New Rules For A New Economy

Great piece by Anand Giridharadas in the NY Times about the need for new labor laws in regard to the new sharing/on-demand economy. In the recent lawsuit against Uber and Lyft by the people who drive for them, a jury must decide whether these workers should be classified as employees or independent contractors. Other startups like TaskRabbit and Handy are facing similar legal challenges. The problem is the existing labor classes are not appropriate for this new way of doing business. As one of the judges, quoted in the Times piece, said:

“The jury in this case will be handed a square peg and asked to choose between two round holes,” Judge Chhabria wrote.

Uber and Lyft’s square-pegged workers don’t fit into the round hole of employee because they have no real supervisors, they work irregular hours of their own choosing, and they are free to work for anyone else, too. But they also don’t fit into the hole of independent contractor, like your accountant or neighborhood plumber, because they cannot negotiate their own price, aren’t peripheral to the business (but are central to it), and are subject to extensive control and monitoring.

It’s time for a new class of labor to be developed and regulated. This is one of the first challenges policy-makers and labor departments can tackle, but it will take thought and extensive research to figure out how to handle the creation of a new class of workers. It will, however, be worth the investment as the number of these types of “jobs” continue to swell, providing much-needed primary and secondary incomes to those who pursue them.

Click the thumbnail to read the Times piece:

New York Times

Uber’s Offices Raided in France & South Korea

This could’ve been avoided. But again, it illustrates that governments don’t have the proper tools to regulate apps. They don’t even know where to begin, so after sending “warnings” they use police force. Neither is effective.

Uber, for its part, is acting like a rebellious teenager. Except this rebellious teenager has more money than its parents, so it can kinda do what it wants.

So what’s the solution?

Governments need to develop the tools to work with start-ups. One place to start would be by developing partnerships, putting out RFPs, and trying to work in unison to mesh the rules and the innovations – and to change each where appropriate. In other words, governments need to begin acting a little more like start-ups. And start-ups, for their part, could use a little growing up (well, some of them, at least). It’s time for cities, states, and countries to embrace innovation while being smart about how to handle it. That would be the biggest innovation of all.

BBC News has the story:

BBC News

When “less expensive” actually means “more expensive”

Lo and behold, there’s another new app out there. This one, called OpenStreetCab, lets you compare Uber prices with yellow taxi fares in New York City. A bunch of computer scientists compared these prices from 2013 and 2014 and discovered the benefit shifts from yellow cab to Uber at around $35. That means for the majority of taxi rides, which are short and therefore less than $35, a yellow taxi is cheaper – despite Uber’s advertising to the contrary. I haven’t tested this, but the logic here sounds about right.

Uber has a higher minimum than a yellow cab, and their algorithm is mysterious. Taxi pricing, on the other hand, are comparatively straightforward. Prices are regulated by the TLC and measured by the meter. Sure, there are ways to influence the meter (taking some air out of tires to increase wheel revolutions is one example), but these are severely punished, and it’s not worth it for many cab drivers to even try. Uber’s fares, famously, have no limit, and are measured by time and distance using an algorithm that a regular passenger has no access to. You find out how much your ride costs after you’ve left the car. Their model, however, is elegant and slick. The convenience of using the app still makes it an attractive option despite the lack of fare transparency.

It’s good to have choice. It’s even better to know the options you’re choosing between.

Click the thumbnails to read more:

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You can check out OpenStreetCab here:

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Uber Women

Uber’s recent play to attract more female drivers overlooks one thing: these jobs have no security. Not in the traditional sense, at least. While the idea of flexible employment is indeed attractive, job security can’t be underestimated. Driving a cab puts your income at the mercy of traffic, passenger moods, and local economic fluctuations. Uber’s move feels more like a PR stunt than a genuine attempt to get women working. Let’s see how this one plays out.