and the growing ranks of the freelance workforce, security in the 21st century economy is about choice and flexibility, not betting that a Silicon Valley startup can provide any semblance of stability.
As it turns out, ride sharing companies are a wonderful case study in the future of work. Let’s (very briefly) dive in:
Single rides -> carpool with professional drivers-> carpool with normal drivers -> automated mass private transit
In confidence, ridesharing executives have confessed to me that for both moral and business reasons, their end goal is to completely eliminate the need for full-time drivers. If they can figure out how to turn every driver already on the road into a temporary taxi, they can both pay drivers more per trip and charge riders less.
More importantly, an algorithm that can turn every car trip into a carpool or package delivery service would also dramatically reduce the number of cars on the road and reduce environmental damage.
For now, Uber, Lyft, and Sidecar are rolling out super-cheap carpooling services, and millions of riders have willingly accepted $5 rides across town for the inconvenience of sharing their ride with a stranger. Mathematically speaking, more carpools means less cars on the road, cheaper fares for riders, and fewer drivers needed overall (MIT did the calculation on congestion in recent study).
As early full-time Uber drivers see their paychecks dwindle, I’ve spoken to many new temporary drivers who see ridesharing as a personal boon. I’ve met part-time computer science students driving busy nights to earn spending cash, retirees who need work to feel a sense of purpose, and I even met a social entrepreneur who uses Uber to raise money for alternative energy startup in Africa.
For temporary workers, Uber’s model is better than anything else out there.
Eventually, the companies hope to leverage this cultural acceptance of carpooling so that they can turn every day commuters into instant taxis. In the future, ridesharing will be a healthy mix of temporary part-time workers and an army of normal drivers.
Of course, in 10 or 15 years, there won’t be any drivers at all, once Uber CEO Travis Kalanick realizes his dream of a completely automated self-driving fleet.
The new economy requires rethinking social services
Multi-tasking part-time workers are more efficient than full-time employees and automation is more efficient than part-time workers.
For instance, Sidecar recently started to act as a food delivery service. They partner with food delivery startups, such as EAT24; in this new model, workers could double up and earn money simultaneously from two different services.
Full-time benefits may not apply to workers splitting their time between many companies (and, indeed, many freelancers work for multiple different types of service startups throughout their day, just as many Uber drivers also work for Lyft in the same day).
And, just to be sure, eventually, in the near future, Amazon’s delivery drones will automate food deliverymen out of existence, anyways. Fortunately, when this happens, workers just hop to another temporary job, unlike the unionized auto plant workers who only knew full-time employment.
This is the new life cycle of capitalistic creative destruction.
The upshot is that single companies can no longer be relied upon to provide social services, whether it be workers compensation, retirement benefits, maternity leave, healthcare or any other social service. There are three options (as I see it).
- The government could step up and provide services, such as maternity leave, for free, like some European countries already do.
- Permanent freelancers will buy bundled social services from private venders. Lyft drivers, for instance, already get a discount from a private company that offers health insurance and a gym membership. In other words, bundled social services will be privatized.
- Workers guilds have been around since the greco-roman era. A modern incarnation, in the form of Freelancers guilds, are one such promising area where groups of self-employed workers can purchase benefits in bulk from a private provider.
Whatever the scenario, tech companies, and the industries that are being eaten by the tech industry, are far too volatile to be a safety net. The future of worker security is unlikely to be fixed in a court room.