4 ms·

> Yet again, an investigative report has found that Uber underpays its drivers. Aren't the fares proportional to how many drivers are available? If the fares a

by imgabe 10y ago

> Yet again, an investigative report has found that Uber underpays its drivers. Aren't the fares proportional to how many drivers are available? If the fares are too low, don't drive. If enough people stop driving, the fare will go up.

Avshalom 10y ago
If you're driving for beer money you won't care that the fares are low. If you're driving as a career you can't just not work and hope the fares go up.
- zaroth 10y ago
  Which is exactly why no one should drive for Uber thinking it's a career. It's not W2, there are no benefits, there are no opportunities for advancement, and your pay can only decrease. If at least rates increased as you logged more miles and 5-star reviews that would be something. But it's quite obvious that Uber drivers are fresh meat for the machine. Not only that, but Uber is investing heavily in ways to eliminate drivers altogether. Literally everything about this screams do it for fun, for pocket cash, this is not a career.
- brownbat 10y ago
  It's an important point, that these concerns are always about careerists, not the beer money group. But there are two groups here. The beer money group could be significant: retirees, students, people who want extreme flexibility because they have another primary job or responsibility. Half of all drivers is a significant block. On the other hand, careerists legitimately face an impossible situation, since so much of their life is in the hands of one company that's constantly tinkering with its economics. The common policy response across similar situations seems to demand every single job must work as a 40 per week career with benefits, killing any pure beer money jobs. I don't know whether that's a wise policy solution or not. Maybe the benefits do outweigh the costs. But it's certainly not pareto optimal. Restrictive policy responses hurt one group of people in an attempt to protect others. I'd feel better about such policies if proponents showed awareness of who they were hurting. Like if proponents said, "ok, honestly, we're going to hurt retirees with this jobs protection measure, but we think that's ok, because we value single moms over retirees." Though if you get that far, you could just reduce it to a wealth transfer. Let Uber do what it wants, then tax retirees and give the money to single moms. Similar effect. One group loses, one group benefits. Though of course then you'd stop and ask why you're taxing people supplementing a fixed income. Maybe you'd rather tax some other group first. And that line of analysis is how you end up supporting deregulation combined with aggressively progressive taxation where the benefits are targeted to vulnerable groups.
  - tnecniv 10y ago
    > Restrictive policy responses hurt one group of people in an attempt to protect others. That's the definition of Pareto optimality
    - brownbat 10y ago
      Ok, pareto optimal describes a state, and I was abusing the term to apply it to a change of states. Definitely could be ambiguous: Are you moving towards pareto optimality, or starting at PO? When I've heard others commit similar abuses, they use "pareto optimal [change]" or "pareto efficient [change]" as synonyms for "pareto improvement." ie, moving towards pareto optimality. ie, a change that makes someone better and doesn't hurt anyone. But you're right, "pareto improvement" is really the proper term there.
      - SilasX 10y ago
        I think the parent was referring to how "you're at a Pareto optimum when any change has to make someone worse off", and was applying that (incorrectly IMHO) to the situation you described where a regulation makes someone worse off. I say "incorrectly" because "some regulation R makes some group worse off" (as you were saying) does not imply "all reg changes would make someone worse off" (Pareto optimality).
- protomyth 10y ago
  This isn't exactly a unique problem to Uber. The minimum wage conflict is basically a battle between people wanting it to be a living wage and the beer money / need experience / part-time folks. Favoring either side destroys the opportunity of the other. Living wage means an end to starter, beer money, retirement jobs. Market wage, means no career minimum wage jobs.
zaroth 10y ago
Just this. How can you underpay for a job which isn't even contracted for a specific number of hours? It's like saying I underpaid for AAPL because my limit order executed. Uber offers a certain amount of money per mile to any driver who wants to take it. They don't even price discriminate against drivers who; drive more hours, have better ratings, have better cars, etc. I just don't get it, it's not a right to drive for Uber and be paid a certain amount. If a driver leased a Prius to drive for Uber and saw the rates cut, even still, there's no contract with Uber guaranteeing a certain rate. We've even seen cases where they've exited a market altogether. Uber can disappear from a market tomorrow and those drivers will need to find someone else to drive for or get a different job. Likewise a driver can cut their hours or walk away with zero notice. If Uber cuts their rates and still ends up with enough drivers, perhaps the only thing you could say is that they were overpaying. There's only one thing the article touches on which seems worth investigating, drivers which get "stuck" driving more and more to try make their minimum required income. The anecdote of the driver doing 19 hours in a day. First, the driver app should not let you log 19 hours in a day. Second, if Uber is somehow "trapping" drivers to work more for less, I'm not sure I really understand the problem, let alone the solution, but it's something worth exploring, e.g. if there were false promises by Uber.
chrisseaton 10y ago
I can't even work out what they think they mean by 'underpay'. Is this less than the minimum wage? Less than they were promised in a contract? Less than taxi regulations allow? Something else? I see they say it's not the same as what some other article claimed, but unless Uber was promising drivers that this still isn't underpaying by any definition is it?
pmorici 10y ago
The article is making an assertion that isn't supported by the facts they themselves cite. They say that "Buzzfeed found that drivers in Detroit, Houston, and Denver “earned less than an average of $13.25 an hour after expenses”" If that is true then Uber isn't under paying their drivers at all. They are paying them at a slightly above average rate. You can easily look up the average salary for a Taxi / Limo driver in the US on the BLS website[0] and you will find that the national mean hourly wage for this job is $12.53. They also have data by state. Now, a couple years ago Uber was running adds on Facebook to recruit drivers in average cost of living areas that said things like "Make $70,000 a year driving for Uber". Those were clearly misleading if not outright false when the average taxi driver makes $27k. Perhaps that is where the narrative that they are underpaid comes from. [0] http://www.bls.gov/oes/current/oes533041.htm http://www.bls.gov/oes/current/oes533041.htm
mrweasel 10y ago
>If the fares are too low, don't drive. It's still better to be under paid, than make no money. Some people simply can't afford to take the morale high ground. It's societies job to ensure that employers don't take advantage for people in unfortunate positions. While I understand the reasoning and appeal behind Uber, I still think it has a weird business idea. Very few people seem to want to discus the fact that ordinary taxi drivers aren't exactly well paid either. This is despite the fact that their in an artificially limited market, with little or no competition. Uber is an important part in increasing service, which is apparently extremely poor in some countries. In terms of pricing, the salaries don't appear to leave much room for lowering the cost.

