7 ms·

There are 2 big problems with on-demand/ gig employment. #1 Our current system of coupling healthcare and other life essential benefits with employment is brok

There are 2 big problems with on-demand/ gig employment. #1 Our current system of coupling healthcare and other life essential benefits with employment is broken. It makes it difficult for people to work small jobs or switch jobs. In order for gig jobs to be viable, people need to be able to get survive a broken foot without going bankrupt. #2 Gig-style businesses tend to vastly underpay employees. The early claims that Uber drivers were averaging $15-20/ hour or more were completely fabricated. The reality is most gig jobs require people use their own vehicles and don't pay them for inevitable downtime which means they are vastly underpaid. Minimum wage for gig workers should include payment for expenses (including a reasonable $0.50+ / mile for travel) and downtime between gigs. If those things are fixed, then suddenly gig work is amazing, but that's a pretty big ask.

aphextron 7y ago
>If those things are fixed, then suddenly gig work is amazing, but that's a pretty big ask. There is no fixing these things. They are a feature, not a bug. The entire viability of these businesses exists within the margin created by stripping away any vestige of traditional employment stability, allowing desperate people to exchange their long term wellbeing for short term cash.
- xrendan 7y ago
  Eh, a significant portion of the first problem is solved by simply having single payer healthcare like most developed countries (except the States) has.
  - bgorman 7y ago
    Or we could simply remove the tax break for employer based healthcare and let the market readjust.
    - rhapsodic 7y ago
      And while we're add it, make health insurance premiums paid by individuals 100% deductable from their federal income tax.
    - SaxonRobber 7y ago
      I think this readjustment would tend towards extracting more money from fewer people who can pay and letting the rest go without care.
    - ogre_codes 7y ago
      > remove the tax break for employer based healthcare This is a big part of the problem, but I don't think it would fix everything by a long shot.
  - DamnYuppie 7y ago
    You do realize that in fact most developed countries actually have a healthcare system much like the US. Also most of the countries with a single payer health system have 3rd party health insurance that can be purchased. A true one payor only plan is the exception not the rule.
    - stormbrew 7y ago
      > You do realize that in fact most developed countries actually have a healthcare system much like the US. You're gonna have to work a lot harder than you are here to make this point pass muster. It's pretty blatantly untrue. Yes, supplemental insurance is often a thing that exists. It's generally nothing like the US system's insurance though.
    - aliceryhl 7y ago
      I'm from Denmark, and the fact that certain parts of our healthcare system are not part of the single-payer system, and the fact that you can buy insurance for these things, really really does not make it a healthcare system much like the US'.
  - bhupy 7y ago
    Universal healthcare doesn't necessarily have to be single-payer, lots of countries have multi-payer healthcare systems, like Germany, the Netherlands, Switzerland, and Singapore. In the Netherlands and Switzerland, all health insurance is provided by regulated private payers.
- smallgovt 7y ago
  > The entire viability of these businesses exists within the margin created by stripping away any vestige of traditional employment stability That's a stretch. Even if Uber/Lyft were forced to employ their drivers, they would most likely just raise prices and cut marketing costs. Sure, they'd be much smaller businesses, but they'd very likely still live on. Uber pays their drivers ~$7b a year. Employing them would cost an extra ~$2.1B/yr. Self driving cars are probably coming in 10 years, so even if they didn't increase prices or make any other changes in their operating model, they'd need to raise $21B to hold them over. That's not a small amount of money, but Uber's market cap is $54B.
chrisseaton 7y ago
> Our current system of coupling healthcare and other life essential benefits with employment is broken. Is it not possible to purchase your own healthcare independently of an employer? And opt-out of employer healthcare? Or are only employers allowed to insure you? If it's a matter of scale could a buyer's union buy it bulk like an employer but not linked to your employment?
- mandelbrotwurst 7y ago
  You can opt out of employer healthcare but it's not going to be in your interest to do so - they're not going to offer to give you cash in lieu.
  - bhupy 7y ago
    > they're not going to offer to give you cash in lieu. The ICHRA[1], which came into effect on January 2020 allows employers to do just that. There's even a YC company that offers ICHRA functionality for employers[2]. [1] https://ichra.com/ https://ichra.com/ [2] https://news.ycombinator.com/item?id=22527102 https://news.ycombinator.com/item?id=22527102
    - deleted 7y ago
      [deleted]
- GaryNumanVevo 7y ago
  Buying healthcare as an individual is very expensive, since you're not buying in bulk. Some larger unions do have healthcare for members, but it's more of a bargaining chip to keep workers paying dues.
  - bhupy 7y ago
    > Buying healthcare as an individual is very expensive, since you're not buying in bulk This is a common refrain, but it's actually not true. Individual plans operate as a giant "group" with other individuals, and the size of that group is often larger than most employer groups. There are a host of reasons why healthcare is expensive in the US, and the "bulk purchasing" is not really one of them. Source: I work in health insurance.
zozbot234 7y ago
> Gig-style businesses tend to vastly underpay employees. Low-productivity services tend to vastly underpay employees. This is to be expected. The question is whether one can have "gig"-like work that's more worthwhile than driving around for services that can't even make a decent profit and are just spending money they get from their VC funders.
- standardUser 7y ago
  Not "underpaid" as in "not a living wage", but underpaid because once the cost of equipment is factored in, people can end up being paid less than minimum wage. It's a wage floor loophole that should be closed. Though to be fair, rideshare isn't the only guilty industry.
