ridesharing

What Elizabeth Warren Gets Wrong About Uber

Democrats can fight the sharing economy-but they'll lose voters if they do.

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Uber
Credit: illustir / photo on flickr

Add Massachusetts Senator Elizabeth Warren to the growing number of Democrats who have declared war on the sharing economy—specifically, ridesharing.

At a? speech at the New America Foundation's annual conference on May 19, Warren argued, "For many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10 percent."

At some points Warren did seem to praise ridesharing for offering "more rides, cheaper rides, and shorter wait times." She also laid out the regulatory barriers that cartelize most taxi markets and create vast inefficiencies.

However, immediately after pointing out the many consumer benefits of this innovative business model, Warren ended her temporary cease fire by pointing to Uber's and Lyft's recent exit from Austin, Texas over the city's fingerprint background check requirements. She said, "[Uber and Lyft fight] against local rules designed to create a level playing field between themselves and their taxi competitors."

What Warren and other critics of the sharing economy cannot seem to comprehend is that there are two ways to "level the playing field." One is by extending antiquated, anti-competitive regulations to new technologies. The other—and far better—option is to remove these barriers so that legacy business models can adapt to new competition.

Given the many downsides of fingerprint background checks, including higher costs, longer processing times, and false positive results, Austin should have removed the fingerprint requirement from its taxi drivers instead of applying it to ridesharing drivers.

The common failure of fingerprint databases to keep up-to-date records on those who were arrested and then never charged with a crime has many negative effects. This is the main reason why the NAACP and Austin Area Urban League came out ?strongly against? these requirements—which they correctly argue disproportionately harm minorities.

Beyond Warren's push to apply pointless regulations to new business models, there were countless other problems with her speech. The most glaring is her push to extend collective bargaining to every worker.

When discussing collective bargaining, Warren argued that, "every worker should have the right to organize—period." Warren does not seem to care that ridesharing drivers are rightly classified as independent contractors instead of employees. Independent contractors can join a union (such as the ?Freelancers Union), but for good reason they cannot collectively bargain.

Extending collective bargaining to independent contractors makes no sense and would violate federal laws against price-fixing. Not to mention that collective bargaining, which requires an employee designation, would take away ?most of the benefits that make sharing-economy work so appealing, namely flexibility. For example, 50 percent of Uber drivers work less than 10 hours a week and 80 percent of Lyft drivers work under 15 hours a week.

Warren also claimed that ridesharing relies on, "extremely low wages for drivers." This may be true compared to senators' speaking fees, but for a single mother working while her children are in school or for a college student trying to earn some extra income in between classes, the ability to earn about $15 an hour after expenses is important. After all, given the Fight for $15 movement, is this not the wage that activists desire for workers?

Warren is the latest in the long line of Washington Democrats who cannot hide their distaste for the independent, flexible work that many workers prefer—especially working mothers and millennials. While much of this opposition is led by labor unions that desperately want to unionize sharing-economy workers, another reason is the utter lack of understanding of why someone would want to drive for a ridesharing company. Given that these powerful individuals—such as Hillary Clinton—usually do not even drive themselves around, it is no wonder they look down on the decisions that millions have made to earn extra money by driving with Uber or Lyft.

Speaking of Clinton, while she clearly values independent work (99 percent of the Clintons' labor income since leaving the White House came from independent contractor "gigs"), she apparently does not want others to participate in the new economy. This new economy is driven by work that is flexible, mobile, and individualized, and the sharing economy is just a small subset of the new opportunities provided by technological progress. So when Bernie Sanders says "I am not a great fan of Uber—you can quote me on that," he is actually showing his love for a 20th century model that gave employers high levels of control over their workers.

What Democrats such as Warren, Clinton, and Sanders fail to realize is that opposition to the sharing economy is a losing political strategy. While it is a positive sign that Warren did not call for an outright ban on ridesharing, what she fails to realize is that applying a 1930s model of employment and regulation to new technologies will effectively destroy many sharing-economy companies. If government gets between voters and their Ubers, Democrats can kiss flexible voters goodbye.

