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The Gig Economy’s Unhappy Middle Class
With Lyft and Uber going public, we need to face facts about their business model
Uber, Lyft, Postmates, and Deliveroo. These words are now part of our everyday lexicon.
The gig economy has changed the world. I find it hard to remember when I didn’t see hundreds of delivery scooters zipping around the city near our office. Nor do I easily recall when it was unusual to see somebody happily getting into an unmarked car driven by someone they didn’t know. From Beijing to London to San Francisco, our cities are bisected 24 hours a day by the journeys of bicycle couriers, delivery mopeds, and taxi drivers.
I previously wrote that the explosion of the gig economy over the past decade has been primarily fueled by the money of venture capitalists (VCs) and the software written by skilled and highly compensated software engineers. There is a notable dichotomy between the job security and income of those who are creating this new economy and that of the gig workers who are generating the revenue, one delivery or ride-sharing trip at a time.
One could argue that the drawbacks of gig work far outweigh the benefits.
In the race to rapidly grow the companies that utilize gig work, huge net losses are generated, signifying high risk for future investors and workers. Gig economy platforms such as Lyft and Uber, in their sprint for market dominance, dramatically undercut traditional companies such as local taxi and courier firms. These tactics create new unicorns that grow and become immensely valuable for their founders and staff. The VCs and investors that propelled their growth receive significant returns on their money.
And while this furious competition is excellent for consumers, who get cheaper, faster, and more technologically advanced services, what becomes of the human beings who generate revenue by driving and biking day and night, come rain or shine? Are the workers an afterthought in this economy? One could argue that the drawbacks of gig work far outweigh the benefits. There is no job security. There is the stress of unpredictable income. There is a reliance on algorithms to get work. Ratings systems cast their judgment.
