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This is incomplete, but very, very good economic analysis. In the end his points are simple: 0. Employees are willing to trade "freedom" for job stability and

by _lex 11y ago

This is incomplete, but very, very good economic analysis. In the end his points are simple: 0. Employees are willing to trade "freedom" for job stability and increased average returns. Contracters will more easily defect for sporadic higher paying opportunities, which makes them less reliable. 1. Employers can overpay employees while ensuring that they know that they are overpaid, to 'domesticate' their employees and improve reliability of outcomes. 2. Decades ago, employers could also promise long-term job security to achieve similar effects, however rapidly changing markets mean their future existence (and ability to grant stability) is in question. 3. Instead, employees have fixated on cross-company careers, optimizing for general employability , which means that they must still conform to the requirements of a domesticated employeeship. 4. However, when employees have significant, direct, measurable profit impact skill, and can make or break the company, they can not be owned. He also does an economic analysis of cursing, while explaining that maximizing employability tends to strip away the parts of people that can make them great.

_lex 11y ago
Two interesting things: 1) this predicts difficulty in controlling contractors and getting them to stick to schedules. It explains why taxis suck, homejoy struggled, and showcases that uber circumvented the entire issue of driver reliability by only doing on-demand rides. It also predicts that scheduled contractors will attempt to steal clients from the scheduling company (direct measurable profit impacting skill - you can't own them). Perhaps the on-demand service strategy that works requires either the use of employees or zero-scheduling/real-time request resolution. 2) As an employee, you must figure out how to measure your profit impact and consistently represent that metric as fact - socialize the idea that you have profit impact. You also want to figure out exactly how what you do and how you do it can increase or decrease profits: being the person who's able to both represent a meaningful metric and show how you've affected that metric, and how that metric should have affected the bottom line will make you the most valuable. If what you do does not impact profitability, then do something else.
- acveilleux 11y ago
  One way to view Uber is as a redundant array of inexpensive drivers. Since the individual contractors are fully fungible and numerous, one will usually be available to take on any new request. It is an anomaly of the Uber model that the barriers are incredibly low, the service is provided very quickly and that a significant number of drivers are willing to idle waiting for a ride. This is reflected in the relative low pay. Even then, I bet Uber has retention or reliability problems with drivers.
- anon4 11y ago
  2) Is very tricky to do for creative professions. Wouldn't it mean something like asking every client who uses the feature you worked on to give you a quote on how useful the part you did was to them? I'd like to hear what others think about how to effectively measure and market your contribution to management.
Nitramp 11y ago
I think he does not do a good job of analyzing the value proposition of "freedom" in this context. Freedom definitely is a value by itself, but he just posits and accepts that being a contractor gives you more freedom than being an employee. There are definitely counter examples, for example the cleaning personnel in many hotels is working on a contract basis. The more general observation is that being a contractor only gives you freedom if you have relative market power over your employer/contract giver. The same applies as a regular employee, but less so: there is value in retaining a skilled labor force, and employers are more reluctant to give that value up by firing people, as compared to contractors. (Also, many legislations restrict hire and fire of employees, but that might be a different topic.) Given a very acute risk of not finding any other contracts, contractors might find themselves having to live up to demands of your employer, ultimately ending up being less free than an employee in a comparable market.
- Retric 11y ago
  Working hourly at a fairly high rate changed my outlook on work. It's motivating to get up and think I am going to work to get paid vs. not burning a vacation / sick day. At the same token taking a day off for a few hundred $ really makes you feel 'important'. Where taking vacation from a pool feels like something the company gives you vs. something you earn.

by _lex 11y ago

_lex 11y ago

Two interesting things: 1) this predicts difficulty in controlling contractors and getting them to stick to schedules. It explains why taxis suck, homejoy struggled, and showcases that uber circumvented the entire issue of driver reliability by only doing on-demand rides. It also predicts that scheduled contractors will attempt to steal clients from the scheduling company (direct measurable profit impacting skill - you can't own them). Perhaps the on-demand service strategy that works requires either the use of employees or zero-scheduling/real-time request resolution. 2) As an employee, you must figure out how to measure your profit impact and consistently represent that metric as fact - socialize the idea that you have profit impact. You also want to figure out exactly how what you do and how you do it can increase or decrease profits: being the person who's able to both represent a meaningful metric and show how you've affected that metric, and how that metric should have affected the bottom line will make you the most valuable. If what you do does not impact profitability, then do something else.

acveilleux 11y ago
One way to view Uber is as a redundant array of inexpensive drivers. Since the individual contractors are fully fungible and numerous, one will usually be available to take on any new request. It is an anomaly of the Uber model that the barriers are incredibly low, the service is provided very quickly and that a significant number of drivers are willing to idle waiting for a ride. This is reflected in the relative low pay. Even then, I bet Uber has retention or reliability problems with drivers.
anon4 11y ago
2) Is very tricky to do for creative professions. Wouldn't it mean something like asking every client who uses the feature you worked on to give you a quote on how useful the part you did was to them? I'd like to hear what others think about how to effectively measure and market your contribution to management.

Nitramp 11y ago

I think he does not do a good job of analyzing the value proposition of "freedom" in this context. Freedom definitely is a value by itself, but he just posits and accepts that being a contractor gives you more freedom than being an employee. There are definitely counter examples, for example the cleaning personnel in many hotels is working on a contract basis. The more general observation is that being a contractor only gives you freedom if you have relative market power over your employer/contract giver. The same applies as a regular employee, but less so: there is value in retaining a skilled labor force, and employers are more reluctant to give that value up by firing people, as compared to contractors. (Also, many legislations restrict hire and fire of employees, but that might be a different topic.) Given a very acute risk of not finding any other contracts, contractors might find themselves having to live up to demands of your employer, ultimately ending up being less free than an employee in a comparable market.

Retric 11y ago
Working hourly at a fairly high rate changed my outlook on work. It's motivating to get up and think I am going to work to get paid vs. not burning a vacation / sick day. At the same token taking a day off for a few hundred $ really makes you feel 'important'. Where taking vacation from a pool feels like something the company gives you vs. something you earn.