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Politicians and Regulators Beware, the Uber Economy is Here to Stay

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Ridesharing companies Uber and Lyft saw huge demand increases in Portland between May and August, KGW reports, while taxi service slowed, according to a report released by the city of Portland.

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The report showed that overall, ridership for private for-hire transportation was up 40 percent, giving more than 1 million rides in four months. Uber and Lyft saw a 125 percent increase in rides while taxi rides dropped significantly.

Lyft said the data shows a “strong consumer demand for transportation options like Lyft in Portland.” Uber posted a commentary on its website. “Ridesharing is serving East Portland and underserved neighborhoods like never before,” notes the commentary. “Wait times for ridesharing are shorter than other for-hire options at nearly every time of the day, in nearly every Portland zip code.”

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The taxi union doesn’t have relevant comments to offer. It is, of course, understandable that taxi drivers resent Uber and Lyft threatening their obsolescent services with modern app technology and a superior, much more flexible business model.

All seems to indicate that a similar explosion of ridesharing is occurring in major cities in the US and, increasingly, worldwide.

Revolutionary Businesses Needlessly Hampered by the Government (Rubio)

uber-enjoy-ridePoliticians and regulators in the US and – especially – in over-bureaucratized Europe try to shut down Uber and Lyft with over-regulation to show support to the taxi drivers and “protect jobs.” But it’s also evident that the consumers are voting for the Uber economy, and the political and regulatory establishments will be forced to give in, or lose votes.

The Uber economy creates jobs – for example, there are 30,000 Uber drivers in New York City. Not, of course, traditional 9-to-5 jobs with employment security and benefits. Uber drivers aren’t considered as employees, but independent contractors. However, anyone with a family to feed and bills to pay will agree that an Uber job is better than no job.

These days, “jobs” are becoming a scarce commodity, earn-as-you-go freelance jobs are often the only option for the fast-growing masses of people without a fixed job, and the trend seems unstoppable.

Browsing the Uberpeople.net independent rideshare drivers community forum is a good way to take the pulse of Uber economy workers. Many drivers, of course, complain about long hours and low earnings after expenses – a few hundred dollars per week is what most full-time drivers make – but their advice to newcomers is often that, well, it’s better than nothing. A nationwide protest, organized by dissatisfied Uber drivers last weekend, wasn’t successful.

The Uber economy is much more than Uber the company, and doesn’t necessarily need companies as centralized service providers. New decentralized technologies for distributed web and phone apps could enable Uber-like services powered by the individual devices of drivers and consumers, without a company. Uber without Uber, by the people for the people.

Some politicians, especially Republicans, are beginning to realize that they should ride the Uber economy wave if they can’t stop it. After the much publicized Uber ride of presidential candidate Jeb Bush, other Republican candidates are coming out in favor of the sharing economy. Marco Rubio recently praised companies like Uber and Airbnb “as revolutionary businesses that are needlessly hampered by the federal government.” But Democrats should also pay attention, because the people seem to support the Uber economy.

Uber and Lyft drivers themselves could be a temporary phenomenon. “Within 10 years, we will see Uber laying off most of its drivers as it switches to self-driving cars,” said technology and business expert Vivek Wadhwa. But other sectors (e.g. home cooking, baby sitting, counseling, senior citizen care, sex services) that can’t be automated will offer new opportunities for a sharing freelancing economy enabled by new technologies.

The sharing economy is here to stay. Governments should accept that, and at the same time make preparations to give everyone a guaranteed basic income.

Images from Wikimedia Commons and L.A. Foodie/Flickr.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Giulio Prisco is a freelance writer specialized in science, technology, business and future studies.




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Decentralization

JP Morgan’s Surprise Cryptocurrency Fees are a Reminder of Why Decentralization Is Sorely Needed

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JP Morgan Chase & Co has been hit with a class-action lawsuit by cryptocurrency traders over allegations of unannounced fees and higher interest rates on purchases of digital currencies. Though the allegations have not been proven, extra fees are a tactic routinely employed by traditional banking institutions. In the case of JP Morgan, this has karma written all over it given the way its chief executive has ridiculed digital assets by associating them with fraud.

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Class Action Lawsuit

Traders from across the United States are seeking statutory damages of $1 million for unannounced interest charges and fees on cryptocurrency transactions between January and February of this year. The named plaintiff in the lawsuit is Brady Tucker, an Idaho resident who paid a total of $163.91 in fees and surprise interest charges over a six-day stretch.

According to information obtained by Reuters, the lawsuit accuses the bank of violating the U.S. Truth in Lending Act, a piece of legislation that requires credit card issuers to inform customers in writing of any notable change in fees.

