8 ms·

Uber drivers are fighting the wrong fight in this case. They should focus on fighting for a minimum wage that accounts for expenses. Uber's edge is not their te

Uber drivers are fighting the wrong fight in this case. They should focus on fighting for a minimum wage that accounts for expenses. Uber's edge is not their technology, their edge is the ability to burn billion dollars a quarter subsidizing rides. Uber is masking customer demand and this sort of behavior is anticompetitive and should not be allowed in an industry as critical as transportation. Case in point, when Uber/Lyft was forced to pay their drivers a minimum wage that accounted for expenses, Uber and Lyft stopped accepting new drivers in New York City. They were force to act according to true supply and demand. Link: https://www.theverge.com/2019/4/29/18522885/uber-lyft-not-accepting-new-drivers-nyc-rules-supply-demand https://www.theverge.com/2019/4/29/18522885/uber-lyft-not-ac...

ralusek 7y ago
What do you mean "true" supply and demand? What was happening before was true supply and demand. They offered a rate, people were capable of consenting to the terms while accounting for expenses, and they did. Then an intermediary stepped between the consenting transactors and told them that they could no longer accept those terms, and now those transactions can no longer transpire, regardless of whether or not both parties would like to engage. How is that true supply and demand?
- romwell 7y ago
  >They offered a rate, people were capable of consenting to the terms while accounting for expenses See, on party here has a lot more data on said expenses, and all the incentives in the world to be misleading about them. The existing demand was not "true" under the reasonable assumption that nobody wants to work for less than minimum wage after expenses.
  - gridlockd 7y ago
    > The existing demand was not "true" under the reasonable assumption that nobody wants to work for less than minimum wage after expenses. That's an unreasonable assumption, especially when that "minimum wage" is 17$.
  - kgc 7y ago
    There are definitely people who are willing to work below minimum wage. It's actually quantifiable if you look at the workforce reduction after minimum wage hikes in locales.
    - speedplane 7y ago
      > There are definitely people who are willing to work below minimum wage. Yes, and there are also people willing to work in unsafe conditions, work in illegal industries, and trade with the country's enemies. The "free market", as implemented almost anywhere, has never been synonymous with trading with whoever you want on whatever terms.
    - learc83 7y ago
      It's not that simple. No one can agree if a given minimum wage increase results in a workforce reduction, and if it does by how much. There is no consensus here, which probably means at the minimum wage increases we've seen, the effect is negligible.
      - magicalhippo 7y ago
        > No one can agree if a given minimum wage increase results in a workforce reduction, and if it does by how much. It's certainly not a nice analytic function, but clearly the higher the minimum wage, the fewer jobs make economic sense. If I could pay someone a couple of bucks a day to open and close my garage door, I could afford that. But the minimum wage is far beyond that, so I got an electric door opener instead.
        learc83 7y ago
        There are 2nd order effects though. Higher minimum wage has a direct impact on the income velocity of money because it tends to move money towards lower income workers, who spend money faster. This effect can actually result in more jobs overall.
        magicalhippo 7y ago
  - orangecat 7y ago
    The existing demand was not "true" under the reasonable assumption that nobody wants to work for less than minimum wage after expenses. "Want" is a complicated term in this context, but there are plenty of non-gig employees earning minimum wage or above, but less than minimum wage after subtracting expenses like commuting.
- teej 7y ago
  > They offered a rate Uber offered a rate that was subsidized by investors. That is not true supply and demand.
  - povertyworld 7y ago
    Isn't moving the demand curve by burning capital still a matter of supply and demand?
    - kortilla 7y ago
      Yes. Supply and demand curves capture all of these things. Subsidies just increase the supply at the lower prices on the curve.
- inkaudio 7y ago
  When you charge far less than the actual cost of service you're going to get demand that does not reflect the actual market, hence not true "true" supply and demand. If I was selling dollar bills for 50 cents I would sell a lot of dollars bills. We've seen this before it's called Groupon. A key difference between Uber and Groupon is there are more drivers to con then there are businesses. Uber is losing billions dollars subsidizing rides, that is not a legitimate market. This is a farce to sell a growth story to raise capital and allow early investors to make huge gains, again see Groupon. Uber was saying drivers could make 90k a year back in 2014 see: https://www.businessinsider.com/uber-drivers-salary-90000-2014-5?r=US&IR=T https://www.businessinsider.com/uber-drivers-salary-90000-20... Which lead to this https://www.vox.com/2017/2/28/14766964/video-uber-travis-kalanick-driver-argument https://www.vox.com/2017/2/28/14766964/video-uber-travis-kal...
  - gridlockd 7y ago
    Even then, having the city of New York set the price according to "utilization" isn't supply and demand either. It's price fixing.
    - blub 7y ago