NEXT: Brickbat: You Dirty Dog

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  1. “For many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10 percent.”

    Sheesh, just hire *everyone* as TSA agents and be done with it. 8-(

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  2. They also didn’t understand it when we were calling it “Capitalism.” Changing its name to “sharing” didn’t help to unwed leftists and populists from their cherished economic fallacies.

    1. Well over one hundred million corpses and hundreds upon hundreds of millions of slaves of the last century wasn’t enough to dissuade leftists from their cherished economic fallacies, Uber certainly won’t.

  3. a world where all the benefits are floating to the top 10 percent

    It used to be the top 1%, so I guess that’s progress?

    1. I love how “all” the benefits are just “floating” to the top 10 percent. Because nobody ever earns anything, it’s all just blind dumb luck.

      1. Can’t wait for Warren to give away her millions!

      2. Better for hotels and taxis to be regulated, safe, and unionized, than to create new economic opportunities for the less well-off to make additional income driving, or renting out their houses or apartments, I guess? Even if the less well-off can’t afford to stay in those hotels or rent those taxis? Wait, I thought Dems wanted to help low income voters. You mean they just want to make sure there are more of them?

        1. Rich people have always made big money renting out their mansions to movie producers. Champagne socialists who live in mansions never complain about that. But if a retired person on a small pension living in a modest home wants to occasionally rent out a room or unused driveway in order to scratch up enough cash to pay property taxes that are relentlessly increasing at twice the rate of inflation, it’s not acceptable to champagne socialists. Meanwhile, those skyrocketing property taxes are going into the pockets of vastly-overpaid, unionized city employees.

          In many cities, 30% to 50% of every taxi fare goes into the pockets of rent-seeking taxi medallion speculators who contribute nothing to the system. These medallion rental fees are ultimately squeezed out of low-income taxi drivers and low-income passengers, including cancer patients and other sick people who need to take taxis to medical treatments because they can’t afford a car of their own or they’re too sick to drive. Uber makes a profit of 19 cents per ride.

          But socialist politicians sell their votes and their ethics cheap. For every thousand dollars squeezed out of poor people by taxi medallion speculators, all the speculators have to do is give $1 in campaign contributions to socialist politicians, and not only will hypocritical socialist politicians look the other way, they will do everything in their power to help taxi medallion speculators continue to fleece the poorest, most downtrodden people in society.

          1. In some cities the drivers are forced to rent the car and license for a fixed fee per day. On a bad day the driver can get nothing, or end up negative.

      3. It is when you’re some worthless progtard government stooge who fails upward. They must assume everything else works the same way.

  4. Only central committee knows what’s best = central committee members go to top schools like Kennedy School of Government where they’re taught to make decisions just for you.

  5. I posted this link last night, so feel free to ignore, but it sounds like it was ghost written by Elizabeth Warren:

    http://www.theguardian.com/com…..pew-survey

    “As I write this, I’m about to travel to beautiful, sunny Puerto Rico for a brief vacation. If all goes according to plan, there will be keys waiting for me in a mailbox outside an apartment in San Juan, which will hopefully look like the pictures I saw on the Airbnb website.

    To get to the airport, I’m probably going to take an Uber, partly because I just moved to New York and still feel like a fool trying to wave down a cab, but mostly because calling an Uber is really, truly, ridiculously easy to do.

    Welcome to the new economy, where convenience is king. It’s no wonder these kinds of services are popular ? they give us just what we need, when we need them. They make fast lives possible. But is convenience turning us into monsters?

    A high minimum wage, guaranteed medical leave for workers, and paid overtime are all issues young progressives have taken vocal positions on. But in an environment shaped by on-demand apps, workers are considered independent contractors or free agents, and job protections are eliminated. It’s a system that heavily favors the corporation over the laborer.

    Trading ethics for comfort is par for the course in America.”

    1. Yea that was pretty bad. Thankfully the comments were mostly sane. Except for a few hardcore commies who were chastising how any capitalism is unethical.

