The Wealthy Want What They Want and They Want It Now!

Recently the wealthy in California spent huge amounts of money getting a proposition passed; namely Proposition 22, which exempts “gig workers” from the normal protections of labor laws. See “Prop 22: why Uber’s victory in California could harm gig workers nationwide” <subtitle> Ballot measure exempting ride-sharing companies from treating drivers as employees could serve as model for future laws” in The Guardian.”

While that article addresses the fear that such efforts will spread across the nation (and they will because it is what the wealthy want), the main point is what is never, ever is mentioned in discussing Uber. And that is that: Uber is losing mountains of cash and has no conceivable route to profitability.

Uber is losing mountains of cash and has no conceivable route to profitability.

Uber built its business by subsidizing driver’s wages (and then lying freely on its required financial reports). The amounts collected by drivers are not enough to pay the driver and Uber’s overhead, therefore billions of dollars have been spent subsidizing Uber’s drivers “salaries.”

If all taxi companies were to go out of business tomorrow, Uber could only be profitable by cutting driver’s salaries to the point that most drivers will quit. Yes, it is that simple. Drivers aren’t stupid. They have figured out that after they pay for gas, maintenance (tires, insurance, wear and tear, etc.) they are barely making minimum wage. And when municipalities lose the income from taxi-cab licenses, don’t you think they will come up with an annual sticker for gig worker drivers to display on their cars. (I live in Chicago and we have to buy a sticker annually to be allowed to park in the city. If you never stop and park, you can do without the sticker . . . or in other words, you have to have a sticker. At $75 a year or so.)

Can you see now why rich people don’t want ordinary labor laws to apply to Uber drivers? So much that they were to spend big bucks and lie through their teeth to get a proposition passed to that extent in California?

Well, if this company has no way to make a profit, why do they care? Well, if they jack up the fares so much to be able to pay for everything, the taxi companies become attractive once again, so they can’t do that. Uber states that it is betting on driverless cars being made available in just a few years, which will eliminate the expense of a driver. But it would also necessitate the purchase of fleets of driverless cars, monitoring the cars, and maintaining the cars. (Who cleans the cars when a drunken rider barfs in the backseat foot well?)

As I said, there is no path to profitability for Uber . . . none.

So, why do the rich care? Because they can make huge sums dicking around on the stock market, that’s why. Studies show that the so-called “secondary market” which includes the vast majority of all stock market transactions right now, the buying and selling of stocks already sold, is a vast drain on the economy. That is it sucks money out of the economy, and it doesn’t produce anything in return.

I know, you were taught in school, how the stock market helps companies get started or expand through the initial sale of stocks. This is till true, but is a rare occurrence when compared with the numbers of shares bought and sold that are not new. The “support” for those newbie companies is long gone, the secondary market is just between buyers and sellers, and is considered a bit of a game. (Experts in game theory mathematics are employed.) The winners take money out of the market, and the losers leave theirs behind. Nothing tangible or useful is created and money is siphoned into the pockets of the already rich, who own the vast majority of the shares.

Our problem in the US is greed. The greedy have accumulated a great deal of wealth and they are using it to remake the economy to serve their desires (not needs, desires). If there is any way to disadvantage labor unions, they will do it. If there is any way to disempower working people, they will do it. They love a high unemployment economy because workers are just glad to have a job, any job, no matter how shitty and they won’t cause a fuss.

You see we abandoned slavery and the wealthy really, really miss it.