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If you want to look at it that way, I think it's unfair to not consider the startup costs of operating a taxi. A medallion in New York is no longer over a mill

by PakG1 8y ago

If you want to look at it that way, I think it's unfair to not consider the startup costs of operating a taxi. A medallion in New York is no longer over a million dollars, but it's still pretty expensive. https://nypost.com/2018/06/09/139-taxi-medallions-will-be-offered-at-bankruptcy-auction/ https://nypost.com/2018/06/09/139-taxi-medallions-will-be-of... Becoming an Uber driver has comparatively much lower startup costs (buy a car). In the short-term, Uber drivers will have a much better cash flow, and potentially in the long-term too. Taxi drivers would see their cash flow significantly drop, but that's due to competition. Uber artificially has lower prices in most locations except when surge pricing kicks in. If their prices were not artificially low, I think you'd actually see a bit of parity. Yes, taxis would see lower cash flow, but it would not be a race to the bottom like it can be if Uber is artificially pricing lower. Paywall, so I can't read the whole article and see if they address this.

austincheney 8y ago
The two primary metrics that Berkshire Hathaway considers before making an investment is management satisfaction and employee compensation. The higher these things are the healthier the company appears internally and there are all manners of second and third order consequences that come from this. In the case of the gig economy there is no company. The people doing the work are underpaid consultants. So, where does the money go, the money that would have been paid to employees in an healthy company? It remains at the gig company. There are all kinds of economic problems with this, particularly if the company is itself not profitable and not on track to become profitable. For example how can these people invest back into the company to further stimulate the company and thus their long term earning potential?

by PakG1 8y ago

austincheney 8y ago

The two primary metrics that Berkshire Hathaway considers before making an investment is management satisfaction and employee compensation. The higher these things are the healthier the company appears internally and there are all manners of second and third order consequences that come from this. In the case of the gig economy there is no company. The people doing the work are underpaid consultants. So, where does the money go, the money that would have been paid to employees in an healthy company? It remains at the gig company. There are all kinds of economic problems with this, particularly if the company is itself not profitable and not on track to become profitable. For example how can these people invest back into the company to further stimulate the company and thus their long term earning potential?