The 'Reshaping Work' conference took place on Friday [10 August], and was headlined by a fascinating key note speech from gig economy author and scholar Juliet Schor.
The US academic presented new research based on data from a nationwide package delivery platform based in California. The study found that the shift from being an 'independent contractor' to an employee at the firm did not reduce flexibility for the worker, a finding completely at odds with what the big platform companies have been telling us for years. Click here to read our full report of Schor's speech.
We will just highlight one aspect of Schor's talk here. Her analysis of the ride hail and food delivery platform sectors was that neither looks to be capable of attaining profitability, at least not at its present size. These industries are only as large as they are now because they are riding a wave of finance capital that is yet to hit the rocks.
Investors bought into the idea that Uber was going to replace the taxi worldwide, and that cash influx allowed the company to subsidise prices to the tune of 40% in the US, as they chased a monopoly position through setting prices so low that it would destroy all possible competition. Yet Uber's plan for global domination has continually hit hurdles, be it regulatory push-back, market competition or illusions in the speed of technological change in the mobility sector. Investors are starting to wonder whether the company will ever be profitable. CEO Dara Khosrowshahi had promised profitability by 2021, but, as Schor points out, this has been another year of missed targets, with a -38% profit margin for the first half of the year.
"Uber is the lose-est company in human history," Schor stated, explaining that their losses since 2009 are estimated to be between €25-28 billion.
The company is now raising prices while struggling to attract drivers, a combination that could see customers turn away. Is Uber a big bet by finance capital gone wrong? Is the whole of the ride hail and food delivery platform sector an unsustainable bubble based on dirt-cheap prices that can't be sustained, and on a 'lean' model of outsourcing all the risk to the worker that is increasingly not accepted? Schor, who described Uber's present situation in the US as "a kind of death spiral", is by no means the only economist to believe that the writing is on the wall.
Ben Wray, Gig Economy Project co-ordinator