An informal economy could be the transfer of commodities ranging from adults buying alcohol for teenagers hanging about convenience stores to the proliferation of straw-purchase firearms, to the ridesharing during transit strikes where hitch-hikers will wait at an affected transit station to accompany an unknown passing driver through the HOV or carpool reduced toll lanes (often, the two parties will not speak during the ride). Rideshare (sic) alternatives to taxi services such as such as Uber, Sidecar, and Lyft fulfills this kind of disintegrating and commodified public transit in the space of the neoliberal urban economy.

But on the other hand, there are critics such as New York magazine, which argued that these apps (and others) create an alternative private transportation system that only benefits the wealthy or the tech crowd. And that they undercut mass transit, causing less political pressure for improving public transit. This relationship with public transit is a key issue as these apps (and other sharing economy services) seek to grow nationwide, and regulators figure out how to address them. (Los Angeles recently issued cease-and-desist orders against Uber, Sidecar and Lyft.)

Let’s look at this in two parts.

First, do ride sharing apps (and private transit options generally) encourage people not to use public transit or are they complementary?

And secondly, are these apps generally helpful more to higher income people, leaving lower income people stuck with a worsening public transportation system?

There are others better versed in transportation economics to address these issues of social division but it does raise questions about the space of flows or the flows of spaces in which these converged technologies have become commodified.

If it continues to grow—and there are few reasons to think it won’t—will Uber transform the infrastructure of cities or glom onto what’s already there?

Expansion into physical cities involves more than theory and seed funding, though. Every city has its own demands, challenges, and idiosyncrasies, all of which play a role in how its transportation infrastructure has developed. Yet Uber offers the possibility of the first global transportation tool—a uniform way (through the app) to move within space no matter where you are, without any need to understand or comprehend your individual location.

“There’s always been an informal economy of ridesharing, in other parts of the world especially,” says Mark Hamin, the director of the Master of Regional Planning Program at the University of Massachusetts-Amherst. “Uber isn’t at that level of informality, but it’s much more flexible and much less regulated than the transportation infrastructure we’re used to here.”

(India), is becoming one of the most resistant to the company’s intrusion. Urged on by the strong network of local taxi operators, the Reserve Bank of India has dictated that Uber must comply with a new mandate on credit-card transactions by October 31 or cease operations. Even though the huge levels of demand that exist in India have allowed Uber a foothold despite the heavy presence of local transportation options, that heavy presence has also meant a greater opponent to its intrusion.*

More than half of the 938 for-hire cars snatched up by taxi enforcement agents in the past six weeks are affiliated with Uber bases, according to figures from the Taxi and Limousine Commission.

The TLC on April 29 put in a new policy allowing it to seize for-hire vehicles suspected of picking up people off the street and at airports for some ill-gotten cash on the side.

Uber cars made up 496 of those seizures. Their drivers, allegedly trawling for fares at John F. Kennedy and LaGuardia airports, were behind the wheel of half the cars seized there between April 29 and June 7, according to the TLC.

Suprisingly a critique comes from the Right although the author’s target is an even more libertarian concept of a labor market. Fare-trawling at airports by trying to work the interstices of the badged-taxi system reveals the fragmentation of the spatial and temporal commodity of individualized personal transit.

In the long run, however, if the “sharing economy” is disruptive of anything, it is disruptive of hard-fought labor protections. Uber brings on 40,000 new drivers a month. But to avoid minimum wage laws and liability claims, Uber will not admit that it actually employs these drivers—though around 20% work full time.

Uber then extracts millions of dollars from its drivers’ labor and invests in ad campaigns and lobbying efforts to spread to other cities. Right now in New York, if you pull up a map of public transportation on Google, the app offers Uber as an alternative to trains and buses, as if a private car amounts to “public transportation.”

In the short term, Uber is encouraging drivers to take out predatory subprime car loans with the Spanish bank Santander. But ultimately, Uber wants to replace drivers with robots, as soon as the technology becomes viable…

If “sharing-economy” corporations don’t want to become employers, they can easily sell their technology to the workers who use it—like everyone else. Government can play a constructive role here by requiring that transportation services be owned by workers’ collectives, or at least employ unionized labor. To leave the sharing economy space entirely unregulated, as Feeney suggests, would usher in a dystopian future, where the precariously employed hover over their smart phones waiting to be summoned by someone lucky enough to have a full-time job.

A new book discusses some of these matters in this context. I defer to those with greater knowledge of South Asia.

