26 ms·

Uber will charge significantly more per trip as new Seattle law goes into effect

128 points by donsupreme 6y ago

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google234123 6y ago
Took a while for the article to get to the main point but the reason for the raise is because: "Under the new rules, drivers will earn a gross hourly pay of about $30.30 per hour, before expenses." I was very confused why rates were going up if the drivers made 23$ an hour on average now and the minimum wage was only 16$.
- adjkant 6y ago
  > Researchers from The New School and University of California, Berkeley, in a city-commissioned study, determined that drivers make about $9.73 per hour after expenses. > However, Uber points to a study from Cornell University’s Industry Labor Relations School that found the median driver made about $23 an hour after expenses. That study uses a different definition of working time and makes different assumptions about driver expenses, among other differences. > Under the new rules, drivers will earn a gross hourly pay of about $30.30 per hour, before expenses. The legislation will set new per-mile and per-minute rates for drivers while they’re carrying passengers, which are meant to be high enough to compensate for job-related expenses, time spent waiting for rides and time driving to pick up passengers. The city found it to be just under $10, hence the 50% raise. Uber did their own math and found it to be $23. I haven't read either study but I don't trust Uber one bit with their calculation. Either way, they have to meet the standards of the law, not their own number they can define however they want.
  - troydavis 6y ago
    SCC Insight did a great analysis here: https://sccinsight.com/2020/07/21/the-war-heats-up-over-seattles-attempts-to-regulate-uber-and-lyft-drivers-pay/ https://sccinsight.com/2020/07/21/the-war-heats-up-over-seat... It's hard to summarize, but I pasted the closest to a summary below. The Parrott and Reich study is the one commissioned by the Seattle Office of Labor Standards and City Council: > At this point, there’s no real point in groping through the wage, expense or hours calculations for either study; the underlying data in the Parrott and Reich study is garbage, and both studies skew their analysis and recommendations in the direction that favors the one who commissioned their study. Instead, we should be focused on the key policy questions, and forcing city officials to be transparent about who they are prioritizing in the policy decisions they are making in setting a minimum wage. Once the policy questions are answered, there is enough raw data in the Cornell report to calculate out the proper minimum wage. > The key policy question, one that drives so many others, is whether the city should prioritize full-time drivers over part-time and casual drivers. As we’ve seen above, it affects almost everything: what expenses to include, how much the system needs to try to maximize paid hours for full-time drivers, the economic model for the companies. According to the Uber/Lyft data set that Cornell analyzed, only 15% of TNC drivers are full-time, but for them the job is their livelihood. Should they be prioritized over people driving as a second job to help make ends meet or deal with emergency expenses? Should the city try to increase the number of full-time TNC driver jobs? Should the city be picking winners and losers at all between full-time and part-time drivers?
    - godelski 6y ago
      I skimmed the studies since the are linked in the main article. It does in fact seem like they bias towards which position they had as a prior, but I would still say that they are useful. Both provide approximate bounds. So we have a lower bound of $9/hr and an upper bound of $23/hr (now this doesn't mean that we should say it is $16/hr). But the things the studies did bring up a lot of questions. Both did nefarious things (lower wage study is including the vehicle cost as part of expenses and higher wage poorly tries to account for "lurkers" by only counting idle times that directly lead to a ride.) For example, one of the big differences in the studies was how they accounted for "working." One did with app open and the other did idle time that directly led to rides. So if Uber and Lyft are required to pay for idle time, how are they going to handle people that pass on rides and just sit idle? Do you get banned from the platform if you pass on x amount of rides? I'd imagine whatever the policy (not stated in the article) is going to get harsher if they aren't paid by the ride and rather by a combination of hourly and ride. Since it is clearly difficult to actually determine hours working. Or maybe I'm over thinking it and the amount of people sitting idle is actually really low where it isn't a big deal. Does anyone know? [0] Berkeley released this comparison which is kinda odd and biases towards the lower wage study. The odd things are like #4 how they say the high wage study is void because it includes tips and technically the state doesn't count tips as hourly wage, but if we're talking about take-home that's an important number. https://irle.berkeley.edu/files/2020/07/Comparison-of-two-Seattle-studies.pdf https://irle.berkeley.edu/files/2020/07/Comparison-of-two-Se...
- hnracer 6y ago
  How do they account for the expected lower turnover due to the price increase when they estimate the post-policy gross hourly wage?
DerekL 6y ago
Title should be “Uber will charge 25% more …”
- dang 6y ago
  We've changed the title to be that of the article, in keeping with the site guideline: "Please use the original title, unless it is misleading or linkbait; don't editorialize." (Submitted title was "Uber will charge 25% starting Jan. 1 in Seattle as per minimum wage law". Submitters: please don't do that.) https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
WalterBright 6y ago
"By April 1, as the compensation for drivers fully phases in, fares could increase by 50% compared to today’s prices,"
redwood 6y ago
This should be a great opportunity to test whether at this point we're all so conditioned to rely on these services, will we be willing to pay more? If the answer is yes this suggests that these services can start raising prices and start taking home more profit across the board
- zacharyvoase 6y ago
  Or paying their workers more?
