Flattening the seasonal rollercoaster

[ramsy]

I believe trade shops may soon have more competition from Amazon, who wants to be Uber of trade services. They asked me to join their bid pool, for electrical services, but could not discuss any volume.

I already went thru this with Task Rabbit & Takl, who ran background checks on me, before offering $40 to install an over-the-range hood vent. Yes, that was $40.- total parts & material, with exclusive instructions that my resume would be terminated with poor references, if I accepted any projects requiring permits, which is my responsibility to refuse.

There are hundreds of Takl soldiers who got terminated from the service, and complained on social media and other public domains. They were happy getting paid a fraction of what the jobs are worth, just to keep busy. My State license board has template Forms for illegal activity that Licenses are trying to submit against Takl, & Task Rabbit soldiers, but with Amazon joining in, I'm afraid both the licensed community and their license board won't be able to keep up.

The Taxie lobby had organized labor and local Governments on their side, but lost that battle to Uber, Lyft, and the Gig economy. Amazon has put the writing on the wall, and Trade services are the next Gig.

 

[ramsy]

To bid on electrical Gigs, Amazon want's a GL policy, but it appears not necessarily licensing. Trade shops beware, if you already bid against unlicensed contractors, Amazon's Gig economy soldiers will be filling up the trenches.

Last month was my turn for periodic Jury service, this time for another Uber case. This Gig economy appears affordable for drunk people looking for a ride after heavy drinking or partying. Perhaps better than driving drunk.

An Arabic translator was provided for the accused, who carried the drunk girls bags into the hotel room, and hung around long enough to take advantage, after everybody passed out. The public defender explained the victim bears the burden to prove it was not consensual, and highlighted the lifestyle of the drunken victim as an open invitation for consent. The presumption of innocence, until proven guilty, demands proof.

It was this Gig-economy soldier's 2nd time in court, a balding, overweight man, about 4-times older than the victim. He didn't need to speak the native language, possess a trade license, financial bond, General-liability insurance, much less get screened by priors, or perhaps he prevailed in court & passed the criminal-background check. A Gig as a driver, a State issued personal-driver's license, and predatory patience is all it takes.

 

[RumRunner]

I believe trade shops may soon have more competition from Amazon, who wants to be Uber of trade services. They asked me to join their bid pool, for electrical services, but could not discuss any volume.

I already went thru this with Task Rabbit & Takl, who ran background checks on me, before offering $40 to install an over-the-range hood vent. Yes, that was $40.- total parts & material, with exclusive instructions that my resume would be terminated with poor references, if I accepted any projects requiring permits, which is my responsibility to refuse.

There are hundreds of Takl soldiers who got terminated from the service, and complained on social media and other public domains. They were happy getting paid a fraction of what the jobs are worth, just to keep busy. My State license board has template Forms for illegal activity that Licenses are trying to submit against Takl, & Task Rabbit soldiers, but with Amazon joining in, I'm afraid both the licensed community and their license board won't be able to keep up.

The Taxie lobby had organized labor and local Governments on their side, but lost that battle to Uber, Lyft, and the Gig economy. Amazon has put the writing on the wall, and Trade services are the next Gig.

I love the insight.

Never heard of Task Rabbit. I've heard Home Advisor which resembles TaskRabbit business model as explained.

Seems like the dreaded Walmart Scourge” that is considered the nemesis of the Mom & Pop small-town retail shop owners with the arrival of Walmart into their community.

And Amazon getting in the game, would certainly add misery to small service providers like electricians and plumbers. And being the biggest consumer provider (AMAZON) such a move would no doubt gain traction.

This retailing giant (WalMart) literally wiped out (mostly) this mom & pop operation.
I remember in the 70's and later before Home Depot, I had to get to my electrical wholesaler early before a crowd of contractors waiting to have their orders filled at the counter. There were not much choice then. Builders Emporium was not much of a help.

Even when Home Depot and Lowe's started serving customers in my area, the Electrical Wholesalers Association filed lawsuits against selling electrical products to DIYers. Their argument was-- it will encourage homemakers to perform unsafe electrical installation. This was also done to the plumbers.

When I made a big remodel project on my first home I could not buy plumbing pipes because I am not a licensed plumber. You can only find cast iron pipes then. . . no PVC or ABS.

I had to order plumbing pipes at Grainger. Having a business license, I could use it to purchase any product listed in their product line.
So, the only place to buy electrical devices (eg) wires, boxes, switches conduits etc was the electrical wholesale distributor.

All of these lawsuits were thrown out of court. . . a big victory for Home Depot.

As stated. . . just like UBER-- there will be surge of handymen doing electrical and plumbing repairs without the need for licenses. A homeowner can pull a permit and have a handyman do the job.

Of course there is the inspector to cite corrections if needed.

