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How can you say that Lyft is "stiffing" the drivers when they lose money on every ride? Where is the extra money for the drivers supposed to come from? Every pa

How can you say that Lyft is "stiffing" the drivers when they lose money on every ride? Where is the extra money for the drivers supposed to come from? Every passenger has the opportunity to tip if they want: would you also say that restauranteurs are stiffing the waitstaff?

ummonk 7y ago
Well restaurants do stiff the waitstaff by paying them less than minimum wage, but that doesn’t really apply here. Only would apply to Instacart.
- Spooky23 7y ago
  No. If they do that they are breaking the law. Minimum wage is the floor. If tips don’t bring your cash wage up to minimum, the employee has to get paid.
  - ummonk 7y ago
    Yes, but that is the point. The restaurant doesn’t pay minimum wage, instead using tips to make up the difference.
  - michaelmrose 7y ago
    I thought Instacart was purportedly paying minimum wage and taking employee tips for themselves so long as the total paid was at least min wage.
britch 7y ago
It's possible to pay out an unfairly low wage with money you don't have. I'm not saying that's the case with Lyft, but just because you're operating at a loss doesn't mean you're paying people fairly for their work.
- malandrew 7y ago
  Define unfair. How can we objectively determine what would be a fair wage for that work?
  - prewett 7y ago
    Minimum wage after all expenses (including depreciation) are subtracted seems like the absolute lowest wage that could be considered "fair". Or maybe whatever McDonald's/Walmart are paying in your area, since that is sometimes higher than minimum wage in urban markets.
    - malandrew 7y ago
      this is just punting on the question. how should minimum wage be determined?
      - britch 7y ago
        If you work 40+ hours a week you should be payed enough to support yourself and a child and live in or very nearby the city in which you work. This is not how the minimum wage works currently. This is not all Uber/Lyft's feet, it's a broader problem in the economy. I understand this is more complex than Uber flipping a "fair wages" switch.
  - Spooky23 7y ago
    If I hire a guy to paint my house for $100, and the paint costs $105, but the painter paid for it already, that’s objectively unfair.
    - malandrew 7y ago
      How does this help me in this different context? What's the litmus test that we can apply across opportunities to earn a wage?
    - pkaye 7y ago
      Why would the painter accept a job where they lose money?
username223 7y ago
> How can you say that Lyft is "stiffing" the drivers when they lose money on every ride? That's Lyft's problem, not the drivers'. They could always find more money by charging higher fares and maintaining a fleet of identical cars for drivers to rent, but then they'd just be a taxi company, not a "tech platform." If they want to keep offering VC-subsidized rides, that's fine by me. And when they run out, they can decide whether they want to stiff their drivers even more, or raise their fares. And yes, the American tipping system needs to die.
- gradys 7y ago
  > They could always find more money by charging higher fares... It's not clear that they'd actually end up with more money as a company or more money for drivers this way. I'd expect they could pay many fewer drivers somewhat more, but total payments to drivers would be much less.
neffy 7y ago
Lyft (and Uber) are essentially borrowing money long term, and selling rides at a less than market price short term. Some of the drivers are getting stiffed - many of them, did they but know it, are getting an income where otherwise there wouldn´t be one with higher prices. The trick is essentially that at the end, the loan (or the shares that replace it) goes into default(become worthless). This is an old, old game, and one that can be run for a few short years, before it all ends in tears, and "whocoodanode" (to coin an americanism). Let´s just hope there isn´t too much pension fund money tied up in all this.
jjeaff 7y ago
They aren't losing money on every ride. There is essentially no marginal cost for every new ride. Overall, they are losing money as a company. And if you divide that out by the number of rides, you can make it seem like they are losing money. So to think they couldn't be cheating drivers because of that is like saying we know Donald Trump never cheated anyone in business from 85-95 because he lost money for every year that decade.
Spooky23 7y ago
Waitstaff are employees, and aren't providing the chairs and plates. A waiter gets his ass in the restaurant and does stuff. That's it. Totally different situation. Drivers are subcontractors, and if they are looking at striking, that's a signal that their pay isn't sufficient. Ride sharing providers encourage their contractors to perform accept tasks in a way that resembles full-time employment, but the message they recruit with is that "you're making extra money with your car, which is "free"". It's a bad deal because they pay $0.85/mi, and operating the car costs around $0.58/mi (which is a lowball estimate for livery use, and $0.23 of that is depreciation). When you factor in additional wear and tear, brakes, etc, full time drivers probably have another $0.10 of expense. It's inherently exploitive, as Lyft subcontractors are working for cashflow and operating at a loss. Where the money comes from is Lyft's problem. They can cut operational overhead, raise prices, reduce R&D science projects, take measures to eliminate unprofitable routes, etc. The usual reply is "robot cars are coming and this goes away"! That's not really right either -- there are no sentient robots driving around looking to be exploited, so they will need to own or lease those assets, which will depreciate at something like $0.50-0.75/mi (your robot cab isn't going to be cheap), and they will need to manage, insure and maintain the assets, which isn't cheap either. Congrats to the folks who cash out. As amazing as ridesharing is, it's a fucked business.
michaelmrose 7y ago
Whether compensation is appropriate depends on the individual and their circumstances and costs. The employees situation depends on the perceived value of services rendered not the employers profitability.

ummonk 7y ago

Well restaurants do stiff the waitstaff by paying them less than minimum wage, but that doesn’t really apply here. Only would apply to Instacart.