Tom Barnes (2015) Informal Labour in Urban India: Three cities, three journeys

This book takes a critical, longer-term view of India’s economic transition. It focuses on employment and livelihoods in India’s massive ‘informal economy’. Most people in contemporary India scrape a living in small enterprises based in trade, manufacturing, construction or agriculture. But, alongside this ongoing reality, India has also experienced an industrial transformation that has been profoundly influenced by the country’s integration with the world economy as well as government efforts to lift restrictions on trade and investment. After lagging economic growth for decades, employment in large firms – the so-called ‘organised’ or ‘formal’ sector – has recovered since the mid-2000s. In some parts of the country, domestic and foreign firms have been adopting technologically-advanced ‘world’s best practice’ production. International trade and foreign investment have played a role in influencing this formal sector employment
growth.

However, many scholars have rightly resisted the conclusion that India isundergoing a transition to a Western-style industrial and consumer society. India has many distinctive historical, institutional and cultural characteristics that have conditioned the process of capitalist development. Furthermore, the very process of industrial development in the 1990s and 2000s, in India and globally, has been different from what occurred decades ago in the West or even northeast Asian countries like Japan or South Korea. Specifically, rapid economic growth and development in India has been based upon the mass employment of informal labour. As this book demonstrates, this has been based upon a major shift towards the employment of wage workers in informal enterprises and, in several key urban regions, the concentration of informal wage workers in large, formal sector enterprises. The book argues that this contradictory process has been driven by uneven and combined development: on the ‘combination’ of existing social structures of accumulation with the advanced features of global capitalism.

But what does ‘informal labour’ mean? There is a massive Global South-oriented literature on this question. Many economists and mainstream development agencies, influenced by different shades of neoliberalism, argue that informal workers have made a rational choice to work outside the regulatory shadow of the state due to excessive bureaucracy, ‘red tape’ and taxation. Traversing the writing of alternative thinkers, my book clarifies that informal labour is more than this. As well as the absence and evasion of state regulation, informal labour represents a categorisation of socio-economic disadvantage and a historical and spatial process that reconfigures the balance between different types of work and employment. I take a ‘classes of labour’ approach, reconstructing the problem through the combined theoretical lens of Marxist and institutional political economy.

I try to do this in two ways.

First, different types of work and employment are framed as different ‘forms of exploitation’, a phrase borrowed from Jairus Banaji. Forms of exploitation are the myriad types of work, occupations and labour process organisation in which economic surplus is transferred from the labour of workers to different forms of capital. Each case of informal labour represents a specific form of exploitation; a different way for capital to lower production costs, control workers and increase enterprise flexibility.

This leads into the controversial bit of my argument: I argue that the informalisation of Indian labour markets since the mid-1980s, a period of neoliberal globalisation, has been marked by a shift towards the employment of wage labour. This argument runs counter to the views of several prominent South Asia scholars who, instead, claim there has been a shift towards self-employment and ‘petty commodity production

And what of wage-labor itself as technology affects the social relations of production. The creation of online labor brokers, however self-subsidized, have their own problems, as anyone who has used Monster.com can tell you. Those in this group who have discussed workers collectives and cooperatives have shown that could be the way forward to reduce the capitalist destruction of many elements of the informal economy that could be vanguard elements in social change, forcing even the agents of reserve armies of labor to reconsider how they commodify labor processes.

Rowan was here to demonstrate the invention to which he has dedicated the past 20 years of his life. He believes that it can transform the very nature of work – by doing for downtrodden shift workers what automation and financial arbitrage have done for the flash boys of Wall Street. His creation looks at first like a pretty straightforward website, where recruiting firms can advertise positions and would-be workers can log on to find jobs. The site is powered by gruesomely complex software at the backend, which ushers the two parties towards one another, as if – to quote a great Scot – guided by an invisible hand. Rowan talks excitedly about “securing the vision of Karl Marx through the means of Adam Smith”. After hearing him enthuse about his project, its name comes as a disappointment: the central database of available hours, or Cedah…

Rowan is convinced that what is needed is a website that reconciles the interests of hired hands and casual employers. Cedah, he vows, can do exactly that. The website will operate not as a buccaneering enterprise, but instead as a staid “regulated utility”, which – he argues – can be better for everyone.

If casual work that might otherwise be done on a cash-in-hand basis went through an official system, that would obviously be better for the government, since it would enable more taxes to be collected.

Because Cedah would be properly regulated, workers could be sure that all their rights would be respected. The system is also designed to allow workers to build up a portable reputation, the precondition for a real casual career.

Finally, for workers and employers alike, there is an obvious advantage to a website that brings them together without charging an excessive fee.