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It's hard to ignore the siren song as a business person of comparing your 300k a year engineers to a senior engineer that costs $80k in India (regardless of the

by atonse 6y ago

It's hard to ignore the siren song as a business person of comparing your 300k a year engineers to a senior engineer that costs $80k in India (regardless of the potential hidden costs of cultural and time zone differences). This gap should probably narrow as more remote work becomes normal, and more people move out of the Valley and can actually live decently on 150k, rather than 300k.

secondcoming 6y ago
Yes, the salaries I've seen bandied about for SV developers are absurd. That a new grad in SV can out-earn a seasoned dev located elsewhere was never sustainable. People will point out that the rent is absurdly high too, and maybe it is, but I'd also wager that these employees are renting from colleagues higher up who approve these salaries because they know they'll get a large cut.
- babycake 6y ago
  Maybe the new grads with those legendary salaries are paid closer to their true value, while the seasoned devs are not?
godzillabrennus 6y ago
Paying $80k a year in India would get you top level talent. They’d pay less than that. Uber is preparing for a death spiral as their financial backing runs out and they need to shrink to the profitable markets.
- toomuchtodo 6y ago
  > Uber is preparing for a death spiral as their financial backing runs out and they need to shrink to the profitable markets. Many of their top markets have ruled their drivers are employees (or requiring similar compensation/benefits), except Brazil. I'm unsure if they can remain anywhere near their current size (versus the headcount of a traditional livery service) based on that regulatory environment, even with McKinsey style transformations to their business (ie offshoring). > "But one detail in particular caught my eye. About 24 percent of Uber’s bookings—all the money that customers pay through the app and in cash, including driver earnings—occur in just five cities: New York, Los Angeles, San Francisco, London, and São Paulo." [1] London: https://www.theguardian.com/technology/2018/dec/19/uber-loses-appeal-over-driver-employment-rights https://www.theguardian.com/technology/2018/dec/19/uber-lose... ("Uber loses appeal over driver employment rights") France: https://www.reuters.com/article/us-uber-court/top-french-court-deals-blow-to-uber-by-giving-driver-employee-status-idUSKBN20R23F https://www.reuters.com/article/us-uber-court/top-french-cou... ("Top French court deals blow to Uber by giving driver 'employee' status") California: https://finance.yahoo.com/news/california-regulator-uber-lyft-drivers-employees-044824014.html https://finance.yahoo.com/news/california-regulator-uber-lyf... ("Uber, Lyft drivers are employees according to California regulator") New Jersey: https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-drivers.html https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-... ("New Jersey has demanded that Uber pay $649 million for years of unpaid employment taxes for its drivers, arguing that the ride-hailing company has misclassified the workers as independent contractors and not as employees.") New York: https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay-nyc.html https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay... ("New York City regulators are moving toward significantly raising wages for drivers for Uber and other ride-hailing apps.") [1] https://slate.com/business/2019/04/uber-ipo-nyc-london-risks.html https://slate.com/business/2019/04/uber-ipo-nyc-london-risks...
  - eldavido 6y ago
    Unintended side effect of this is to prevent competitive entry. No other TNC will be able to achieve enough density from day 1 to run at the wage floor without huge amounts of VC. That alone should make people suspicious of this legislation. In the long run, this is really, really good for Uber/Lyft.
    - Jommi 6y ago
      Yes, its basically a potential way for uber and lyft to lock themselves in as the only 2 players in the US market.
- chanakya 6y ago