      One man's price fixing is another's correction of socially harmful behavior. The free market will almost always devolve into worker exploitation unless there are rules.
      - ehnto 7y ago
        It was a bad measure to try and solve the problem of Uber fixing it's own prices in order to create the current market dynamic. The cost of an uber ride AND the drivers wage are both subsidized by Ubers losses. If they didn't do that rates would go up necessarily. The Uber we know now simply can't exist forever, New York tried a bad way to illuminate the real price of the service so that the rest of the driving industry had a level playing field.
        blub 7y ago
gridlockd 7y ago
> Uber drivers are fighting the wrong fight in this case. They should focus on fighting for a minimum wage that accounts for expenses. Since they are not employees, they don't get a wage, so minimum wage laws don't apply. > Case in point, when Uber/Lyft was forced to pay their drivers a minimum wage that accounted for expenses, Uber and Lyft stopped accepting new drivers in New York City. They were force to act according to true supply and demand. This was the result of the city of New York deciding, on behalf of the taxi lobby, that there were too many Ubers on the street, so they fixed the supply to make the average pay add up to 17$/hour (which is not a minimum wage either). Real supply of drivers was higher than that, people that wanted to drive at lower price were effectively prohibited from entering the market.
sdegutis 7y ago
What if instead our society reeled globalization back in a little, and we lived in smaller, closer, local communities? I live in a rural-ish area, and any time I get on the interstate, especially during the workweek, I can't help but wonder how much those people's lives would be improved if everything was in walking or bicycling distance, how much more time they would have to give to their families or their interests or even their daily needs. Maybe it's not possible for most people due to unfortunate situations society has created. But didn't we do this to ourselves?
- gridlockd 7y ago
  How exactly does globalization play a role here? Limousine services are one of the least affected services you can imagine, you can't outsource virtually all of that labor, perhaps with the exception of customer service. To answer your question: A "rural life" in a "tight-knit community" would be a horror scenario for me. To each their own.
- baddox 7y ago
  I don't quite understand the connection to globalization or more rural communities. Urban cities, of course, generally offer the best walkability simply because of population density. In my experience in the United States, suburban communities and small towns are most literally unwalkable due to the design of the road network. In rural areas generally it's not feasible to walk simply because your place of work, grocery store, etc. are many miles away.
  - francisofascii 7y ago
    Before globalization, rural communities had walkable towns, maybe just a few blocks, but enough stores to fulfill daily needs without the use of a car. Now all those communities have is big box stores several miles away.
    - ionised 7y ago
      That's not true about the United States. The entire US road network has been designed with cars in mind since at least the turn of the 20th century.
cypherpunks01 7y ago
I don't think the "right" fight is city-by-city patchwork legislation to require that rideshare drivers be paid a living wage. This does not fix the issue for all workers across the country (and probably doesn't need to be said that 1099s are not entitled to a minimum wage), neither does it fix the problem when the next industry crops up hiring workers considered independent contractors performing work under conditions much more similar to employees.
standardUser 7y ago
It's not clear to me how much the core Uber/Lyft business model needs to be subsidized to be sustainable. At this point, an Uber isn't any cheaper than a taxi is most cases. With surge pricing, it's often far more expensive.
- paxys 7y ago
  Not sure where you are getting your data from. They are still cheaper and more reliable than taxis pretty much everywhere.
  - standardUser 7y ago
    I am getting my data from paying for taxis, Ubers and Lyfts on a regular basis. Of course rideshares are more reliable - and better across pretty much every possible metric! - but they are no longer cheaper across the board in the metro areas I have used them. Sometimes they are cheaper, sometimes they cost more, and in both cases we are now expected to tip.
    - Jommi 7y ago
      So you're basing this on experiences in a city in the US? Do you know how many cities Uber operates in?
- JumpCrisscross 7y ago
  > an Uber isn't any cheaper than a taxi is most cases They’re more reliable in more areas. If I lose something, I’ll get it back. The drivers are less likely to be on their phone, and if they are, it takes less effort to get compensated. (Also, pools are cheaper than taxis.) With most taxi medallions owned by companies as, if not more, abusive than Uber, a congestion charge appears to be the best solution. This would lower supply evenly, letting prices be raised and thus creating room for compensation (and competition for drivers).
- deleted 7y ago
  [deleted]
kortilla 7y ago
I don’t think you understand supply and demand. Forcing Uber to pay a non-market price for a service is pretty much the opposite of “true supply and demand”.
- astrange 7y ago
  The supply curve doesn't have to be rational, it just exists.

