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The "gig economy" bites back. For those wondering, here is a breakdown of the TLC's implementations[1]. Without a doubt, Lyft is bemoaning "Minimum Driver Pay"

by dvt 8y ago

The "gig economy" bites back. For those wondering, here is a breakdown of the TLC's implementations[1]. Without a doubt, Lyft is bemoaning "Minimum Driver Pay" where "Each app company will have its own rate, which will be set by TLC and adjusted periodically, and those with lower utilization rates will have to pay their drivers more per trip than companies with higher utilization rates." While it's true that higher-utilization apps (like Uber) will have to pay their drivers less, this puts drivers in a position of power and Lyft in a position of higher driver demand. I think this is a good thing both for drivers and consumers. Drivers get to arbitrage working for either Uber or Lyft -- depending on the utilization/pay scale -- while being protected financially by the TLC's policies. Lyft can cry wolf all it wants, but it's not as "small a player" as it makes itself out to be. By the way, this also protects new players in the space. These rules only apply to businesses doing, on average, 10,000 dispatches a day. [1] https://www.chauffeurdriven.com/news-features/in-this-issue/2049-new-rules-and-regulations-taking-effect-in-nyc.html https://www.chauffeurdriven.com/news-features/in-this-issue/...

dnautics 8y ago
As a former driver I have to say lyfts logic is accurate. Also, why should a company with less dispatches be subjected to different rules from those that don't?? That's extremely anti-driver.
- TylerE 8y ago
  The general logic is that larger players have more economies of scale so making regs apply to all makes it even harder on the small guys.
  - mlthoughts2018 8y ago
    Except in this case it’s the reverse. The larger players, which have it far easier in terms of utilization rate, are rewarded more than smaller players working their tails off to reach better, but not best, utilization. So it’s even worse than applying a single rate to all and tacitly advatanging larger players. It’s actively basing that advantage on largeness.
    - Buge 8y ago
      Are you saying the law advantages providers with over 10k/day and hurts providers with under 10k/day? I don't understand how that could be. The law doesn't apply to providers with under 10k/day, so they should have freedom to do whatever they find optimal.
      - mlthoughts2018 8y ago
        The utilization formula part of the law advantages each operator individually according to that operator’s numeric utilization score. Imagine if utilization was like a credit rating and the TLC wants laws that ensure good credit ratings among operators. So they incentivize reaching a good credit rating. One option could be to say, hey if you get a credit rating about 700, that is good for the people, so you get a tax break or something. Instead they are saying, hey if the size of your business already makes it easier for you to build a high credit rating, then you get even more tax breaks than others do, giving you even more advantage over them. This is not about the 10k/day part at all, only about how if Uber’s position as current market leader leads Uber to already lead on raw utilization rate, then the new law automatically rewards Uber with a labor price break more than the price break Lyft would get, and more still than Via or Juno.
        Buge 8y ago
        dnautics and TylerE were talking about the 10k/day boundary. If your reply isn't about the 10k/day boundary, then I think you misunderstood them.
        mlthoughts2018 8y ago
        No, I understood them. Despite my commentnot being directly about the 10k/day part of the issue, my reply is directly relevant to the parent comments. Perhaps you misunderstood my first comment?
        Buge 8y ago
  - mathattack 8y ago
    In general larger players can better spread (amortize) fixed costs to enjoy economies of scale.
bleriot 8y ago
This seems specifically targeted to give Uber an advantage over Lyft especially with the 10,000 dispatches rule. I’d also keep an eye on where the TLC commissioner ends up now that she’s resigned. Given all the corruption in NY, it wouldn’t surprise me at all to see her end up at Uber in the next few years.
mlthoughts2018 8y ago
I don’t think Lyft is disputing some form of incentive to increase utilization. I think Lyft is asking a fair question: what’s the point of an incentive for utilization? If the goal is to better society, in this case to better NYC congestion, then wouldn’t it make sense to incentivize companies to meet a single standardized level of utilization that is related to traffic patterns and congestion analysis? In what way is a custom utilization rate based price good for the city? It would seem to build in a margin advantage to which ever company is already the volume leader, even if that company’s actual utilization in real terms is not at a level that meets society’s goals. It feels honestly very much like Uber pulled strings for regulatory capture.
- notduncansmith 8y ago
  Interesting timing on this related article: https://angel.co/blog/why-you-should-join-a-regulated-startup https://angel.co/blog/why-you-should-join-a-regulated-startu... > In a recent talk at Columbia University, entrepreneur Steve Blank, along with Bradley Tusk, Uber's first head of policy, and Evan Burfield, author of Regulatory Hacking, discussed how some of the most exciting unicorns of the last 10 years have been launched in heavily regulated markets—and why they think that trend will only accelerate. > ... > Tusk—who'd made a career in New York politics working for Chuck Schumer and Michael Bloomberg—was experienced with these regulators. He leveraged his knowledge of NYC politics, along with Uber's massive user base, in what he gleefully described as “a vicious f$&@ing campaign” to flip the city council and halt regulation blocking Uber.
kodablah 8y ago
Why can't the rate requirements be consistent city-wide and still have similar effect? Or, if the concern is really a flooded supply, have an incubation period that doesn't favor incumbents? Surely it's clear that a law favoring the more popular company based on demand alone is actually worse for drivers and consumers by reducing choice for both of them.