      1. a few hardcore commies
        Spotted one.

        We can now buy – on our identical high streets – cheap burgers, caramel lattes, washing up liquid with added aloe vera and razors with not one, but five blades…all it has cost us is job security, a healthy long term economy, a wage that is enough to live on, the environment, a democracy that serves the people and pretty much the entire global eco-system. What a “bargain”.

        Fuck! FIVE blades? The absolute decadence! Nobody NEEDS more than one razor blade when children don’t have job security in this country.

    2. But is convenience turning us into monsters?

      No, Hillary was already a monster.

      1. Hillary is almost certainly a sociopath. Possibly a psychopath.

    3. It’s no wonder these kinds of services are popular ? they give us just what we need, when we need them.

      Monsters!

      And this brave author doesn’t even take into account how the capitalist system punishes those who refuse to give us what we want in a useful timeframe!

      1. And this brave author doesn’t even take into account how the capitalist system punishes those who refuse to give us what we want in a useful timeframe!

        And that’s why it’s so unfair! Imagine having to do something others find useful the earn money, rather than collecting a lavish salary for performing Marxist puppetry!

    4. Anybody know how much Bernie Sanders tips when he goes to a restaurant? He seems like the type that would leave as a “tip” a note explaining why he’s not leaving a tip because people who work for tips are pawns of their corporate overlords and he’s not supporting the plutocracy, blah blah blah. But he by god ain’t willing to pay his server more on a voluntary basis.

      This person has every opportunity not to contribute to the downward slide she’s complaining about yet she chooses the meaningless posturing that allows her to feel morally superior even while engaging in the conduct she’s decrying. Life is good. Eat like a pig, complain about the hogs.

      1. I’d bet he tips for shit. He’s got that 15% or less look about him, and god knows he’s never worked in the service industry.

      2. His people tip. Bernie doesn’t tip or pay or anything like that.

      3. I have it on the best authority that Bernie Saunders tips very well, and charges it to his taxpayer-funded expense account.

    5. In a just world people with this much self-loathing would hang themselves in the shower and would leave us the hell alone.

    6. Can the author confirm our biases? Why, yes… yes he can.

      1. Pajama boy meets antelope boy?

        1. Pajamalope?

    7. If the writer is so concerned, why doesn’t she take a unionized taxi and stay in a unionized hotel? Where are her principles?

  6. Warren lacks self awareness seeing how she is well into the Top 10%. Bernie and Warren strike me as control freaks.

  7. Squaw is on warpath against paleface uber tribe. Many scalps for Chief Big Gov.

    1. Winner!!!

  8. Why are progressives like Warren and Sanders such miserable people?

    1. Phrased better: why are such miserable people progressives?

      1. Progressives are afraid that someone, somewhere, might be enjoying life.

        1. Misery loves company, convert your friends to socialism!

    2. It’s what happens when stupid people think they’re smart.

      1. But they have an advanced degree!

    3. I’ve been thinking of the SJWs and this whole transgendered mess. I think when you base your personal happiness on what other people think of you or how they treat you, you can be guaranteed of coming up disappointed. All I hear from those folks is how they are in tears because not everyone embraces them.

  9. The International Association of Machinists and Aerospace Workers trumpeted an agreement reached earlier this month to represent New York Uber drivers, saying it “gives organized labor an opportunity to shape the new economy in a way that supports and values workers and their families.”
    […]

    Uber deal shows divide in labor’s drive for role in ‘gig economy’

    1. My first question is, what the heck do Machinists and Aerospace Workers have to do with driving for Uber?

      1. Collecting union dues.

  10. $15 per hour?

    Come on, I’ve talked to progressives. I’ve been to progressive websites. Everyone knows that if you properly calculate expenses – including depreciation on your car – people driving for Uber actually lose money. It’s a fact, you can look it up..

    1. Look, if you take an $88,000 Cadillac Escalade and drive it for two years (say, 150k miles), it is worth about $30,000.

