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that they are effectively making less than minimum wage? That's the whole point of the gig economy: How to pay people to work without paying them minimum wage

by ramy_d 7y ago

that they are effectively making less than minimum wage? That's the whole point of the gig economy: How to pay people to work without paying them minimum wage by "disrupting labor laws".

napoleond 7y ago
Is that actually true, though? I've seen anecdotal reports from certain Uber drivers or whatnot, but I have not seen data. (It seems counterintuitive that such a huge amount of contractors would continue to choose that work over traditional employment in service jobs if it paid less.)
- sct202 7y ago
  Uber published a study with 2014 data here that says their drivers make ~$20/hr not including expenses which they estimate at like $3/hr https://drive.google.com/file/d/0B1s08BdVqCgrZWZkV0ZfZnhGUGc/ https://drive.google.com/file/d/0B1s08BdVqCgrZWZkV0ZfZnhGUGc... This MIT study says $8-10 after expenses https://www.npr.org/sections/thetwo-way/2018/03/07/591430857/researcher-says-criticism-is-valid-will-revise-study-finding-low-uber-and-lyft-p https://www.npr.org/sections/thetwo-way/2018/03/07/591430857... Plus given that drivers could be trying to drive when there's no demand, its very possible for people to earn below minimum wage.
  - Spooky23 7y ago
    That's a long time ago. They've cut the payment substantially since then. https://www.inquirer.com/news/uber-lyft-rideshare-drivers-philadelphia-pay-cut-ipo-public-stock-strike-20190410.html https://www.inquirer.com/news/uber-lyft-rideshare-drivers-ph...
  - cperciva 7y ago
    Plus given that drivers could be trying to drive when there's no demand, its very possible for people to earn below minimum wage. If you count every hour that people want to work regardless of whether their employer wants them to, there aren't many employers who pay minimum wage.
  - napoleond 7y ago
    Thanks!!
- jboy55 7y ago
  It could be that they're not factoring in the cost and maintenance of their vehicles because they foresee this as being a temporary period of their life. They're borrowing from the future cost of their cars. From my experiences with Gig workers, I used to work in the engineering part of an early one, there will be definitely a bi-modal distribution between full time and part time workers. There will be those that will only want to 'pay a bill' with the proceeds. There will also be those that buckle down and organize their lives/finances around it. For the former, it wouldn't surprise me that they're earning less than service jobs, all in. However, the freedom of choosing one's hours really is powerful for those looking for just a few extra hundred dollars, plus the emphermeral cost against one's vehicles is easy to overlook.
wpietri 7y ago
Definitely. A lot of current startup darlings are shifting costs traditionally borne by the business to the workers. Uber is exhibit A here. Taxi companies, for all their flaws, at least paid for, maintained, and took on most of the risk of the cars. With Uber, all of that is on people desperate enough to drive for Uber. This strikes me as woefully inefficient systemically; large organizations are much better placed to manage cost and amortize risk. Or you could look at the recent DoorDash tip theft controversy, one of many such blow-ups. Anand Giridhardas has a lively discussion of that here: https://twitter.com/AnandWrites/status/1153312792964935682 https://twitter.com/AnandWrites/status/1153312792964935682
gpapilion 7y ago
I feel this is a little too cynical. For example, maybe I want to make extra money but don't want to be tied to a shift. This type of flexibility is amazing for lots of people. It's very appealing if you need extra money, and have a lot of time. Unfortunately, this aligned in an economic cycle where people needed work, and undervalued their value as workers(and for sometime bonuses, and gamification made this type of work very profitable i.e. 4k a week driving uber in SF).
eridius 7y ago
The gig economy is more about having workers without giving them benefits and with making the workers shoulder the burden of shifting demand throughout the day. With food delivery you have the lunch rush and the dinner rush and outside of those windows your demand is a lot smaller. The gig economy means the company isn't on the hook for predicting or satisfying that demand; if there's too many workers for the demand, it's the workers who take the pay hit rather than the company. And if demand spikes unpredictably the company has an easy lever to push to get more workers out there (just notify workers of the spike, and surge pricing as needed to make the unplanned demand more attractive to the workers). So the gig economy is really just auto scaling applied to human resources instead of computing resources.

