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It's gauche to say it on the day a bunch of people lost their jobs (and there's no need for the schadenfraude) but I think the underlying point is sane. Uber's

It's gauche to say it on the day a bunch of people lost their jobs (and there's no need for the schadenfraude) but I think the underlying point is sane. Uber's business model is replacing FTEs in a a hidebound, regulated industry with gig workers (& good UX!). If you were forecasting how this company in particular would deal with a downturn, it's a reasonable guess that they'll try to do the same thing to their own workforce, if they can find engineers willing to take on gig work. It's in their DNA. To be charitable, the grandfather comment is a warning to think about the broader effects of the work we do, driven home by the possibility of a "what goes around comes around" situation. EDIT: as many have pointed out, taxi drivers don't get benefits either (I originally said one of the margins Uber competes on is not providing benefits).

librish 6y ago
A large portion of taxi drivers are independent contractors.
- rdslw 6y ago
  and they dont' pay % of their revenue to the 'base station entity'. This Uber trick: taking % of the revenue for the fixed cost service (they provide to the taxis drivers ) is the master trick making uber money. So far, in Europe, all taxi corporations charge taxi driver FIXED (quite small 100..200 usd/month) amount for operating telco/web/radio and coordinating fleet of taxis. Uber's ability to push bulshine here is really business milking 101 course: Fixed costs, uncaped incomes.
  - seanmcdirmid 6y ago
    > and they dont' pay % of their revenue to the 'base station entity'. Unless they own their own medallion, they pay "medallion rent". They'll also pay dispatch fees. Many taxi drivers switched over to being Uber drivers because they could earn (and keep) more money, not less.
nostrademons 6y ago
The reason why software companies don't generally hire contract software developers rather than bringing them on as FTEs is that they're less effective. Software development is a high-communication, high-trust activity; it's very helpful to be able to explicitly direct and manage the activities of your workforce, because otherwise they don't produce anything useful. For specific tasks that don't need to be high-trust and high-communication (eg. writing an iOS app for a non-critical part of the business that uses a public API), companies are already inclined to hire contractors. The bigger risk with getting a job at Uber is "will they be in business in 2 years?" Tech company success tends to be binary: either you're growing and on top of the world, or you'll be out of business in a couple years. Just ask DEC, Symbolics, SGI, Sun, Yahoo, AOL, Netscape, etc.
- tracerbulletx 6y ago
  "You're either a one or a zero. Alive or dead." Gary Winston from AntiTrust
- johntiger1 6y ago
  Exactly, Uber's business model only applies to (highly) fungible labour markets. As past experience shows, you (usually) can't swap out 10 devs here with 10 devs there and expect similar results (although who knows in the future)
- TeMPOraL 6y ago
  I think the even bigger risk with getting a job at Uber will be that some of the future employers may not be willing to consider you due to sketchy reputation Uber has as a company.
  - nostrademons 6y ago
    This is something I see employees worry about all the time, but I have never seen a business owner or person with hiring authority consider it. People who get to that position within a company learn to inhabit shades of grey; unless you personally did something illegal, they're not going to hold the company you worked for against you, except to the extent that they may think that people working at that company are incompetent. I see ex-Facebook and ex-Uber employees popping up all the time at high positions within hot (and sometimes even ethical) growth companies within the valley.
easytiger 6y ago
> one of the margins on which they can undercut competition is not paying benefits You think minicab firms paid benefits before Uber?
JumpCrisscross 6y ago
> Uber's business model is replacing FTEs Where are taxi drivers employees with benefits? At least in New York, they're mostly independent contractors. (A minority are sole proprietors.)
- CydeWeys 6y ago
  Look more at car service companies (Uber's original service), not taxis.
  - bhupy 6y ago
    Why? For the vast majority of people, Uber is a taxi service.
    - CydeWeys 6y ago
      The reason is that car service drivers are also being replaced and they are more likely to have been FTEs.
      - bhupy 6y ago
        Great, I think you came up with the simplest solution: Uber should make whatever single digit percentage of total drivers that comprise their Uber Black drivers FTEs.
        CydeWeys 6y ago
        This might be a good selling point for the higher levels of Uber service: You're getting a full-time, professional driver who's been thoroughly vetted. It's not just some random person with an app.
        bhupy 6y ago
        I think for the vast VAST majority of riders, the "random person with an app" is good enough. In the age of turn-by-turn directions, rides are commoditized. A hundred crimes per year divided by billions of trips per year represents decimal point percentage crime rate — which is a risk not all that different from aircraft crash statistics, or even car crash statistics. I know I definitely prefer to save tens of dollars per ride vs the services provided by some platonic ideal of a "professional driver".
ping_pong 6y ago
You seem to not know how taxi companies work. They are independent contractors except they are even more at a disadvantage. They need to pay money upfront for their shift and spend half their time earning that money back before they even make money. And they have no benefits.

