How Uber and the gig economy changed the way we live and work

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Gig work starts online. Aside from traditional self-employment methods, such as plumbing, classified ads have already been found in the Yellow Pages and newspaper classifieds, and later Craigslist and Backpage took over. Low-cost internet allows for the proliferation of online platforms such as Mechanical Turk, Fiverr and Elance, giving everyone extra pocket change. But when cell phones took off, anywhere could be an office, and anything could be a gig – and thus the gig economy was born.

Perhaps it was a combination of technological advancements and greater financial anxiety since the 2008 recession, but prospects were grim, people needed money and many had no choice about how to spend it. This was the time when the term “sharing wealth” became popular – it was immediately marketed as a currency medicine excessive consumption, but freedom from ownership opposed the desperate sale of any art or property. Of all the companies that have taken advantage of this trend, none have gone further or persisted more than Uber.

Uber he became famous by operating railways in new markets without regulatory approval. It strengthened its reputation as an underperforming company through a Byzantine scandal to avoid regulatory review, several small ones have been completed user password and less-profitable extra money and, in its infancy, the inner history of sexual violence and discrimination. In the past, the company has used its deep database of businesses to support its growth, feeding into the market share of its given businesses. finally increase the prices and try to reduce the cost of driving when it reaches the top. The same database was used to recruit drivers with sign-up bonuses and convince them that they could be their employer.

Self-employment has some liberating issues, but Uber has completely transformed an employee-based business into one created by contractors. This means that one of the casualties of the ride sharing was taxi medallions. For years, cab drivers in many areas have seen these licenses as retirement plans, because they can sell them to newcomers when it’s time to hang up their hat. But mainly due to the increase in shared services, the value of the medallion has decreased. in the last decade or so – in New York, for example, medal value dropped from $1 million in 2014 to $100,000 in 2021. This is linked to a decrease in wages, which leaves many struggling to pay off the huge loans they took to buy the medal.

Some authorities have tried to stop the fall in the value of the medallion. Quebec pledged $250 million CAD in 2018 to pay back the cab drivers. Some regulators, particularly in Australia, have used higher fares for ride-sharing as part of an experiment change taxi licenses and returning medal holders. In both cases, taxpayers and passengers, not rideshare companies, were the most affected by the medal holders.

At first it was only the cab drivers who were hurting, but over the years, compensation for this new class of unemployed software drivers dried up as well. In 2017, Uber paid $20 million to address allegations from the Federal Trade Commission that it used false promises of benefits to entice drivers to join the platform. Late last year, Uber and Lyft partnered paying $328 million for New York drivers after the state conducted a fraud investigation. The settlement also guaranteed an hourly rate for drivers outside of New York City, where drivers already had limited rates under Taxi & Limousine Commission rules.

Many rideshare drivers also wanted to be recognized as employees rather than contractors, so they could have a fixed hourly wage, overtime pay and benefits — efforts favored by the likes of Uber and its partner Lyft. they have been fighting against. In January, the Department of Labor issued the final order which aims to make it harder for gig economy companies to designate workers as independent contractors rather than employees. The EU is also weighing a temporary contract reclassifying millions of program workers as employees.

Of course, a slight erosion of the labor market in all industries was not the ultimate goal. At one point, Uber wanted to cut operating costs by laying off drivers. It plans to do so by rolling out a fleet of self-driving cars and flying taxis.

“The reason Uber can be expensive is because you’re not just paying for the car — you’re paying for someone in the car,” former CEO Travis Kalanick said. said in 2014, a day later​​​​ Uber reported that drivers could make $90,000 a year on the platform. “When you don’t have someone else in the car, the cost of taking an Uber anywhere is cheaper than owning a car. So, the magic is there, you bring down the cost of ownership for everyone, and then car ownership goes away.”

Uber’s grand plans didn’t pan out as planned, however. The company, under current CEO Dara Khosrowshahi, sold its shares a self-driving car and taxi units at the end of 2020.

The success of Uber also had a secondary effect: although the business model that is best described as “investing money in the fire until (fingers crossed!) Stability is established” many startups were born, taking their ideas from Uber or dropping themselves like. “Uber to X.” Sure, you can find accommodations on Airbnb or Vrbo that are nicer and cheaper than a hotel room. But studies have shown that such companies have harmed the affordability and availability of housing in other markets, as many homeowners and developers choose profitable short-term rentals instead of long-term rental units or sales. Airbnb has faced many other challenges over the years, since many cases to a mass shooting at a rented house.

More and more, this is becoming a plan. Goods and services are exchanged by third parties, guided by an autonomous platform and not a person. The algorithm of the platform creates a very narrow path between the selection and control of employees who perform similar work in the companies that the platform came to change, but the feature allows the platform to avoid worrying things such as legal liabilities and labor laws. Meanwhile, customers with few alternatives find themselves prey to the low-cost platforms that are now coming in to take their money. Stunned by the promise of innovation, the directors rolled over or signed a deal with the devil. Everyone else is paying the price.


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To celebrate 20 years of Engadgetwe’re looking back at the products and services that have changed the industry since March 2, 2004.

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