by ramy_d 7y ago

that they are effectively making less than minimum wage? That's the whole point of the gig economy: How to pay people to work without paying them minimum wage by "disrupting labor laws".

napoleond 7y ago

Is that actually true, though? I've seen anecdotal reports from certain Uber drivers or whatnot, but I have not seen data. (It seems counterintuitive that such a huge amount of contractors would continue to choose that work over traditional employment in service jobs if it paid less.)

sct202 7y ago
Uber published a study with 2014 data here that says their drivers make ~$20/hr not including expenses which they estimate at like $3/hr https://drive.google.com/file/d/0B1s08BdVqCgrZWZkV0ZfZnhGUGc/ https://drive.google.com/file/d/0B1s08BdVqCgrZWZkV0ZfZnhGUGc... This MIT study says $8-10 after expenses https://www.npr.org/sections/thetwo-way/2018/03/07/591430857/researcher-says-criticism-is-valid-will-revise-study-finding-low-uber-and-lyft-p https://www.npr.org/sections/thetwo-way/2018/03/07/591430857... Plus given that drivers could be trying to drive when there's no demand, its very possible for people to earn below minimum wage.
- Spooky23 7y ago
  That's a long time ago. They've cut the payment substantially since then. https://www.inquirer.com/news/uber-lyft-rideshare-drivers-philadelphia-pay-cut-ipo-public-stock-strike-20190410.html https://www.inquirer.com/news/uber-lyft-rideshare-drivers-ph...
- cperciva 7y ago
  Plus given that drivers could be trying to drive when there's no demand, its very possible for people to earn below minimum wage. If you count every hour that people want to work regardless of whether their employer wants them to, there aren't many employers who pay minimum wage.
- napoleond 7y ago
  Thanks!!
jboy55 7y ago
It could be that they're not factoring in the cost and maintenance of their vehicles because they foresee this as being a temporary period of their life. They're borrowing from the future cost of their cars. From my experiences with Gig workers, I used to work in the engineering part of an early one, there will be definitely a bi-modal distribution between full time and part time workers. There will be those that will only want to 'pay a bill' with the proceeds. There will also be those that buckle down and organize their lives/finances around it. For the former, it wouldn't surprise me that they're earning less than service jobs, all in. However, the freedom of choosing one's hours really is powerful for those looking for just a few extra hundred dollars, plus the emphermeral cost against one's vehicles is easy to overlook.

wpietri 7y ago

Definitely. A lot of current startup darlings are shifting costs traditionally borne by the business to the workers. Uber is exhibit A here. Taxi companies, for all their flaws, at least paid for, maintained, and took on most of the risk of the cars. With Uber, all of that is on people desperate enough to drive for Uber. This strikes me as woefully inefficient systemically; large organizations are much better placed to manage cost and amortize risk. Or you could look at the recent DoorDash tip theft controversy, one of many such blow-ups. Anand Giridhardas has a lively discussion of that here: https://twitter.com/AnandWrites/status/1153312792964935682 https://twitter.com/AnandWrites/status/1153312792964935682

gpapilion 7y ago

I feel this is a little too cynical. For example, maybe I want to make extra money but don't want to be tied to a shift. This type of flexibility is amazing for lots of people. It's very appealing if you need extra money, and have a lot of time. Unfortunately, this aligned in an economic cycle where people needed work, and undervalued their value as workers(and for sometime bonuses, and gamification made this type of work very profitable i.e. 4k a week driving uber in SF).

eridius 7y ago

The gig economy is more about having workers without giving them benefits and with making the workers shoulder the burden of shifting demand throughout the day. With food delivery you have the lunch rush and the dinner rush and outside of those windows your demand is a lot smaller. The gig economy means the company isn't on the hook for predicting or satisfying that demand; if there's too many workers for the demand, it's the workers who take the pay hit rather than the company. And if demand spikes unpredictably the company has an easy lever to push to get more workers out there (just notify workers of the spike, and surge pricing as needed to make the unplanned demand more attractive to the workers). So the gig economy is really just auto scaling applied to human resources instead of computing resources.