  The numbers $300K and $80K are roughly accurate. Yes, you can get engineers in India for $5K or even less, but you don't want them working on your product. Senior, architect-level talented engineers may well cost $80K. And yes, if you want to hire the same capability engineer in Silicon Valley, they will likely cost $300K.
- greesil 6y ago
  Nitpicking a bit, it's not a death spiral if they don't die in the end.
  - godzillabrennus 6y ago
    Contemplated changing that wording before posting but decided that it’s a bit of a ship of Theseus thought exercise. If Uber radically shifts its focus to focus solely on smaller profitable markets and the people working there are swapped out then has the company ultimately failed/died and had to be reborn? It may not be a General Magic style death but it seemed reasonable to me that at least philosophically it is a death spiral nonetheless.
Avalaxy 6y ago
I think the cost of an engineer is way less than 80K in India. Here in the Netherlands a senior SE would be $80K. I see no reason to go to India instead of western Europe then.
- kareemm 6y ago
  The reason is that instead of 300k (or 80k) you're paying less than 80k.
- 0xcafecafe 6y ago
  I don't think it is "way less". 80K USD converts to 5,979K INR which is about the ballpark estimate some of the senior engineers I know make in India (one of them is working for the Western European company btw). One of the reasons to move to India would be the availability of talent even if it is at comparable cost. Companies like to scale and lack of talent is a risk they want to mitigate.
  - rubber_duck 6y ago
    In my experience working with outsourcing agencies - "talent available" in India is filling headcount numbers. Good developers ask for similar wages as EU based ones and are equally hard to find, probably even harder because the market is filled with scammers (eg. on several occasions I would interview a competent guy and then the work would clearly get delegated to someone inexperienced)
    - 0xcafecafe 6y ago
      Sure, scammers are abound and the bad to good ratio is pretty high but due to the population size, the number of good developers is high as well.
      - egh5oon 6y ago
        > the bad to good ratio is pretty high but due to the population size This is not how ratios work.
illuminati1911 6y ago
With 80k you could get a team of senior engineers in India. Or ”senior engineers”, but anyway.
LeifCarrotson 6y ago
Why should those engineers be paid $150k if they're generating more than $300k of value? For that matter, why should an Indian engineer be paid $80k if they're generating $300k of value minus whatever hidden costs you want to assign (surely not $220k)?
- frandroid 6y ago
  The value generated is an interesting number when the company is hemorrhaging money...
- ukoki 6y ago
  People are paid based on how much a similarly skilled worker is willing to work for, not based on how much value they generate for a company.
  - jupp0r 6y ago
    They are paid based on how much other companies are willing to pay the same worker.
  - bronzeage 6y ago
    They are paid between their value and what they are willing to work for. Where exactly in between depends on supply and demand. When demand is high, competition will drive the salary close to the value generated. When demand is low, cost cutting and unemployment will drive the salary towards the minimum price.
- karpierz 6y ago
  Why should an engineer be paid that value they produce when they assume none of the risk? If the company goes bankrupt, will the engineer be willing to bail the company out? The engineer is paid less than the value they produce because they don't assume any of the risk. If the product they produce turns out to be worthless or break, they don't have to pay their salary back.
  - egh5oon 6y ago
taylorlapeyre 6y ago
You can live decently in the valley on a lot less than 300k. Speaking from experience, even 90k is perfectly comfortable. Based on the salaries of my friends in SF, $150k is a very reasonable salary that allows a fantastic lifestyle.
- eldavido 6y ago
