The New Sharing Economy

I see that Hillary is dead set against entities like UBER, citing the need for work place security.  If contractors can take over work traditionally done by company employees, or worse yet, by union employees, then the Sharing Economy must be bad for America.  Of course Hillary is not interested in protecting your job so much as she is interested in protecting and even increasing union jobs.  The vested interest of unions in the political arena is well known.  If one is a union member then one may tend to vote as the union suggests.  But more than that, if one belongs to a union, a portion of one’s dues will be used for political contributions to candidates that back union interests, including influence peddling.  Any non union worker is a threat to the union organization.  And by that I mean the union management.  Oh, that’s right, the shop stewards, the business agents, the local officers and the regional staff and the national officers are really your representatives.  Did you ever notice that the hierarchy of the union management, and let’s not pretend it’s function is anything other than that, mirrors that of the corporation or company it does business with?  Union dues support a lot of “non workers”, that is, people who have nothing to do with the job that the union member does.  When the union employee gets a raise all the union non workers get a raise.  The major difference is that when the union employee goes out on strike he is not paid while being on strike.  True, some unions may have strike funds but most don’t.  But the union non worker gets paid during that strike.  The funny thing about strikes is that if one goes out for three weeks and only gets a three percent increase one has effectively “paid” for that raise.  The company will save enough labor costs from not paying you for those three weeks that they lose nothing and you gain nothing.

Back to the “new Sharing Economy”.  Or perhaps we might venture back in time before the advent of the personal computer.  Back then the sharing economy was truly a sharing economy.  That is, if you couldn’t afford to rent an apartment you might advertise in the local newspaper or place a notice on a couple of bulletin boards saying that you were looking for some one to share an apartment, splitting the rent and utilities, perhaps even the food costs.  Or say you lived in Waco Texas and wanted to travel to Bend Oregon.  You would place an advertisement in the local newspaper or perhaps the one in Austin, it being a far larger city, looking for someone with a car or truck and offer to share the cost of the gas for a ride to Bend.  One could advertise to share babysitting with other mothers through the same medium.  If one belonged to a church, one could place a notice with the minister’s secretary (god, that’s an old job title).  This was a very common way to meet the expenses of living.  You know, during World War Two when the gasoline was rationed, companies took an active part in promoting ride sharing among their employees, often times gathering the date and matching individuals with vehicles.  One day it would be your turn to drive four or five other people to work, the other four days you rode in someone else’s car.  Notice that those who did the sharing did not pay a fee other than the cost of the advertisement.  Whether you needed to room with some one or wanted a roommate to share your apartment, it all worked both ways.  But obviously you weren’t doing ride sharing as a taxi business, the business plan didn’t support the delay between offer and completion of service.

Then came the personal computers and the dial up bulletin boards.  That was the first social media, by the way.  The original chat rooms one could join.  And one could look at the personal advertisements.  People looking for roommates, ride sharing, relationships, hobby enthusiasts, part time work that might be informal or formal, personal services, suppliers of firewood or gardening fertilizer.  Of course one had to have a personal computer or have access to one.  A top of the like TRS-80 would cost upwards of $4000.  As we know, the price of computers has been reduced to a very small amount.  Now a little more than  a hundred dollars gets you a pad type computer that more than meets your social needs.  And these things are now mobile, like cell phones.  Oh, but they really are cell phones with big screens.  Or you can buy, for much more money, a super sized cellphone that is “smart”, meaning it does what a computer can do but just don’t try to type than term paper on it, cut and paste and hope you don’t get caught.  Well, apartment sharing is more a long term advertising business, meaning no one needs a roommate right now, this minute.  But ride sharing, or what is really a taxi service, is an immediate need and want.  So someone starts a company by writing the programming needed to dispatch individuals with their own vehicles to individuals willing to pay for the ride from point A to point B at a fare lower that the public taxicab.  Notice that this is not a bulletin board service.  One needs the app, which, even if the app is free is still a subscription.  I have a common dumb cell phone.  I cannot call UBER and order a cab.  Do you see the difference?  This difference makes a legal point, that UBER is selling a service.  Who pays?  The “contractor”, the person with the vehicle for hire.  Ah, another legal point, vehicle for hire.  That means the vehicle and the service offered comes under the jurisdiction of Common Carrier regulations.  The driver must have a chauffeur’s license, a professional license.  And the vehicle must carry the appropriate insurance for liability.  The vehicle is subject to periodic inspections by those mechanics who are licensed to inspect such equipment.  And the company that dispatches the vehicles must keep a record of all dispatches and complains, if any.  They must have a specific way to redress any complaint.  Finally, the drivers, because UBER controls all aspects of the taxi service, are employees.  They must pay, by law, their portion of the social security tax.  Uber must pay the unemployment insurance tax and heyr portion of the social security tax per employee.  And Uber must pay the worker’s disability tax.  But none of this is done.

