A couple of years ago, I was invited to a dinner organized by Google in France. The occasion was the coming of Vint Cerf, and the teams at Google wanted to give him the opportunity to meet with a variety of people in the French scene, a mix of start-uppers, movers and shakers and (for lack of a better terminology), agitators. I (barely) count myself in that last category, and believe me when I say that I felt honored to be there.
The discussion was (as one might expect) quite fascinating and I found Vint Cerf to be not only an impressive figure for his achievements, but a keen listener. Not necessarily what you'd expect from a jetlagged Father of the Internet who's been shuffled in front of twenty or so French people vying for his attention.
At one point, the discussion touched upon something that has been bothering me for a while, and this is what I want to talk about today. Basically, here's what it comes down to: in their boundless optimism, or perhaps startling naïveté, the giants of the Internet economy fail to acknowledge the destructive nature of the digital revolution. And I think it might harm them more than they expect. I should stress that Cerf wasn't denying the destruction, it's just that that conversation was the starting point of my thought process.
Around the time this dinner happened, taxi drivers in Paris were on strike because French taxi regulation applied to them, but not to Uber. Ultimately, the concern for them comes down to this: in order to become taxi drivers, most of them have had to buy a stupendously expensive licence (and usually go in debt 20 years or so to pay back for it) that comes with a ton of obligations about not refusing a passenger, health and safety, vehicle checks, etc. Along comes Uber saying: I'll offer the same service, but I'm not a taxi company, so regulation doesn't apply to me.
Uber is just the tip of the iceberg, and not a very nice tip at that. But just because they've made themselves look obnoxious, we shouldn't ignore the larger trend: the digital revolution is destroying jobs and livelihoods, and for a significant part of them, those people concerned will never again exert a meaningful job. Some authors have made a livelihood out of denouncing this value destruction. Until recently I'd heard of and read Nicholas Carr, but apparently the new star of this trend is Andrew Keen. Mathew Ingram's post on GigaOm entitled Six Ways in Which Andrew Keen is Wrong about the Internet is actually what sparked this post of mine.
Here's the rub: you can trust that this is creative destruction, and there are certainly elements to substantiate that view. Or you can go Luddite like Carr and (apparently) Keen and bemoan the horrors that await us. Either way, the destruction is not going away.
The sharing economy, at the core, is about applying drastic economic efficiency to existing assets. Calling it disruption is, in my opinion, another nice way of disguising the fact that it's destruction. There are good reasons to embrace this destruction, and in some cases (car sharing, ride sharing, couch surfing, etc.) there's an argument to be made for the ecological impact of reducing the assets needed and therefore produced without missing out on the benefits these assets produce.
But we must accept that these efficiencies, even if justified, are destroying existing value. Not acknowledging that feeds into the populist politicians agenda, and that is a very worrying trend, in Europe in particular. As I've followed this space over the last few years I've seen this topic turn from "we buy the Internet gurus' optimism" to "this hurts but it will benefit us in the long term" to "where is the value going?" And now we're down to "regulate and tax the hell out of this whole thing before it kills us all".
I have a pretty benign view of regulation even though I acknowledge its potential excesses. And I absolutely think more and better regulation is needed in this space. This is especially true when the proposed disruption does away with decades of hard-won social gains that have allowed citizens to live a bit more of a decent life. Going back to Uber for a second, it should be clear to anyone who's even briefly looked at their model that what they are doing is turning steady employment into on-demand service. In other words, someone was guaranteed a salary in the past whether their services were needed or not. From now on, "you get paid when we need you, buster". The social impact of this is much more dramatic than the threat to legacy taxi companies that - to be fair - have gotten fat and complacent over the last decades.
This is clearly where regulation is necessary. And I wish that the companies involved would acknowledge the destruction and work constructively with governments at ensuring that its effects are minimized and that they don't last. I think it's in their best interests too: however Uber is dealt with (and there have been some pretty dramatic moves in some places) will be a milestone in how governments and policy makers view the digital revolution.
If there's one thing I know from personal experience, having looked at tech policy for the last 10 years or so, it's that governments have a fantastic talent to shoot themselves in the foot with policy on topics too complex for them to grasp. The problem is that they shoot with a scattergun: those around will get sprayed.