Yesterday, Mayor Bill de Blasio stood down in his fight against the ride-hailing service Uber: The New York City Council will not cap its growth, at least not for the time being.
For Republicans, that is an unalloyed good. An innovative start-up offering a better, cheaper service for consumers wins, over the objections of a despicable cartel and a bumbling, red-tape-tangled government.
For Democrats the company remains a Rorschach test — one that tells you more about the preconceptions of the viewer than what is really happening in the picture. Uber, for its part, flogged its progressive bona fides in its fight against the de Blasio administration, a fight led by Obama veteran David Plouffe. The company touted its job-creation record, and pointed to evidence that Uber makes it easier for people in outlying neighborhoods and minorities to get an inexpensive ride.
De Blasio argued that the company contributes to congestion in the city, compared the $40 billion start-up to Walmart, and insinuated it exploits its drivers. “There’s a point at which more and more drivers will find themselves fighting over the same group of riders,” he wrote in an opinion piece. “We still need basic standards that ensure people who work hard in this sector can earn a decent living.”
It is a microcosm of a much bigger argument happening on the left. Is the on-demand economy, on net, good for consumers and workers? Is it good for consumers but bad for workers? Is it regressive, with cheaper services for the rich made possible only by poverty wages for the poor?
It is pretty easy to analyze the consumer side of the coin: On-demand services are great. They provide a better, faster, cheaper option, if you can afford them, making life just a little less difficult.
But the labor side of the coin is surprisingly hard to analyze: The data are thin; the economic effects complex. To be sure, the jobs that Uber and other on-demand companies provide tend to be low wage, and they are certainly low benefit. They just are not great jobs.
However, Uber drivers, TaskRabbits, and on and on tend to use the work to supplement their income, not to provide all of it. The vast majority of Uber drivers, for instance, say that the company boosts their income and financial security. In a world where good jobs are scarce, it’s flexible, low-wage work that helps shore families’ financial situations up, in other words.
It is worth taking a second to think about causality here. You’ll often hear the argument from progressive voices that companies like Uber are helping keep wage growth low, by minting tens of thousands of iPhone-enabled, poorly compensated positions. That might be true on the margin. But Uber and other on-demand companies remain a teeny, tiny portion of the overall labor market. They are much more an artifact of the sluggish economic environment than a driver of it: They benefit from having a huge pool of idle, ill-compensated workers hanging around waiting to drive, deliver, assemble Ikea furniture, and so on. They didn’t make the pool.
And if you were feeling cheeky, you could even argue that companies like Uber are progressive — with cash-drunk venture-capital types subsidizing services for the middle-class and supplementing the incomes of tens of thousands of low-income households.
I would not go that far. But I’d certainly argue that the economic effects of on-demand services remain a little too hazy to take a stand on, with both Uber partisans and Uber detractors overstating their cases. For politicians on the left, the safest thing to do might be to stay out of it.