  This is kind of a contrarian viewpoint but one I happen to agree with. As a single person, you can live a great life on $100K. No, maybe you aren't going to $100/plate restaurants every night or living in a $5000/month luxury studio, but there are plenty of great apartments in Oakland (where I live) for $1500-2000/month. What's actually started to become jarring is the difference between SF proper and the rest of the region. SF rents seem to be almost 2x comparable places in the East Bay, plus the general price level is higher from Prop C and all the other insane junk the electorate wants. 2x the cost and the city is rapidly becoming a tent camp, I'm happy to live a little farther out and commute to work 1-2x/week when I'm not WFH.
- stuff4ben 6y ago
  Probably single with no family to support, living in a shoebox, with no car. Sure if you want to spend 60% of your salary on "housing" in SF, $150K is perfectly fine...
  - Jommi 6y ago
    Why do you need to live in SF?
- jupp0r 6y ago
  With mortgage payments in the $5k range, I highly doubt your assessment. Maybe your definition of comfortable is different than mine, or you don’t have children.
centimeter 6y ago
Regardless of how “senior” they are, you get what you pay for.
gorpomon 6y ago
This is well-trodden ground as far as discussion around here goes. The common points pro and con always come up: is the quality the same (some say yes, some say no), is co-location or time-zone location important (same parenthetical), what $ amount is ethical to pay, whom is it more ethical to pay (are you a nationalist or a global citizen, etc), what's sustainable, many more etc's. I've decided that's it's a personal decision to a company. Many find benefits in having some teams in India or Asia, some don't so they don't. We should really divorce politics from this discussion. I'm ok with company A saying they like Indian devs and company B saying they enjoy the benefits of keeping it in their geographical area. I've seen outsourcing backfire. I've seen it succeed. I've seen team leads emerge in India and direct an entire product from 10,000 miles away. I've also seen dead weight that I had to go out of my way to get productivity from. You see it all and you'll get it all, so why the fuss?
- LoSboccacc 6y ago
  > We should really divorce politics from this discussion. that's a common technical people pitfall. politics permeates society, and ignoring it is only to your own detriment exposing you form exploitation of those whom play the political game, of which you most assuredly participate in, whether you want an active role in it or not.
  - thebean11 6y ago
    There's a difference between "let's try to figure out the best way to do something" and "let's sell the solution we've settled on". That's not an argument for avoiding politics, but there's nothing wrong with veering in the other direction either.
    - LoSboccacc 6y ago
      once you figure out the best way, you _still_ have to sell it to stakeholders which are each optimizing for different things, some of which you probably don't even known, and that's when the politics kicks in.
  - 6y ago
softwaredoug 6y ago
There is always one 'business KPI' being measured whether engineers like it or not - your pay. I know it's passe to poo poo KPIs and measuring value delivered to the business. If you're not in a position to justify the investment to stakeholders, relative to other options with lower costs, you're probably going to lose that argument.
collyw 6y ago
$80K will get you good engineers in Europe. Not saying they would be better or worse, but the cost of living is higher and the culture is closer.
MichaelRazum 6y ago
Just wondering why they don't want to outsource to europe. Here in Germany you will get good engineers for $80k. Or east europe is even cheaper + better cultural fit.
- EdwinLarkin 6y ago
  Employees in countries like India are more disposable. In theory if you mean by eastern europe the part that is in EU even that one has some decent labor laws to prevent companies like Uber from firing at will. I think even Ukraine or Belarus do.
  - itsmefaz 6y ago
    A very good point, the labor laws in India are messed up.
  - 0ld 6y ago
    Ua&By bodyshops work on B2B basis, so fire at will is quite possible, though highly unusual - demand is simply too high
deleted 6y ago
[deleted]
Alex3917 6y ago
> This gap should probably narrow as more remote work becomes normal, and more people move out of the Valley and can actually live decently on 150k, rather than 300k. The gap is a function of Moore's Law. If Moore's Law slows down, the gap will narrow. If not, then not.

