The same goes for services. When I lived there, a man came around every morning to collect my clothes and bring them back crisply ironed the next day; he would have washed them, too, but I had a washing machine.
These luxuries are not new. I took advantage of them long before Uber became a verb, before the world saw the first iPhone in 2007, even before the first submarine fibre-optic cable landed on our shores in 1997. In my hometown of Mumbai, we have had many of these conveniences for at least as long as we have had landlines—and some even earlier than that.
It did not take technology to spur the on-demand economy. It took masses of poor people.
In San Francisco, another peninsular city on another west coast on the other side of the world, a similar revolution of convenience is underway, spurred by the unstoppable rise of Uber, the on-demand taxi service, which went from offering services in 60 cities around the world at the end of last year to more than 200 today.
Uber’s success has sparked a revolution, covered in great detail this summer by Re/code, a tech blog, which ran a special series about “the new instant gratification economy.” As Re/code pointed out, after Uber showed how it’s done, nearly every pitch made by starry-eyed technologists “in Silicon Valley seemed to morph overnight into an ‘Uber for X’ startup.”
Various companies are described now as “Uber for massages,” “Uber for alcohol,” and “Uber for laundry and dry cleaning,” among many, many other things (“Uber for city permits”). So profound has been their cultural influence in 2014, one man wrote a poem about them for Quartz. (Nobody has yet written a poem dedicated to the other big cultural touchstone of 2014 for the business and economics crowd, French economist Thomas Piketty’s smash hit, Capital in the Twenty-First Century.)
The conventional narrative is this: enabled by smartphones, with their GPS chips and internet connections, enterprising young businesses are using technology to connect a vast market willing to pay for convenience with small businesses or people seeking flexible work.
This narrative ignores another vital ingredient, without which this new economy would fall apart: inequality.
There are only two requirements for an on-demand service economy to work, and neither is an iPhone. First, the market being addressed needs to be big enough to scale—food, laundry, taxi rides. Without that, it’s just a concierge service for the rich rather than a disruptive paradigm shift, as a venture capitalist might say. Second, and perhaps more importantly, there needs to be a large enough labor class willing to work at wages that customers consider affordable and that the middlemen consider worthwhile for their profit margins. (...)
There is no denying the seductive nature of convenience—or the cold logic of businesses that create new jobs, whatever quality they may be. But the notion that brilliant young programmers are forging a newfangled “instant gratification” economy is a falsehood. Instead, it is a rerun of the oldest sort of business: middlemen insinuating themselves between buyers and sellers.
by Leo Mirani, Quartz | Read more:
Image: Reuters