  - JJMcJ 7y ago
    Or even lose money if they are reducing the value of an asset. Specifically, running their car into the ground doing driving.
bvandewalle 7y ago
> #2 Gig-style businesses tend to vastly underpay employees. Yes and as said below, that's by design. Uber/Lyft for example would not survived if they priced their service to allow a fair pay for the gig worker after accounting for vehicle costs. This whole system is built on underpaying workers and making people believe that a ride could "really" be that cheap. It isn't. There is a reason why taxi rides were expensive before Uber became a thing.
- ogre_codes 7y ago
  > Yes and as said below, that's by design. I realize this, which is why I suggest strongly that Uber not be allowed at the table if/ when any legislation around this matter.
clairity 7y ago
> "Gig-style businesses tend to vastly underpay employees." to your point, this is a function of information asymmetries in the labor market. based on a rough calculation from a couple years ago, a gig driver needs to make about $18/hour (including downtime between rides) to break even against a minimum wage job. between that and additional tax and benefits burden, it's no wonder most people forgo deeper consideration and focus on the gross income of gig work. it's obvious that workers need to be given direct and upfront information about this. another remedy is to make it as easy to comply with labor, tax and other regulations as a w-2 job (where the employer does nearly all the work). you could also let workers set their prices, but riders hate having prices fluctuate a lot so maybe the platform needs to take on some of that risk. lot's of things could be changed to make it a more even playing field between worker and platform.
- AnthonyMouse 7y ago
  > based on a rough calculation from a couple years ago, a gig driver needs to make about $18/hour (including downtime between rides) to break even against a minimum wage job. Is this counting the similar uncompensated costs for ordinary wage labor? Most minimum wage workers can't afford to live in the city center even though that's where jobs are concentrated. If you live 60 miles from work, that's not just 120 miles a day of uncompensated driving expense, it's two hours of uncompensated time. If you use .55/mile as the transportation cost with that long of a commute for a job that pays $7.25/hour for eight hours, that worker makes... uh, negative $8/day. Which I guess makes the two extra uncompensated hours they spend commuting a benefit because they get to amortize their losses over ten hours instead of eight and lose $.80/hour instead of $1/hour? This might explain why a lot of people prefer making "less money" working for Uber.
gwright 7y ago
I'm not going to tackle #1 other than to say I do agree that health insurance shouldn't be provided by your employer. But for #2, you seem to be asserting that there is some method by which it is possible to determine that a particular salary/wage is "fair" and that "fair" wage must be mandated for all people. You've asserted that gig businesses are underpaying and yet lots of people continue to take those jobs. Are you asserting that all those people are incapable of determining what is best for them? Are you asserting that what works for a college student on the side or a retired person or someone who needs extreme flexibility in their hours is unimportant and that the only the particular compensation package that you declare to be "fair" is valid for everyone? Not everyone puts the same value on different job criteria. Some people want flexibility, some people want safety, some people want benefits (see #1), some people want to work outside, some people just want to keep busy, etc. Declaring that there is a "fair" wage for any particular job presumes not only that jobs are identical but that people are identical also.
- ogre_codes 7y ago
  > But for #2, you seem to be asserting that there is some method by which it is possible to determine that a particular salary/wage is "fair" and that "fair" wage must be mandated for all people. We have a nationally agreed minimum wage. Expecting that the average person doing a gig job would be able to earn that minimum wage plus expenses is not unreasonable. Since gig type employers, this base wage would need to be 50% higher than minimum wage to account for other expenses paid by employers. (employment taxes being the biggie)
  - bhupy 7y ago
    The national agreed minimum wage is $7.25/hour. Every Uber/Lyft driver earns well in excess of that.
    - reaperducer 7y ago
      Every Uber/Lyft driver earns well in excess of that. No. For most, it's not even close. The only way to make that kind of money was to collect kickbacks from bringing tourists to strip clubs. Plus, many states have a minimum wage much higher than $7.25/hour. Source: Drove for Uber for eight months.
grecy 7y ago
> There are 2 big problems with on-demand/ gig employment The only developed country where they are a problem is the USA. Other countries have healthcare regardless of employment status, and minimum wages high enough to live a good life ($19.48 AUD/hr in Australia, for example). They can, and have been fixed elsewhere.
- ogre_codes 7y ago
  > They can, and have been fixed elsewhere. Yep. And I should have mentioned that.
- gok 7y ago
  That's US$12.12/hr to save anyone interested the time looking it up
  - joppy 7y ago
    It's more like US$13.50/hr if you take the exchange rate from a few months ago, before the COVID-19 crisis.
stevenwoo 7y ago
on #2, someone told me how much they made and I could not understand why anyone would do it - the additional wear and tear on your vehicle and depreciation did not seem to leave a net profit after the first month incentives/bonuses that all the gig employment places were using at that time (you have to be building enough of a profit margin to buy another vehicle at some point - just keeping your head above water seems like a waste of time driving instead of anything else to me personally but maybe I am speaking from a position of too much privilege).
- bhupy 7y ago
  It usually only makes sense if your car is a sunk cost — I.e. you own it for personal use, you would have owned the car anyway (Uber or not), and you decide to monetize it on the side.

