So there is this legal case in the UK that has been going on for the last 4 years. It's dealing with the question as to what level of responsibility the Uber Corporation has for it's drivers.
Uber has basically been in the UK Supreme Court defending it's business model.
If you are not up to speed on this story you can read about it here:
https://uk.reuters.com/article/uk-uber-britain/uber-defends-business-model-at-uks-supreme-court-idUKKCN24L2TE
Uber Drivers Have Employee Rights
A UK employment tribunal in 2016 ruled that Uber drivers are entitled to minimum wage, paid holidays and rest breaks.
That's not really how Uber works. It's a marketplace for freelance cabs with self employed drivers.
If an Uber driver wants those kinds of rights they can work for a traditional taxi company.
My Research
I'm a curious fellow, so I've sat in the back of a dozen Ubers and grilled the driver about their experience being an Uber driver, how it works for them, how much commission Uber take etc.
I've had answers all the way up to "Uber take 50% of our fees".
If true, that's ridiculous. Uber the company are not providing 50% of the value, more like 10%.
The Stock Market Problem
This happens all the time.
There is an innovative startup like Uber who create a new platform based business model to increase efficiency in an industry like taxis.
They automate the admin using technology and take a small % fee from all the volume that goes through the platform, kind of like a crypto exchange I suppose.
The business takes off and they end up doing an IPO.
That's Where It Goes Pear Shaped
Once a company goes public the focus shifts from innovation to dividends and the stock price.
Since the executives own stocks they have a greater incentive to pump the stock price than they do to grow the intrinsic value of the business.
The process of squeezing more profit out of the model begins and fees begin to rise and rise and rise. All with the intention of boosting profits, which boosts the stock price and makes the shares owned by the executives worth more, making the executives super rich.
If that comes at the cost to the business, the brand or the service level to the customer, so be it. The executive can always move on to another company and repeat the process.
What once was a wild and innovative company becomes a big shriveled piece of fruit that gets squeezed tighter and tighter to get more juice out of it.
Looking Sideways
Here is the precedent that is being set if this legal case continues in favor of the Uber drivers.
Facebook user creating content - employed by Facebook as a journalist.
AirBNB vendor - employed by AirBNB as a hotel manager.
Uber driver - employed by Uber as a taxi driver.
How far do we take this?
eBay shop - employed by eBay as an eBay retail store manager.
What about Amazon store owners?
It's One Or The Other
These companies run a peer to peer marketplace.
Peer to peer, driver to rider, renter to landlord, shop keeper to customer, creator to consumer.
The platform should vanish into the background and facilitate those interactions. That is the intention of these platforms when they are created but as soon as they go public they become corrupted when the focused moves from value creation to profit creation.
Blockchain Technology Is The Solution (Again)
Uber is not creating 50% of the value in my view. They automate the administrative part of the transaction such as finding a ride and taking the money.
A smart contract isn't interested in making any profit for itself and thus becomes the ideal candidate to act as that automated administrative layer.
The cost for the smart contract to administer an Uber like transaction is so comparatively small as to not even be considered.
OK fine, let's charge a 1% fee and put the money into a DAC to fund development or something. Although if a protocol were developed, even this wouldn't be required.
A smart contract will never float itself on the stock market and thus will never begin creeping it's fees up from 10% all the way up to nearly half of the drivers income.
If Only Such A Thing Existed
The only thing that causes me to raise an eyebrow is that the fee is 15%.
I suspect this is because as a startup the volume through the platform is low. As volumes rise they can bring the % fee down.
Over To You
What other decentralised Uber, AirBNB or Turo type apps do you know about?
Post them in the comments so everyone can check them out.
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