Comment by dragonwriter | Hacker News Reader

Comment by dragonwriter | Hacker News Reader

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And anti-statists should take notice of how many improvements in working condition did require regulation, and how the Uber/Lyft market has special features (particularly, the fact that the primary service being provided to the end customer is provided entirely by one worker using their own capital and that the fact that what Uber/Lyft provide is essentially a matchmaking service where there is very low friction for a driver to switch services and for the other service to absorb new drivers -- which is not true in many other industries regardless of how competitive they may be on the consumer end.

Even in a competitive market for autos, the capital dependence of the industry -- and potentially geographical separation between plants -- means that if the workers in Alan's factory are upset with their working conditions, they very likely can't just walk over to Bob's factory en-masse and sign up to work there. The ability to do that with certain services that are 1:1 and where the middleman is just providing matchmaking gives the individual service providers more power to set working conditions with the middleman in a market where there are competing middlemen then would be the case in many industries.

What's happening right now to Uber and Lyft is a metaphor for how the free market works. You've touched on a few interesting points yourself:

"provided entirely by one worker" : this is like admitting that the problem comes from injecting hierarchy into the system, which in a free market can only happen voluntarily if both parties benefit from it, but in a statist society is imposed or restricted by the economy planners through regulation.

"essentially a matchmaking service where there is very low [switching] friction" : every market is a matchmaking service between the seller and the buyer, and the way to sustain low friction is to have as little regulation as possible (you will see the Uber/Lyft_fuelled prosperity (e.g. happy workers) disappear if the government steps in, and it will decrease wages to the point that it will be equal to the taxi market which is heavily regulated)

"which is not true in many other industries" : how can we know? "many other industries" are mostly regulated, and heavily so.You're saying deregulation doesn't work in other industries because they're already regulated.

The problem of workers and factories, as far as I know, is solved by unions. However, historically governments have regulated unions as well. Cf. Bangladeshi garment workers, their poor working conditions and their torturing of labor organizers.

> every market is a matchmaking service between the seller and the buyer

No, markets are not matchmaking services. Markets are places where people make matches, matchmaking services are a service that is sold in the market. Notably, its the core of the service Uber and Lyft provide, and its low friction to switch, as a user or supplier, between them. This is a special characteristic of the kind of service Uber and Lyft are selling.

> "which is not true in many other industries" : how can we know?

Because we can readily observe that what many other industries are selling is not matchmaking services between single-worker-provided services and purchasers of those services with low switching friction for workers because local competition exists which can readily absorb additional workers because there is little capital dependency for the service being provided that isn't carried with the worker and there is low friction for consumers to switch between service providers.

> You're saying deregulation doesn't work in other industries because they're already regulated.

No, I'm not saying either that deregulation doesn't work in other industries, or that to the extent it doesn't its because they're already regulated. I'm saying the specific features of the market in which Uber and Lyft are operating which provide significant leverage to their drivers to improve their labor conditions by leveraging competition among potential employers does not exist in most other markets, and so is not simply generalizable into "improvement in working conditions come through competition not regulation" (and that, additionally, history provides plenty of examples of improvement in working conditions that came through regulation.)

It certainly illustrates how workers can, in certain market conditions, leverage competition between services through which their labor is marketed to improve labor conditions, and its certainly worth understanding for that value.

I tried to respond on the other sub-thread about getting downmodded, but I think this is probably more concise than mine. I think the key here is that workers are always going to be better off when they have more bargaining leverage with their employer / are competed for more rabidly, and competition is fierce for drivers between Uber and Lyft more because of their business model than any regulatory influence (or lack thereof).

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