aphextron 7y ago

>If those things are fixed, then suddenly gig work is amazing, but that's a pretty big ask. There is no fixing these things. They are a feature, not a bug. The entire viability of these businesses exists within the margin created by stripping away any vestige of traditional employment stability, allowing desperate people to exchange their long term wellbeing for short term cash.

xrendan 7y ago
Eh, a significant portion of the first problem is solved by simply having single payer healthcare like most developed countries (except the States) has.
- bgorman 7y ago
  Or we could simply remove the tax break for employer based healthcare and let the market readjust.
  - rhapsodic 7y ago
    And while we're add it, make health insurance premiums paid by individuals 100% deductable from their federal income tax.
  - SaxonRobber 7y ago
    I think this readjustment would tend towards extracting more money from fewer people who can pay and letting the rest go without care.
  - ogre_codes 7y ago
    > remove the tax break for employer based healthcare This is a big part of the problem, but I don't think it would fix everything by a long shot.
- DamnYuppie 7y ago
  You do realize that in fact most developed countries actually have a healthcare system much like the US. Also most of the countries with a single payer health system have 3rd party health insurance that can be purchased. A true one payor only plan is the exception not the rule.
  - stormbrew 7y ago
    > You do realize that in fact most developed countries actually have a healthcare system much like the US. You're gonna have to work a lot harder than you are here to make this point pass muster. It's pretty blatantly untrue. Yes, supplemental insurance is often a thing that exists. It's generally nothing like the US system's insurance though.
  - aliceryhl 7y ago
    I'm from Denmark, and the fact that certain parts of our healthcare system are not part of the single-payer system, and the fact that you can buy insurance for these things, really really does not make it a healthcare system much like the US'.
- bhupy 7y ago
  Universal healthcare doesn't necessarily have to be single-payer, lots of countries have multi-payer healthcare systems, like Germany, the Netherlands, Switzerland, and Singapore. In the Netherlands and Switzerland, all health insurance is provided by regulated private payers.
smallgovt 7y ago
> The entire viability of these businesses exists within the margin created by stripping away any vestige of traditional employment stability That's a stretch. Even if Uber/Lyft were forced to employ their drivers, they would most likely just raise prices and cut marketing costs. Sure, they'd be much smaller businesses, but they'd very likely still live on. Uber pays their drivers ~$7b a year. Employing them would cost an extra ~$2.1B/yr. Self driving cars are probably coming in 10 years, so even if they didn't increase prices or make any other changes in their operating model, they'd need to raise $21B to hold them over. That's not a small amount of money, but Uber's market cap is $54B.

