Uber and Amazon: Easy to get in, hard to get out?
It is a race to the bottom.
[Photo by Oli Scarff/Getty Images. Appeared in Slate under the title: “An Amazon fulfillment center in Peterborough, England].
Uber and Amazon promise to change the world. And they do.
Let’s start with Uber. What is so bad about a company that promises low fares for commutes?
Everyone wants to save $10 rather than paying it to a taxista who overcharges them while also bores them to death as he talks about politics during the ride.
I used Uber often, particularly in developing countries where the fares were incredibly cheap, and not only there.
However, there were some things that slowly put me off about the company.,
First, I would order, and when the driver would cancel, I would be automatically charged. I would then complain to Uber, only to have the charge disappear. However, the issue came up over and over again. It was as if they counted on me forgetting to contact them so they can make money on the side. In a separate occasion, the money wasn’t even returned to me but was to be used as a future credit, forcing me to use their services again. I kept using the automatic system to complain but kept receiving the response that the money could be use for a future ride. [To Uber’s credit I must be unequivocal about the fact that on occasions where I wrote to them the details of the case, they refunded the money at once].
Second, I recently met an Uber driver in a major American who told me that things are not going well. Now, that Uber has put taxi drivers out of business is old news. That Spain is revolting against them, that Turkey and South Africa have become witnesses to violent demonstrations or attacks against Uber drivers, or at the very least, strikes, has also become common place. And, of course, to be fair, it must be understood that Uber has also helped many people find cheap rides.
However, what the Uber driver told me is that now everyone wants to work in Uber on the side, and that therefore, there are too many drivers and too few riders for all.
Let’s examine this for a moment.
Everyone wants to use Uber. So at the beginning it is good, cheap rides. But then, too many drivers, mostly by people who work an extra job, as a growing number of us do.
So, this particular driver was thinking of relocating to another city, a less expensive one, one in which there are less Uber drivers.
But, who will the customers be if a growing number of people seek to work in Uber and cannot be paid decently? I mean, the customers need to make money too, don’t they? Moreover, who will the customers be? And will the same problems that afflict the major American cities not afflict the smaller ones too, in due time?
Uber uber alles.
Now let’s move our scope on Amazon.
Amazon provides books and any goods you want, very quickly usually, and at low prices. Not a bad thing, right? And who doesn’t want to save money besides those who waste it?
But, in the processs, Barnes and Noble is being put out of business, as David Leonhardt noted in the New York Times.
I guess that is fine, or even karma. After all, did B&N not put many small bookshops out of business, it did.
Still, do we want to live in a world where people don’t even socialize in bookstores but just order everything from their home and live on a mental island? I guess we do.
Amazon is also making drivers work much harder. I met a trucker, who has been in the business for 20 years. He told me that in the past he could drive, stop for a few hours at his pace, sleep, and move on. You can look at it as a truckers’ version of a Spanish siesta.
Now, due to recent legislation in Congress, he claimed that not only is he forbidden by driving more than 12 hours a day, but also that he must drive for the full period and only then take a break. A computer of some sort was placed in his car, so they will know if he takes a break out of the blue. He cannot do that any more.
So, he must drive goods along the roads of America for only 12 hours a day, which means being away from home for longer weeks, and cannot even sleep at his own pace, which means automatic rhythms defined by a computer is dictating the sleep schedule of a human. Makes sense.
At the same time, he told me he is getting paid a lot more, which is good for him, of course.
The trucker claimed that the people in Congress never drove a truck in their lives. And he’s probably right.
It may be safer for truckers to drive only 12 hours a day, but if they take longer sleep breaks in between, will it be that dangerous if they drive 14, or 16 hours a day?
Of course, all this is inevitable. People want goods quickly. You need truckers for that. It means they make more money but the transport system also becomes more regulated.
But still, driving long journeys has never been an easy job. There are no simple answers, but nor should we seek to simplify the complicated and pretend the problem is not there. Ignored problems tend to explode in our faces eventually.
A bigger issue with Amazon is not necessarily that it is killing off other businesses. That is the nature of the market.
The big issue is that Amazon is becoming a monopoly. So, once they kick out their competitors, what is to stop them from bringing up their prices significantly? After all, drunk by success, they already brought up the price of Prime significantly (by 18%).
Some of these companies work as the Devil. They are as Satan himself, so to speak. Easy to get in, you are tempted by their lower price. But all of a sudden, while you were not paying attention, you find yourself inside a prison. You cannot escape.
You gave Satan your freedom. Now accept the price.
I don’t think Americans realize what it’s like to live under a monopoly. At least not yet. Just imagine, if Amazon controls everything, can we really change our minds about it, who else will we turn to then? There will be no one.
With time this will become more obvious, I think.
One brave woman, Lina Khan, has been fighting against Amazon and created The Open Markets Institute. She was cut off from a Soros-sponsored think-tank at some point and worked for a month without a salary.
In my view, fighting against Amazon is quite futile. It is too late. Everyone wants to save and the immensity of the change (or of the monster?) will become obvious only at a later change.
At least President Trump had the guts to take on Amazon verbally. Obama never did that.