  - freeone3000 6y ago
    Why do that unless you have to?
    - deleted 6y ago
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- DeonPenny 6y ago
  I'm going to say no. I am most people I know uber way less because uber pool is gone. I don't think making uberx way more expensive will do anything but drive people away from those services unless necessary. I bike a lot more though which is good.
  - alisonkisk 6y ago
    Uber pool is temporarily suspended due to rona.
    - DeonPenny 6y ago
      I am point it out as a case study on what happen when cheaper options are removed.
- tolbish 6y ago
  > This should be a great opportunity to test whether at this point we're all so conditioned to rely on these services, will we be willing to pay more? Uber tested this out years ago when they first launched. In my city they offered ride passes that had a flat fare (of less than $5 per trip, within some threshold...I think it was within 20 miles). Then when they expanded they slowly raised the price of the flat fare before getting rid of it altogether. In short, yes, we are generally conditioned to rely on these services.
ogre_codes 6y ago
The big challenge here is when is someone "Working" and when are they idle. A big part of gig economy profits revolves around not paying drivers for idle time between gigs. The flip side of this is a lot of drivers want flexibility in hours. It's a tricky problem because the gig companies don't set driver hours. As these laws take effect, it's likely flexibility in shifts will decrease.
- SpicyLemonZest 6y ago
  Seattle's policy avoids that complication by setting very high wage requirements for the actual trips with the expectation that idle time and expenses will pull down the "true" compensation. The requirements add up to about $29.90 over an hour of driving, which the city believes will get drivers to the $16.39 hourly minimum for traditional workers. (https://www.seattletimes.com/seattle-news/transportation/seattle-to-require-minimum-wage-for-uber-and-lyft-drivers/ https://www.seattletimes.com/seattle-news/transportation/sea...)
  - godelski 6y ago
    I don't think that answers the question at hand. The question is about if the driver is actually working (waiting for a rider) or just sitting with their phone on. I don't think this is a trivially solvable thing. But I'd also imagine Uber/Lyft would be more aggressive in kicking idle people off the platform. But that will get complicated because "rides needed" is not a uniform or homogeneous distribution throughout the day, week, month, or year. I'd imagine someone driving as a 9 to 5er would be idle much more often than someone driving on the weekends and holidays. I'm fairly certain good actors will get kicked in an attempt to rid the platform of bad actors.
    - SpicyLemonZest 6y ago
      The Seattle rule doesn't require Uber to pay drivers while they wait for a trip to be assigned, only once they actually have one. (This might seem intuitively gameable by making drivers wait longer, but there's no reason for Uber to do that, since one way or another they have to pay out the statutory minimum for every ride.)
jelliclesfarm 6y ago
[..] Ahmed Mahamud, 46, an Uber driver from Federal Way, said he’s looking forward to the wage increases, as he’s responsible for nine children, along with his wife who works part-time. “I believe this will help my family to live,” Mahamud said.[..] This man needs another job.
- deleted 6y ago
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- cultus 6y ago
  Easy for you to say.
  - jedmeyers 6y ago
    Probably because he considers nine children to be a luxury he cannot afford.
    - cultus 6y ago
      If we reduced having children to pure economic calculation, humanity would go extinct.
      - sokoloff 6y ago
        If people have children without regard to their finances, humanity won't go extinct, but there is likely to be increased suffering and anxiety along the way.
        cultus 6y ago
        Birth rates go down when people are in a secure situation. The solution isn't to make having children hard through impoverishment. That increases birth rates further. Besides, in the case of this Somalian man, in subsistence-oriented societies having more children is often economically advantageous.
baron816 6y ago
It's easy for middle and upper income individuals with disposable income to advocate for these kinds of laws. If you're using Uber to get home from the bar late at night once a week, an extra 25% is no big deal. But if you're on the lower income scale and you need Uber to help you get between your second and third job (because you can't afford a car and public transit is unreliable) or you need it to get to a doctor's appointment, this kind of change is a big deal. What will also likely happen is that ridership decreases at the margins. People won't cut it out completely, they'll just use it proportionally less. Drivers might make a little more, but fewer drivers will be able to make any money at all.
- toomuchtodo 6y ago
  This is not an excuse for one cohort of poverty to subjugate the other by way of Silicon Valley. If public transportation is not reliable, make it reliable. If people aren't paid enough, improve wage and labor requirements. Many countries provide for their workers' transportation without Uber, so why can't we? For example: > But if you're on the lower income scale and you need Uber to help you get between your second and third job (because you can't afford a car and public transit is unreliable) or you need it to get to a doctor's appointment, this kind of change is a big deal. If this is the problem we're solving for (getting you between multiple distant jobs that you desperately need to make ends meet), and have determined that Uber is the only or best solution, we have already failed. The solution to poverty is not serfdom.
