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Uber Bummed
Hillary Clinton Talks Uber

In her first major economic policy address of the 2016 campaign, Democratic presidential frontrunner Hillary Clinton raised questions about the effect that companies like Uber and Airbnb are having on American workers:

Many Americans are making extra money renting out a spare room, designing websites, selling products they design themselves at home, or even driving their own car. This “on demand” or so-called “gig economy” is creating exciting opportunities and unleashing innovation but it’s also raising hard questions about workplace protections and what a good job will look like in the future.
Later in the speech, Clinton vowed to “crack down on bosses who exploit employees by misclassifying them as contractors” — a possible reference to something like the recent California Labor Commission decision that threatens to undermine Uber’s business model.

To be sure, Clinton does not want to destroy the sharing economy. She acknowledged that “these trends are real” and “none is going away.” But she may believe that, with the right application of political muscle, the new economy can be forced to conform with the antiquated blue social model — that is, the midcentury vision of steady, regulated, unionized employment with generous benefits.

As we have argued again and again, this notion is unrealistic. Like it or not, this 1950s model of economic organization is breaking down, and has been for several decades, thanks to globalization, demographic changes, technological innovation, and other trends that simply cannot be reversed. Measures like the California decision are futile and counterproductive. We should treat the emergence of a more entrepreneurial, dynamic landscape as an opportunity to be engaged with productively, not a danger to be henpecked by regulations better suited to the last century.

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  • circleglider

    To be sure, Clinton does not want to destroy the sharing economy.

    No, of course she doesn’t. She just wants to pass a bunch of laws that will put the “sharing economy” out of business.Thank goodness that Professor Mead knows what’s in Hillary Clinton’s heart. That way, he never has to call her (or any other mainline politician or government official) wrong.

    • pointsnfigures

      No, she wants to unionize it and collect taxes from it.

      • circleglider

        All economics operates on the margin. And the “sharing economy” is nothing but using technology to lower marginal transaction costs. Go re-read Coase’s The Nature of the Firm:[A] firm will tend to expand until the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction by means of an exchange on the open market or the costs of organising in another firm.So “unioniz[ing] and collect[ing] taxes” from the so-called sharing economy will eliminate its cost advantage, and put it out of business.

        • pointsnfigures

          100% agree. Coase is the sharing economy. Clinton is out of touch and doesn’t get it

        • Boritz

          Either that or pass regulations that require lots of reporting to demonstrate compliance. Make it so complicated that even with computers it takes hours and hours to prepare reports. Make Uber drivers spend an hour on compliance reporting for every hour driven.

  • Fat_Man

    “Uber Promotes ‘Senior Mobility’ on Same Day Hillary Attacks Company”
    3:57 PM, Jul 13, 2015 • By SHOSHANA WEISSMANN

    Hillary Clinton outlined her economic agenda today at the New School in Manhattan, and attacked Uber. The ridesharing service did not reply to Clinton directly, but the company did post a story on its blog about how the service helps “senior mobility.” Clinton, a grandmother, is 67 years old.

  • pointsnfigures
  • Kevin

    A lot of the “Gig” economy is due to a very loose labor market. If the economy were humming along Uber would find it much tougher to hire the drivers it needs and would find its business model much more cramped. However, the solution is not to punish Uber, but rather to loosen up labor market (and other) regulations, restrict low skilled immigration and to encourage growth.

    • CapitalHawk

      Yes, this. Which is why we need to make sure nothing slows down illegal immigrants from entering the country. Wouldn’t want that labor market to start giving people raises, I mean tighten up, would we?

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