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I always wonder how it is "exploitation" of drivers to bring them customers and pay them at a loss, thanks to venture capital. Can you explain this to me?

b_tterc_p 7y ago
Let’s imagine a slave cotton plantation was unprofitable due to poor weather, some burglary, and other external factors. Is the cotton plantation not exploiting the slaves? The final profit margin has nothing to do with the concept of exploitation.
- el_dev_hell 7y ago
  > Let’s imagine a slave cotton plantation was unprofitable due to poor weather, some burglary, and other external factors. Is the cotton plantation not exploiting the slaves? You don't see the glaring differences between a slave on a cotton plantation and an Uber driver?
  - scarejunba 7y ago
    The original argument has two independent parts: 1. Access to customer base 2. Subsidizing the service provider over market rates You're responding to an argument that is claiming that the second thing is irrelevant to the conclusion. i.e. whether or not you are subsidizing the service provider at a loss is irrelevant for the exploitation value. The exploitation is coming from elsewhere, and the subsidizing doesn't do anything about it. I, personally, don't think they are being exploited but I agree that the subsidy doesn't remove exploitation if it did exist.
    - b_tterc_p 7y ago
      Yes this is what I meant. Slavery is a convenient example where exploitation is obviously occurring but could still encounter the same loss as the parent had claimed was proof of no exploitation.
save_ferris 7y ago
Because once rideshare companies corner specific markets, they're no longer incentivized to keep paying drivers competitive rates. A few years ago, Uber and Lyft left Austin, which in turn created a local, non-profit MVP rideshare app called RideAustin that worked OK. It wasn't perfect, but it covered the bare necessities of ridesharing fairly well. The drivers I spoke with were pretty happy with RideAustin because they made more money than they had been using Uber and Lyft since RideAustin took a smaller cut. When Uber and Lyft returned, they enticed drivers with rates that RideAustin couldn't keep up with. Within a few weeks, it became a lot harder to hail a ride through their app. And within a month, I couldn't get a ride consistently from my apartment in north Austin. If I wanted to get a ride, it had to be through Uber or Lyft. Once they regained the market, they cut the rates to drivers, who have no rights to negotiate pricing since they're contractors. Rideshare drivers are essentially a captive labor force that must accept all conditions to work without really any say over what they're paid.
- gridlockd 7y ago
  Wait, you didn't finish the story. Now that RideAustin is once again (presumably) paying the better rates, why don't the drivers just switch back? Did RideAustin go out of business? > Rideshare drivers are essentially a captive labor force that must accept all conditions to work without really any say over what they're paid. They clearly aren't "captive", otherwise they couldn't have just switched to RideAustin in the first place. Nothing stops them from becoming completely independent drivers either, but then they need to find their own customers. In the end, they are getting paid market rates. Maybe those rates are really bad, but that's just what happens when supply is far larger than demand. Prices are always driven down by the people at the bottom, how can Uber/Lyft be faulted for that?
  - mattzito 7y ago
    Except that the market effects of Uber/Lyft’s network, coupled with their cash reserves, allows them to potentially distort the free market in such a way that they can push out the competition until they have a dominant position, and then it’s no longer a free market economy. As far as what happened to RideAustin, from last year: > Uber and Lyft's brand recognition, as well as discounts the companies were offering when they returned to Austin, made it difficult to compete, RideAustin's Tryba said.
tomjakubowski 7y ago
This counter argument is silly. Paying workers at a loss doesn't make it not exploitative. If the customer is charged $1 per unit and the employer pays workers (at an obvious loss) $2 per unit sold, that still says nothing about the worker's conditions, just that the company is subsidizing its losses somehow.
- gridlockd 7y ago
  It's not "a counter-argument". It's a question. You didn't answer the question.

b_tterc_p 7y ago

Let’s imagine a slave cotton plantation was unprofitable due to poor weather, some burglary, and other external factors. Is the cotton plantation not exploiting the slaves? The final profit margin has nothing to do with the concept of exploitation.

el_dev_hell 7y ago
> Let’s imagine a slave cotton plantation was unprofitable due to poor weather, some burglary, and other external factors. Is the cotton plantation not exploiting the slaves? You don't see the glaring differences between a slave on a cotton plantation and an Uber driver?
- scarejunba 7y ago
  The original argument has two independent parts: 1. Access to customer base 2. Subsidizing the service provider over market rates You're responding to an argument that is claiming that the second thing is irrelevant to the conclusion. i.e. whether or not you are subsidizing the service provider at a loss is irrelevant for the exploitation value. The exploitation is coming from elsewhere, and the subsidizing doesn't do anything about it. I, personally, don't think they are being exploited but I agree that the subsidy doesn't remove exploitation if it did exist.
  - b_tterc_p 7y ago
    Yes this is what I meant. Slavery is a convenient example where exploitation is obviously occurring but could still encounter the same loss as the parent had claimed was proof of no exploitation.

save_ferris 7y ago

Because once rideshare companies corner specific markets, they're no longer incentivized to keep paying drivers competitive rates. A few years ago, Uber and Lyft left Austin, which in turn created a local, non-profit MVP rideshare app called RideAustin that worked OK. It wasn't perfect, but it covered the bare necessities of ridesharing fairly well. The drivers I spoke with were pretty happy with RideAustin because they made more money than they had been using Uber and Lyft since RideAustin took a smaller cut. When Uber and Lyft returned, they enticed drivers with rates that RideAustin couldn't keep up with. Within a few weeks, it became a lot harder to hail a ride through their app. And within a month, I couldn't get a ride consistently from my apartment in north Austin. If I wanted to get a ride, it had to be through Uber or Lyft. Once they regained the market, they cut the rates to drivers, who have no rights to negotiate pricing since they're contractors. Rideshare drivers are essentially a captive labor force that must accept all conditions to work without really any say over what they're paid.

gridlockd 7y ago
Wait, you didn't finish the story. Now that RideAustin is once again (presumably) paying the better rates, why don't the drivers just switch back? Did RideAustin go out of business? > Rideshare drivers are essentially a captive labor force that must accept all conditions to work without really any say over what they're paid. They clearly aren't "captive", otherwise they couldn't have just switched to RideAustin in the first place. Nothing stops them from becoming completely independent drivers either, but then they need to find their own customers. In the end, they are getting paid market rates. Maybe those rates are really bad, but that's just what happens when supply is far larger than demand. Prices are always driven down by the people at the bottom, how can Uber/Lyft be faulted for that?
- mattzito 7y ago
  Except that the market effects of Uber/Lyft’s network, coupled with their cash reserves, allows them to potentially distort the free market in such a way that they can push out the competition until they have a dominant position, and then it’s no longer a free market economy. As far as what happened to RideAustin, from last year: > Uber and Lyft's brand recognition, as well as discounts the companies were offering when they returned to Austin, made it difficult to compete, RideAustin's Tryba said.

tomjakubowski 7y ago

This counter argument is silly. Paying workers at a loss doesn't make it not exploitative. If the customer is charged $1 per unit and the employer pays workers (at an obvious loss) $2 per unit sold, that still says nothing about the worker's conditions, just that the company is subsidizing its losses somehow.

gridlockd 7y ago
It's not "a counter-argument". It's a question. You didn't answer the question.