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That compensation divided among Uber's approximately 27,000 employees results in about $3,000 per employee, but Uber's employees are probably mostly software en

by ksdale 6y ago

That compensation divided among Uber's approximately 27,000 employees results in about $3,000 per employee, but Uber's employees are probably mostly software engineers, so $3,000 per person is mostly not life-changing. A quick googling says that 3 million people "drive for Uber." Paying them what the high-flying executives make would mean a few dollars per person. I completely understand the impulse to question the huge disparity in salaries, but for the most part, executives that get paid that much work at gigantic companies, where hundreds of millions of dollars is an almost irrelevant pay increase when distributed across all of the employees.

panarky 6y ago
> Paying them what the high-flying executives make would mean a few dollars per person Let's radically simplify Uber's stakeholder into five classes: executives, investors, engineers, full-time drivers and occasional drivers. Each of these five classes of stakeholders have contributed to create Uber's market valuation of $55 billion. The first three classes are already well compensated because executives, investors and engineers have negotiating leverage. But the full-time drivers are the one stakeholder class that created much of Uber's value yet receive very little of the value they created. Maybe they're 10% of the total driver base, or 300,000 workers. How much of Uber's value do they deserve?
- gsibble 6y ago
  Key principal taught in business school: pay people what it costs to replace them. Which in Uber's case is very low.
  - inetknght 6y ago
    > taught in business school The school is ethically wrong here.
    - robertpateii 6y ago
      Now we’re back to the opening comment: who’s job is it ethically to ensure people receive a living wage? The companies that employ some people or all of us?
      - inetknght 6y ago
        Most people don't have leverage to negotiate a fair compensation for people to do it on their own. So you're presenting a a false dichotomy. "all of us" includes the companies that employ "some people". For better or worse, America seems to reject the idea that "all of us" means the government should help people out through taxes. That therefore leaves that companies must do it.
    - Fellshard 6y ago
      Just realistic, not idealistic.
      - gsibble 6y ago
        Exactly. This has nothing to do with ethics and the school wasn't wrong from an economic perspective, which is what you learn about in, ah, business school.
        Fellshard 6y ago
        Furthermore, there's a presumption of ill intent - a question begged: do all employee replacements occur because the employer unethically fires their employee?
  - TLightful 6y ago
    Get a broader education.
  - deleted 6y ago
    [deleted]
- ksdale 6y ago
  I mean, if drivers shared in Uber's net profit thus far, they'd have to pay Uber to drive. Do you think Uber is actually worth $55 billion? If it goes to zero, should the drivers pay back what they've earned? I think you make an excellent point that Uber wouldn't exist without drivers, but I feel like the inverse is also true? How much would a driver make just posting on FB or wherever that they were willing to drive people around for what they make driving for Uber? I feel like the vast majority of them would make basically nothing, otherwise there would be a lot more people doing that.
  - failuser 6y ago
    People made non-insignificant amount of money driving around and looking for hailing hand. Maybe not in the US, but that worked in Russia.
- savanaly 6y ago
  >because executives, investors and engineers have negotiating leverage Are you sure it's not because their marginal product is higher? Are you implying that collectively those groups managed to finagle a situation where the marginal worker is paid more than their marginal value, persistently and across multiple rounds of hiring? If it's not that, I think the more correct thing to say is they're paid higher because they're worth more to the company, not because they have "better negotiating power".
  - selestify 6y ago
    Don’t they have better negotiating power because their marginal product is higher (and their supply is more limited)? I don’t think you’re necessarily contradicting them
- Zhenya 6y ago
  The full time drivers have not generated the value. They are a replacable function and the market has priced their low-skilled labor in various other situations. What about the car manufacturers? The reliability and availability of the cars has "generated value" in an analogous way for Uber as well. Should they be compensated or should the cars be priced at what people are willing to pay for them?
- throwaway373438 6y ago
  "But the full-time drivers are the one stakeholder class that created much of Uber's value" This is not a true statement. Uber is not worth $55b because they have performed a lot of driving work. Uber is worth $55b because they have constructed a system in which driving work can be easily scheduled and allocated. The value is the system and the system was not created by drivers. The system was created to serve drivers and riders together. "yet receive very little of the value they created." They have received all of the value from the driving work they performed, in the form of a 1099 paycheck. There is a fairly clear market rate for driving work. They did not contribute to the construction of the $55b system. "How much of Uber's value do they deserve? " None.
- Mathnerd314 6y ago
  Revenue for Uber last year was $14 billion. Divide that by 300k workers and you get $47k/year. The average full-time driver makes $36k/year (https://www.thestreet.com/personal-finance/education/how-much-do-uber-lyft-drivers-make-14804869 https://www.thestreet.com/personal-finance/education/how-muc...). So drivers are getting 75% of Uber's revenue. This matches up with other sources that say Uber's commission is 25%. Is there a reason 25% is a bad number, besides that Lyft's commission is lower (20%)?
Allenaz 6y ago
Money given to people with no disposable income tends to be spent right away, unlike richer people, who tend to "park" their money.

