I spent two weeks delivering for Uber Eats and made $4.40 per hour

"Gig/Contract economy" is the analogue of outsourcing, except for the cheap workers being drawn from local population. Its a logical consequence from corporations wanting to reduce wages and legal trickery to avoid work liabilities and benefits for the workers. Its exploitative and ruthless example of what "capitalism" becomes when law doesn't hold the punch, companies just figured out the necessary mix of legal and tech means to avoid the system being labeled as "work" and pay fair wages/expenses per worker. Expect this type of "work" to increase and subsume new sectors of economy as they figure out how to transform them into uber model.

Outsourcing just means using another entity to do the work. Did you mean offshoring?

If you're going to be pedantic, at least be correct. The commonly understood meaning of 'outsourcing' is to use foreign labor. So commonly understood that even Webster includes it as part of their definitions:

: to procure (something, such as some goods or services needed by a business or organization) from outside sources and especially from foreign or nonunion suppliers : to contract for work, jobs, etc., to be done by outside or foreign workers (https://www.merriam-webster.com/dictionary/outsource)

"Cheap" is extremely misleading here. The gig economy has known data points where it has worked extremely well for a large number of people working within the rules defined by the companies who created these services. I heavily recommend Brad Stone's The Upstarts[1] as proof of this idea. There are Uber drivers and Airbnb hosts who did all types of incredible things because of the freedom that was a direct consequence of the gig economy. Sure, Uber Eats may be a raw deal, but let's not castigate a huge sweeping idea that has changed the face of humankind probably for the better.

[1]https://www.amazon.com/dp/B01HZFB3X0/ref=dp-kindle-redirect?...

That does not jibe with common usage I hear in the field, despite what Webster says.

For example, young startups frequently outsource CFO functions to someone up the street.

To be truly pedantic, your definition doesn't say remote workers, just foreign, without specifying their region. OP talked about local workers in contrast.

Not only does the definition not say I am wrong (it includes the thing I said) but I was speaking in context of OP's comment (about location)

So you complained about my lack of precision and to do so you lost even more and didn't actually understand the context.

Outsourcing is the overarching concept to which offshoring and nearshoring belong. Obviously its much cheaper to outsource work to countries where wages are fraction of work rates in developed world. Startups use it agressively to reduce costs.

https://ww2.kqed.org/news/2016/01/12/startups-use-gig-econom...

Now we have some economy sectors where offshore locations don't make sense(work is service-oriented & local) and bringing foreign workers is more expensive/legally complicated than a job is worth for the company.

Thats where "gig economy" model comes in: it allows exploiting local workers for much cheaper wages, without bringing foreign labor. The outsourcing part is what work there was(regular food delivery jobs) made into granular contracts and "gigs"/"tasks", which divide the labor into independent segments(e.g. deliveries) where task distributed into local labor pool(as some kind of cloud computing with the humans being servers).

Yes, I have to agree with you here. Gig economy might reduce quality of life in developed countries but in SEA countries like Thailand, Indonesia, Vietnam, gig economy is helping local populations to actually increase their income. Yes, USD5-8/hour might sound low, but in this side of the world, it is better than nothing.

Thats corporate PR fluff. All the freedom in the world is worth very little on near starvation wages and total disposability of workers. The goal of "gig economy" is not independent free-thinking freelancers, its large pool of easily replaceable drones working for fraction of real wages. You can't support a family with being bound to such a labor scheme, nor you can't afford to be sick, less productive or unavailable/deficient in some productivity metric - as any change in productivity immediately reduces your income. If all economy was based on such cheap, disposable labor there would be fierce competition for basically slave wages. Corporate propaganda attempts like this shitty book hide its basically robbing the workers of their fair wages and benefits. In 10 years these "incredible things" uber drivers "did"(realistically a fraction of them) will not amount to nothing significant, while real jobs allow one to accumulate enough savings to be financially stable: gig economy hyper-exploitative nature means you are paid the minimum possible, that you have no financial stability, no fixed income, no insurance and zero employer responsibility(you really can't even try fight it legally on below-minimum wage). Gig economy replacing real jobs will lead to drastic drop in lower and middle class income, it will destroy whats left of outsourcing/offshoring and whatever union jobs remaining. How you can't understand "Sure, Uber Eats may be a raw deal" will become the norm very fast, with competition driving down wages and ethical race to the bottom. Gig economy subverts ethics and laws with clear economic benefit to corporations: they don't give a rats ass about flexibility, employer "freedom" and "independence". Thats all PR fiction, they just want their cheap labor that could be replaced at will and paid as little as possible.

Much of the "gig economy" seem to basically be "urban day labor".

What's it called when the gigsters have to front their own capital to get the gigs? Pay to play?

I get why an electrician has their own tools. Why does an Uber driver need their own car?

It's obviously to keep the liability off of Uber's balance sheet.