Maybe the electricians need to create some kind of a cooperative association like farmers do.
Farmers can control the price of turnips. (correct me if I'm wrong)

Or some electricians may end up converting their service trucks for mobile Dog-Grooming business.
A dog grooming charge at $170.00 a pop (no pun ). . . it doesn't need inspection only business permit. (at least applies to those dog owners in Beverly Hills)

 

[ramsy]

I love the insight..

You shouldn't encourage me.

25 years ago Walmart history was required reading for Calif.-State business undergrad's. The text books focused on executive bonuses for empire-building, with margins from sweat-shop products, and the lectures focused on discouraging organized labor.

It appears Walmart pioneered the adoption of indentured wages in the States, with part-time hours eliminating health & retirement benefits. Now most Stateside organized-labor groups either serve under executive-bonus systems that demand indefinite part-time positions, or operate wait lists that result in substantial unemployment.

I believe HomeAdvisor's lead-generation model is designed to exploit contractors with advertising budgets, while Uber, Lyft, TaskRabbit, & Takl exploit the disenfranchised-wage slave, WanaBe self-employed, who have no budget. The Gig economy brings independent contractors into the indentured-wage workforce. The Uber driver described earlier couldn't afford bail, so he was incarcerated while waiting trial.

Amazon used the internet to out sell brick & mortar industries, and now if vendors don't pay commissions to get on Amazon, their stuck at low volumes, or fold completely like Radio Shack. If Amazon's Trade-services model can't fund those executive bonuses, it may get dropped the way Google Plus, and other services are dropped when they fail to scale in mass markets.

If Amazon can't scale up their brand, since all lead-generation and Gig-economy trade-services already exist on the internet, executive-empire building may start acquiring, like HomeAdvisor acquired Angies List, Amazon could consolidate competitors into their own brand.

He who rules Lead Gens & Gig Economies is no threat to me yet. But, what if Amazon exploits trade expertise, and material purchasing at the same time, online? Such nirvana for consumers could be real hurt for trade-service shops, whole sale & supply houses.

No doubt executive-empire will try, but the question is can markets respond to a Trade-Repair shrine, like Builders Emporium was abandoned for Big-Box hardware, and Sears abandoned for Walmart's low-cost retail.

 

[RumRunner]

You shouldn't encourage me. . . .

This (WalMart) empire building was the result of organized labor's own undoing, by holding management “hostage” to achieve their demand.

We know that organized labor had been a formidable force that could shape management decisions in terms of how management allocate their assets going forward. Trust me, I 'm not against organized labor.

I did have a brief membership in IBEW—but since I worked mostly in Administration I didn't find much benefit from it.
Yeah, a lot of rookie engineers were IBEW members. They do materials take off and estimates.

WalMart is simply responding to the dynamics of our changing economy
This practice had gone on for decades--during the heyday of the auto industry.
Important corporate decisions had to be made if the auto industry has to survive. Industry forecasters knew that this pattern is not sustainable . . . hence--the birth of outsourcing and the result was diminished clout of the auto industry. Detroit is falling apart.
It is not what it used to be.

Now, we can argue that service shops cannot be outsourced. Your physical presence is needed and no “virtual electrician ” or robots are brewing on the horizon yet. . . but if millennials continue to be outpriced in the housing market-- something needs to happen. Much of what we see here is: residential customers still bring the bacon to the service shops' dining table. And for those go-getters they will be able to eke out a living.

However, there is a talk about building pre-fabricated homes to lower cost. I'm not talking about trailer park type housing.
All facets of home construction cannot be pre-fabbed. . . but majority of bedroom walls, kitchens, family rooms can be prewired and pre plumbed and set in place by cranes. The electricians and plumbers only have to splice wires and connect pipes at the jobsite. This is how they build multi-story cruise ships. They looked like floating hotels.

In the late nineties (IIRC) when Los Angeles International Airport (LAX) added runways and facilities, the Airport Authority bought hundreds of properties adjoining the airport. Many houses were sold to home buyers for $1.00.

But there was a catch: you have to move the structure within a certain period—and you pay the mover from $10,000 to $30,000. You also have to pay for the permit to haul the structure through freeways and city streets.

A big success and homes are now valued at about half a million dollars in some locations.

A win-win situation for movers, homeowners, realtors, tradesmen along with increased city revenue.

Sometimes the structures were so large they won't fit in a regular city street-- so-- movers cut them in two or three sections. . . sliced like loaves of bread.
This became the “honeypot” for electrical and plumbing contractors. . . when the structure was put back together. . . we connect the wires where the movers cut them.. . .piece of cake.

I did about ten of them in different locations but AHJ required to change the service from overhead to underground. Most of them were already 100-125 Amp service.
This is just to give an idea that (prefab) sectional home-building is possible.

We'll just have to see when Alibaba and Amazon get their arsenal together.

But don't worry about doom and gloom, Americans are resilient. . . we'll just have to be vigilant.