Some Thoughts on the Gig Economy and Autonomous Vehicles

A nasty piece of work was in the office last week. There was a telephone interview scheduled with one of the U.S. senators representing the state. The nasty piece of work announced herself as the campaign manager for the senator. While we were waiting for the senator to call in from Washington D.C. (at which time I would put the call on hold and walk over to the board room where various union reps were seated around a large conference table and pick up the line and put it on speaker) I chatted with the campaign manager.

I do a lot of this. I call it "fluffing." Judges, state representatives, candidates for lands commissioner and superintendent for public instruction, etc., come into the office to be interviewed for an endorsement and they sit and wait in a little area near my desk.

The conversation is about the climate, both political and meteorological. There has been a lot discussion about the unusually warm spring we have had in the Pacific Northwest. I have lived here for nearly 25 years, and I have never been through an April as sunny and hot as the one that just passed.

Most of the talk is about the volatile political shift underway. Trump is on the rise and Hillary is a smelly corpse, but the pols just cluck and smile and act as if everything will snap back to the same old, same old after the fall.

With the campaign manager I disagreed politely. I said Trump's appeal was understandable. He was lying through his teeth; but people are scared and willing to be seduced because everything is turned upside down. Look at the gig economy and the rapidly approaching fleet of autonomous vehicles, said I. People don't see a future for themselves.

The campaign manager poo-pooed me. She said all those stories about self-driving cars and fleets of robot tractor trailers were merely public relations fodder for the business pages. She alleged that the tech wasn't even in the beta stage. Besides, she said, even if it were true, labor could rely on stalwart friends like the senator (who voted for every free-trade agreement to jostle down the sluice) to protect our jobs.

That left me speechless.

A must-read story by Mike Isaac and Neal Boudette, "Automakers Befriend Start-Ups Like Uber, Girding Against a Changing Car Culture," appeared today, and I wish I could forward it to the campaign manager, particularly this handy synopsis of the huge investments and partnerships presently being formed between the tech and auto giants.

In January, General Motors invested $500 million in Lyft, the ride-hailing app popular with American users, with a focus on developing networks of autonomous vehicles. Ford Motor is making over its Dearborn, Mich., headquarters into a Silicon Valley-like campus of green buildings connected by self-driving shuttles. 

And a few weeks ago, Fiat Chrysler and Google agreed to produce a test fleet of driverless minivans. Both BMW and Mercedes-Benz have started to pilot ride services. 

Even other technology companies only tangentially related to automobiles are becoming more involved in ride services. Apple, which is working on its own autos project, said this month it had invested $1 billion in Didi Chuxing, a Chinese ride-hailing company that competes fiercely with Uber.

The scale of ride-hailing as a phenomenon is encapsulated in China. Uber operates in more than 30 Chinese cities with plans to expand to 100 by the end of the year. Didi is in well over 300 cities and towns throughout the country. 

Last June, Uber said it had approximately 20,000 regular drivers in the Chinese city of Chengdu alone, on par with the approximately 22,000 drivers in San Francisco and 26,000 in New York at the time.

The gig economy is here to stay. Next, sooner than most think or care to contemplate, the labor component of the gig economy will be swapped out by machines.

But a contradiction at the heart of the gig-to-robot revolution is few will earn enough money to actually buy an automobile. Fordism meant paying the worker on the assembly line enough money to purchase the product he was helping to produce. This ends with gig-to-robot.

Don't the captains of industry see this? How can you maintain growth when the workforce is constantly shrinking? Maybe the answer is that low growth/no growth is no longer a problem if the super-rich keep gobbling down a greater chunk of the pie. This has certainly been the situation post-Lehman.