How (not) to regulate disruptive business models
By Steven Hill – The latest trend from Silicon Valley is known as the “sharing economy,” sometimes referred to as the “gig economy,” “on-demand,” “peer-to-peer” or “collaborative-consumption” economy. Dozens of »disruptive« companies like Uber, Airbnb, Up-work, TaskRabbit, Lyft, Instacart and Postmates have proven to be attractive to consumers and those who would like to “monetize” their personal property (real estate, car) or find flexible, part-time work.
In some ways, these new platforms have the potential to provide new opportunities. But they also display a number of troubling aspects.
With this latest wave of Silicon Valley startup companies, the business model of US corporations is in the process of being redesigned.
The post-Second World War era was dominated by vertical, industrial powerhouses, such as auto companies, in which end-to-end production, design, research, marketing and sales were all performed under a single company roof. Many of these companies – such as GM, Volkswagen, Ford, IBM, Siemens, BMW and Daimler – created a huge number of jobs, numbering in the hundreds of thousands.
Today that company model is yielding yet again, to a new one typified by companies such as taxi service Uber, hospitality company Airbnb and labor brokerages Upwork and Task Rabbit. Their precursor was Amazon, which blazed the way for how to market and sell online. These corporations are little more than websites and an app, who utilize technology to oversee an army of freelancers, contractors and part-timers.
The quality of jobs created by many of the Silicon Valley disruptors is also troubling. The business-friendly “happy talk” of Silicon Valley tells us that these new companies are creating new opportunities by allegedly “liberating workers” to become “independent entrepreneurs” and “the CEOs of their own businesses.” In reality, these workers have ever-smaller part-time jobs (called “gigs” and “micro-gigs”), with low wages and no job guarantee or safety net benefits, while the companies profit handsomely.
In short, workers’ labor value is reduced to only those exact minutes they are producing a report, designing a logo or cleaning someone’s house. It’s as if a football star only got paid when kicking a goal or a chef were paid by the meal. In the name of hyper-efficiency, suddenly the “extraneous” parts of a worker’s day, such as rest and bathroom breaks, staff meetings, training, even time at the water cooler are being eliminated. more> https://goo.gl/hMV72j