It's time to put to rest the ridiculous marketing message that Uber is somehow creating entrepreneurs.

Uber drivers are contract labor. Yes, they get to set their own hours. But that's also true of manufacturing laborers who are paid according to how many items they produce or agricultural workers who are "paid by the bushel."

True entrepreneurs start businesses by doing something new. They have control over their ideas. They run their business. They make decisions. They hire people.

Uber drivers do none of these things. They work under conditions set by Uber and then are manipulated to behave in ways that are often contrary to their own interests.

The only new thing about the so-called "gig economy" is that technology helps companies like Uber bypass hard-won worker protections. The result is not more entrepreneurs, but the creation of an economy where being a real entrepreneur becomes harder every year.

Right now, the US is one of the least entrepreneurial countries on earth. It launches fewer startups and few small businesses than most other countries. As Forbes recently pointed out:

"Start-up activity has been slowing down in the United States for about three decades, dropping sharply over the past 10 years. New firms accounted for about 13% of all companies in the late 1980s, but only about 8% two decades later. In the 1980s and 1990s, small number of young, innovative, and dynamic companies grew at very high rates. But in the post-2000 period, startups contributed less to U.S. job creation than they did in earlier decades."

Part of the reason for this decline is the tax code, which is massively loaded against small business. Big companies can pay lawyers and accountants to make certain that they pay little or no taxes. Smaller companies can't afford the high-priced talent and so they pay their taxes through the proverbial nose.

If you think that any of the "tax reform" that's being proposed in Washington D.C. today is going to change any of that, I have a bridge in Brooklyn I'd love to sell to you. Money talks and the big money is all about making more money for billionaires.

Another reason the U.S. lags in startups is that the country only enforces anti-trust laws if a merger would increase consumer prices. Unlike in the past (when the US was full of small businesses), the government no longer breaks up monopolies simply to create more opportunity for competition.

If you think that the Trump administration is going to change this, you're living in Bizarro world. Rather than strengthening anti-trust to create competition, all signs are that the Trump administration will kowtow to whatever the huge corporations want. (Example: letting ISPs sell your web browsing data.)

Finally, the "gig economy" also makes it difficult for real entrepreneurs because most entrepreneurs found small businesses or buy franchises that depend upon the local economy (that is, upon the wealth and financial well-being of their neighbors) to survive and thrive.

Entrepreneurism was at its strongest in the US when there were millions of well-paying union jobs, because then there was plenty of wealth to be spent. Today, the "gig economy" helps create the wealth inequality that makes the U.S. fundamentally hostile to startups and the entrepreneurs who found them.

Here's what real entrepreneurs can do to help fix this:

1. Stop idolizing the guys who run these companies.

There's a tendency among entrepreneurs to lionize the people who've built companies like Uber and AirBnB. They're not role models. From what I can see, they're mostly jackasses.

2. Stop letting them get away with misusing the term.

Every time an executive in a "gig economy" company claims to be creating entrepreneurs, real entrepreneurs should thunder at him--via email or social media--that he's full of crap.

3. Stop electing corporatist politicians.

The "gig economy" needs to be called to heel, not encouraged. This will only happen when we stop electing billionaires and people beholden to billionaires.

I apologize for edging into politics on this. However, it deeply irritates and frustrates me when people use the term "entrepreneur" to describe something that actually makes being one more difficult. Enough is enough.

Published on: Apr 10, 2017
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