      So you gotta take $25k per year right off the top of anything they make. Plus insurance. Plus maintenance. Plus gas. Plus repairs …. you know that you are going to get hit a few times if you are driving as a taxi, come on people.

      People who drive for Uber must be sooooo stupid! They don’t even realize that they are losing money!

    2. I totally love reading progressives start to use business lingo to present their case. It’s there you see just how shallow they really are.

      Morons who never ran businesses telling people who run/own them how it ought to be run.

      Jackasses.

      1. “Morons who never ran businesses telling people who run/own them how it ought to be run.”

        Most “progressives” I know have never even held a supervisory position at work. I think this belief is why most of them think that upper-level managers and CEOs don’t do any work whatsoever, and that the rank-and-file workers should be paid the lion’s share of the profits because they “do all the work”. Since they’ve never been in charge of other workers, they don’t understand that being the boss is actually a ton of fucking work.

        1. Back when I was in architecture school all of the younger students couldn’t wait to start their own business; so they could get rich by picking and choosing their clients, only working on “important” projects, and setting their own working hours.

          The professors who had actually been out in the real world working kept trying to tell them it doesn’t quite work that way.

      2. They overlook an even simpler issue: that these drivers already had said car and had already “lost” money on it.

  11. The Democrats Just Don’t Understand the Sharing Economy: New at Reason

    FTFY

    1. Exactly.

      Don Boudreaux: “No sensible economist could have looked at Venezuela in 2007 ? or in whatever year the price of oil recently peaked ? and predicted anything but the general state of economic calamity that reigns there today. Stiglitz’s 2007 assessment of Chavez’s policies wasn’t wrong because Stiglitz failed to account for falling oil prices. His assessment was wrong because every good economist understands that making property rights more insecure, centralizing more and more economic decisions in a government bureaucracy, and preventing market prices from rising and falling as the forces of supply and demand would push those prices unavoidably cause economic damage ? and that the greater these interventions the greater the extent and depth of the resulting damage.”

      http://cafehayek.com/2016/05/40857.html

      1. Not even just that. They don’t acknowledge what happens when the Government nationalizes industries. First it prevents private sector investment especially foreign investments. When someone doesn’t know if next week the infrastructure you built is going to be seized you will look to invest elsewhere. Second when Chavez nationalized vast amounts of oil infrastructure the knowledge base to run them efficiently left.

      2. Nuh-uh!! Venezuela was a utopia until the greedy Western capitalists ruined everything by making oil so cheap!!!

        *sticks fingers in ears*

        LALALLALALALAL I CAN’T HEAR YOU

        /prog

    2. Progressives don’t understand the concept of marginal utility, or cost, or really any microeconomics whatsoever. I’m not sure why, but there’s some sort of weird cognitive block that prevents it. I actually tried to explain marginal utility in the context of carbon taxation schemes to an otherwise very intelligent person and she was completely at sea.

      Eventually it boiled down to:

      – Carbon is bad, so taxing it to reduce carbon emissions is a good thing.
      – Ok, but if the costs incurred by taxing it at a given rate exceed the costs of any environmental harms you’ve avoided, then you’re worse off.
      – Why? Who cares if rich people have to make less money in order to protect the environment?
      – But it’s not rich people who’d get hit, it’s poor people who can’t afford the higher prices that those taxes produce.

      ,.,and then she stormed off. I was thinking about starting her off slow with the broken window parable but I’m afraid she wouldn’t get it.

  12. She said, “[Uber and Lyft fight] against local rules designed to create a level playing field between themselves and their taxi competitors.

    “Yeah, hands of my uterus!”
    “Um, think she said Uber Lyft.”
    “Oh, good ahead and fist fuckem then.”

  13. Oh who are we fooling? It is not that the Democrats do not understand the sharing economy. They understand it well enough to know that it is something largely out of their usual methods of direct control. And they do not like that at all.

  14. Warren says: “Massive technological change is a gift ? a byproduct of human ingenuity that creates extraordinary opportunities to improve the lives of billions. But history shows that to harness those opportunities to create and sustain a strong middle class, policy also matters.”

