The way we work now is changing rapidly: Self-employment is up, workers are putting their own money into what once would have been company purchases, and there’s endless chatter about the future of robot labour transforming the landscape.
On the first big shift, the Office for National Statistics data released Wednesday shows that self-employed people in the UK increased by 30,000 to 4.55m for July to September compared to the same period a year ago.
From ONS: Read more
To conclude FT Alphaville’s contribution to the self-driving car debate, here’s a bullet-point summary of why we don’t think it would ever be economically efficient or publicly useful for a private enterprise to fund the roll-out of a driverless taxi fleet.
- Cars in garages are like gold — naturally depreciating and don’t yield anything.
- Unlike gold, cars do provide the hoarder with optional utility — the option to use the car whenever they want.
- Most personal car options expire un-utilised.
- If you rehypothecate the car (rent it out) you can compensate for the depreciation by substituting unused optionality for more useful optionality in the wider system.
- The more passive and automated the rental — the self-driving element — the less it eats into your general time value, thus the more profitable the option trade.
We argued earlier that the economics of self-driving taxis don’t necessarily make sense.
Which is to say, we’re not entirely convinced (at this stage) that self-driving taxis will be any more or less affordable than those driven by humans. At least if deployed by a private enterprise.
But there’s a bigger point to be made about the economics of the self-driving car market. It’s about society’s general treatment of so-called idle assets. But also, how the rhetoric from Silicon Valley regarding the need to diminish the number of idle assets in society and up capacity utilisation everywhere contradicts the standing mantra that distributed, decentralised systems are stronger and more resilient. Or for that matter that gold or bitcoin are a better form of money than evil centralised rehypothecated fiat.
So here’s a post about why private cars have a lot in common with gold, and more specifically how Uber is to cars what fractional-reserve bankers were to gold. Read more
Financial blogger Frances Coppola runs through how and why the “sharing economy” is grossly mis-representing itself to consumers by daring to suggest it’s anything but a traditional for-profit — or more pertinently rentier — enterprise.
Indeed the whole idea of the “sharing economy” seems to be based not on the idea of working together to produce something for mutual benefit (the cooperative principle) but on millions of people scraping a living by selling services and renting assets to each other. How does this add value to the economy over the longer term? There is no production. It is entirely consumption. Recycling is all very well – and we do need secondary markets – but we cannot build an economy solely on sweating existing assets. An economy that exists solely on consumption has no long-term future.
In Paris this week, at the Ouishare Fest, the great and the good from Europe’s sharing economy have been delving deep into what it means to be running a collaborative business model within a capitalist framework. Are the two even compatible? Or is there a fundamental conflict at the heart of an industry that preaches collaboration but, due to being radically commercialised by venture capital money from Silicon Valley, also needs to profiteer from the goodwill of others if it’s to remain viable?
For the most part it’s a hypocrisy the community is trying to address. The $1bn elephant in the room — the fact some aspects of the sharing economy are becoming the very thing they set out not to be — has basically become too enormous to ignore. Read more
Unscaling is made possible by the number of Internet-based platforms and cloud-based services and tools now available to startups and small businesses in general. New companies can now be launched without a massive investment in personnel and IT infrastructure. They can quickly get to market, and compete effectively with far larger companies. Mobile Internet platforms, in particular, make it easier and cheaper to experiment in the marketplace. While most such experiments will likely fail, some, like Airbnb, will succeed and can then quickly scale up their capabilities as their businesses grow.
That’s from the blog of former IBMer Irving Wladawsky-Berge, who is riffing on the back of a Newsweek piece by Kevin Maney on the “end of mass production”. Read more
Felix Salmon at Reuters sums up the problem with a lot of “disruptive” innovation these days.
It’s not really all that innovative — but rather focused on finding ever cleverer and more subtle ways of dodging established regulations, which, as he also points out, exist for a reason.
Should it therefore be surprising that the likes of Airbnb, Uber and even Bitcoin are more cost effective than established competitors when they’re either cutting out the taxman or costs of compliance altogether? How can regulated industry possibly hope to compete?
Which also confuses, if not exploits, the ethos of the sharing economy in and of itself. Read more
A nice spot by Emily Badger of Atlantic Cities:
“Do you have to give out 1099s?” wondered Congressman Chris Collins, a Republican from New York.
“This is fascinating,” said Arizona Republican Representative David Schweikert, pondering a startup platform called 1000 Tools that enables people to rent cement hammers from each other. “You may slow down capital expenditures but actually make the economy much more efficient.” What’s the net effect of that?
“Given the nature of peer-to-peer platforms, it would be difficult if not impossible to capture their contribution in official employment statistics,” argued Congresswoman Nydia Velazquez, raising a good point. “So what are the ramifications of excluding this job creation from government employment indicators?”
The questions came up Wednesday at a House Committee on Small Business hearing that marked the first time Congress has peered into the sharing economy. The tone of the inquiry was more sympathetic than probing. And the event, attended by just a few dozen congressional aids and industry insiders, was low-stakes. There’s no related federal legislation waiting in the wings hoping to suddenly regulate these businesses, which are perhaps mostly notable for the fact that no one yet knows how best to regulate them.
Ever since Robert Gordon made his assertion that all the low hanging technological fruit has been picked, evidence to the contrary has been piling up.
It’s worth noting, first off, that Gordon’s paper was relatively backward looking. It arrived at its conclusions by taking trends prior to 2007 and projecting them forward, largely ignoring the 2008 crisis that occurred. It also measured innovation in terms of dollar denominated growth. Read more
FT Alphaville’s series on the rise of the collaborative economy has so far looked at a new type of growth, how peer-to-peer lending is a return to full-reserve banking, and the link between social networks and evolutionary game theory.
In the latter post we considered the value of reciprocity and collaboration, and whether what appears to be altruistic content generation really is self-serving after all?
But what about the rise of completely altruistic models like crowdfunding websites? Read more
FT Alphaville has been taking a closer look at the collaborative economy, and noting the stellar growth this mysterious sector has been experiencing of late.
An important question to consider, however, is to what degree is this growth being driven by a genuine rise in reciprocity and altruism in the economy — or to what degree is this just the result of natural opportunism. Read more
FT Alphaville had the pleasure of moderating the “Future of Banking” panel at OuishareFest, a collaborative economy gathering, earlier this month.
During this discussion, an interesting point was made by Francois Carbone, CEO of an equity-based crowdfunding venture Anaxago. Namely, when you think about it, every peer-to-peer initiative (P2P) on offer today is really representative of a move towards a private sector version of full-reserve banking. Read more
Earlier in May FT Alphaville attended Ouisharefest in Paris, a conference dedicated to exploring and discussing the growth of the collaborative economy.
The timing of the event coincided with the ECB cutting its benchmark refinancing rate to an all-time low of 0.50 per cent to counter economic weakness which had in the central bank’s opinion spread to the eurozone’s “core economies”. Read more