21st Century Hi Tech companies, 19th century tycoons


During the recent violent taxi drivers’ protests in Paris, a journalist for the  french newspaper Liberation outlined some interesting facts about the Uber company’s business model:

  • As with  many world-wide companies, they try to reduce their tax rate to the minimum by using accounting “creativity”
  • The model is built from the start by knowing that some part of the activity is illegal according to the law in the country where they operate; they however bet on the slowness of justice not to be interrupted in their conquest of the market. Given the ‘first arrived on the market’ premium, once they reached a certain level of market share, they can be sure they almost will get a monopoly when their activity is eventually legalized
  • Finally, they incorporate the avoidance of labor law in their plans: the sustainability of their business plans could not be taken for granted if they were to respect the traditional employer/employee schema the incurred costs. Presenting the ‘no employee rule’ as a benefit for the people effectively doing the tasks is then just a matter of clever advertising.

If we look back at history, this model has already existed in the past and was well described by several people, including authors like Zola or Dickens: avoiding at all costs to provide social net to the people who work for you is a trait of the 19st-century bosses. By having no visibility on their employment on a day-to-day basis, no ability to make projects for the future, they were truly thinking human beings as a commodity. And that their orders are given by shouting at them or beeping at them using your smartphone does not change anything.

However, in addition to the traits mentioned in this article, some of these tycoons also try to apply also other recipes when they have direct employees. Do you remember that old paternalism way of thinking? Getting coal subsidy or your enterprise-sponsored football team is not far different from today’s free meal or campus projects big hi-tech companies have in mind.

Will the triumphant capitalism and its market-free, no state-issued welfare bring us back to two centuries ago, except for these little shiny portable devices that will be our free-willing fetlocks?

 

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