4 ms·

Not necessarily. I think it’s a combination of easy money and lack of understanding of net income.

by pbreit 7y ago

PhasmaFelis 7y ago
Even the most clueless and innumerate person is going to notice when they've been working and getting paid for a month, haven't paid any bills yet or bought anything but food and gas, and still have $0.
- beatgammit 7y ago
  The problem is that gas is a small part of the equation. You also need to account for depreciation, increased repairs, and opportunity costs (e.g. Uber may require a newer car than you'd otherwise get). It may look like you're making money because you make more than you pay in gas, but I'm guessing people aren't noticing that their day job is subsidizing their side hustle for infrequent expenses. I use the IRS figure of ~$0.50/mile to ball park an opportunity. When I calculated it for my car, I got closer to $0.25/mile, but that's because I got a good deal on a reliable, used, efficient car (~$10k for a 60k mile Prius) and I do most of my own maintenance. The average driver (having a shop do repairs, worse mileage, buy from dealer with loan) will likely be closer to the IRS figure.
JackFr 7y ago
When you have no money net income is pretty damn obvious. I'd argue instead that they're actually pretty rational. The job requires no training and is untaxing both physically and mentally. Despite driver complaints, it's much more flexible than the vast majority of unskilled jobs. I'm sure for most long term drivers, the job basically sucks -- but it's still better than their next best alternative.
- beatgammit 7y ago
  It's certainly better than getting a payday loan or something, but there's a good chance many workers are operating at a net loss, especially if they don't do their taxes right (e.g. claim a deduction for car expenses). Couple this with the general lack of financial education among the populace (40% would have trouble with an unexpected $400 expense, 20% don't have $400 in their bank account) and we have a real problem. As a society, we need to do a better job of teaching people how to evaluate opportunities. Driving 10 miles for a $3 delivery is probably a net loss, unless you can work out a clever tax arbitrage system (e.g. it costs you $0.25/mile to drive, but you deduct $0.50/mile on taxes). - [1] https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-...

Not necessarily. I think it’s a combination of easy money and lack of understanding of net income.

by pbreit 7y ago

Not necessarily. I think it’s a combination of easy money and lack of understanding of net income.

Even the most clueless and innumerate person is going to notice when they've been working and getting paid for a month, haven't paid any bills yet or bought anything but food and gas, and still have $0.

beatgammit 7y ago
The problem is that gas is a small part of the equation. You also need to account for depreciation, increased repairs, and opportunity costs (e.g. Uber may require a newer car than you'd otherwise get). It may look like you're making money because you make more than you pay in gas, but I'm guessing people aren't noticing that their day job is subsidizing their side hustle for infrequent expenses. I use the IRS figure of ~$0.50/mile to ball park an opportunity. When I calculated it for my car, I got closer to $0.25/mile, but that's because I got a good deal on a reliable, used, efficient car (~$10k for a 60k mile Prius) and I do most of my own maintenance. The average driver (having a shop do repairs, worse mileage, buy from dealer with loan) will likely be closer to the IRS figure.

JackFr 7y ago

When you have no money net income is pretty damn obvious. I'd argue instead that they're actually pretty rational. The job requires no training and is untaxing both physically and mentally. Despite driver complaints, it's much more flexible than the vast majority of unskilled jobs. I'm sure for most long term drivers, the job basically sucks -- but it's still better than their next best alternative.

beatgammit 7y ago
It's certainly better than getting a payday loan or something, but there's a good chance many workers are operating at a net loss, especially if they don't do their taxes right (e.g. claim a deduction for car expenses). Couple this with the general lack of financial education among the populace (40% would have trouble with an unexpected $400 expense, 20% don't have $400 in their bank account) and we have a real problem. As a society, we need to do a better job of teaching people how to evaluate opportunities. Driving 10 miles for a $3 delivery is probably a net loss, unless you can work out a clever tax arbitrage system (e.g. it costs you $0.25/mile to drive, but you deduct $0.50/mile on taxes). - [1] https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-...