This won’t stop others from trying. Whether they realize it or not, it’s a race to the bottom leaving nothing but “McJobs.”
I read somewhere recently that from 1945 to 1973 our GNP doubled and the income of every income group increased in lock step with that increase in productivity: poor, working class, middle class, upper middle class and the rich – everyone’s income doubled. Since ’73 the average wage has stayed the same while the 1% has captured all the increases.
If accurate, that doesn’t bode well. Not because I’m a socialist and believe in distributing other’s wealth, but because sooner or later no one will be able to afford another’s goods and services. Though many thought him mad at the time, Henry Ford understood that industry had an interest in ensuring that their employees could afford the products they produced. Paying higher wages might lower profits temporarily, but it leads to a more sustainable economy over time. If nobody is paying the average worker enough, who is going to afford the products being produced by all the robots?
Only the 1%? I’m just wondering.
Witness the recent collapse of SpoonRocket, an on-demand pre-made meal delivery service. Like Uber wanting to replace your car, SpoonRocket wanted to get you out of your kitchen by trying to be cheaper and faster than cooking. Its chefs mass-produced its limited menu of meals, and cars equipped with warming cases delivered the goods, aiming for “sub-10 minute delivery of sub-$10 meals.”
But it didn’t work out as planned. And once the VC welfare started backing away, SpoonRocket could not maintain its low price point. The same has been happening with other on-demand services such as the valet-parking app Luxe, which has degraded to the point where Manjoo notes that “prices are rising, service is declining, business models are shifting, and in some cases, companies are closing down.”
Yet the telltale signs of the many problems with this heavily subsidized startup business model have been prevalent for quite some time, for those who wanted to see. In July 2014, media darling TaskRabbit, which had been hailed as a revolutionary for the way it allowed vulnerable workers to auction themselves to the lowest bidders for short-term gigs, underwent a major “pivot.” That’s Silicon Valley-speak for acknowledging that its business model wasn’t working. It was losing too much money, and so it had to shake things up. […]