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The ongoing strike by Ola and Uber drivers is not the first time app-based cab aggregators have run into such trouble. The strike is unlikely to bring about any substantive changes in the way they function—but it has two important takeaways.
First, this highlights a basic weakness in tech-enabled businesses for whom market share is paramount—network effects make functioning with a limited base difficult in this space, no matter the cost. Unsustainable models have become the norm. The comedown can be harsh.
Secondly, the gig economy is in a nascent stage. The relationship between labour and capital is not fully formed yet. Service aggregators hold that they are merely platforms. Those who provide services via the aggregators insist they are the latter’s employees and thus must have the labour protections afforded to workers in conventional industries.
How these conflicts will play out—and the regulatory approach governments take—will determine the course of the gig economy.