Meet the New Boss

As the City of Vancouver and the Province of BC grapple with the introduction of Uber services, here is some perspective on the gig economy’s impact.
Kelsey Munro writes in the Sydney Morning Herald on Uber, and the “sharing economy” in general.  Her opinions are not kind to these disruptive corporations.  She interviewed (and quotes) Canadian Tom Slee, among others:

Canadian writer and researcher Tom Slee’s new book What’s Yours is Mine takes aim at what is “supposedly the vanguard of a rethinking of capitalism”: Lyft, Airbnb, Airtasker, Taskrabbit, Uber. He points out this new wave of tech companies “is funded and steered by very old-school venture capitalists”, and “extends harsh, free-market practices into previously protected areas of our lives”.

In the Panama Papers era, it should come as no surprise that Uber, Airbnb and the like are following the well-known tax management strategies used by old-economy global corporations, with minor wrinkles specific to hi-tech. In Bloomberg Businessweek, David Kocieniewski looks into this topic. Does the sharing economy share the wealth?  You can easily guess the answer.

This is the challenge that Airbnb, like Uber and other companies in the so-called sharing economy, poses for the world’s treasuries. In the five years since these businesses began their spiraling growth, some cities and states around the globe have fought hard to make them play by the same rules as traditional hotels or taxis and collect various local taxes—often as not, they’ve lost. As the new breed of companies moves toward profitability, transforming larger chunks of the economy, policy experts say the battle is likely to shift to the national level, where billions of dollars a year in corporate taxes could be at risk. (A source close to Airbnb says the company will turn its first profit this year.) Governments have been slow to respond.
“These companies are the future,” says Stephen Shay, a former top international tax lawyer at the U.S. Department of the Treasury, now teaching at Harvard. “The nature of their business and the structure of the companies can allow them to essentially keep all of their profits out of the U.S. Unless the tax systems find a way to deal with this, the lost revenue may be enormous.”

Meanwhile, in BC, Uber puts heat on the Provincial Gov’t to speed up its regulatory review and produce its proposed policy (thanks to Ian Bailey in the Globe and Mail):

The B.C. cabinet minister responsible for developing regulations for ride-sharing services such as Uber says he’s resisting pressure from the U.S.-based company, which has been using a variety of tactics as part of a prolonged public-relations campaign.

“You might characterize it as pushy. You might characterize it as cheeky,” TransLink Minister Peter Fassbender said in an interview, adding it’s clear to him Uber is trying to push him to speed up his government’s consultations on a provincial policy.

Speaking of regulatory issues, here’s Brishen Rogers in the University of Chicago Law Review taking a high-altitude and long-range view of the gig economy and Uber in particular “The Social Costs of Uber“. The writer poses the questions and raises the issues below, and then delves into them.

Like Airbnb and other sharing-economy firms, Uber may enable far more efficient use of capital and substantially enhance consumer welfare. For example, Uber reduces consumers’ incentives to purchase automobiles, almost certainly saving them money and reducing environmental harms. As consumers buy fewer cars, Uber also opens up the remarkable possibility of converting parking spaces to new and environmentally sound uses. Uber may also reduce drunk driving and other accidents. These are all important social goods.

At the same time, Uber has faced criticism along at least six dimensions: First, that it is unfairly competing with taxi drivers by entering their market without following regulations or fare schedules; second, that it aspires to become a monopoly; third, that its cars or drivers are unsafe or underinsured; fourth, that it may invade customers’ privacy; fifth, that it enables discrimination by drivers and passengers; and sixth, that it is undermining working standards for taxi drivers and compensating its own drivers poorly. . . .
. . . Which brings us back to the public’s mistrust of Uber. The company’s name clearly evinces Nietzsche’s vision of a new morality and a new class dedicated to human excellence. But in Uber executives’ hands, that ideal has become little more than a defense of privilege. The company’s leaders seem just fine with a future in which the many are supplicant to the few, and the few are licensed to disregard ordinary rules. Uber’s slogan—“Everyone’s private driver”—speaks volumes. Perhaps the public’s intuitive skepticism toward Uber reflects a widespread sense that our economy should reflect basic democratic values. Given Uber’s size, power, and ambitions, whether lawmakers ensure that it advances those values may shape the future of low-wage work.