Let’s talk about the gig economy! I mean, that’s the whole point, right? To chronicle that super-hot topic, the next great disruption in America’s labor force. Well, here is a nice bit of data-driven reality: The gig economy is really just the Uber economy. That’s from Lawrence Katz and Alan Krueger, two big-name US labor economists who find in forthcoming research that Uber alone could make up half to two-thirds of all gig work. TaskRabbit, Instacart, Fiverr, Caviar, Hourly Nerd, Shyp, you name it—they’re all just a drop in Uber’s gig bucket. And even that bucket is pretty small. According to an estimate from Katz/Krueger, as well as a handful of other studies, the entire gig movement accounts for a mere 0.5% of the overall US labor force.
The research is new but the takeaway is the same: We need better data on this much-hyped, little-understood segment of our economy. Here is a letter more than a dozen senators sent to the Senate Appropriations Committee earlier this month, requesting just that.
Uber for Uber.
In related things, New York Times tech columnist Farhad Manjoo has joined the ranks of those calling an end to “Uber-for-X.” I did it a few weeks ago in a story about Instacart’s misguided attempt to become the Uber of groceries, as did Quartz’s Gideon Lichfield, with this definitive line: “The ‘Uber-for-X’ model rarely works, except when X = Uber.” Recently, I’ve talked to a lot of VCs and startup founders who readily admit that the Uber hype ran away with Silicon Valley’s better judgement. Hunter Walk, a venture capitalist at Homebrew, says much the same to Manjoo: “The industry went through a period where we said, let’s look at any big service industry, stick ‘on-demand’ on it, and we’ve got an Uber.” What’s notable is how blunt these statements have gotten. VCs usually avoid speaking ill of companies, or even business models, in public. They don’t want to deter entrepreneurs from seeking them out in the future, or unintentionally hurt a member of their portfolio. The real sign that Uber-for-X is over isn’t that companies like Instacart are struggling—it’s that everyone is suddenly willing to talk about it. Which I assume means this is old news in Silicon Valley, and the rest of us are just finally catching on.
David Chang of the Momofuku empire has a new project underway. It’s called Ando, as in instant ramen creator Momofuku Ando, but also as in “I walk,” a nice double entendre as Ando is a food delivery service. Ando is launching in New York this spring with an initial focus on serving lunch in Midtown East. Per Fast Company, Chang has been “obsessively focused on perfecting the food: level of saltiness, degree of spiciness, portion size, and so on.” Nevermind that he is also an investor in Maple, another up-and-coming New York food delivery app. “It’s a giant pie,” Chang tells Fast Company, meaning the food delivery market. That’s good, since Maple and Munchery and UberEats and Caviar and Grubhub/Seamless and now Ando are all going after it in New York. “This is food for everyone and … not everyone,” Chang says. “I feel like we’re aggregating all of the things that we want to eat.” He’s talking about Ando, but you could say the same of our entire on-demand food delivery dream.
Uber last week sued Ola, its main Indian competitor, for allegedly creating 93,000 fake Uber accounts to sabotage its service. Uber claims these fake accounts were used to book and cancel more than 400,000 rides over the last six months, causing it to pay out huge sums in cancellation fees to drivers and also prompting around 20,000 frustrated Uber drivers to quit the platform altogether. Ola denies the allegations. If this sound familiar, it’s because Uber was accused of pulling similar hijinks on its competitors in New York. In 2014, first Gett, then Lyft complained that Uber’s New York team members had been repeatedly ordering and cancelling rides on their platforms.
What’s different? Uber’s 2014 tactics, while underhanded, seemed less like a companywide decision than the result of a New York team gone rogue. (The sprawling, decentralized structure that helped Uber grow so quickly in the US also caused it many headaches early on, as rash decisions by local city managers could turn into highly public missteps.) In Ola’s case, if the allegations are true, the sheer volume of fake accounts and cancelled rides would seem to suggest something more systematic. Either way, karma.
Silicon Valley’s stars guess what real startups do. Instacart… might be generating profits? Uber “sustainably” losing $1 billion a year in China. New ride-hailing service in Boston is just for women. Trump is the Uber of politics. US judge says proposed Lyft settlement might be too low. Billion-dollar crowdfunding exit. DoorDash downround. Don’t quit your day job for a unicorn. “I’m done with intangible valuations.”
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