The Uberisation of Everything

Affordable luxuries have come at a deeper cost

Boeing 737 Max-10: symbol of affordable luxury, or grim necessity? (Source: Boeing)

Though originally designed in the 1960s, the Boeing 737 is an unsung hero of the early 21^st century. A flimsy-looking airplane, its cramped conditions and unnerving tendency to rattle on take-off have driven many a short-haul passenger to the brink of panic. Yet it has delivered millions of Europeans to their weekend breaks at a price that makes the humiliations of Ryanair seem bearable.

The 737 is a symbol of what Janan Ganesh dubbed “the middle-class world citizen,” an ordinary consumer who enjoys a degree of mobility and convenience once reserved for wealthy. It was the forerunner of many other designs distinctive to our age: the Uber app, the bright turquoise Deliveroo uniform, the Air BnB review system, the Amazon distribution warehouse. This ecosystem of mostly platform-based services has made luxury seem cheap.

But as Ganesh noted in 2019, it has also long felt unsustainable. Some of these businesses have rarely, if ever, turned a profit, and appeared to survive only thanks to ultra-low interest rates. Many, likewise, seemed to be inviting a political backlash, exploiting underpaid gig workers and regulatory loopholes to undercut older business models.

Four years later, after a pandemic and several economic crises, the convenience economy appears more resilient than expected. Ryanair has just placed an order for three hundred new Boeing 737 Max-10s, the largest in its history, with which it hopes to eventually transport 300 million passengers per year. And you might soon be booking your flights with Uber, which is steadily expanding across the travel market in its bid to become a “super app.” Even Deliveroo has found enough savings to report revenue growth, despite a drop in takeaway orders.

But none of this means we’re heading for the frictionless lifestyle that was the dream of the 2010s. The terrible genius of the convenience economy is that it can continue expanding even as it becomes less and less convenient, simply because we can’t afford any alternative. And increasingly, we may find the reason we can’t afford an alternative is that the forces of Uberisation are eroding our incomes too.  

An Amazon fulfilment centre: one of the distinctive designs of our age. (Source: Bloomberg)

Budget services have been dragged down by labour shortages, inflation, and a loss of investor patience. Short-haul air tickets are around twenty to thirty percent more expensive than last year, and with new environmental regulations looming in Europe, it’s safe to say they will never be as cheap as they were. Uber’s fares keep rising, even as wait times have grown. Netflix is cracking down on account sharing and has introduced ads. But these companies remain cheapest option available, and they have reshaped our expectations enough that giving them up seems unthinkable. So they remain viable and, in some cases, very profitable.

Affordable luxuries have a deeper cost though. The digital platform companies work on the principle that if you make services cheap enough to capture a big market share, workers and producers will need you as a middle-man to reach consumers, even if this means accepting low pay and minimal job security. It’s a race to the bottom, forcing competitors to adopt the same tactics to keep up.

See the humbling of food delivery challenger Just Eat. Two years ago its CEO slammed gig employers for creating “precarious working conditions across Europe, the worst seen in a hundred years.” Unable to compete with Deliveroo and Uber Eats, it has now been forced to adopt the same model.

New research by the University of Bristol claims that more than half of UK gig workers earn below the minimum wage, with even larger numbers reporting anxiety and insecurity. Little wonder the convenience economy struggles to find enough of them to meet demand.

Even if people dislike being served by an underclass of exploited workers, I’m not sure they have fully appreciated the risks of allowing such conditions to be normalised. Employers everywhere are looking for efficiency savings and hedges against economic uncertainty. Taxi rides and parcel deliveries are not the only jobs that can be broken up into discreet tasks and advertised to workers only when necessary. These trends can spread into other industries too.

As the Times reported, a recent sharp drop in full-time positions is being matched by a rise in temporary contracts, effectively white-collar gig employment. In the EU, almost forty percent of workers under the age of thirty are in temporary positions already, and employment in general has become more flexible with fewer benefits. Unions in the United States have warned about the Uberisation of nursing, with shifts at some hospitals being booked through apps. Freelance professionals are finding themselves part of an increasingly competitive and global labour pool that keeps their fees down.

But all of this, perversely, will only benefit the likes of Uber and Amazon. As our time and disposable incomes are squeezed, their low-cost luxuries will become more appealing than ever, even if these are not actually as low-cost or luxurious as they used to be.

The roots of this situation go back beyond even the arrival of budget airlines. The decisive moment was the globalisation shock of the 1990s, which accelerated the offshoring of jobs to cut labour costs, and delivered in return a flood of cheap products from overseas. Access to an ever-expanding range of goods and services became the aspiration by which we measure our quality of life. For that we have traded, consciously or not, the principle that employment should entail a reasonable degree of security. 

The growth of the convenience economy, with its budget trips to the continent aboard a Boeing 737, made this bargain seem like a good one. But new opportunities are quickly taken for granted, whereas stagnation doesn’t lose its bitterness. The cheapest option from Amazon; cattle-class on Ryanair; a take-away because you are too exhausted to cook: these things will feel rather different if they become the limit of what we can hope for.