Originally posted by Wayne
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If you think Uber treats their workers poorly, just look at district health boards or school principals. It's the same system, but Uber is private and the other is run publicly. Both function exactly the same however. They are examples of structured market places.
Do you see teachers and nurses driving around town looking for work and quoting on services? No.
Could you imagine if there were no schools or hospitals, but only teachers and nurses in vans driving around town pricing their jobs? Could you imagine how inefficient that would be. Imagine every day getting quotes for 'little Jonny', to find a math teacher, then getting a quote on an English teacher. Do you see how that would open it up to pricing manipulation. Prices would sky rocket and teachers would work 100 hours a week "looking" for work, trying to maximize their salary by "gaming" the market place.
This type of market creates an over supply, as it encourages more people into the market to capture the potential higher wages. Without a structured marketplace, as competition rises, prices do the opposite and go up, so does inefficiency.
This is what happened to the taxi industry in the 1990's and 2000's, before Uber arrived, and this is what is happening in the building industry. The free market is actually making prices go up, artificially, and causing efficiently to go down!
As the salary for builders go up, more builders enter the market. This creates more competition between builders for jobs, so to offset this, they rise their prices on jobs to make up for the lost income, but at the cost of efficiently. This just encourages more builders into the market, and prices go up more. This is also what causes the boom and bust cycles.
One solution is to nationalize and fix prices (think left wing, Labour ideas). It works well for schools and hospitals. Another idea, free market liberalism, is to leave prices floating on the market. This works well for currencies, commodities like soy beans, and things that you can create a futures market for. But, for things like Builders and Taxi drivers, it's different, because they are difficult to trade. When prices go down, I can't for example buy a whole bunch of 'builders futures' and then trade that at a later date for a profit, nor can I 'short' the market by buying 'put options' and make the supply go up. So you end up with a dead untradeable market. The market breaks down and becomes inefficient.
What Uber does is regulates the demand and supply efficiently. It keeps prices stable. Schools and hospitals do this as well as they control the market demand and supply in a centralized way. They are effective at managing the marketplace and distributing resources efficiently.
An open market without structure, is 'damn expensive' to the customer and ripe for pricing manipulation.
What you need is less builders, working shorter hours, but more efficiently. Most builders only spend 20% of their time building. The rest of the time they are chasing work or doing things other than building work. Same with real estate agents. Only 20% of their time is spent selling. The rest is chasing potential clients and gaming the market.
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