From my understanding (and Wikipedia agrees with me[1]), "outsourcing" simply means paying someone to perform work outside your company that the company would otherwise perform. For example, my employer outsources payroll to ADP, and outsources office cleaning to a service company rather than hiring its own cleaning staff.

[1] https://en.wikipedia.org/wiki/Outsourcing - "In business, outsourcing involves the contracting out of a business process (e.g. payroll processing, claims processing) and operational, and/or non-core functions (e.g. manufacturing, facility management, call center support) to another party."

>What's it called when the gigsters have to front their own capital to get the gigs? Pay to play?

Normal freelancing/independent contracting. And yes, there's a dispute about whether the classification is legal, my point is just that there it's not something Uber invented (edit: or any of the other on-demand startups).

So were people who currently drive for gig economy companies better off when Uber and Lyft did not exist?

These people are destroying real jobs. You have to see the entire market: where Uber gives a "job"(with no liabilities of a real job), it(by competing on same sector) reduces wages/jobs of other people, driving down average quality of life and median income. Gig economy only benefits corporations long-term: for them you are just "disposable human resource" not worker paid wages. While you can imagine some bottom-tier income being preferable to no income, its a bargain with the devil, allowing the companies to pay below minimum wage and remove all external expenses - the independent worker has now to absorb them. It creates a norm, where you don't really have a choice between this bottom-tier income and nothing, as real jobs are replaced with gig/contract schemes.

https://en.wikipedia.org/wiki/Uberisation https://www.recode.net/2016/10/26/13349498/gig-economy-profi...

Their claim is they're opening up new markets of their own, e.g. prior to Uber taxis weren't as widely used for bar-hopping or casual trips, prior to Airbnb people would not travel as much as they would look at the hotel prices, decide it was too much, and just not attempt a trip, prior to Taskrabbit someone who bought a new item from Ikea would assemble it themselves instead of finding a rando to do it for them.

Is their assessment incorrect? Are there examples of (a) gig economy company entering a market (b) average income and quality of life driven down and (c) a causal link between the two?

To me it seems like bad economy is the reason those companies came to be in the first place - as soon as sectors like construction or energy or manufacturing start growing and hiring, who's going to consider an offer to drive for UberEats?

No. Its like being paid per each function of code developed. There is a segmentation of work into deliverable units(rides, deliveries). If programmers were replaced by gig economy, it would look like freelancers getting paid pennies for creating tiny pieces of code(with large competition between them for speed and performance): e.g. a gig where you write function X of project Y, which is then graded for performance and compliance and paid 60 cents, with a twist:you are only paid if your function is the best one among all submitted. With gamification and ratings, the competition become very fierce and people get near zero income, making the job unsustainable except for those living in third-world countries.

It makes products cheaper because it exploits workers more ruthlessly, "who's going to consider an offer to drive for UberEats?" isn't a choice where industry is destroyed and only a UberEats-level job is available(companies which had fair wages(taxi drivers) were driven out of the market).

see this post for example with programmers : https://news.ycombinator.com/item?id=14334469

I don't really buy such a maximalist view.

Service economy differentiates itself on a multitude of dimensions, of which price is just one. By that notion McDonald's should've driven everyone out of business because who's going to buy a $5 or $7 or $10 burger when a $1 cheeseburger is available? Gas station coffee or vending machine coffee should've destroyed all other coffee businesses, as what fool would pay $4.50 for a cup of coffee when a 50c cup is available at the corner 7-11?

The competitive forces at lower segments of the market determine the overall economy. The people who serve you 4.50$ cups of coffee can't afford to drink them. When your gig-level job can't pay for 4.5$ coffee, you'll switch to lower segment too, and 4.5$ coffee becomes a luxury for a shrinking minority.

So that the loss aversion element of that investment makes them work like slaves

The comparison gets moot because you typically don't pick the company who delivers. You just pick whatever's cheapest or selected by default; instead, you pick where you order your food. Because that's the largest factor affecting the quality of the food.

You'll have different segments indeed. Say we keep it simple and you got two: a luxury one and one for the (poor) masses. Most people won't be able to afford the luxury one, so they'll grab the cheap one. (The cheapest one is still either not drinking coffee at all, drink it at a place where its free ie. at work, or bringing your own coffee in a vacuum can.)

Generally (the exception being catering to travellers such as a drive-in near a highway) you won't see a McDs in a rich neighbourhood, and you won't see a luxury restaurant in a poor neighbourhood. Neither the customers nor the workers live nearby.

Also, don't forget people are loyal to brands.

As a final note, I'd be rather interested to see which local brands have disappeared over the years, if that can be attributed to fast food businesses such as McD's.

As for you not buying the view, that is exactly what was being described in the link with first hand experience from a taxi driver in The Netherlands (heavily regulated market by law) which I posted elsewhere [1].

[1] http://www.taxibelangen.nl/ervaringen-ex-uber-chauffeur/