Now, is UBER an attack on unions or the job security of union members?  No, not directly.  It is an attack on local government.  You see, a public transportation service is a monopoly that is regulated.  It is not a natural monopoly such as telephone land lines or electric power lines to the residence.  But because a transportation service uses public facilities the local, the state, and the federal governments may and do subject them to regulation.  At issue is public safety.  That is why we have vehicle inspections and vehicle liability insurance.  That is why we subject individuals who wish to operate a vehicle on public facilities to testing and licensing.  If the local government allowed any and all individuals to offer taxi services, there would be chaos.  That is, the more individuals offering the service the greater the competition.  But when competition becomes great enough, all public safety is thrown to the winds and business practices such as fraud become standard.  Your first mile under such a system may be advertised as ten cents but your last mile may be two hundred dollars.  Yes, a totally free market is buyer beware and that is why we demand some government protection against unfair business practices.  Are UBER’s business practices unfair?  To the average user, that is, those who want the transportation service, the practices are generally fair.  Although there have been instances in which people have been unaware of the extortion UBER can engage.  Trying to get home from a rock concert might be a simple fifty dollar fare but one has to endure long waits even for UBER drivers,  Demand the service now and you may find that the fare is now five hundred dollars and unless you paid close attention to the screen, you are in for a big surprise.  You will have to pay that excessive fare.  Uber is a business of short cuts.  We want to find the short cut to getting somewhere without paying what everyone else does.  We want the income without paying for the costs that others are compelled to support.  UBER is not about sharing, it is about making money for its owners, shareholders be damned.  The new “Sharing Economy” is about the big CON, about beating the system, about not paying your fair share of society’s costs.  It’s not about sharing because you are going to pay for the privilege of using such systems.

Well, what about sharing tools.  Imagine needing to use a drill for an hour or son once a year.  Why people could share their tools and maybe even have them delivered by drone.  Yeah, and pigs can fly.  No one ever thinks through the costs involved.  You own the drill to be share, you own the liability for any personal and property damage even though the person with whom you “shared” this tool used it improperly.  I can go down to Harbor Freight and buy a corded drill for twenty nine dollars.  That is far cheaper that I can rent one from Home Depot for the minimum four hour charge.  Some ideas are stupid, tool sharing is one of them.  Besides, we do not teach home improvement in our public school.  Most children go into adulthood without knowing how to use a hammer and a screw driver.  Do you understand the problems?  Well, what if we could get the various governments to pass legislation that allows all the sharing ideas without the “red tape”?  Shit would happen and you would be screaming for the legislations and regulation to be put back into force.  When we try to short cut the system shit happens and then we scream blood murder.  Happens all the time, that is why we have the corporation mess, the loss of jobs in this country.  Get the states and federal government o allow us to short the system and we export jobs our people use to do.  Why, because it’s cheaper.  Then we report that now the people can buy more stuff cheaper than before.  Except fewer people have jobs and thus incomes to buy more stuff.  Those who lost their jobs have unemployment insurance for a while and them welfare, hardly an inducement to buy the big ticket stuff.  Oh, but no money down for the least credit worthy and they can partake in the American Dream for a few months o a few years before losing almost everything.  Do you start to see the moral of the story?


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