Ride-Sharing and the “Gig” Economy

Ride-Sharing and the “Gig” Economy

More Bumps on the Road of Change

First, let me announce my absolute ignorance in most matters of modern business. For example, I try to imagine what one could do with a business if it possessed or created a fabulous new technology to accomplish the mission and in addition to that this enterprise didn’t have to follow the primary rules of that industry, but the competitors would still be bound by them.

I can see growing it into an $11 billion company. What leaves me scratching my head though is how I could do that AND still lose about $2 billion a year rather than making a dollar of profit. It’s not like they had to buy a huge fleet of vehicles and maintain them or have to keep track of thousands of workers. Yet those are the numbers for one of the companies named in the accompanying article.  If I had the brains to do that… never mind, that point is moot.

That’s had my head scratching for a while now and it’s forced me to try to look at things and how they change more broadly.

Pop Quiz!

I’m thinking about a few words and phrases. Please consider their meanings without using your phone or desktop.

 

 

Dictionary Logo

Cult
Taxi
Thong
Gig
Slug
Ride-sharing

Here are some definitions (note some are the first entry) of these as written in Webster’s Unabridged Dictionary from 1963 and a dictionary from 2019.

Cult 1 (1963):  religious practice: worship
Cult 1  (2019):  a religion regarded as unorthodox or spurious

Taxi (1963):  taxicab
Taxi ( 2019):  of an aircraft,  move slowly along the ground before takeoff or after landing
Taxicab (2019):  a chauffeur-driven automobile available on call to carry a passenger between any two points (as within a city) for a fare determined by a taximeter, zone system, or flat rate

Thong (1963) :  a strap or strip of leather or hide used as a whiplash or a rein
Thong (2019) :  a strip, especially of leather or hide
Curiously (2019)  definition 2 : a sandal held on the foot by a thong…

And more curiously still:  thong definition # 3 is “an article of swimwear or underwear… “  (To my fellow men, as an aside, I strongly suggest do not under any circumstances use this factoid as a conversation starter in the office. Please wait until you get home.)

Gig, 1st definition :   something that whirls; as obs TOP, WHIRLYGIG or gig mill …
Gig  7th definition :   a single engagement : ONE-NIGHT STAND

Slug (1963) :  sluggard
Slug (2019):  a round bullet larger than buckshot
Slug  (2019) 4th definition:  to wait for or obtain a ride to work by standing at a roadside hoping to be picked up by a driver who needs another passenger to use the HOV lanes of a highway.

Ride-sharing (1963):  nada, nada, lemonada, AKA — no entry.
Ride-sharing ( 2019) : an arrangement in which a passenger travels in a private vehicle , driven by its owner, for free or for a fee, especially as arranged by means of a web site or computer application.

Days ago Webster’s announced it was adding a definition of ‘they’ as a singular non-binary pronoun. They (Webster’s) swear up and down that they did not do this just to induce apoplexy fits on English teachers and wordsmiths over the age of 40. I will accept that as truthful, just as soon as I’m satisfied that the company didn’t buy large blocks of stock in pharmaceuticals beforehand.

This lighthearted look at our ever changing language reminds us that the only true constant is change. Constant change feels real hard to most everyone but then we have to consider the alternative. Imagine if things didn’t.

I’ve bristled at the use of the terms ride-sharing and the sharing-economy to describe some of the newer service companies using technology to reconfigure the economic models of certain industries. I bristled because to me, they were not descriptive of the businesses and seemed simply misleading. The terms were brilliant as marketing tools. They worked, they convinced the world seemingly overnight that what they were offering was an entirely new industry. The marketing went something like: since they were entirely new, they couldn’t be constrained by nor bothered with overly burdensome regulations AKA rules. Having actually participated in the practice of slug-riding in our nation’s capital, in this century, I held a particular contempt for the term ride sharing, if you look at the fourth definition of slug I think you’d agree that, that is what sharing a ride is.

It’s a weird little phenomenon, people who may be earning close to or over six figure annual incomes, standing in informal lines in places known only by local custom, basically hitch-hiking to work. Cars pull up (usually those who are running a little late for work and need the advantage of using an HOV lane) the person standing at the front of the line. It’s an odd sight at first but then I saw its beauty, a win-win situation.

When I first heard about the ride-sharing companies I saw the brilliance of the technology but I had difficulty understanding how their claims to be beyond any regulatory reach were so effective. It came to me slowly but the keys to much of their success at steamrolling every level of government over wide swaths of the globe was three-fold:

 

  • One, their “Mad Men” level of marketing, or, the use of language;
  • Second, that they were darned great at what they did: operating the best livery service in the world. They delivered the goods, they delivered their passengers from point A to point B faster than anyone else could: for a fee. That is the essence of the company, transporting people for a price. There was no sharing involved between customers and the company.
  • Third, but hardly least, the concept I first saw emblazoned on a silk-screened T-shirt made and sold buy the Monticello Community College Department of Geology student’s Geological Society club; My Lawyer Can Beat Up Your Lawyer.

 

Some folks might try to glean from that, that I have a somewhat cynical worldview. You guessed right but there’s no prize in it for you.

Here is a snapshot summary a few governmental entities across the world are challenging the business model that “gig” workers are not employees because, well — Smartphone. Some will win and some will lose. As you see in the article, California is going big but they are in for a big fight.

At the federal level the U.S. Dept. of Labor Wage and Hour Division issued an opinion letter that looks in MY humble opinion like it was written by one of the ride sharing companies. Opinion Letter – US Department of Labor.  Okay, I admit, it might not be such a humble opinion.

What does this mean for the “gig economy” / ride sharing world? It may have peaked and will be facing increased pressures to regulate.  Then again, it may not have and the competition (companies with employees) will follow suit.  But one way or another, things will change.

One final observation: the press as always is pressed for time so they must take shortcuts but one thing I’ve seen all of them get kinda wrong or really wrong — this is true for both the so called Lame Stream Media and Gerontological Stream Media — that if the workers are suddenly employees, then employers will have to give them schedules and shifts and will be next to impossible to keep track of all that.  Wrong.

If gig workers become employees, employers will have to treat them as employees under the rules of federal and state laws, and please don’t try to tell me that companies providing such services can’t figure out when and where their workers are. If they can’t, then they aren’t providing services either. Workers aren’t punching time clocks any more, they leave a permanent trail of breadcrumbs made up of 1’s and 0’s.

Yes I completely ignored the prospect of Artificial Intelligence (AI), driverless cars and drone delivery systems.  Thank you,

— Ken Frazer  /  Ken@eligibilitytrackingcalculators.com

 



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