Yeah, I’ve been curious about this ever since reading about all the resources Uber was putting into autonomous car research. It doesn’t seem to make a lot of sense based on their current business model, but on the other hand, they’d be making 100% of what is now split between themselves and the driver. Maybe they’ll just shift the business model such that they pay to use private autonomous cars, cutting out the driver…
FedEx Express, Ground, and Home Delivery are different business units. The Express drivers are employees, but Ground and I believe Home Delivery are contractor schemes.
It gets even more Invisible Hand here, actually. With Ground, they hand out route contracts - sort of like if an Uber driver owned 3rd avenue. Then in practice you have to buy a contract in a secondary market for $$$ if you want to work there.
I don’t think Wall Street has invented a Collateralized Delivery Obligation yet, but…
2 Likes
Actually, just to elaborate a little more on the FedEx example here…
With these FedEx jobs, in practice someone takes out a bank loan to buy their job contract and the working capital (truck etc). The working capital, unlike an Uber car, has a bunch of corporate logos on it and doesn’t have much resale value. Plus they nickel-and-dime you for the insurance.
The job contract of course is revokable by the company, in which case it has no resale value.
So in practice, people can’t quit their job unless they can find someone in the secondary market to pay off their bank loans. Otherwise they’re in hock to the bankers in addition to being unemployed. They also have a major incentive not to tell anyone if they’re unhappy since that would hurt the secondary market in jobs.
Basically, what I’m saying is that Uber is child’s play at evil. The established corporate players figured this stuff out decades ago, and have basically gone so far as to securetize these jobs and sell them in a market.
Come on Uber! Up your game already! You’ll never get to cat-stroking-villain level at this rate!
12 Likes
I have a minor bone to pick the basic premise, while not having much opinion about Lyft or Uber. Covering capital is not a requirement for many successful businesses. I am thinking of fabless design companies. You can make plenty of money designing semiconductors (e.g. Qualcomm) while somebody else (e.g. TSMC) pays for the capital.
1 Like
Barbershops rent out their chairs as well as take a cut. That’s not much different on an all-in cost basis than Uber requiring you to bring your own car to the business.
1 Like
it would seem that uber and lyft’s business models will be a major obstacle for other businesses to offer transportation using fleets of self-driving electric vehicles.
1 Like
I’m going to start my own disruptive company, lending cars to Uber drivers. Most of them just sit around all day at company parking lots, why not get them working?
7 Likes
Heard an interview of one of the creators of Lyft on NPR the other day, and it was painful to hear the verbal gymnastics in their answer about the “sharing economy” and how great it was.
3 Likes
No one calls renting stalls “the sharing economy,” nor is there an Uber for unlicensed barbers.
(Though hair cutting and cosmetology licenses are often deliberate barriers to entry with ridiculous requirements rather than those really necessary for safety and good customer service.)
4 Likes
Well, in a more legal footing, there is that company that offers to rent out you car to strangers while you are on vacation. Don’t know if they are still in n business.
I didn’t know that about barbershops, but the norm for the hair salons that I’ve frequented was either full employment or booth rental with no cut. My current stylist takes checks, cash, and cards through her smartphone. The owner of the salon has no idea how much her clients pay her since he switched to booth rental.
1 Like
Technically, barbershops give a cut.
12 Likes
Idk, I’d rather have someone trained in highlighting my hair than just winging it. But I get that maybe you’re suggesting an apprenticeship rather plunking down a crapload of money to a “beauty academy.”
I’ve always thought that this profession could be perfect for high school vocational training. I’ve often seen a positive relationship between students who get into vocational classes that they enjoy and their overall academic progress.
2 Likes
But it’s a shift in the capital cost to the worker. That, alone, doesn’t distinguish Uber, is all.
(And yes, the barriers to entry for barbering are both absurd and, often, racist: http://ij.org/case/washington-african-hair-braiding/)
1 Like
I always thought it’d be more tactful if the car thing also said “free mustache rides.”
2 Likes
The only problem with that idea is that in many states vocational programs have been thoroughly gutted.
3 Likes
The problem is that cosmetology licenses are often protectionist barriers rather than the training really needed for the job
[quote]2015 California Board of Cosmetology License Requirements
COSMETOLOGIST LICENSE: 1600 Hours / 3200 Apprenticeship + 220 Related Training Hours
BARBER LICENSE: 1500 Hours / 3200 Apprenticeship + 220 Related Training Hours
[/quote]
To be a “Phlebotomy Technician I (authorized to do venipunctures and skin punctures)” only requires 40 hours of traing and 40 hours of practical experience.
2 Likes
The only “sharing” that’s going on is Uber is sharing your capital and getting a cut.
Why shouldn’t Uber get a cut? It seems like they are providing a useful service.
That’s true, to some degree, but in California there has been an uptick in funding. The two schools where I spent the last 10 years saw funding for ROP programs such as the culinary arts program, which just got state-of-the-art equipment; the auto program, which successfully participates in a national competition on annual basis; and the fine arts department, which has joined with ROP to develop computer graphics/drafting/pre-engineering classes that includes using a 3-D printer.
The key to this funding was applying for some grants along with state-mandated building facility improvements. The district teachers got their raises and the students got their a/c, and ROPs funding was significantly increased.
Additionally, the campuses share the programs. Thus students from one campus might take their ROP classes on a different campus than their academic courses.
I agree, which is why an apprenticeship could be preferable to a cosmetology academy. I believe the for-profit academies are as bad as any for-profit vocational institutions; it’s just a way to make money. However, showing your competency should not be neglected either.
1 Like
