Out With ‘Banana Republic’ & in With ‘Gig Republic’

Lawrence MishelBack in 2007, while between jobs, I worked the graveyard shift at a gas station that was a mile away from the San Francisco Airport. So I knew a lot of taxi cab and limo drivers. They were a desperate group — always looking for fares — and generally willing to screw over each other in the process. They struck me very much like small business people, even though they were technically workers. That’s because the base pay was pathetic and they really depended upon tips. It got rid of any romantic ideas I ever had of driving a cab.

So when Uber came around, I didn’t see it as being that big a deal. The main thing is that Uber seems decidedly worse. Generally, cab companies only checked to make sure you had a clean driving record. And they provided you with the car. I don’t much see the point from the user’s perspective either. In both cases, you are using your phone to get a lift. To me, it all stinks of Pets.com: nothing new, except it’s on the internet! Ultimately, the big difference is that Uber gets 20% of all fairs just because they had the idea of creating an app. It isn’t adding much value, and I really question its business model in the long run.

“Evidence of an exploding gig economy is, as they say, showing up everywhere but the data.” —Lawrence Mishel

But I got to thinking about this from a different perspective after reading an article by economist Lawrence Mishel in The Atlantic, Uber Is Not the Future of Work. It contains a great quote, “Evidence of an exploding gig economy is, as they say, showing up everywhere but the data.” It turns out that the majority of Uber drivers do it very casually — usually only when they are looking for other (real) work. The Simpsons got Uber exactly right in their episode, “My Fare Lady“: it is best thought of as a job stay-at-home mothers have to make a little extra cash.

As regular readers know, I’m a freelance writer. It would seem pretty strange to call myself that, however, if all the writing I did was through a single service. I would tend to think that I worked for that one service. In the writing world, that “service” is generally called an agent. And those agents do a lot more for you than Uber does for its drivers. And those agents only charge 15% — not the 20% that Uber seems to think it deserves. So it seems to me that the freelance world of Uber isn’t very freelance at all. Rather, it is just called that (or “gig” — a hipster term for the same thing) so that companies like Uber can justify paying low wages and providing next to nothing in terms of support and benefits.

UberI wonder if it is actually possible to have a cab company actually be freelance. I mean in a legal sense of the word. One of the defining characteristics of freelance work is being able to manage it yourself. The writers that I work with generally have week long deadlines. And if they can’t manage that, they get more time. So a writer will be working on a dozen articles and she will decide when and how much to work on every bit. But people need cabs right away. Thus, they are not hiring a particular cab driver, but rather a system of cab drivers. Thus, regardless of what Uber wants to claim about it just providing an app, it is providing a fleet of cabs. It is a cab company.

Mishel showed that the fraction of the economy that is self-employed has been basically static for the last two decades — that’s through both the mother of all booms and the mother of all busts. So Uber and other “gig economy” companies have yet to change the basic contours of our economy. Yet we find ourselves talking about Uber as though it is something new. But it really isn’t. Consider the decline in the wage earning capacity of middle class workers. I think it is this and not the smartphone technology that allows Uber to exist. Cab companies in the 1960s could have been set up the same way Uber is today. The base technology hasn’t changed. What has changed is that now workers are desperate enough to provide all the startup and maintenance costs of running their own cab company without the compensation of a larger wage.

As part of my work as a freelance editor, I was recently working on an infographic that focused on things like the Uber app. It was about how regular people could have all these things (like a personal driver) that used to be available only to the rich. One of the things on it was a laundry service. We were immediately contacted by a website that wanted to use the infographic, but there was a problem: the laundry service had gone out of business just a couple of weeks before. So I went out and looked for a replacement. There used to be three such services. They had all gone out of business in the last year.

Being a driver or a cook or a launderer is not a freelance job. We are being sold a bill of goods. This is just another example of businesses using a technology to screw over workers. And these things only work so long as the economy is bad. If Uber and the “gig economy” is the future of America, then we are in for a very bumpy ride. People will stop talking about “banana republics” and start talking about “gig republics.” And I don’t think Americans are going to stand for that.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

7 thoughts on “Out With ‘Banana Republic’ & in With ‘Gig Republic’

  1. I wouldn’t put too much stock on there being a floor to what Americans will stand for in terms of getting shafted by finance capital. That would involve, among other things, admitting that liberals were right 40 years ago and every day since then. The slave morality has soaked down to the marrow of their bones. They will scrap and claw for every shred of privilege they can hang on to, and Devil take the hindmost. The so called white working class that DLC strategists pursue like Moby Dick is never coming back. We need to get to the future without them, and in spite of them. Mat Bevin’s election should leave no doubt as to what we are dealing with.

    • Yeah, I generally agree with you. Most of the time I don’t think there is a bottom. But sometimes I’m more optimistic. And I do think that if people are so poor they have nothing else to do but vote, things could change. Fast.

  2. Cab drivers-at least in my town-do have a set time of hours they have to rent the car from the cab company. Uber or Lyft drivers can do it whenever they want to.

    Both result in less than minimum wage which means someone is making money but that someone is almost always not the one who has to deal with the irate passenger.

    • Well, Uber drivers are renting cars. Uber drivers are starting their own businesses, paying enormous referral fees, and making anywhere from less than minimum wage to not a bad wage. But unlike a small business, there is no remove to grow, no capital accumulation, basically nothing. The best they can get a decent wage. You know, the kind of thing that most workers got when we had unions.

      • I must be missing something since it sounds like they are in your area able to build a business or get a decent wage but not make a small business? Or did you mean they cannot obtain the same accoutrements of a small business but make a decent wage?

        • I mean that small businesses can grow by hiring employees and opening new locations. An Uber driver is effective a small business person, but stuck being a worker. How does a successful Uber driver hire an employee? I suppose it is possible. She could buy another car and hire a driver. But she’s paying a huge premium — building a business inside another business.

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