Your smart phone contains a wealth of information and entertainment. Apps not only offer games, books, and social media — they also offer opportunities to earn a living. Business innovation at your fingertips has opened up a world of possibility and given rise to the sharing economy.
Demand for comfortable places to stay and convenient transportation services is nothing new; however, “the problem in the past was finding someone who was willing to offer the desired good or services at a reasonable price.” The sharing economy adapts with developing technology, offering “easy access to an online platform that facilitates transactions between buyers and providers of goods or services.” Policy Researcher and fellow at the Manhattan Institute, Jared Meyer, shares his understanding of the constantly evolving economy in his new book, Uber-Positive: Why Americans Love the Sharing Economy. By studying the successes of and road blocks faced by the ride sharing company Uber, Meyer sheds valuable light on the necessary freedom of creativity and the benefit of added competitors in the market.
Meyer’s small but highly informative book chronicles the origins of “outdated” regulations placed on yellow taxis (necessitating the need for Uber) to “Embracing Permissionless Innovation”. Important factors like safety, accessibility and pricing are addressed and Meyer proves that the sharing economy model comes out on top. Each point is supported with data and facts, thoroughly undermining the old regulations that no longer benefit consumers, to proving just how well Uber can meet consumer demands. Laws attempted to be put in place around new competitors are shown to protect those who stand to lose the most from change, and risk the supply for those who stand to gain. What I loved about this study was the amount of thorough research done not only refuting failed regulations, but also emphasizing the ability of individuals to work around those restrictions through a new platform and improve today’s economy.
This is exemplified through Meyer’s examination of the yellow taxi medallions, required for taxi drivers to purchase in order to service street hails. The limitation on the number of medallions allowed has become too low and as the number of taxis has shrunk, supply has not met demand. Prices on medallions and rides have skyrocketed. Uber has managed to combat these restrictions.
The regulations put in place around yellow taxis could not have regulated Uber because the sharing economy could not have been foreseen. “Because Uber’s ride-sharing trips are categorized as prearranged rides instead of street hails, the service is able to operate all over New York City without being required to attain medallions.” Meyer demonstrates how Uber’s ability to maneuver around these laws results in the growth of jobs and therefore, services. Even low-income, outer-borough residents are now able to access rides through Uber, achieving what yellow taxis have not.
While Uber’s ability to meet demands and successfully compete in the market is evident from Meyer’s research, Uber faces bureaucratic threats. Rather than fostering millennial entrepreneurship, there are those who seek to decrease the freedom allowed in the workplace. Meyer does not back away from tackling these threats in his study and shrewdly warns the ride sharing company itself to be careful when giving too many benefits to contractors who work independently. “Currently, Uber’s drivers, Airbnb, and TaskRabbit taskers are all categorized as independent contractors, not employees. That designation — which is crucial to the companies’ success and consumer benefits — is threatened by collective bargaining advocates.” The attempt to enforce collective bargaining reflects a misunderstanding of entrepreneurial freedom within the market, as those who work independently would “be forced to follow and fund a labor agreement that they did not support.” Even the ride sharing companies need to tread carefully as they begin to offer benefits to individual contractors, coming closer to creating an employer-employee relationship.
In order to support the sharing economy and avoid further crippling regulations, “a regulatory framework for the future must embrace flexibility if it is to allow for the next transformational product or service to reach the market.” Uber’s success results in reasonable prices, higher wages and greater efficiency. Meyer praises the competition of Uber, explaining that “the company’s breakthrough puts pressure on taxi companies-often actually government-enforced monopolies-to improve their services.” As the economy changes with innovation, competition must be welcomed and not stifled. Meyer understands the need for welcomed experiment and change within the market and the improvement it bears even on a slow-moving economy. Meyer succinctly states that “not only do many workers prefer to be part of the sharing economy, but in the current period of low economic growth, it is an essential way to increase Americans’ earnings.”
Only 37 pages long, Meyer’s book offers a model for creative entrepreneurship that opens up jobs and services. Although very factual and statistic-based, Meyer’s book is a quick and fun read. The detailing of Uber encourages millennial creativity and tells a story of entrepreneurial innovation.