by atonse 6y ago

secondcoming 6y ago

Yes, the salaries I've seen bandied about for SV developers are absurd. That a new grad in SV can out-earn a seasoned dev located elsewhere was never sustainable. People will point out that the rent is absurdly high too, and maybe it is, but I'd also wager that these employees are renting from colleagues higher up who approve these salaries because they know they'll get a large cut.

babycake 6y ago
Maybe the new grads with those legendary salaries are paid closer to their true value, while the seasoned devs are not?

godzillabrennus 6y ago

Paying $80k a year in India would get you top level talent. They’d pay less than that. Uber is preparing for a death spiral as their financial backing runs out and they need to shrink to the profitable markets.

toomuchtodo 6y ago
> Uber is preparing for a death spiral as their financial backing runs out and they need to shrink to the profitable markets. Many of their top markets have ruled their drivers are employees (or requiring similar compensation/benefits), except Brazil. I'm unsure if they can remain anywhere near their current size (versus the headcount of a traditional livery service) based on that regulatory environment, even with McKinsey style transformations to their business (ie offshoring). > "But one detail in particular caught my eye. About 24 percent of Uber’s bookings—all the money that customers pay through the app and in cash, including driver earnings—occur in just five cities: New York, Los Angeles, San Francisco, London, and São Paulo." [1] London: https://www.theguardian.com/technology/2018/dec/19/uber-loses-appeal-over-driver-employment-rights https://www.theguardian.com/technology/2018/dec/19/uber-lose... ("Uber loses appeal over driver employment rights") France: https://www.reuters.com/article/us-uber-court/top-french-court-deals-blow-to-uber-by-giving-driver-employee-status-idUSKBN20R23F https://www.reuters.com/article/us-uber-court/top-french-cou... ("Top French court deals blow to Uber by giving driver 'employee' status") California: https://finance.yahoo.com/news/california-regulator-uber-lyft-drivers-employees-044824014.html https://finance.yahoo.com/news/california-regulator-uber-lyf... ("Uber, Lyft drivers are employees according to California regulator") New Jersey: https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-drivers.html https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-... ("New Jersey has demanded that Uber pay $649 million for years of unpaid employment taxes for its drivers, arguing that the ride-hailing company has misclassified the workers as independent contractors and not as employees.") New York: https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay-nyc.html https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay... ("New York City regulators are moving toward significantly raising wages for drivers for Uber and other ride-hailing apps.") [1] https://slate.com/business/2019/04/uber-ipo-nyc-london-risks.html https://slate.com/business/2019/04/uber-ipo-nyc-london-risks...
- eldavido 6y ago
  Unintended side effect of this is to prevent competitive entry. No other TNC will be able to achieve enough density from day 1 to run at the wage floor without huge amounts of VC. That alone should make people suspicious of this legislation. In the long run, this is really, really good for Uber/Lyft.
  - Jommi 6y ago
    Yes, its basically a potential way for uber and lyft to lock themselves in as the only 2 players in the US market.
chanakya 6y ago
The numbers $300K and $80K are roughly accurate. Yes, you can get engineers in India for $5K or even less, but you don't want them working on your product. Senior, architect-level talented engineers may well cost $80K. And yes, if you want to hire the same capability engineer in Silicon Valley, they will likely cost $300K.
greesil 6y ago
Nitpicking a bit, it's not a death spiral if they don't die in the end.
- godzillabrennus 6y ago
  Contemplated changing that wording before posting but decided that it’s a bit of a ship of Theseus thought exercise. If Uber radically shifts its focus to focus solely on smaller profitable markets and the people working there are swapped out then has the company ultimately failed/died and had to be reborn? It may not be a General Magic style death but it seemed reasonable to me that at least philosophically it is a death spiral nonetheless.

Avalaxy 6y ago

I think the cost of an engineer is way less than 80K in India. Here in the Netherlands a senior SE would be $80K. I see no reason to go to India instead of western Europe then.

kareemm 6y ago
The reason is that instead of 300k (or 80k) you're paying less than 80k.
0xcafecafe 6y ago
I don't think it is "way less". 80K USD converts to 5,979K INR which is about the ballpark estimate some of the senior engineers I know make in India (one of them is working for the Western European company btw). One of the reasons to move to India would be the availability of talent even if it is at comparable cost. Companies like to scale and lack of talent is a risk they want to mitigate.
- rubber_duck 6y ago
  In my experience working with outsourcing agencies - "talent available" in India is filling headcount numbers. Good developers ask for similar wages as EU based ones and are equally hard to find, probably even harder because the market is filled with scammers (eg. on several occasions I would interview a competent guy and then the work would clearly get delegated to someone inexperienced)
  - 0xcafecafe 6y ago
    Sure, scammers are abound and the bad to good ratio is pretty high but due to the population size, the number of good developers is high as well.
    - egh5oon 6y ago
      > the bad to good ratio is pretty high but due to the population size This is not how ratios work.

illuminati1911 6y ago

With 80k you could get a team of senior engineers in India. Or ”senior engineers”, but anyway.

LeifCarrotson 6y ago

Why should those engineers be paid $150k if they're generating more than $300k of value? For that matter, why should an Indian engineer be paid $80k if they're generating $300k of value minus whatever hidden costs you want to assign (surely not $220k)?

frandroid 6y ago
The value generated is an interesting number when the company is hemorrhaging money...
ukoki 6y ago
People are paid based on how much a similarly skilled worker is willing to work for, not based on how much value they generate for a company.
- jupp0r 6y ago
  They are paid based on how much other companies are willing to pay the same worker.
- bronzeage 6y ago
  They are paid between their value and what they are willing to work for. Where exactly in between depends on supply and demand. When demand is high, competition will drive the salary close to the value generated. When demand is low, cost cutting and unemployment will drive the salary towards the minimum price.
karpierz 6y ago
Why should an engineer be paid that value they produce when they assume none of the risk? If the company goes bankrupt, will the engineer be willing to bail the company out? The engineer is paid less than the value they produce because they don't assume any of the risk. If the product they produce turns out to be worthless or break, they don't have to pay their salary back.
- egh5oon 6y ago

taylorlapeyre 6y ago

You can live decently in the valley on a lot less than 300k. Speaking from experience, even 90k is perfectly comfortable. Based on the salaries of my friends in SF, $150k is a very reasonable salary that allows a fantastic lifestyle.

