Many of us denizens of major Western metropolitan centres
have been there at some point. A few light ales turn into a few
more and before you know it you're standing in the queue for a
kebab with the dawning realisation that the last train leaves
in two minutes and you're never going to make it. You don't
fancy the prospect of three buses so out comes the phone and
you hit up the Uber app.
That option may soon be taken away for residents of the
British capital as Transport for London last month refused to
renew Uber's license to operate in the city. So ingrained into
the fabric of London life is the cut-price ride hailing app's
services that in a few short days, nearly a million people
signed the company's public petition to Mayor Sadiq Khan. One
of the key arguments deployed by Uber is that, if the decision
is upheld following appeal, it will put more than 40,000
drivers out of work.
The decision is undoubtedly a devastating one for Uber's
drivers, but in the long run many of them may have ended up out
of work anyway. The reason for this is that Uber has set itself
up as a pioneer of driverless car technology and with the
courts challenging the notion that its drivers are
self-employed individuals not entitled to minimum wage and
holiday pay, it is not a huge leap of the imagination to
envision that the next step in the evolution of the gig economy
is to take workers out of the equation entirely and replace
them with machines and AI.
According to an Oxford University study, around 47% of all
current US jobs could be automated by 2034. That's not to say
new jobs won't be created, but there's no denying technological
trends will put a massive dent in the labour market. So what
can we do about it? One suggestion that is gaining traction
– to the extent that it was hinted at by UK opposition
leader Jeremy Corbyn last month – is taxing robots.
Such a tax might be placed on companies that replace human
workers with computers or machines and would be used to fund
the retraining of staff put out of work.
The prospect of higher taxes for companies is never going to
go down well, but on a macroeconomic level it makes sense.
Companies replace people with machines because machines are
cheaper. In the short-term this is good for profits. But
unemployed humans don't tend to spend all that much on goods
and services, so over time these trends will hurt corporate
bottom lines unless they invest back in retraining people to
take up new jobs.
The idea is still in its infancy, but it is one
International Tax Review intends to investigate in
more detail in upcoming issues – unless we have all
been replaced by machines, in which case I, for one, welcome
our new robot overlords.
Salman Shaheen
Managing editor, International Tax Review
salman.shaheen@euromoneyplc.com