Six years ago, two men named Travis Kalanick and Garrett Camp created a small limo timesharing service to crack the horrible taxi problem in San Francisco. Their original plan, which initially was only meant for the two of them, consisted of nothing more than a driver, a car, a spot in a garage, and an IPhone app. These obstacles, while perhaps daunting to a normal startup, were nothing to two men who had already made a fortune making apps in Silicon Valley. In just the few months that followed, Kalanick and Camp majorly expanded their business plan and created a fully operational app which could be applied anywhere within the United States. The rest is history. Today, Uber is valued at $66 million, and their founders are both assessed at over 6 billion dollars in net worth. The value of the company, however, cannot be measured in just dollars. Uber rocked the app making world, leading to hundreds of similar new startups across the country. Even more than that, though, the widespread popularity of Uber ushered a new age of something called the ‘sharing economy.’
In a sharing economy, individuals are able to borrow or rent services owned by somebody else at a cost significantly less than traditional retail or employment arrangements. This idea is not new. For years now companies have been renting out products to consumers as an alternative to full purchase. Examples include businesses like Blockbuster, Gamefly, and even Ebay. Each company built its empire on the idea that consumers found it quicker and, more importantly, cheaper to borrow or buy used products rather than purchase them at full price. The model of these businesses, though, has begun to stagnate. Blockbuster, for instance, closed its doors for good in 2011 because of bankruptcy. The reason behind this was that their business model provided no room for growth. Sure, new branches could be opened. Sure, video games could be added to the mix. Beyond that though, there was simply nowhere to go. People are only going to want to buy certain products for so long, and then they get bored. That is why the creation and success of Uber was so momentous. Product sharing became service sharing, a sector which had almost unlimited potential. People may get sick of movies but, until the advent of self driving cars, no person is going to get sick of getting cheap rides anytime soon. Uber opened the floodgates towards an almost entirely unexplored sector of shareable services. After the success of Uber, companies specializing in anything from homestays to talent sharing began to pop up across the globe. Even niche services like bike sharing or dog sitting emerged. These businesses all offered alternative methods of service, and they all made millions for it. The combination of being only a click away on a phone and only a fraction of the cost found elsewhere has made these companies some of the fastest growing in the world.
Now, while there are many advantages that have been created by the growing sharing economy in the United States, none of them have extended to the already pre-existing service industry. Whether it be hotels, car companies, banks, or other services, huge industries are being challenged by the rising importance of peer to peer sharing platforms. Taxis, in particular, are beginning to feel the effects of their undercut business. Drivers who used to pull home $800 a day are struggling to make half that number. Naturally, this decrease has led to a competition between taxi drivers and uber drivers in major cities and towns across the country. A competition that, without a doubt, is being won by uber drivers. That trend of competition can be seen throughout the country in every single industry that the sharing economy is involved in, not just car services. Many people have seen this one sided advantage and given pre-existing service providers one piece of advice -- adapt or die. A valid point, but a point that bodes ill for the future of the service industry and, unfortunately, the nation as a whole. Unemployment is already high, and, despite its convenience, companies like Uber are only making it higher. The whole attraction of the sharing economy is that services are shared. Inherently, then, less people are needed to do the same job. Entire professions are becoming antiquated, and that means entire livelihoods are being tossed down the drain. Now, I should mention here that I am in no way opposed to the progress of a peer to peer sharing economy. In fact, I’m all for it. My only constraint is the future of the job market in this country, as the combination of a more efficient economy and a rapidly increasing population can lead to only one thing: monumental unemployment. So, a message to all those taxi drivers, hotel workers, and bike shop owners reading this (of which I know there are none): for the sake of the ever growing next generation, adapt, because it’s not just going to be you feeling the consequences, but us.
Six years ago, two men named Travis Kalanick and Garrett Camp created a small limo timesharing service to crack the horrible taxi problem in San Francisco. Their original plan, which initially was only meant for the two of them, consisted of nothing more than a driver, a car, a spot in a garage, and an IPhone app. These obstacles, while perhaps daunting to a normal startup, were nothing to two men who had already made a fortune making apps in Silicon Valley. In just the few months that followed, Kalanick and Camp majorly expanded their business plan and created a fully operational app which could be applied anywhere within the United States. The rest is history. Today, Uber is valued at $66 million, and their founders are both assessed at over 6 billion dollars in net worth. The value of the company, however, cannot be measured in just dollars. Uber rocked the app making world, leading to hundreds of similar new startups across the country. Even more than that, though, the widespread popularity of Uber ushered a new age of something called the ‘sharing economy.’
In a sharing economy, individuals are able to borrow or rent services owned by somebody else at a cost significantly less than traditional retail or employment arrangements. This idea is not new. For years now companies have been renting out products to consumers as an alternative to full purchase. Examples include businesses like Blockbuster, Gamefly, and even Ebay. Each company built its empire on the idea that consumers found it quicker and, more importantly, cheaper to borrow or buy used products rather than purchase them at full price. The model of these businesses, though, has begun to stagnate. Blockbuster, for instance, closed its doors for good in 2011 because of bankruptcy. The reason behind this was that their business model provided no room for growth. Sure, new branches could be opened. Sure, video games could be added to the mix. Beyond that though, there was simply nowhere to go. People are only going to want to buy certain products for so long, and then they get bored. That is why the creation and success of Uber was so momentous. Product sharing became service sharing, a sector which had almost unlimited potential. People may get sick of movies but, until the advent of self driving cars, no person is going to get sick of getting cheap rides anytime soon. Uber opened the floodgates towards an almost entirely unexplored sector of shareable services. After the success of Uber, companies specializing in anything from homestays to talent sharing began to pop up across the globe. Even niche services like bike sharing or dog sitting emerged. These businesses all offered alternative methods of service, and they all made millions for it. The combination of being only a click away on a phone and only a fraction of the cost found elsewhere has made these companies some of the fastest growing in the world.
Now, while there are many advantages that have been created by the growing sharing economy in the United States, none of them have extended to the already pre-existing service industry. Whether it be hotels, car companies, banks, or other services, huge industries are being challenged by the rising importance of peer to peer sharing platforms. Taxis, in particular, are beginning to feel the effects of their undercut business. Drivers who used to pull home $800 a day are struggling to make half that number. Naturally, this decrease has led to a competition between taxi drivers and uber drivers in major cities and towns across the country. A competition that, without a doubt, is being won by uber drivers. That trend of competition can be seen throughout the country in every single industry that the sharing economy is involved in, not just car services. Many people have seen this one sided advantage and given pre-existing service providers one piece of advice -- adapt or die. A valid point, but a point that bodes ill for the future of the service industry and, unfortunately, the nation as a whole. Unemployment is already high, and, despite its convenience, companies like Uber are only making it higher. The whole attraction of the sharing economy is that services are shared. Inherently, then, less people are needed to do the same job. Entire professions are becoming antiquated, and that means entire livelihoods are being tossed down the drain. Now, I should mention here that I am in no way opposed to the progress of a peer to peer sharing economy. In fact, I’m all for it. My only constraint is the future of the job market in this country, as the combination of a more efficient economy and a rapidly increasing population can lead to only one thing: monumental unemployment. So, a message to all those taxi drivers, hotel workers, and bike shop owners reading this (of which I know there are none): for the sake of the ever growing next generation, adapt, because it’s not just going to be you feeling the consequences, but us.
