New "Uber" Economy

http://www.nytimes.com/2015/07/13/business/rising-economic-insecurity-tied-to-decades-long-trend-in-employment-practices.html?ref=topics

       The issue outlined in this New York Time article is the creation of a new economic structure, which centers around new "Uber-like" businesses. Uber is a company that provides rides through smartphones. Independent drivers who work for the company pick people up and they can pay on the app. Businesses like this one are not like the traditional workplace environments of the past. In most cases, it is possible to work from home or away from the central location of the company.

       These businesses are those that are more independently contracted, and have been steadily growing every year since the 1970's. A major part of this trend is outsourcing jobs which are less essential to the core purpose of the company. These include jobs in human resources, customer support, and other technology related departments. I had assumed that saving money would be the only reason for these changes. However, it turns out that another main motivation for this new kind of business structure is to get back to what they are best at.

       For example, a company which manufactures cars would be less interested in the day to day management, and so could outsource these jobs in order to return to their original purpose: manufacturing cars. With the new business model that is cropping up everywhere, they do not have to waste time or resources on tasks they consider to be less essential.

       The article explains that the inciting incident of the new "uber-like" economies as dating back to the hospitality industry, specifically hotels. Motels began being managed independently instead of being owned and operated by a larger company. Since then, the state of United States businesses has become even more franchised and segmented.

       The argument expressed by the New York Times is that this new structure is not beneficial for workers, especially the middle class. More and more people are worrying about retaining stable wages and enough hours to live on. Days of the nine to five work day just might be over. More and more people are working more flexible jobs, in jobs like Uber, or are only employed part-time.

       My initial reaction is agreement that this setup is not good for the US economy as it stands right now. Outsourcing jobs, especially overseas, seems like it would increase the unemployment rate here at home. People here would still appreciate these  jobs, it just hasn't positively improved the outlook for companies to keep them here.

       When there is not a traditional boss, all of the rules change. Workers may not, for instance, have the same access to benefits or insurance. However, in a court ruling, it was decided that Uber drivers deserve the same workplace protections that others have. Uber is expected to fight for an overturn of the ruling. At this moment, the new structure of companies does not have the government support to be able to positively impact American workers. I expect this won't last for long, and will become a major issue, along with the middle class, in the 2016 presidential election.