No Joke, Gig Economy Is Bust; Can It Be Fixed?

If you’re reading this while riding in Prank Mode with Lyft, rest assured we’re not fooling you. This is all too real for millions of people working in benefits-less jobs: The much celebrated, “independent contractor”-reliant on-demand economy that brought us such “innovations” as Uber, Lyft, SpoonRocket, TaskRabbit, and way too many others was just a paper tiger for traditional business, now fraying at the edges.

That’s the conclusion in two recent op-eds from national media that focus on a very local quagmire for San Francisco. One is a searing op-ed published by The Huffington Post today from journalist and author Steven Hill that blasts the hubris of startup mentality. It comes in response to a column last week from New York Times tech cheerleader Farhad Manjoo lamenting how services from the self-described “sharing economy” are no longer cheap as dirt.

Both pieces highlight that this more and more expensive trend makes the services less and less attractive.

But who are the real victims in all this?
[jump]  Certainly not the venture capitalists (Hill points out that in their warped reality, they believed there was a market for Luxe, the vehicle-valet-from-anywhere app, because it’s something they themselves would find useful).

The startups are suffering mightily. They are turning to Silicon Valley spin and telling starry-eyed journalists they’re in “pivot mode” — another way of saying, “We’re on life support, someone pay the bills before they pull the plug!” Can you be a victim of your own stupidity? Sure, but you’re not going to get much sympathy.

Indeed, the real victims here are the millions of people fooled into thinking the on-demand economy was offering killer jobs at

good wage points for flexible work that did not require a huge investment of time learning a new skill. Essentially, if you were young and under-employed, perhaps an artist or creative type, maybe even a startup dreamer yourself, or just a mostly stay-at-home parent looking for supplemental income, driving for Uber or Lyft was appealing. Delivering for SpoonRocket looked like a solid bet. Performing other people’s mundane taks for Zaarly or TaskRabbit? Why the hell not. All of this came under the guise of good pay at your own pace.

Sadly, the reality is anything but.

Exec, a much lauded errand-running service upon launch, wanted to compete with TaskRabbit by connecting busy people with independent contractors willing to fill the gaps in their lives. Only it wasn’t quite that straightforward. In a moment of clarity too often missing from this business sector, Justin Kan penned an honest blog detailing where he believes his startup went wrong. In short, the money offered to do the work ended up not being as advertised, and the independent contractors were not as motivated to run errands for strangers as the company hoped they’d be.

Hill aptly sums this up as the “wide-eyed visionaries of Silicon Valley” underestimating “the human factor.”

“To so many of these hyperactive venture entrepreneurs, workers are just another ore to be fed into their machine. They forget that the quality of the ore is crucial to their success, and that quality was dependent on how well the workers were treated and rewarded. The low pay and uncertain nature of the work keeps the employees wondering if there isn’t a better deal somewhere else,” Hill wrote.

Where that somewhere else might be is anyone’s guess. Manjoo offers an apocolyptic conclusion that the on-demand economy is kaput save for Uber, the king of kings. Hill takes a more nuanced position, saying the problem is the companies’ approach to their workforces and not the workers themselves or the demand.

“At the end of the day, the sharing economy startups have been hamstrung by the quality of the workers they hire,” Hill writes. “If they want good workers, they need to offer decent jobs. Otherwise, this sharing economy is not about sharing at all, and not very revolutionary.”

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