by imgabe 10y ago

Avshalom 10y ago

If you're driving for beer money you won't care that the fares are low. If you're driving as a career you can't just not work and hope the fares go up.

zaroth 10y ago
Which is exactly why no one should drive for Uber thinking it's a career. It's not W2, there are no benefits, there are no opportunities for advancement, and your pay can only decrease. If at least rates increased as you logged more miles and 5-star reviews that would be something. But it's quite obvious that Uber drivers are fresh meat for the machine. Not only that, but Uber is investing heavily in ways to eliminate drivers altogether. Literally everything about this screams do it for fun, for pocket cash, this is not a career.
brownbat 10y ago
It's an important point, that these concerns are always about careerists, not the beer money group. But there are two groups here. The beer money group could be significant: retirees, students, people who want extreme flexibility because they have another primary job or responsibility. Half of all drivers is a significant block. On the other hand, careerists legitimately face an impossible situation, since so much of their life is in the hands of one company that's constantly tinkering with its economics. The common policy response across similar situations seems to demand every single job must work as a 40 per week career with benefits, killing any pure beer money jobs. I don't know whether that's a wise policy solution or not. Maybe the benefits do outweigh the costs. But it's certainly not pareto optimal. Restrictive policy responses hurt one group of people in an attempt to protect others. I'd feel better about such policies if proponents showed awareness of who they were hurting. Like if proponents said, "ok, honestly, we're going to hurt retirees with this jobs protection measure, but we think that's ok, because we value single moms over retirees." Though if you get that far, you could just reduce it to a wealth transfer. Let Uber do what it wants, then tax retirees and give the money to single moms. Similar effect. One group loses, one group benefits. Though of course then you'd stop and ask why you're taxing people supplementing a fixed income. Maybe you'd rather tax some other group first. And that line of analysis is how you end up supporting deregulation combined with aggressively progressive taxation where the benefits are targeted to vulnerable groups.
- tnecniv 10y ago
  > Restrictive policy responses hurt one group of people in an attempt to protect others. That's the definition of Pareto optimality
  - brownbat 10y ago
    Ok, pareto optimal describes a state, and I was abusing the term to apply it to a change of states. Definitely could be ambiguous: Are you moving towards pareto optimality, or starting at PO? When I've heard others commit similar abuses, they use "pareto optimal [change]" or "pareto efficient [change]" as synonyms for "pareto improvement." ie, moving towards pareto optimality. ie, a change that makes someone better and doesn't hurt anyone. But you're right, "pareto improvement" is really the proper term there.
    - SilasX 10y ago
      I think the parent was referring to how "you're at a Pareto optimum when any change has to make someone worse off", and was applying that (incorrectly IMHO) to the situation you described where a regulation makes someone worse off. I say "incorrectly" because "some regulation R makes some group worse off" (as you were saying) does not imply "all reg changes would make someone worse off" (Pareto optimality).
protomyth 10y ago
This isn't exactly a unique problem to Uber. The minimum wage conflict is basically a battle between people wanting it to be a living wage and the beer money / need experience / part-time folks. Favoring either side destroys the opportunity of the other. Living wage means an end to starter, beer money, retirement jobs. Market wage, means no career minimum wage jobs.

