Ridesharing is good in some ways, but it’s a bad deal for most workers, offering them no protections while destabilizing entrenched industries with guarantees, all in the name of “flexibility.” Anyone who thinks it’s a significant part of the solution for an American labor force that’s been laid low by a myriad of factors probably isn’t driving for Uber or Lyft.
In an Atlantic piece, Lawrence Mishel fires a statistics-supported salvo at the Gig Economy for drawing a great deal of attention while having relatively little impact on American employment, particularly of the positive kind. You could extrapolate forward its place in the U.S. economy as some Silicon Valley enthusiasts like to when trying to bend laws in their favor, but the writer will likely still be correct a decade or two down the line. If I’m wrong and the Gig Economy has truly become ascendant in that time, wow, major policy shifts are going to be necessary.
The opening:
The rise of Uber has convinced many pundits, economists, and policymakers that freelancing via digital platforms is becoming increasingly important to Americans’ livelihood. It has also promoted the idea that new technology—particularly the explosion of platforms enabling the gig economy—will fundamentally alter the future of work.
While Uber and other new companies in the gig economy receive a lot of attention, a look at Uber’s own data about its drivers’ schedules and pay reveals them to be much less consequential than most people assume. In fact, dwelling on these companies too much distracts from the central features of work in America that should be prominent in the public discussion: a disappointingly low minimum wage, lax overtime rules, weak collective-bargaining rights, and excessive unemployment, to name a few. When it comes to the future of work, these are the aspects of the labor market that deserve the most attention.
Curiously, the best evidence of Uber’s relatively small impact on the American labor market comes from data released and publicized by the company itself. David Plouffe, an Uber strategist, began a recent speech by saying, “I want to talk today about the future of work—specifically, the fact that a growing number of people are engaging in flexible and freelance work because of the sharing economy or through on-demand platforms.” He highlighted the large number of people driving for Uber, saying, “Uber currently has 1.1 million active drivers on the platform globally. Here in the U.S., there are more than 400,000 active drivers taking at least four trips a month.” As he went on to list the number of drivers in the biggest American cities, he said, “The numbers show just how attractive this type of work is to people around the country.”
In other words, Plouffe is sending the message that Uber is very big and growing, and he portrays his company and other companies in the gig economy as increasingly important to the United States’ economic future. But these claims are undermined by the relatively minor contribution Uber makes to its drivers’ incomes.•