    Citation needed for that second sentence.

    (but what I really want to know is this: have they caught the guys with the guns? You know, the guys pointing the guns at Uber drivers and forcing them into this hell of being independent contractors.

    1. Progs don’t believe that good things happen outside of the state. When they do, it’s clearly an accident, and it behooves the state to move in quickly with regulations in order to protect them.

  15. While it is a positive sign that Warren did not call for an outright ban on ridesharing, what she fails to realize is that applying a 1930s model of employment and regulation to new technologies will effectively destroy many sharing-economy companies.

    Oh, I’m sure they understand this just fine. They know it would be politically unpopular to outright ban these companies, so instead they will implement onerous regulations “to protect customers.” The real intent of course will be to shut down those upstarts who are competing with the established (and politically connected) businesses.

  16. They understand it just fine. A decentralized economy means less union & corporate money in their coffers. Easier to strongarm a handful of large static entities than millions of small dynamic ones.

  17. Recently I’ve been watching The Sopranos on Amazon Prime. In one episode two of the crew try to shake down the manager of a newly arrived “chain coffee” outlet. It takes a second for the manager to catch on to what is being attempted, but he rather quickly explains that he has no way to pay them anything – even if he wanted to pay – corporate accounting and product tracking make it impossible, any attempt to divert cash or inventory would see him replaced by the morning.

    The two goons leave totally befuddled and disheartened by the changes coming to the old neighborhood.

    The Democrats in a nutshell.

    1. Nobody told me that show was funny. I tend to avoid mobster bullshit, but I might have to make an exception…

  18. How about a really, really short article on what Warren gets right?

    1. Nothing.

      (How’s that!)

  19. Warren is a despicable scum bag who would put her political opponents in an oven if she could figure out how to do it legally.

    1. She really is. I hope she never touches the presidency.

      1. I fear Hillary will make her VP.

  20. Electing Warren was like electing a Gawker commenter. She has little concept of economics, and wishes for a US economy that existed way before the globalization of the economy, or in fact never existed in the first place.

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  23. sharing economy

    I despise this term. I’s not “sharing”. It’s business/commerce/trade.

    1. Shh! If you call it “sharing”, the socialists and the Progressives might think it’s something like welfare and leave it alone.

    2. I understand the sense in which the term’s being used, and it’s as good a brief moniker as most. You’re sharing the use of a car, a dwelling, or whatever. It’s not your main source of income. Ride shares, time shares, etc. So why not “sharing” as a word to encompass them?

  24. Perhaps someone believes himself to be an excellent Uber driver and that driver also has a wide association of other high quality drivers. If those people want to get together and form an Uber driving guild that would be free association. The guild could be quite exclusive and only the best drivers with nice cars would be allowed to join. If that guild then went to Uber and offered the services of its trained and screened members at a premium price that would be free commerce. Maybe those drivers are worth more because the customers perceive value in the driver or premium car. Maybe they have less accidents or are more reliable.

    The guild could charge dues to its members for negotiating this high value employment contract and offer them insurance or other benefits befitting a group of employed individuals. As long as neither the company nor the workers are legally required to associate with one another, there is absolutely nothing wrong with the formation of unions of Uber drivers or any other worker.

    1. And then the guild will be replaced by robots. Even if they don’t get to the guild part.

    2. Nice idea, if that was the way unions actually worked.

      Instead you might get an association of drivers that only worked 8-4:30 with an hour for lunch and two fifteen-minute breaks, never handled luggage, didn’t drive in the rain, and demanded that you fire all the non-association people.

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  27. RE: What Elizabeth Warren Gets Wrong About Uber
    Democrats can fight the sharing economy?but they’ll lose voters if they do.

    Senator Warren can do no wrong.
    She’s a native American.
    Her application to an Ivy League says so.

  28. “For many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10 percent.”

    Mrs. High Cheek Bones. Please use a napkin. You’re drooling again.

  29. “While it is a positive sign that Warren did not call for an outright ban on ridesharing, what she fails to realize is that applying a 1930s model of employment and regulation to new technologies will effectively destroy many sharing-economy companies.”