ralusek 7y ago

What do you mean "true" supply and demand? What was happening before was true supply and demand. They offered a rate, people were capable of consenting to the terms while accounting for expenses, and they did. Then an intermediary stepped between the consenting transactors and told them that they could no longer accept those terms, and now those transactions can no longer transpire, regardless of whether or not both parties would like to engage. How is that true supply and demand?

romwell 7y ago
>They offered a rate, people were capable of consenting to the terms while accounting for expenses See, on party here has a lot more data on said expenses, and all the incentives in the world to be misleading about them. The existing demand was not "true" under the reasonable assumption that nobody wants to work for less than minimum wage after expenses.
- gridlockd 7y ago
  > The existing demand was not "true" under the reasonable assumption that nobody wants to work for less than minimum wage after expenses. That's an unreasonable assumption, especially when that "minimum wage" is 17$.
- kgc 7y ago
  There are definitely people who are willing to work below minimum wage. It's actually quantifiable if you look at the workforce reduction after minimum wage hikes in locales.
  - speedplane 7y ago
    > There are definitely people who are willing to work below minimum wage. Yes, and there are also people willing to work in unsafe conditions, work in illegal industries, and trade with the country's enemies. The "free market", as implemented almost anywhere, has never been synonymous with trading with whoever you want on whatever terms.
  - learc83 7y ago
    It's not that simple. No one can agree if a given minimum wage increase results in a workforce reduction, and if it does by how much. There is no consensus here, which probably means at the minimum wage increases we've seen, the effect is negligible.
    - magicalhippo 7y ago
      > No one can agree if a given minimum wage increase results in a workforce reduction, and if it does by how much. It's certainly not a nice analytic function, but clearly the higher the minimum wage, the fewer jobs make economic sense. If I could pay someone a couple of bucks a day to open and close my garage door, I could afford that. But the minimum wage is far beyond that, so I got an electric door opener instead.
      - learc83 7y ago
        There are 2nd order effects though. Higher minimum wage has a direct impact on the income velocity of money because it tends to move money towards lower income workers, who spend money faster. This effect can actually result in more jobs overall.
        magicalhippo 7y ago
- orangecat 7y ago
  The existing demand was not "true" under the reasonable assumption that nobody wants to work for less than minimum wage after expenses. "Want" is a complicated term in this context, but there are plenty of non-gig employees earning minimum wage or above, but less than minimum wage after subtracting expenses like commuting.
teej 7y ago
> They offered a rate Uber offered a rate that was subsidized by investors. That is not true supply and demand.
- povertyworld 7y ago
  Isn't moving the demand curve by burning capital still a matter of supply and demand?
  - kortilla 7y ago
    Yes. Supply and demand curves capture all of these things. Subsidies just increase the supply at the lower prices on the curve.
inkaudio 7y ago
When you charge far less than the actual cost of service you're going to get demand that does not reflect the actual market, hence not true "true" supply and demand. If I was selling dollar bills for 50 cents I would sell a lot of dollars bills. We've seen this before it's called Groupon. A key difference between Uber and Groupon is there are more drivers to con then there are businesses. Uber is losing billions dollars subsidizing rides, that is not a legitimate market. This is a farce to sell a growth story to raise capital and allow early investors to make huge gains, again see Groupon. Uber was saying drivers could make 90k a year back in 2014 see: https://www.businessinsider.com/uber-drivers-salary-90000-2014-5?r=US&IR=T https://www.businessinsider.com/uber-drivers-salary-90000-20... Which lead to this https://www.vox.com/2017/2/28/14766964/video-uber-travis-kalanick-driver-argument https://www.vox.com/2017/2/28/14766964/video-uber-travis-kal...
- gridlockd 7y ago
  Even then, having the city of New York set the price according to "utilization" isn't supply and demand either. It's price fixing.
  - blub 7y ago
    One man's price fixing is another's correction of socially harmful behavior. The free market will almost always devolve into worker exploitation unless there are rules.
    - ehnto 7y ago
      It was a bad measure to try and solve the problem of Uber fixing it's own prices in order to create the current market dynamic. The cost of an uber ride AND the drivers wage are both subsidized by Ubers losses. If they didn't do that rates would go up necessarily. The Uber we know now simply can't exist forever, New York tried a bad way to illuminate the real price of the service so that the rest of the driving industry had a level playing field.
      - blub 7y ago

