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The whole idea of "unemployment insurance" for an Uber driver is not compatible with their business model. This isn't a factory where workers come in at 9 and l

The whole idea of "unemployment insurance" for an Uber driver is not compatible with their business model. This isn't a factory where workers come in at 9 and leave at 5 and you either have a job or you don't. Uber drivers set their own hours. What would unemployment insurance for an Uber or Lyft driver look like? If you get less than X rides per hour you get unemployment insurance? Regardless, let me make this simpler because we seem to be getting lost on tangents. Each Uber driver bring in $X revenue per hour. For each Uber driver there are $Y hourly expenses (almost certainly dominated by the drivers' wages). So for every hour of work each Uber driver generates $X - $Y dollars for Uber. But that's not the whole situation. Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and each driver has a $50 a week overhead cost. So Uber drivers have to drive for 10 hours a week to make even. Benefits almost always take the form of overhead costs. So now lets say these overhead costs go up from $50 a week to $150 a week. Now each driver needs to drive for at least 30 hours a week to break even. Uber now has a strong incentive to get rid of the drivers working less than that amount because they're costing the company more in expenses than they're bringing in. Money doesn't appear out of nowhere. If Uber drivers are getting more benefits, then that costs money and that money needs to come from somewhere. It's either going to be lower pay, less flexible hours, or something we're not thinking of. There's no having your cake and eating it too.

inferiorhuman 7y ago
Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and each driver has a $50 a week overhead cost. So Uber drivers have to drive for 10 hours a week to make even. No, you're talking about Uber breaking even — not the drivers. If you're worried about the drivers, how much does their individual health insurance cost versus a group plan for a large company like Uber? How about the rates they'd get with an IRA versus a 401k that only a W2 employee is eligible for? The employee's share of the costs go down when they are classified as an employee and not an individual contractor. You're conflating the costs of driving for Uber (most of which Uber has shifted to their pseudo-employees) with the costs to run Uber. Uber itself loses money on every ride, it's entirely subsidized with VC money. That's why their stated goal is to develop autonomous vehicles and dump the drivers ASAP.
cycomanic 7y ago
Why should I as a taxpayer (mind you I am not American, argument still holds though) subsidise ubers business practices? Because that is exactly what you are arguing for. The article clearly states, that uber is extwrnalising costs, which results in significant losses for the state. Somebody will have to pick up the tap, and your argument seems to be that regular taxpayers should do it.
- tomohawk 7y ago
  You are aware that we are all subsidizing the money losing operations of the state all the time? Pretty much anything the state does is assumed to be a money losing proposition. Is it right for the state to externalize its costs on business? If I'm an independent contractor, then it is my responsibility to get insurance, etc. It is my responsibility to make sure I'm taking in enough money to cover that stuff. So, the state is going after the wrong entity here.
  - cheerlessbog 7y ago
    > money losing proposition. You are defining money losing as not funded by selling goods and services. Most accountants would define it as costs exceeding revenue.
- CydeWeys 7y ago
  I am an American, and I think we should switch to the model that is successful in many other high standard of living countries, namely, decoupling benefits from employers entirely and offering them without qualifications to all Americans. Healthcare, unemployment, retirement accounts, disability insurance, etc., should not come from your employer at all. All you should be getting from your employer is your salary. This neatly solves the Uber problem too, as full-time/part-time/contractor becomes a near-meaningless distinction. All of them just end up earning money for work done, with the only difference being whether you choose your hours or are given regular working hours, and if you're paid by the hour or by the week.

inferiorhuman 7y ago

Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and each driver has a $50 a week overhead cost. So Uber drivers have to drive for 10 hours a week to make even. No, you're talking about Uber breaking even — not the drivers. If you're worried about the drivers, how much does their individual health insurance cost versus a group plan for a large company like Uber? How about the rates they'd get with an IRA versus a 401k that only a W2 employee is eligible for? The employee's share of the costs go down when they are classified as an employee and not an individual contractor. You're conflating the costs of driving for Uber (most of which Uber has shifted to their pseudo-employees) with the costs to run Uber. Uber itself loses money on every ride, it's entirely subsidized with VC money. That's why their stated goal is to develop autonomous vehicles and dump the drivers ASAP.

cycomanic 7y ago

Why should I as a taxpayer (mind you I am not American, argument still holds though) subsidise ubers business practices? Because that is exactly what you are arguing for. The article clearly states, that uber is extwrnalising costs, which results in significant losses for the state. Somebody will have to pick up the tap, and your argument seems to be that regular taxpayers should do it.

tomohawk 7y ago
You are aware that we are all subsidizing the money losing operations of the state all the time? Pretty much anything the state does is assumed to be a money losing proposition. Is it right for the state to externalize its costs on business? If I'm an independent contractor, then it is my responsibility to get insurance, etc. It is my responsibility to make sure I'm taking in enough money to cover that stuff. So, the state is going after the wrong entity here.
- cheerlessbog 7y ago
  > money losing proposition. You are defining money losing as not funded by selling goods and services. Most accountants would define it as costs exceeding revenue.
CydeWeys 7y ago
I am an American, and I think we should switch to the model that is successful in many other high standard of living countries, namely, decoupling benefits from employers entirely and offering them without qualifications to all Americans. Healthcare, unemployment, retirement accounts, disability insurance, etc., should not come from your employer at all. All you should be getting from your employer is your salary. This neatly solves the Uber problem too, as full-time/part-time/contractor becomes a near-meaningless distinction. All of them just end up earning money for work done, with the only difference being whether you choose your hours or are given regular working hours, and if you're paid by the hour or by the week.