
Secret to the Uber Economy Is Wealth Inequality - geodel
http://qz.com/312537/the-secret-to-the-uber-economy-is-wealth-inequality/
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bko
> With nothing more technologically advanced than a phone, you can arrange to
> have delivered to your doorstep, often in less than an hour, takeaway food,
> your weekly groceries, alcohol, cigarettes, drugs (over-the-counter,
> prescription, proscribed), books, newspapers, a dozen eggs, half a dozen
> eggs, a single egg. I once had a single bottle of Coke sent to my home at
> the same price I would have paid had I gone to shop myself.

I never understand these anti-uber rants. The author points out the ubiquitous
nature of on-demand services, their affordability and convenience. He even
admits that the market has to be large enough to warrant such a service. And
then he goes on about how this is fueled by inequality when I see it as doing
the opposite, providing services to large portions of the US that were never
able to indulge in such conveniences.

> Another distinction, just as telling, lies in the opportunities the local
> economy affords to the army of on-demand delivery people it supports. In
> Mumbai, the man who delivers a bottle of rum to my doorstep can learn the
> ins and outs of the booze business from spending his days in a liquor store.
> If he scrapes together enough capital, he may one day be able to open his
> own shop and hire his own delivery boys.

This to me just romanticizes manual labor. I'm not sure how the author defines
"local economy", but he provides no rationale why someone working for a
"local" business would be better off in the long run than someone working for
an Uber-like business. My impression of on-demand services is they allow for
flexibility in hours as well as utilization of capital (e.g. a car).

The fact is that growth mainly occurs through specialization and trade. I'm
sure if the author were writing 100 years ago, he would bemoan the fact that
fewer people are making their own clothing. Micro-services such as cabs,
laundry, delivery, cleaning, etc, are the natural extension of a wealthy
society.

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filipecalasans
Those arguments is pretty similar to the candle industry extinction. Some may
argue that electricity has killed thousands of jobs in the candle industry,
including those who had to light the candles every night in the streets.

