7 ms·

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 t

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
        If they buy more things, then surely it depends highly on where those things are produced though. Of course it'll mean a bit more jobs in the retail sector, but with most being online, won't the primary increase be at the production end? If it allows more people to buy iPhones then most of the jobs created by that is made in China, which doesn't help local economy much.
        learc83 7y ago
        Online sales are only projected to account for about 12% of retail in 2020, and retail is only a small percentage of the overall economy. >If it allows more people to buy iPhones then most of the jobs created by that is made in China Only a small part of the value of an iPhone is captured by China. Not much of it goes to the local economy either, but luxury electronics are also a small fraction of the economy. Dining out, groceries, retail, housing, transportation, entertainment, travel, child care, home repair, cell phone repair, medical care etc... the local economy captures a large percentage of all of those.
  - romwell 7y ago
    >It's actually quantifiable if you look at the workforce reduction after minimum wage hikes in locales. People definitely are willing to work below minimum wage; that's exactly why we need minimum wage!
    - deleted 7y ago
      [deleted]
- 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

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
        If they buy more things, then surely it depends highly on where those things are produced though. Of course it'll mean a bit more jobs in the retail sector, but with most being online, won't the primary increase be at the production end? If it allows more people to buy iPhones then most of the jobs created by that is made in China, which doesn't help local economy much.
        learc83 7y ago
        Online sales are only projected to account for about 12% of retail in 2020, and retail is only a small percentage of the overall economy. >If it allows more people to buy iPhones then most of the jobs created by that is made in China Only a small part of the value of an iPhone is captured by China. Not much of it goes to the local economy either, but luxury electronics are also a small fraction of the economy. Dining out, groceries, retail, housing, transportation, entertainment, travel, child care, home repair, cell phone repair, medical care etc... the local economy captures a large percentage of all of those.
- romwell 7y ago
  >It's actually quantifiable if you look at the workforce reduction after minimum wage hikes in locales. People definitely are willing to work below minimum wage; that's exactly why we need minimum wage!
  - deleted 7y ago
    [deleted]
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