eldavido 6y ago
This is kind of a contrarian viewpoint but one I happen to agree with. As a single person, you can live a great life on $100K. No, maybe you aren't going to $100/plate restaurants every night or living in a $5000/month luxury studio, but there are plenty of great apartments in Oakland (where I live) for $1500-2000/month. What's actually started to become jarring is the difference between SF proper and the rest of the region. SF rents seem to be almost 2x comparable places in the East Bay, plus the general price level is higher from Prop C and all the other insane junk the electorate wants. 2x the cost and the city is rapidly becoming a tent camp, I'm happy to live a little farther out and commute to work 1-2x/week when I'm not WFH.
stuff4ben 6y ago
Probably single with no family to support, living in a shoebox, with no car. Sure if you want to spend 60% of your salary on "housing" in SF, $150K is perfectly fine...
- Jommi 6y ago
  Why do you need to live in SF?
jupp0r 6y ago
With mortgage payments in the $5k range, I highly doubt your assessment. Maybe your definition of comfortable is different than mine, or you don’t have children.

centimeter 6y ago

Regardless of how “senior” they are, you get what you pay for.

gorpomon 6y ago

This is well-trodden ground as far as discussion around here goes. The common points pro and con always come up: is the quality the same (some say yes, some say no), is co-location or time-zone location important (same parenthetical), what $ amount is ethical to pay, whom is it more ethical to pay (are you a nationalist or a global citizen, etc), what's sustainable, many more etc's. I've decided that's it's a personal decision to a company. Many find benefits in having some teams in India or Asia, some don't so they don't. We should really divorce politics from this discussion. I'm ok with company A saying they like Indian devs and company B saying they enjoy the benefits of keeping it in their geographical area. I've seen outsourcing backfire. I've seen it succeed. I've seen team leads emerge in India and direct an entire product from 10,000 miles away. I've also seen dead weight that I had to go out of my way to get productivity from. You see it all and you'll get it all, so why the fuss?

LoSboccacc 6y ago
> We should really divorce politics from this discussion. that's a common technical people pitfall. politics permeates society, and ignoring it is only to your own detriment exposing you form exploitation of those whom play the political game, of which you most assuredly participate in, whether you want an active role in it or not.
- thebean11 6y ago
  There's a difference between "let's try to figure out the best way to do something" and "let's sell the solution we've settled on". That's not an argument for avoiding politics, but there's nothing wrong with veering in the other direction either.
  - LoSboccacc 6y ago
    once you figure out the best way, you _still_ have to sell it to stakeholders which are each optimizing for different things, some of which you probably don't even known, and that's when the politics kicks in.
- 6y ago

softwaredoug 6y ago

There is always one 'business KPI' being measured whether engineers like it or not - your pay. I know it's passe to poo poo KPIs and measuring value delivered to the business. If you're not in a position to justify the investment to stakeholders, relative to other options with lower costs, you're probably going to lose that argument.

collyw 6y ago

$80K will get you good engineers in Europe. Not saying they would be better or worse, but the cost of living is higher and the culture is closer.

MichaelRazum 6y ago

Just wondering why they don't want to outsource to europe. Here in Germany you will get good engineers for $80k. Or east europe is even cheaper + better cultural fit.

EdwinLarkin 6y ago
Employees in countries like India are more disposable. In theory if you mean by eastern europe the part that is in EU even that one has some decent labor laws to prevent companies like Uber from firing at will. I think even Ukraine or Belarus do.
- itsmefaz 6y ago
  A very good point, the labor laws in India are messed up.
- 0ld 6y ago
  Ua&By bodyshops work on B2B basis, so fire at will is quite possible, though highly unusual - demand is simply too high

deleted 6y ago

[deleted]

Alex3917 6y ago

> This gap should probably narrow as more remote work becomes normal, and more people move out of the Valley and can actually live decently on 150k, rather than 300k. The gap is a function of Moore's Law. If Moore's Law slows down, the gap will narrow. If not, then not.