chrisseaton 7y ago

> Our current system of coupling healthcare and other life essential benefits with employment is broken. Is it not possible to purchase your own healthcare independently of an employer? And opt-out of employer healthcare? Or are only employers allowed to insure you? If it's a matter of scale could a buyer's union buy it bulk like an employer but not linked to your employment?

mandelbrotwurst 7y ago
You can opt out of employer healthcare but it's not going to be in your interest to do so - they're not going to offer to give you cash in lieu.
- bhupy 7y ago
  > they're not going to offer to give you cash in lieu. The ICHRA[1], which came into effect on January 2020 allows employers to do just that. There's even a YC company that offers ICHRA functionality for employers[2]. [1] https://ichra.com/ https://ichra.com/ [2] https://news.ycombinator.com/item?id=22527102 https://news.ycombinator.com/item?id=22527102
  - deleted 7y ago
    [deleted]
GaryNumanVevo 7y ago
Buying healthcare as an individual is very expensive, since you're not buying in bulk. Some larger unions do have healthcare for members, but it's more of a bargaining chip to keep workers paying dues.
- bhupy 7y ago
  > Buying healthcare as an individual is very expensive, since you're not buying in bulk This is a common refrain, but it's actually not true. Individual plans operate as a giant "group" with other individuals, and the size of that group is often larger than most employer groups. There are a host of reasons why healthcare is expensive in the US, and the "bulk purchasing" is not really one of them. Source: I work in health insurance.

zozbot234 7y ago

> Gig-style businesses tend to vastly underpay employees. Low-productivity services tend to vastly underpay employees. This is to be expected. The question is whether one can have "gig"-like work that's more worthwhile than driving around for services that can't even make a decent profit and are just spending money they get from their VC funders.

standardUser 7y ago
Not "underpaid" as in "not a living wage", but underpaid because once the cost of equipment is factored in, people can end up being paid less than minimum wage. It's a wage floor loophole that should be closed. Though to be fair, rideshare isn't the only guilty industry.
- JJMcJ 7y ago
  Or even lose money if they are reducing the value of an asset. Specifically, running their car into the ground doing driving.

bvandewalle 7y ago

> #2 Gig-style businesses tend to vastly underpay employees. Yes and as said below, that's by design. Uber/Lyft for example would not survived if they priced their service to allow a fair pay for the gig worker after accounting for vehicle costs. This whole system is built on underpaying workers and making people believe that a ride could "really" be that cheap. It isn't. There is a reason why taxi rides were expensive before Uber became a thing.

ogre_codes 7y ago
> Yes and as said below, that's by design. I realize this, which is why I suggest strongly that Uber not be allowed at the table if/ when any legislation around this matter.

clairity 7y ago

> "Gig-style businesses tend to vastly underpay employees." to your point, this is a function of information asymmetries in the labor market. based on a rough calculation from a couple years ago, a gig driver needs to make about $18/hour (including downtime between rides) to break even against a minimum wage job. between that and additional tax and benefits burden, it's no wonder most people forgo deeper consideration and focus on the gross income of gig work. it's obvious that workers need to be given direct and upfront information about this. another remedy is to make it as easy to comply with labor, tax and other regulations as a w-2 job (where the employer does nearly all the work). you could also let workers set their prices, but riders hate having prices fluctuate a lot so maybe the platform needs to take on some of that risk. lot's of things could be changed to make it a more even playing field between worker and platform.

