Only a CNUT would hold back the waves of the sharing economy

Hurrah for the sharing economy!

A month later, you have hired out your chainsaw to half the street. You have taken more than £500. This is brilliant. This is not, however, the ‘sharing economy’ any more: it is the ‘black economy’. You are acting as a chainsaw-hire business but without paying tax on your new-found business income.

Hurrah for the black economy!

Oh dear, that nice old man down the street hired your chainsaw yesterday but, because you hadn’t maintained the kit properly, the chain broke and sliced his head off. You had looked into the cost of chainsaw maintenance but it would have pushed up your costs, so didn’t bother.

Hurrah for contributory negligence!

The nice old man’s family now want to sue you for compensation but you are uninsured. You had looked into the cost of insurance but it would have pushed up your costs, so didn’t bother. Instead, you simply declare personal bankruptcy and avoid paying the family a penny.

Hurrah for uninsured cowboys!

Hurrah for tax-dodging, uninsured murderers!

Now you know why it costs more to get a chainsaw from a hire shop: it is regulated in order to ensure safety, it is insured in order to protect rights of the public, and it pays its share of tax to maintain society. The ‘sharing economy’ is just an excuse not to do any of these things.

Now, Uber isn’t totally reckless, even if its TNT proponents are a bit short-sighted. The organisation makes more than a reasonable effort to ensure its drivers are safe, insured and above-board legally. But this is done grudgingly rather than willingly, Uber being under the impression that it is not like any other minicab business and therefore should not be regulated as if it was one.

The dogma of disruption dictates that all forms of regulation should be removed and that the spice should be allowed to flow. This is an essential element of the sharing economy, which is all about “democratising supply” and boosting competition to benefit consumers.

Exactly how concentrating $60bn into a smartphone app developer and $6bn into its owner equates to a “democratisation” of anything is beyond me. And I’m struggling with the argument that a multinational that channels its profits off-shore and undercuts local taxi services will boost competition. Surely, the exact opposite is happening.

But all this is just detail. Uber is right about one thing: it is certainly not a minicab business, let alone one capable of earning $60bn in revenues in anyone’s lifetime.

It’s just a social media framework accessed from an app. All it does is offer the equivalent of phoning around for the nearest available and affordable minicab, doing it swiftly and conveniently from an net-connected smartphone.

Sorry, all you TNTs, whether you use a phone or an app, calling a minicab is not a new concept. It demands no box-exterior thinking or paradigm-shifting. As such, it does not require a change in legislation or relaxation of regulations. Claiming that it does is just a way of bamboozling local government with sparkly IT to mask your heap of steaming bullshit.

I fear that Uber itself has been sucked into this daft belief that it is doing something new. With the proper regulatory structure in place, it may well be forced to increase prices to cover costs. And long after the TNTs have left the company, Uber’s backers will wake up and realise they are funding the minicab equivalent of ordering a pizza.

A $60bn pizza, mind.

TNT ... I’m dynamite!
TNT ... I’m full of shite!
TNT ... I’m a power load!
TNT ... I’ll bloat your source code! ®

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