Op-ed: Hillary against the Uber economy

  • By Rich Lowry
  • Wednesday, July 15, 2015 5:47pm
  • Opinion

Grandmothers may know best, as Hillary Clinton has put it in tweets, but judging by her latest economic speech, they don’t necessarily get or like Uber.

The ride-sharing service is synonymous with the new efficiency and convenience enabled by information technology, and is anathema to regulators and entrenched interests everywhere. Add to the list of its critics the presumptive Democratic presidential nominee.

Hillary Clinton didn’t mention Uber by name but warned about the disruption caused by it and other companies in the so-called sharing economy. Her husband wanted to build a bridge to the 21st century; Hillary worries about the downsides of “advances in technology and expanding global trade.”

Republicans would be foolish not to welcome a contrast with Hillary over some of the hottest companies in the world. The Bush campaign let it be known that Jeb will order an Uber ride in San Francisco during a campaign swing there. If he really wants to stick it to Hillary, he will find someone handy to do minor repair work at his Miami headquarters through TaskRabbit, or borrow a wrench during his next trip to Des Moines through NeighborGoods.

In the liberal imagination, the sharing economy is hurting workers by substituting part-time, contractor work for higher-paying full-time jobs that come with the full panoply of traditional benefits and protections. This line of attack creates the impression that these new firms are sucking workers from stereotypical 9-to-5 jobs so they can be dispossessed by tech-savvy entrepreneurs. But obviously something is drawing workers to this kind of work.

In a study for Uber, Princeton University economist Alan Krueger found “drivers who partner with Uber appear to be attracted to the platform in large part because of the flexibility it offers, the level of compensation and the fact that earnings per hour do not vary much with hours worked, which facilitates part-time and variable hours.”

Uber is really a paragon of choice. Its drivers decide when or if they are going to work, and customers call it up at will. It cuts out the middleman in the form of the shabby, highly regulated taxi cartels more concerned with their own interests than customer satisfaction or convenience.

And that gets to the real issue, which is control. The sharing economy tends to do an end run around regulators, and to challenge entrenched business interests that benefit from a cozy relationship with government. It upsets everything if Airbnb lets people find lodging that isn’t a hotel, or Lyft, another ride-sharing service, lets them find a ride without sticking their hand out and hoping for the best.

As a disrupter of sclerotic practices in the economy and government, the sharing economy is predictably the subject of a furious regulatory and legal counter-assault. Uber has been a target in cities around the country, and abroad.

In France, taxi drivers went full Luddite. They attacked and destroyed Uber cars over the launching of a service called UberPop, whose drivers didn’t need a chauffeur license. The French government obligingly gave the Uber France CEO and Uber Western Europe general manager the Vladimir Putin treatment, arresting them for running an illegal taxi service. (The service was suspended.)

Presumably the CEOs of sharing-economy companies in the U.S. don’t have to worry about being hunted down and jailed (at least not until Bernie Sanders is president). But when Hillary pledged to “crack down on bosses who exploit employees by misclassifying them as contractors,” it was clear what she was talking about. She is signaling her intention to declare open season on innovators not to the liking of the regulatory-business complex.

One would think that new services that link up workers and customers in creative ways would be welcomed, not feared. But Democrats are increasingly the party of economic nostalgia. They still want that bridge to the 21st century; they just want to travel the other way.

Rich Lowry can be reached via e-mail: comments.lowry@nationalreview.com.

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