librish 6y ago

A large portion of taxi drivers are independent contractors.

rdslw 6y ago
and they dont' pay % of their revenue to the 'base station entity'. This Uber trick: taking % of the revenue for the fixed cost service (they provide to the taxis drivers ) is the master trick making uber money. So far, in Europe, all taxi corporations charge taxi driver FIXED (quite small 100..200 usd/month) amount for operating telco/web/radio and coordinating fleet of taxis. Uber's ability to push bulshine here is really business milking 101 course: Fixed costs, uncaped incomes.
- seanmcdirmid 6y ago
  > and they dont' pay % of their revenue to the 'base station entity'. Unless they own their own medallion, they pay "medallion rent". They'll also pay dispatch fees. Many taxi drivers switched over to being Uber drivers because they could earn (and keep) more money, not less.

nostrademons 6y ago

The reason why software companies don't generally hire contract software developers rather than bringing them on as FTEs is that they're less effective. Software development is a high-communication, high-trust activity; it's very helpful to be able to explicitly direct and manage the activities of your workforce, because otherwise they don't produce anything useful. For specific tasks that don't need to be high-trust and high-communication (eg. writing an iOS app for a non-critical part of the business that uses a public API), companies are already inclined to hire contractors. The bigger risk with getting a job at Uber is "will they be in business in 2 years?" Tech company success tends to be binary: either you're growing and on top of the world, or you'll be out of business in a couple years. Just ask DEC, Symbolics, SGI, Sun, Yahoo, AOL, Netscape, etc.

tracerbulletx 6y ago
"You're either a one or a zero. Alive or dead." Gary Winston from AntiTrust
johntiger1 6y ago
Exactly, Uber's business model only applies to (highly) fungible labour markets. As past experience shows, you (usually) can't swap out 10 devs here with 10 devs there and expect similar results (although who knows in the future)
TeMPOraL 6y ago
I think the even bigger risk with getting a job at Uber will be that some of the future employers may not be willing to consider you due to sketchy reputation Uber has as a company.
- nostrademons 6y ago
  This is something I see employees worry about all the time, but I have never seen a business owner or person with hiring authority consider it. People who get to that position within a company learn to inhabit shades of grey; unless you personally did something illegal, they're not going to hold the company you worked for against you, except to the extent that they may think that people working at that company are incompetent. I see ex-Facebook and ex-Uber employees popping up all the time at high positions within hot (and sometimes even ethical) growth companies within the valley.

easytiger 6y ago

> one of the margins on which they can undercut competition is not paying benefits You think minicab firms paid benefits before Uber?

JumpCrisscross 6y ago

> Uber's business model is replacing FTEs Where are taxi drivers employees with benefits? At least in New York, they're mostly independent contractors. (A minority are sole proprietors.)

CydeWeys 6y ago
Look more at car service companies (Uber's original service), not taxis.
- bhupy 6y ago
  Why? For the vast majority of people, Uber is a taxi service.
  - CydeWeys 6y ago
    The reason is that car service drivers are also being replaced and they are more likely to have been FTEs.
    - bhupy 6y ago
      Great, I think you came up with the simplest solution: Uber should make whatever single digit percentage of total drivers that comprise their Uber Black drivers FTEs.
      - CydeWeys 6y ago
        This might be a good selling point for the higher levels of Uber service: You're getting a full-time, professional driver who's been thoroughly vetted. It's not just some random person with an app.
        bhupy 6y ago
        I think for the vast VAST majority of riders, the "random person with an app" is good enough. In the age of turn-by-turn directions, rides are commoditized. A hundred crimes per year divided by billions of trips per year represents decimal point percentage crime rate — which is a risk not all that different from aircraft crash statistics, or even car crash statistics. I know I definitely prefer to save tens of dollars per ride vs the services provided by some platonic ideal of a "professional driver".

ping_pong 6y ago

You seem to not know how taxi companies work. They are independent contractors except they are even more at a disadvantage. They need to pay money upfront for their shift and spend half their time earning that money back before they even make money. And they have no benefits.