Saturday, November 26, 2016

Deflationary Policy and the Gig Economy

So, what happens?

Uber and the other Transportation Network Companies

Near as I can figure, Uber will start turning drivers away in harder-hit cities; it's the only way to keep the service going. Who is going to bother working with a service that scarcely will provide any work at all? If Uber is going to keep going, it will have to require drivers to put in minimums, and select from among those who do. And, no unemployment insurance for the now out-of-work drivers.

Of course, the founders having made their pile and then some, they could just fold the company.

AirBNB and similar firms

Likely AirBNB goes under. Most of the "unlicensed hotel" AirBNB sellers and similar do go under; they most likely borrowed to fund their services and will not be able to keep up their payments. The legal AirBNB providers may also get hammered; some of them have borrowed to build extensions to their homes and will have also have trouble making the payments. Some people may lose their homes. On the other hand, it may be that regular hotels in cities that are hit hard enough that the whole market switches to AirBNB instead.

That whole thing about entrepreneurship, capitalism, and so on

You're an entrepreneur if you on take financial risk. During a downturn, businesses go under and small businesses of limited capital, like Uber drivers and small AirBNB sellers, go first.

If a Trump administration tanks the economy, there's going to be a lot of unhappy people!

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