The unions did nothing for Detroit. At one point the wealthiest per capita city in the U.S, Detroit had an incredible potential to develop into one of the most famous cities globally. Culturally rich and innovative in one of the most lucrative industries, the city was poised to become unforgettable for all the right reasons. Then, between 1945 and 1957, twenty-five automobile plants were built in the suburbs outside of the city of Detroit.
It was in 1945, three months after the end of WWII that the United Auto Workers lead a 113-day strike against General Motors which won them a significant raise increase. Ultimately the push for this policy, along with other policies, lead to it costing $1500 more to produce a car in Detroit than elsewhere. This was what caused industry to flee Detroit, and plunged the city into what seemed like a hopeless depression only decades later.
Now manufacturing and the automobile industry are old pieces of our economy, and they have already succumbed to cycles of governmental regulation which have shaped them, for better or for worse, into the forms that they take today.
According to the Bureau of Labor Statistics, 30% of American jobs require driving some level of passenger vehicle. A great portion of our labor exists in the aftermath of the automotive boom. Instead of developing cars, we operate them.
During 2014 there were 1.6 million truck drivers in America and 800,000 delivery truck operators. Conservative speculation estimates that there are 2 million drivers employed by Uber in America alone.
If the freelance economy, facilitated by companies such as Uber, Etsy, and Upwork, will not be the future of our economy, then it will at least continue to play a major role in how millions of America make a living.
The IPO of Uber had an uneven launch. It was the most anticipated IPO to come out of Silicon Valley since the IPO of Facebook, and the results mirror that of the social media giant. Facebook closed its first day with an 11 percent decline.
Uber closed its first day with a 7.62 decline. IPOs have proven difficult for several Silicon Valley companies, which leads to challenges. It is not during this time that the companies are at their strongest. Despite this, it is during the IPO of Uber that several publications and public figures think it is appropriate to raise demands against the company and squeeze further while Uber is in a precarious position.
Recently politicians such as Bernie Sanders have said that they ‘stand with the Uber and Lyft drivers’ citing that no one should have to work between 70 and 80 hours a week to get by. This is a touching statement, and a sentiment that is easy to relate to, but it harkens back to post-war Detroit.
Politicians and unions always hide behind the best interests of the workforce, but people such as Sanders, who hasn’t held a tradition job for longer than a year, can not be trusted to police naturally occurring economic events. He, and many other progressives, have no real world experience which would allow them insight into the inner workings of our economy.
Uber, and companies like it, are not corporations that build up business throughout the communities that they come out of. They are direct responses to the demands of the free market. After the advent of the smartphone, it was natural for industries to change to accommodate the evolving technology.
Uber does not stand alone. It has many competitors, especially in the global market. These competitors are not competing for real estate, deals, or employees in the traditional sense, but for the time of those who chose to work through their apps, and for the money of those who choose to use their apps.
This is a direct transaction between client and talent, which is already weighed down by the costs that the company takes from supplying the talent with the opportunity to work with their client.
The company is entitled to taking such a fee, like Uber’s 22% they take from all rides or the typical 20% that Upwork takes from its freelancers. They are entitled to this money because they do supply opportunity which otherwise wouldn’t exist. Their fee is the cost of opportunity which would not exist without the platform they provide.
The solutions that progressives offer to the financial difficulties of Uber drivers are ridiculous. San Francisco would like to add another surcharge to every ride, which seems like an interesting move from a city which cannot figure out how to budget effective sanitary measures to keep feces from coating their streets.
Pressure on Uber will not play into the interest of those who work with them, as it will only go the way of Detroit. The industry will fail under the demands of unions who demand wages which do not mirror the health of the market.
Freelance opportunities, and independent business such as Etsy shops, are industries currently booming, providing millions of Americans with a much-required income. It’s not easy to make it on any of the platforms, and there is a hustle required to make a living at all, but that’s not these companies fault. It is an issue with the market.
The companies aren’t responsible for the success of the freelancers and small business which utilize their services, but responsible for a platform which gives them a fair deal. They do not employ those who use their platform but allow them the opportunity to practice their trade.
If someone can’t make a living through these services it’s due to luck, their own personal failings, or the living conditions in their environment. Uber is not responsible for the cost of rent in New York City, Austin, or San Francisco.
The Democratic establishments of those cities have more to do with the struggles that their citizens face than those who offer the opportunity to make a living to all levels of society. When Sanders attacks Uber he misses his mark, as it is the cities which he campaigns in which strangle who he claims to stand with.
Our economic issues stem from economic disparity, which has more to do with the government and changes in the industry than they have to do with any individual actors. If there was a healthier middle class then people would be able to tip better with less stress and pay higher rates for luxury goods, such as Etsy jewelry.
Under Trump, the economy has started to recover and we are able to see that there are booms in many of the freelance industries. It is only progressive interference, such as the censorship of YouTube, which resulted in a $70 billion market cap loss. Regulation has strangled several personalities on YouTube, resulting in the loss of several occupations which had been earned through the individual effort of those successful on the platform.
If the technologies that the world relies on are to bring us into the future, then government regulation should be the last thing demanded. Freelancer platforms and riding sharing apps cannot carry the burden that employers are expected to. If we are looking for big tech overreach then it would be much more crucial to look at the sins of Facebook, Google, and Twitter than the sins of platforms which actually have competition.
Google and YouTube are the two most visited websites globally. Facebook is the dominant social media network for businesses, and Twitter hosts much of the political dialogue that occurs within the American public. All of these platforms pose a bigger threat to the American way of life than whether or not those who make a living through Uber are employed by that company or not.
Ultimately that issue is to be addressed by the market, which will cause platforms to fail as they cannot secure workers or business. The government can only alter that process by causing businesses to fail due to regulations, or keeping inefficient companies afloat through undeserved subsidies.
In addition to this, most Uber drivers drive with other apps such as Lyft. This is reflective of how much freedom the drivers have in the industry, as they can switch between the apps at a moment’s notice, and are allowed to register the same vehicle with both companies.
If the drivers are to be treated as employees of these competitor companies, then that liberty will certainly be stripped from them. Progressives claim to be working in the interest of the drivers, but it is most likely their efforts will only take liberties and opportunities away from the drivers.
Our concerns as a public must relate to the long term issues of our country. Pay rates and the policies of private businesses are temporal matters that will have different iterations after another decade of inflation and development.
Let the markets grow naturally so that the appropriate amounts of opportunities can arise, and enforce companies to respect the rights which we are given by our constitution. It is more important that we can speak freely in 2040 than it is for freelancers to be paid a ‘fair rate’ in 2019 which won’t match the cost of living in 2025.
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