In Sao Paulo, the largest city in Brazil, is facing a boom in the Uber offer.
Many people who used to drive particular car are selling them and using Uber
has main transportation. This is particular good for the traffic and a good
alternative in a city where there is a lack of Subway lines.

~~~
PauloManrique
And bad for Uber drivers that works 14 hours/day, 6 days a week to make less
than 1k USD.

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erikpukinskis
The way in which this Uber stuff is about wealth inequality is that there is
no "Uber for getting on your feet after serving time for a felony" or an "Uber
for teaching high school kids how to get on a path to a good job" but there
are three "Uber for cupcakes"'s.

There's nothing wrong with Uber for cupcakes[1], and people can argue that we
should start there because it's just easier to make money off of rich people.
But what's the plan for Uberizing the stuff poor people need? Is there one? I
don't accept that it's just too hard. Margins are margins.

[1] I have no idea whether there is an Uber for cupcakes

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gjolund
There is. It is called Postmates.

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clamprecht
I actually noticed something when I was living in Argentina, South America
(I'm from the US). It was more common for people to have maids, nannies, etc,
than in the US. Not super rich people either, just upper middle class people.
It made me wonder if there was some kind of "maid index" \- an indicator of
the percentage of people who have a maid. I suspect it could be used as some
kind of indicator for wealth equality (or inequality).

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bigchewy
gini coefficient is probably pretty close to what you are looking for. it
shows the delate in inqequality between high and low earners in
[country/region]. haven't looked at that stuff for a while but, traditionally,
much of S America had high gini coefficents

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stickfigure
Pretty much every labor transaction is based on "wealth inequality" \- the
person paying has money, the person doing the work wants that money.
Programming pays better than driving, but the principle is the same. I
certainly wouldn't be working on _your_ project if I was independently
wealthy...

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raincom
I don't know what to say. My ex-roommate used to be a door to door salesman
for comcast contractor, selling comcast's services on commission. He gave up
that gig, as it was not paying enough to live in Hayward, CA.

Now he drives for Uber, uses his Scion xb 2006 car, makes around $6k a month.
Yes, he needs to deduct expenses like gas, insurance, etc. But he is happy
even after those expenses.

Uber has destroyed the taxi industry. And it has also made easy for others to
become Uber drivers. So, one group has lost, another group has won.

Taxi industry has gone hitech; so, the companies like Uber get 100 multiples
for their stock prices, if they go IPO. Even if Taxi industry had gone IPO 20
years ago, it would not have helped taxi drivers.

The losers are those who bought SF taxi permits, and those who used to drive
for yellowcab, but can't become Uber drivers.

Inequality exists as long as greed exists.

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api_or_ipa
Inequality is an unavoidable consequence of economic growth. Economic growth
always destroys incumbent industries and benefits new upstarts. It is up to
government to provide a set of transfers that allows a more equal distribution
of the gains and loses from economic growth.

[https://en.wikipedia.org/wiki/Creative_destruction](https://en.wikipedia.org/wiki/Creative_destruction)

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jaxn
What Uber did is reduce the overhead of being the middleman. Which is what
lets these services expand to smaller markets.

The people who get screwed are the previous middlemen, not the worker bees. If
anything, the job of middleman will be a race to the bottom where the next
Uber find a way to do it a little cheaper (or take a little less profit to hit
a larger scale).

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partycoder
At least it is another work option. Flexible enough for students and people
with a day job that want to supplement their main income.

That's the reality we live in. Some people have multiple jobs, some people
have no benefits, some people work on a 100% commission basis and in slow
months they need to continue to function. "Uber-style" jobs can help you work
in a more flexible schedule.

But to be honest, I do not think that being an Uber driver full-time is a very
good option. Then, I do not see Uber at the moment being at the same evil
scale than Walmart, for instance... a company that has a anti-union training,
anti-union team and standard operating procedures, and makes billions of
dollars in revenue while having their entire workforce on welfare.

~~~
fieryeagle
Their drivers (majority of the workforce) have no welfare to speak of. Wait
until Uber becomes really big like 90s' Microsoft then you'd see the rest of
the Walmart deeds. It's the expected inherent big Corp SOP, nothing new.

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yummyfajitas
According to the graphic linked in the article, Mumbai has a Gini of 35.
That's not very high - it's comparable to Italy, Spain or Sierra Leone - and
only marginally higher than India, France or Bosnia (33) as a whole.

It contradicts the author's thesis to note that a country with so _little_
inequality as India was (and still is) way ahead of the US (Gini 41) in terms
of providing domestic services.

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gumby
> It contradicts the author's thesis to note that a country with so little
> inequality as India was (and still is) way ahead of the US (Gini 41) in
> terms of providing domestic services.

Think of the Gini coefficient as a cumulated histogram of income. The actual
values of high and low income are not represented in the Gini chart.

So India has less differential _in population_ than the US but the absolute
value of max and min are much lower than the US's (actually the max in India
is pretty big but the curve is quite steep).

Also the Gini coefficient is a single number, the geometric mean of the curve.
The shape of the curve is quite different: India has a massive unemployment
problem and a reasonably large middle class that can pay for service (income
is low so the time value of money is low => hiring a servant is worth it).

I don't know what percentage of the median household income an Uber driver
typically earns so it's hard to see if it is a good analogy or not. All the
studies I've seen on this matter have been biased (high or low, depending on
the point to be made) and have been methodologically suspect. It's not clear
if it's even possible to calculate it since many / most Uber drivers enter and
exit the "work force" casually based on available time and desired
compensation.

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jimmywanger
Isn't the takeaway here "the secret to getting people to do stuff for you that
you don't really want to do is wealth inequality?"

I'm struggling to see why Uber is a particular example of evil, rather than
say a restaurant or a nanny service.

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ilostmykeys
damn good article! thank u for the deep insight.

