During my recent San Francisco trip, I had the pleasure of practicing the French language with a fellow traveler from France, who was discussing with me some of the changes that are taking place in the economy as a result of the internet and the horizontal entrepreneurial models that it’s brought into existence.
The Information Age has horizontalized communication and allows anyone to report the news, to be a journalist or blogger, and to produce narratives that make their way into the culture. But this is a whole other level of horizontalization: the democratization of entrepreneurial models is changing labor and productivity on a global scale.
My fellow traveler told me about l’uberisation de l’économie and how taxi drivers in France have tried to stop Uber’s inevitable takeover of their market. He said he understood their concerns, but at the same time people have always complained that taxi cabs are never around when needed. Isn’t this a case where monopoly is bad, and where competition is good because it forces companies to offer better quality of service? Does this argument stand when taxis can no longer compete?
First of all, I found the neologism interesting: uber means super, superior, exceeding in value or quality, and uberization–a word that appears to have been coined to have a bad connotation–actually means maximization, the process of becoming superior.
Uber (and its competitor Lyft) are not the only companies that reinvented business. Hotels are losing business to AirBnB, which allows home and property owners to rent out rooms, houses, or apartments. This article on l’uberisation says:
Ce qui est nouveau, et ça n’est possible que grâce à la révolution numérique, aux smartphones et aux applications, c’est la désintermédiation, plus besoin de passer par une société de taxi, plus besoin de passer par un hôtel. Entre le client et le service dont il a besoin, il n’y a plus qu’un clic, et qui dit moins d’intermédiaires, dit aussi moins de coût et donc des tarifs attractifs.
(Translation: What is new, and is only possible thanks to the digital revolution, smartphones and applications is dis-intermediation, no need to go through a taxi company, no need to go through a hotel. There’s only one click between the client and the service he needs, fewer intermediaries, and also less cost and therefore attractive rates.)
These models allow anyone who owns a car or home to capitalize their property by renting it or providing a service with it that traditionally was not available to just about anyone as it is today. In light of the fiscal crisis and financial difficulties that millions of Americans have faced in recent years, for many homeowners and vehicle owners, these business models offer salvation or alleviation.
Because Uber and AirBnB treat their drivers and hosts as independent contractors–and this is not without controversy–these business models allow individuals to deduct expenses tied to how they earn their living when they file taxes just like any other business owners would.
While many complain that the independent contractor is really as a worker without the full rights or benefits associated with traditional labor, on the other hand these opportunities encourage individuals to research the entrepreneurial process and become more proficient at autarchy. Furthermore, many of the traditional companies who offer hospitality services, like the Hyatt, have in recent years gained notoriety for their anti-labor culture and for their hostility against their own workers, even going as far as taking away their health care benefits in spite of the fact that Hyatt is one of the most profitable hotel chains in the world, if not the most profitable.
Uberization, seen in this light, constitutes a chance for the disenfranchised workforce that has been stripped of its rights and benefits during the last four decades of persistent dismantling of worker unions by the corporatocracy and the government it has bought and paid for, to finally get its vengeance. It’s much easier to boycott a giant that bullies its workers when there are so many alternatives with more attractive offerings.
This French-language article by Le Monde also discusses the proliferation of self-publishing, and how independent authors can easily format and publish an e-book within less than thirty minutes; the availability of inexpensive legal services online and the effects this is having on the legal profession; and the offering of a Google Wallet, PayPal and other services which may evolve to replace traditional banking and financial products, as other examples of l’uberisation de l’économie. Perhaps the existence of the bitcoin and other virtual currencies could be added to the list.
If this is what uberization means, then by all means, bring it! We need innovation and competition! We need diversification of the economy and proliferation of small business!