by ksdale 6y ago

panarky 6y ago

> Paying them what the high-flying executives make would mean a few dollars per person Let's radically simplify Uber's stakeholder into five classes: executives, investors, engineers, full-time drivers and occasional drivers. Each of these five classes of stakeholders have contributed to create Uber's market valuation of $55 billion. The first three classes are already well compensated because executives, investors and engineers have negotiating leverage. But the full-time drivers are the one stakeholder class that created much of Uber's value yet receive very little of the value they created. Maybe they're 10% of the total driver base, or 300,000 workers. How much of Uber's value do they deserve?

gsibble 6y ago
Key principal taught in business school: pay people what it costs to replace them. Which in Uber's case is very low.
- inetknght 6y ago
  > taught in business school The school is ethically wrong here.
  - robertpateii 6y ago
    Now we’re back to the opening comment: who’s job is it ethically to ensure people receive a living wage? The companies that employ some people or all of us?
    - inetknght 6y ago
      Most people don't have leverage to negotiate a fair compensation for people to do it on their own. So you're presenting a a false dichotomy. "all of us" includes the companies that employ "some people". For better or worse, America seems to reject the idea that "all of us" means the government should help people out through taxes. That therefore leaves that companies must do it.
  - Fellshard 6y ago
    Just realistic, not idealistic.
    - gsibble 6y ago
      Exactly. This has nothing to do with ethics and the school wasn't wrong from an economic perspective, which is what you learn about in, ah, business school.
      - Fellshard 6y ago
        Furthermore, there's a presumption of ill intent - a question begged: do all employee replacements occur because the employer unethically fires their employee?
- TLightful 6y ago
  Get a broader education.
- deleted 6y ago
  [deleted]
ksdale 6y ago
I mean, if drivers shared in Uber's net profit thus far, they'd have to pay Uber to drive. Do you think Uber is actually worth $55 billion? If it goes to zero, should the drivers pay back what they've earned? I think you make an excellent point that Uber wouldn't exist without drivers, but I feel like the inverse is also true? How much would a driver make just posting on FB or wherever that they were willing to drive people around for what they make driving for Uber? I feel like the vast majority of them would make basically nothing, otherwise there would be a lot more people doing that.
- failuser 6y ago
  People made non-insignificant amount of money driving around and looking for hailing hand. Maybe not in the US, but that worked in Russia.
savanaly 6y ago
>because executives, investors and engineers have negotiating leverage Are you sure it's not because their marginal product is higher? Are you implying that collectively those groups managed to finagle a situation where the marginal worker is paid more than their marginal value, persistently and across multiple rounds of hiring? If it's not that, I think the more correct thing to say is they're paid higher because they're worth more to the company, not because they have "better negotiating power".
- selestify 6y ago
  Don’t they have better negotiating power because their marginal product is higher (and their supply is more limited)? I don’t think you’re necessarily contradicting them
Zhenya 6y ago
The full time drivers have not generated the value. They are a replacable function and the market has priced their low-skilled labor in various other situations. What about the car manufacturers? The reliability and availability of the cars has "generated value" in an analogous way for Uber as well. Should they be compensated or should the cars be priced at what people are willing to pay for them?
throwaway373438 6y ago
"But the full-time drivers are the one stakeholder class that created much of Uber's value" This is not a true statement. Uber is not worth $55b because they have performed a lot of driving work. Uber is worth $55b because they have constructed a system in which driving work can be easily scheduled and allocated. The value is the system and the system was not created by drivers. The system was created to serve drivers and riders together. "yet receive very little of the value they created." They have received all of the value from the driving work they performed, in the form of a 1099 paycheck. There is a fairly clear market rate for driving work. They did not contribute to the construction of the $55b system. "How much of Uber's value do they deserve? " None.
Mathnerd314 6y ago
Revenue for Uber last year was $14 billion. Divide that by 300k workers and you get $47k/year. The average full-time driver makes $36k/year (https://www.thestreet.com/personal-finance/education/how-much-do-uber-lyft-drivers-make-14804869 https://www.thestreet.com/personal-finance/education/how-muc...). So drivers are getting 75% of Uber's revenue. This matches up with other sources that say Uber's commission is 25%. Is there a reason 25% is a bad number, besides that Lyft's commission is lower (20%)?

Allenaz 6y ago

Money given to people with no disposable income tends to be spent right away, unlike richer people, who tend to "park" their money.