Consider the consumer technologies that we currently enjoy for granted. Among them, few have had as much impact on our daily lives like ride-sharing apps Lyft and Uber. Both companies forwarded simple, yet effective innovations that have created income-generating opportunities for tens of thousands of people.
At the same time, ride-sharing apps are incredibly disruptive. The most egregious example is in New York City. Prior to the sharing-economy craze, the yellow cabs represented a profitable fixture of the Big Apple. Due to ever-increasing demand in the congested metropolis, medallion licenses to operate these cabs soared.
But companies like Uber and Lyft allowed everyday folks with merely a driver’s license to usurp the taxi industry. Not only that, ride-sharing apps offer considerably cheaper fares than their traditional counterparts. At a certain point, the cabbies couldn’t compete, and the entire industry is collapsing.
When the first shots were fired, taxi drivers initially blamed their new competition, the digital scabs. But in recent months and years, Lyft and particularly Uber have squeezed their drivers. In part, that involved reducing opportunities for advantaging premium hours, or “surge” periods.
Of course, with Uber and Lyft competing on price point, that helps customers. But it also makes it next-to-impossible for drivers to earn a living wage from ride sharing; thus, the rising criticism about exploitation. But is this really an accurate assessment?
Ride-sharing Apps Represent the New Economy
From an immediate, elemental perspective, I can understand the criticisms. Having achieved some of their market-share goals, Uber and Lyft did the next logical thing: attempt to squeeze their drivers’ revenue stream.
It’s alarmingly easy to do. As independent contractors, ride-sharing drivers give up the rights, privileges, and benefits associated full-time employees. A major reason for the ongoing controversy regarding these sharing-economy companies is the nature of work. Since Uber or Lyft drivers don’t really control their work, they appear more like employees, not independent contractors.
In that respect, ride-sharing apps are exploitative. But on the other hand, Uber and Lyft provide opportunities to people that just didn’t exist previously. Furthermore, these two organizations offer modularity: work as much or as little as you want.
That’s the type of freedom that you can’t get working in a career nine-to-five job. You’re tethered to a specific environment. A cold, unfeeling corporate entity ultimately limits your personal earnings. If that’s not the very definition of exploitative, I don’t know what is.
I’m not suggesting that Uber and Lyft represent shining examples of business integrity. However, they do provide choices to participants. That’s such a critical factor that I can’t call them purely scheming and manipulative.