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A lot of drivers are acting irrationally (in the economic sense). The number of miles you put on driving for a car service will almost certainly be consequentia

A lot of drivers are acting irrationally (in the economic sense). The number of miles you put on driving for a car service will almost certainly be consequential to your car’s service life, if you are making any money at it. But, new drivers see cash in their bank account every week, and it’s hard to link that to having to splash out $25k for a new car down the road. I expect a lot of these drivers will bow out when their current cars become too old or damaged to keep driving for hire, since they won’t actually have saved enough money for a replacement. Having people who don’t understand how to calculate their costs in the market drives down wages for everyone.

tyopiuy 7y ago
Not exactly. This theory applies steady state analysis to a transient problem. Those drivers need money now. And are willing to trade off miles for money, in some sense. They are able to leverage their time and mileage to get income, which they might not otherwise have. They may already have invested in buying the car so that is a sunk cost. In some sense they are just extracting the value of the car combined with their time and some minor profit which is their opportunity cost. The theory also fails to account for the extra utility they drive from earning the cash, which may offset any costs incurred by spiraling downwards mood from financial stress, unemployment, or even the regret of buying a car which they are having trouble paying off. Also they get to still use the car in the meantime, offsetting transportation costs and most importantly, saving them time and extending their ability to acquire other jobs or new opportunity such as education, driving to visit friends and family, etc.
- deleted 7y ago
  [deleted]
- imtringued 7y ago
  What exactly are you disagreeing with? The comment you're replying to basically says: "it is unsustainable in the long term" and your response is basically: "it is sustainable in the short term" which is effectively equivalent.
  - tyopiuy 7y ago
    I think my comment explains that. Think about it a little more
lugg 7y ago
> Having people who don’t understand how to calculate their costs in the market drives down wages for everyone. Yup, this was my point! :)

tyopiuy 7y ago

Not exactly. This theory applies steady state analysis to a transient problem. Those drivers need money now. And are willing to trade off miles for money, in some sense. They are able to leverage their time and mileage to get income, which they might not otherwise have. They may already have invested in buying the car so that is a sunk cost. In some sense they are just extracting the value of the car combined with their time and some minor profit which is their opportunity cost. The theory also fails to account for the extra utility they drive from earning the cash, which may offset any costs incurred by spiraling downwards mood from financial stress, unemployment, or even the regret of buying a car which they are having trouble paying off. Also they get to still use the car in the meantime, offsetting transportation costs and most importantly, saving them time and extending their ability to acquire other jobs or new opportunity such as education, driving to visit friends and family, etc.

deleted 7y ago
[deleted]
imtringued 7y ago
What exactly are you disagreeing with? The comment you're replying to basically says: "it is unsustainable in the long term" and your response is basically: "it is sustainable in the short term" which is effectively equivalent.
- tyopiuy 7y ago
  I think my comment explains that. Think about it a little more

lugg 7y ago

> Having people who don’t understand how to calculate their costs in the market drives down wages for everyone. Yup, this was my point! :)