    No, she DOES realize it and she actually does want to “effectively destroy many sharing-economy companies.

  30. The other?and far better?option is to remove these barriers so that legacy business models can adapt to new competition

    But that option is far better for consumers. It is far worse for nanny state government types. If we are better off without government regulation, and markets can regulate themselves, of what use are the nannies?

  31. Anti-Uber and Anti-airbnb proglodyte politicians seem be taking the votes of young techies in California and Massachusetts for granted, methinks.

  32. Wait till self driving cars are mainstream. THEN she’ll DEMAND that the government force us to hire a backup driver under the ‘gig’ economy. You know, for the children.

  33. “In a world where all the benefits are floating to the top 10%.” This is so true, because only the rich wold benefit from cheaper taxi rides. The middle class in no way, shape or form see a benefit from cheaper services. Even she doesn’t believe her own bullshit.

  34. The only purpose for finger-print checking a driver is that it the only legal means you have of vetting a junkie/felon/kidnapper who might be driving your cab. If the car is owned by the driver, who gives a fuck?

  35. This is generally the problem with “nanny statist” Democrats. They have never a government regulation that they didn’t think was a good idea. The fact that all of these regulations cost money and reduce choice for the consumer never seems to enter their minds…

    1. One thing nanny state types have never talked about regulating is the amount of taxi medallion rent that can be sq by taxi medallion speculators. The sky’s the limit as long as part of the medallion rent is kicked back to nanny state politicians in the form of campaign contributions.

      In New York City alone, the taxi and limo industry gave $650,000 to politicians before the last election:
      http://www.bloomberg.com/polit…..mit-growth

      Sixty-five percent of New York City voters believe campaign contributions by the yellow taxi industry are behind efforts by some elected officials to limit the growth of Uber: http://www.syracuse.com/state/…..tions.html

  36. This election has me fretful for a reason that I haven’t really seen mentioned in the media: the popularity of Bernie Sanders is a harbinger of things to come. With people Feeling the Bern as they are this cycle, it paves the way for an arguably worse Socializzy Warren candidacy. On the bright side, a Clinton victory means Warren would be held off from running until 2024 where she’ll be 74. Conversely, Hillary is poised to put Socializzy in a prominent position where her misguided (being kind here) views on economics could be disastrous.

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  40. Another downside to the sharing economy from the control-freak perspective: these independent contractors will now get to pay the other half of SS/Medicare that has been paid on their behalf by their employers, and they’re not going to like it. They might even start wondering where the f*&k all their tax dollars go.

  41. Come on now, Warren really cares about poor people!

    Besides, those damn Uber cars get in the way of her limousine.

  42. A true “sharing economy” is decentralized, what both TNCs (like Uber and Lyft) and taxi companies share is a small numbe rof people holding an inordinate amount of control over the profits earned by a larger number of people- a blockchain based TNC like Arcade City puts the control over ‘the program” into the hands of the “worker/contractor” and takes it out of the hands of the leeches/capitalists- True libertarianism- common ownership by the worker/driver/shareholder- each receiving their share of the profits, without some overlord dictating the terms/rules/costs etc

    Uber, Lyft, AirBnb are still centralized and hierarchical organizations dependent upon unequal wealth extraction (trickle-up economics)- lets automate these programs, get rid of management and have a truly decentralized power-sharing, social anarchistic world

    1. fuck off, slaver

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  44. An undocumented alien who went though no background checks serves food and takes care of babies –

    “They are Americans without papers, so that’s OK”

    Uber doesn’t want to add fingerprints to their existing background checks

    “You’re playing by your own rules! Own rules!”

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  47. But is convenience turning us into monsters?

    No, Hillary was already a monster.
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  49. she apparently does not want others to participate in the new economy. This new economy is driven by work that is flexible, mobile, and individualized, and the sharing economy is just a small subset of the new opportunities provided by technological progress. now also download zapya for pc and Vidmate for pc to watch movies online for free

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