by dvt 8y ago

dnautics 8y ago

As a former driver I have to say lyfts logic is accurate. Also, why should a company with less dispatches be subjected to different rules from those that don't?? That's extremely anti-driver.

TylerE 8y ago
The general logic is that larger players have more economies of scale so making regs apply to all makes it even harder on the small guys.
- mlthoughts2018 8y ago
  Except in this case it’s the reverse. The larger players, which have it far easier in terms of utilization rate, are rewarded more than smaller players working their tails off to reach better, but not best, utilization. So it’s even worse than applying a single rate to all and tacitly advatanging larger players. It’s actively basing that advantage on largeness.
  - Buge 8y ago
    Are you saying the law advantages providers with over 10k/day and hurts providers with under 10k/day? I don't understand how that could be. The law doesn't apply to providers with under 10k/day, so they should have freedom to do whatever they find optimal.
    - mlthoughts2018 8y ago
      The utilization formula part of the law advantages each operator individually according to that operator’s numeric utilization score. Imagine if utilization was like a credit rating and the TLC wants laws that ensure good credit ratings among operators. So they incentivize reaching a good credit rating. One option could be to say, hey if you get a credit rating about 700, that is good for the people, so you get a tax break or something. Instead they are saying, hey if the size of your business already makes it easier for you to build a high credit rating, then you get even more tax breaks than others do, giving you even more advantage over them. This is not about the 10k/day part at all, only about how if Uber’s position as current market leader leads Uber to already lead on raw utilization rate, then the new law automatically rewards Uber with a labor price break more than the price break Lyft would get, and more still than Via or Juno.
      - Buge 8y ago
        dnautics and TylerE were talking about the 10k/day boundary. If your reply isn't about the 10k/day boundary, then I think you misunderstood them.
        mlthoughts2018 8y ago
        No, I understood them. Despite my commentnot being directly about the 10k/day part of the issue, my reply is directly relevant to the parent comments. Perhaps you misunderstood my first comment?
        Buge 8y ago
- mathattack 8y ago
  In general larger players can better spread (amortize) fixed costs to enjoy economies of scale.

bleriot 8y ago

This seems specifically targeted to give Uber an advantage over Lyft especially with the 10,000 dispatches rule. I’d also keep an eye on where the TLC commissioner ends up now that she’s resigned. Given all the corruption in NY, it wouldn’t surprise me at all to see her end up at Uber in the next few years.

mlthoughts2018 8y ago

I don’t think Lyft is disputing some form of incentive to increase utilization. I think Lyft is asking a fair question: what’s the point of an incentive for utilization? If the goal is to better society, in this case to better NYC congestion, then wouldn’t it make sense to incentivize companies to meet a single standardized level of utilization that is related to traffic patterns and congestion analysis? In what way is a custom utilization rate based price good for the city? It would seem to build in a margin advantage to which ever company is already the volume leader, even if that company’s actual utilization in real terms is not at a level that meets society’s goals. It feels honestly very much like Uber pulled strings for regulatory capture.

notduncansmith 8y ago
Interesting timing on this related article: https://angel.co/blog/why-you-should-join-a-regulated-startup https://angel.co/blog/why-you-should-join-a-regulated-startu... > In a recent talk at Columbia University, entrepreneur Steve Blank, along with Bradley Tusk, Uber's first head of policy, and Evan Burfield, author of Regulatory Hacking, discussed how some of the most exciting unicorns of the last 10 years have been launched in heavily regulated markets—and why they think that trend will only accelerate. > ... > Tusk—who'd made a career in New York politics working for Chuck Schumer and Michael Bloomberg—was experienced with these regulators. He leveraged his knowledge of NYC politics, along with Uber's massive user base, in what he gleefully described as “a vicious f$&@ing campaign” to flip the city council and halt regulation blocking Uber.

kodablah 8y ago

Why can't the rate requirements be consistent city-wide and still have similar effect? Or, if the concern is really a flooded supply, have an incubation period that doesn't favor incumbents? Surely it's clear that a law favoring the more popular company based on demand alone is actually worse for drivers and consumers by reducing choice for both of them.