AnthonyMouse 7y ago
> based on a rough calculation from a couple years ago, a gig driver needs to make about $18/hour (including downtime between rides) to break even against a minimum wage job. Is this counting the similar uncompensated costs for ordinary wage labor? Most minimum wage workers can't afford to live in the city center even though that's where jobs are concentrated. If you live 60 miles from work, that's not just 120 miles a day of uncompensated driving expense, it's two hours of uncompensated time. If you use .55/mile as the transportation cost with that long of a commute for a job that pays $7.25/hour for eight hours, that worker makes... uh, negative $8/day. Which I guess makes the two extra uncompensated hours they spend commuting a benefit because they get to amortize their losses over ten hours instead of eight and lose $.80/hour instead of $1/hour? This might explain why a lot of people prefer making "less money" working for Uber.

gwright 7y ago

I'm not going to tackle #1 other than to say I do agree that health insurance shouldn't be provided by your employer. But for #2, you seem to be asserting that there is some method by which it is possible to determine that a particular salary/wage is "fair" and that "fair" wage must be mandated for all people. You've asserted that gig businesses are underpaying and yet lots of people continue to take those jobs. Are you asserting that all those people are incapable of determining what is best for them? Are you asserting that what works for a college student on the side or a retired person or someone who needs extreme flexibility in their hours is unimportant and that the only the particular compensation package that you declare to be "fair" is valid for everyone? Not everyone puts the same value on different job criteria. Some people want flexibility, some people want safety, some people want benefits (see #1), some people want to work outside, some people just want to keep busy, etc. Declaring that there is a "fair" wage for any particular job presumes not only that jobs are identical but that people are identical also.

ogre_codes 7y ago
> But for #2, you seem to be asserting that there is some method by which it is possible to determine that a particular salary/wage is "fair" and that "fair" wage must be mandated for all people. We have a nationally agreed minimum wage. Expecting that the average person doing a gig job would be able to earn that minimum wage plus expenses is not unreasonable. Since gig type employers, this base wage would need to be 50% higher than minimum wage to account for other expenses paid by employers. (employment taxes being the biggie)
- bhupy 7y ago
  The national agreed minimum wage is $7.25/hour. Every Uber/Lyft driver earns well in excess of that.
  - reaperducer 7y ago
    Every Uber/Lyft driver earns well in excess of that. No. For most, it's not even close. The only way to make that kind of money was to collect kickbacks from bringing tourists to strip clubs. Plus, many states have a minimum wage much higher than $7.25/hour. Source: Drove for Uber for eight months.

grecy 7y ago

> There are 2 big problems with on-demand/ gig employment The only developed country where they are a problem is the USA. Other countries have healthcare regardless of employment status, and minimum wages high enough to live a good life ($19.48 AUD/hr in Australia, for example). They can, and have been fixed elsewhere.

ogre_codes 7y ago
> They can, and have been fixed elsewhere. Yep. And I should have mentioned that.
gok 7y ago
That's US$12.12/hr to save anyone interested the time looking it up
- joppy 7y ago
  It's more like US$13.50/hr if you take the exchange rate from a few months ago, before the COVID-19 crisis.

stevenwoo 7y ago

on #2, someone told me how much they made and I could not understand why anyone would do it - the additional wear and tear on your vehicle and depreciation did not seem to leave a net profit after the first month incentives/bonuses that all the gig employment places were using at that time (you have to be building enough of a profit margin to buy another vehicle at some point - just keeping your head above water seems like a waste of time driving instead of anything else to me personally but maybe I am speaking from a position of too much privilege).

bhupy 7y ago
It usually only makes sense if your car is a sunk cost — I.e. you own it for personal use, you would have owned the car anyway (Uber or not), and you decide to monetize it on the side.