zaroth 10y ago

Just this. How can you underpay for a job which isn't even contracted for a specific number of hours? It's like saying I underpaid for AAPL because my limit order executed. Uber offers a certain amount of money per mile to any driver who wants to take it. They don't even price discriminate against drivers who; drive more hours, have better ratings, have better cars, etc. I just don't get it, it's not a right to drive for Uber and be paid a certain amount. If a driver leased a Prius to drive for Uber and saw the rates cut, even still, there's no contract with Uber guaranteeing a certain rate. We've even seen cases where they've exited a market altogether. Uber can disappear from a market tomorrow and those drivers will need to find someone else to drive for or get a different job. Likewise a driver can cut their hours or walk away with zero notice. If Uber cuts their rates and still ends up with enough drivers, perhaps the only thing you could say is that they were overpaying. There's only one thing the article touches on which seems worth investigating, drivers which get "stuck" driving more and more to try make their minimum required income. The anecdote of the driver doing 19 hours in a day. First, the driver app should not let you log 19 hours in a day. Second, if Uber is somehow "trapping" drivers to work more for less, I'm not sure I really understand the problem, let alone the solution, but it's something worth exploring, e.g. if there were false promises by Uber.

chrisseaton 10y ago

I can't even work out what they think they mean by 'underpay'. Is this less than the minimum wage? Less than they were promised in a contract? Less than taxi regulations allow? Something else? I see they say it's not the same as what some other article claimed, but unless Uber was promising drivers that this still isn't underpaying by any definition is it?

pmorici 10y ago

The article is making an assertion that isn't supported by the facts they themselves cite. They say that "Buzzfeed found that drivers in Detroit, Houston, and Denver “earned less than an average of $13.25 an hour after expenses”" If that is true then Uber isn't under paying their drivers at all. They are paying them at a slightly above average rate. You can easily look up the average salary for a Taxi / Limo driver in the US on the BLS website[0] and you will find that the national mean hourly wage for this job is $12.53. They also have data by state. Now, a couple years ago Uber was running adds on Facebook to recruit drivers in average cost of living areas that said things like "Make $70,000 a year driving for Uber". Those were clearly misleading if not outright false when the average taxi driver makes $27k. Perhaps that is where the narrative that they are underpaid comes from. [0] http://www.bls.gov/oes/current/oes533041.htm http://www.bls.gov/oes/current/oes533041.htm

mrweasel 10y ago

>If the fares are too low, don't drive. It's still better to be under paid, than make no money. Some people simply can't afford to take the morale high ground. It's societies job to ensure that employers don't take advantage for people in unfortunate positions. While I understand the reasoning and appeal behind Uber, I still think it has a weird business idea. Very few people seem to want to discus the fact that ordinary taxi drivers aren't exactly well paid either. This is despite the fact that their in an artificially limited market, with little or no competition. Uber is an important part in increasing service, which is apparently extremely poor in some countries. In terms of pricing, the salaries don't appear to leave much room for lowering the cost.