gridlockd 7y ago

> Uber drivers are fighting the wrong fight in this case. They should focus on fighting for a minimum wage that accounts for expenses. Since they are not employees, they don't get a wage, so minimum wage laws don't apply. > Case in point, when Uber/Lyft was forced to pay their drivers a minimum wage that accounted for expenses, Uber and Lyft stopped accepting new drivers in New York City. They were force to act according to true supply and demand. This was the result of the city of New York deciding, on behalf of the taxi lobby, that there were too many Ubers on the street, so they fixed the supply to make the average pay add up to 17$/hour (which is not a minimum wage either). Real supply of drivers was higher than that, people that wanted to drive at lower price were effectively prohibited from entering the market.

sdegutis 7y ago

What if instead our society reeled globalization back in a little, and we lived in smaller, closer, local communities? I live in a rural-ish area, and any time I get on the interstate, especially during the workweek, I can't help but wonder how much those people's lives would be improved if everything was in walking or bicycling distance, how much more time they would have to give to their families or their interests or even their daily needs. Maybe it's not possible for most people due to unfortunate situations society has created. But didn't we do this to ourselves?

gridlockd 7y ago
How exactly does globalization play a role here? Limousine services are one of the least affected services you can imagine, you can't outsource virtually all of that labor, perhaps with the exception of customer service. To answer your question: A "rural life" in a "tight-knit community" would be a horror scenario for me. To each their own.
baddox 7y ago
I don't quite understand the connection to globalization or more rural communities. Urban cities, of course, generally offer the best walkability simply because of population density. In my experience in the United States, suburban communities and small towns are most literally unwalkable due to the design of the road network. In rural areas generally it's not feasible to walk simply because your place of work, grocery store, etc. are many miles away.
- francisofascii 7y ago
  Before globalization, rural communities had walkable towns, maybe just a few blocks, but enough stores to fulfill daily needs without the use of a car. Now all those communities have is big box stores several miles away.
  - ionised 7y ago
    That's not true about the United States. The entire US road network has been designed with cars in mind since at least the turn of the 20th century.

cypherpunks01 7y ago

I don't think the "right" fight is city-by-city patchwork legislation to require that rideshare drivers be paid a living wage. This does not fix the issue for all workers across the country (and probably doesn't need to be said that 1099s are not entitled to a minimum wage), neither does it fix the problem when the next industry crops up hiring workers considered independent contractors performing work under conditions much more similar to employees.

standardUser 7y ago

It's not clear to me how much the core Uber/Lyft business model needs to be subsidized to be sustainable. At this point, an Uber isn't any cheaper than a taxi is most cases. With surge pricing, it's often far more expensive.

paxys 7y ago
Not sure where you are getting your data from. They are still cheaper and more reliable than taxis pretty much everywhere.
- standardUser 7y ago
  I am getting my data from paying for taxis, Ubers and Lyfts on a regular basis. Of course rideshares are more reliable - and better across pretty much every possible metric! - but they are no longer cheaper across the board in the metro areas I have used them. Sometimes they are cheaper, sometimes they cost more, and in both cases we are now expected to tip.
  - Jommi 7y ago
    So you're basing this on experiences in a city in the US? Do you know how many cities Uber operates in?
JumpCrisscross 7y ago
> an Uber isn't any cheaper than a taxi is most cases They’re more reliable in more areas. If I lose something, I’ll get it back. The drivers are less likely to be on their phone, and if they are, it takes less effort to get compensated. (Also, pools are cheaper than taxis.) With most taxi medallions owned by companies as, if not more, abusive than Uber, a congestion charge appears to be the best solution. This would lower supply evenly, letting prices be raised and thus creating room for compensation (and competition for drivers).
deleted 7y ago
[deleted]

kortilla 7y ago

I don’t think you understand supply and demand. Forcing Uber to pay a non-market price for a service is pretty much the opposite of “true supply and demand”.

astrange 7y ago
The supply curve doesn't have to be rational, it just exists.