The lawsuit asserts that Tucker tried to resolve the dispute by calling Chase’s customer support service directly. His request was turned down, prompting him to seek legal help. According to Bloomberg, the case in question is Tucker v. Chase Bank USA NA, 18-cv-3155, U.S. District Court, Southern District of New York (Manhattan).

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The Growing Case for Decentralization

Depending on who you ask, the allegations against JP Morgan are akin to cryptocurrency fraud not unlike the kind Jamie Dimon talked about while ridiculing bitcoin. But the irony in Dimon’s comments extend far beyond Chase’s latest dealings.

As the actions of Chase bank and other financial institutions have clearly demonstrated over the years, those who control the size and growth rate of fiat money cannot be trusted to do the right thing. As Nassim Taleb argues in The Black Swan, banks have a tendency of losing as much money as they make in the long run due to shady business practices and high-risk ventures. Decisions like these are easy when you are Too Big to Fail.

Decentralization, like the kind advocated by blockchain startups and cryptocurrencies, allows users to trade directly with each other without having to go through a (predatory) middleman. Decentralized systems not only help participants avoid unnecessary fees, red tape and other forms of unwanted intervention, they are virtually impossible to shut down. In this vein, decentralized currencies give people a fighting chance in their battle against never-ending inflation. As we’ve argued before, this is not only a prudent fight, but a noble one as well.

Cryptocurrencies that rely on decentralization offer society a unique value proposition unlike anything we’ve seen in recent history. What’s more, their adoption is not contingent upon us leaving the realm of traditional finance – at least, not yet. That’s because cryptocurrency started off as an obscure and esoteric asset class but has since become a value store for investors. Tomorrow, it will become a viable medium of exchange accepted worldwide.

That said, we are still in the very early days of the crypto revolution and it may be a while still before we can conclusively prove people like Dimon wrong. But crypto backers and investors should take comfort in knowing that big banks rarely lead in disruption these days. They have the resources to play catch-up, which they are clearly doing with blockchain.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 410 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Bitcoin

Valuing Cryptocurrencies and Blockchain Applications

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Arguably the most interesting financial trend of 2017 is the spreading of cryptocurrencies, especially in the Ethereum ecosystem. With the ICO boom of this year, a lot of different business models have been connected to tokens or blockchains of their own. This brings up several questions in the mind value-conscious investors, as given the special properties of these coins, and especially considering the various distribution and usage schemes of the tokens, valuing them is tricky, to say the least.

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Whether or not we are in a bubble currently is a layered question, as we are definitely in a huge speculative wave that will end badly for several coins, but the segment is in the early phase of adoption, and the market as a whole will likely multiply in the coming years.

As I concluded in my comparison with the Dot-Com bubble, selective investing in the ICO-boom is vital for long-term investors. To make things more complicated, traditional valuation models generally fail with cryptocurrencies, because of the hybrid stock-commodity properties of them and the novelty of the technology, coupled with the questions regarding the future usage patterns.

Is it possible to set up a framework to analyze all the different business models and value the connected coins? Or is it possible to, at least, determine hard guidelines to follow when selecting the coins to hold or forget? I will answer that question below and in the coming second part of the article.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 255 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

ICO Analysis: EOS

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EOS.IO software by block.one wants to “Decentralize Everything”. Mr. Larimer has already put two notable blockchain systems live: BitShares and Steem. Both of these systems remain online and recently benefited from increased interest in the crypto-asset space in general. To this date, EOS has raised $200 million in revenue from token sales.

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Brock Pierce, co-founder of block.one, told Reuters that EOS is designed to be a foundation for blockchain business applications. Attendees heard a lot about EOS at last month’s Consensus conference put on by Coin Desk. Block.one claims its platform has eliminated transaction fees and can process millions of transactions per second.

The startup, which recently started selling the EOS token to create a decentralized distribution of tokens to be used with the EOS.IO software has introduced the concept of automating business processes, monitoring assets, and creating multiple applications based on prior technology introduced by Mr. Larimer, who is the inventor of the “Proof of Stake” and the “Decentralized Autonomous Corporations” concepts.

According to its website,

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(…) block.one provides end-to-end solutions to bring businesses onto the blockchain from strategic planning to product deployment.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 1 rated postsJustin O'Connell is the founder of financial technology focused CryptographicAsset.com. Justin organized the launch of the largest Bitcoin ATM hardware and software provider in the world at the historical Hotel del Coronado in southern California. His works appear in the U.S.'s third largest weekly, the San Diego Reader, VICE and elsewhere.




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