Spooky23 7y ago
No. If they do that they are breaking the law. Minimum wage is the floor. If tips don’t bring your cash wage up to minimum, the employee has to get paid.
- ummonk 7y ago
  Yes, but that is the point. The restaurant doesn’t pay minimum wage, instead using tips to make up the difference.
- michaelmrose 7y ago
  I thought Instacart was purportedly paying minimum wage and taking employee tips for themselves so long as the total paid was at least min wage.

britch 7y ago

It's possible to pay out an unfairly low wage with money you don't have. I'm not saying that's the case with Lyft, but just because you're operating at a loss doesn't mean you're paying people fairly for their work.

malandrew 7y ago
Define unfair. How can we objectively determine what would be a fair wage for that work?
- prewett 7y ago
  Minimum wage after all expenses (including depreciation) are subtracted seems like the absolute lowest wage that could be considered "fair". Or maybe whatever McDonald's/Walmart are paying in your area, since that is sometimes higher than minimum wage in urban markets.
  - malandrew 7y ago
    this is just punting on the question. how should minimum wage be determined?
    - britch 7y ago
      If you work 40+ hours a week you should be payed enough to support yourself and a child and live in or very nearby the city in which you work. This is not how the minimum wage works currently. This is not all Uber/Lyft's feet, it's a broader problem in the economy. I understand this is more complex than Uber flipping a "fair wages" switch.
- Spooky23 7y ago
  If I hire a guy to paint my house for $100, and the paint costs $105, but the painter paid for it already, that’s objectively unfair.
  - malandrew 7y ago
    How does this help me in this different context? What's the litmus test that we can apply across opportunities to earn a wage?
  - pkaye 7y ago
    Why would the painter accept a job where they lose money?

username223 7y ago

> How can you say that Lyft is "stiffing" the drivers when they lose money on every ride? That's Lyft's problem, not the drivers'. They could always find more money by charging higher fares and maintaining a fleet of identical cars for drivers to rent, but then they'd just be a taxi company, not a "tech platform." If they want to keep offering VC-subsidized rides, that's fine by me. And when they run out, they can decide whether they want to stiff their drivers even more, or raise their fares. And yes, the American tipping system needs to die.

gradys 7y ago
> They could always find more money by charging higher fares... It's not clear that they'd actually end up with more money as a company or more money for drivers this way. I'd expect they could pay many fewer drivers somewhat more, but total payments to drivers would be much less.

neffy 7y ago

Lyft (and Uber) are essentially borrowing money long term, and selling rides at a less than market price short term. Some of the drivers are getting stiffed - many of them, did they but know it, are getting an income where otherwise there wouldn´t be one with higher prices. The trick is essentially that at the end, the loan (or the shares that replace it) goes into default(become worthless). This is an old, old game, and one that can be run for a few short years, before it all ends in tears, and "whocoodanode" (to coin an americanism). Let´s just hope there isn´t too much pension fund money tied up in all this.

jjeaff 7y ago

They aren't losing money on every ride. There is essentially no marginal cost for every new ride. Overall, they are losing money as a company. And if you divide that out by the number of rides, you can make it seem like they are losing money. So to think they couldn't be cheating drivers because of that is like saying we know Donald Trump never cheated anyone in business from 85-95 because he lost money for every year that decade.

Spooky23 7y ago

Waitstaff are employees, and aren't providing the chairs and plates. A waiter gets his ass in the restaurant and does stuff. That's it. Totally different situation. Drivers are subcontractors, and if they are looking at striking, that's a signal that their pay isn't sufficient. Ride sharing providers encourage their contractors to perform accept tasks in a way that resembles full-time employment, but the message they recruit with is that "you're making extra money with your car, which is "free"". It's a bad deal because they pay $0.85/mi, and operating the car costs around $0.58/mi (which is a lowball estimate for livery use, and $0.23 of that is depreciation). When you factor in additional wear and tear, brakes, etc, full time drivers probably have another $0.10 of expense. It's inherently exploitive, as Lyft subcontractors are working for cashflow and operating at a loss. Where the money comes from is Lyft's problem. They can cut operational overhead, raise prices, reduce R&D science projects, take measures to eliminate unprofitable routes, etc. The usual reply is "robot cars are coming and this goes away"! That's not really right either -- there are no sentient robots driving around looking to be exploited, so they will need to own or lease those assets, which will depreciate at something like $0.50-0.75/mi (your robot cab isn't going to be cheap), and they will need to manage, insure and maintain the assets, which isn't cheap either. Congrats to the folks who cash out. As amazing as ridesharing is, it's a fucked business.

michaelmrose 7y ago

Whether compensation is appropriate depends on the individual and their circumstances and costs. The employees situation depends on the perceived value of services rendered not the employers profitability.