  - baron816 6y ago
    If society decides that everyone should have minimum standard of living despite their skill level or net contributions, then it should be society as a whole that bares that burden, not just the enterprises that employ low/no skill labor or their consumers. A minimum wage is nothing more than a tool in our arsenal to fight poverty. I (and many economists) argue that it is one of our worst tools. A negative income tax is much better. It won't distort labor markets or risk driving up unemployment. And it's fairer in that the burden is shared collectively rather than just by some industries. Goldman Sachs doesn't get hurt by a minimum wage, but small business owners, such as those running a convenience store, do.
causality0 6y ago
It infuriates me that rideshare services have become the poster children for the "contractors or employees" debate because they're incredibly well-suited to being contractors. They genuinely get to work for competing services and pick their own hours. Uber and Lyft are the hammer used to smash people fighting for workers in industries where they're only contractors on paper. Where they aren't allowed to pick their hours or work for another employer in the same field. "Make everybody we can a contract worker" is a cancer eating the blue collar economy alive. Hair stylists, nail techs, estheticians, massage therapists, painters, plumber's assistants, etc are all suffering immensely. There are buildings with a set 8-4 schedule with hundreds of people in them of which only three managers count as employees.
- dghlsakjg 6y ago
  I think part of the issue is that is difficult and possibly expensive to fight that fight on your own. We need DAs and enforcement actions that favor workers. We need the IRS to automatically flag people with a ton of contractor income from a single source and let them know that they may have been misclassified, and that they may not owe nearly as much in taxes if so. And then we need the IRS to publicly scare employers into erring on the side of calling workers employees. I fought a misclassification with a former employer. I was able to get a ruling from the IRS, but the employer never really faced any real punishment, even though it was in writing that he was playing tax games. I think what it comes down to is that almost no one knows how to dispute it or that they even can dispute. And many employers will immediately get rid of you if you try.
  - bestnameever 6y ago
    > and that they may not owe nearly as much in taxes if so. I imagine many independent contractors would be paid less if they were employees.
- amelius 6y ago
  Yes. It's infuriating how much difference a simple administrative matter can make. I've heard stories from teachers who, working as contractors, make more than 2x the salary of equivalent employees. And they even get to choose their days off. Can we get some economical fairness, pretty soon please?
CryptoPunk 6y ago
An increase in consumer prices, as a result of contract-freedom-violating regulations, is effectively a wage decrease for every one.
wolverine876 6y ago
These stories put out by corporations - that consumers are victimized by %thing-disliked-by-company% because the companies are forced to raise prices - are absolute BS. It's anti-tax/regulation propaganda. Put your business hats back on: Companies don't price based on some 'cost plus' formula (e.g., 'our cost is $100, a 20% markups is 'fair', therefore we'll charge $120!'). If they did, your soda would cost 10 cents (rough estimate). Don't ask what your software would cost. Companies set prices to maximize their profits. When Uber's costs decrease, do they cut prices or take more profit? Do they tell this story when other expenses increase? This expense is no different than all their other ones in terms of its affect on pricing. When competitive SV salaries increase, does Uber whine and say they are forced to raise prices by the cruel demands of software developers? What about when the drivers' expenses increase, such as the cost of gasoline? On an economic level, pricing depends on supply and demand, and price changes depend on the elasticity of demand (among other things). The new law merely causes Uber to share more of its profits with the drivers. If Uber wants to raise prices, that's their problem.
- xyzzyz 6y ago
  > The new law merely causes Uber to share more of its profits with the drivers. If you actually use the microeconomic model of supply and demand curves that you refer to when you talk about “elasticity of demand”, you’ll see that it is by no means clear that it will cause Uber to share “more of its profits” with the drivers. It all depends on shapes of the supply and demand curves, and the exact amount of minimum wage. You might very well find that the total amount of money paid by Uber to its drivers is reduced, as a result of fewer rides being taken because of higher prices of rides. To know the actual outcome, you’d need the data that you don’t have, and that Uber only partially has. However, you seem very confident about the actual outcome, almost as if you assumed it before making an argument to justify it.
- CryptoPunk 6y ago
  >>Companies set prices to maximize their profits. When Uber's costs decrease, do they cut prices or take more profit? Profit margins can only absorb cost increases until they go to zero, after which point prices have to be raised. Additionally, it is NOT good if companies are forced to reduce profit margins below what free market forces would place them at. Profit is compensation for investors. Too low profits leads to under-investment and stagnation of productivity/wage growth.
hash872 6y ago
Sorry, how does this work when drivers toggle between Uber & Lyft? Is that now officially disallowed? Literally every driver I've ever met contracts through both services, but obviously they can't both be paying the driver $30ish an hour at the same time. (With that being said- I'm definitely rooting for the driver who figures out how to hack the system and does exactly that....)
- deleted 6y ago
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- smt88 6y ago
  As far as I can tell, the minimum applies only to time that the driver is carrying passengers. I may have misread things though.
- filmgirlcw 6y ago
  Neither company is paying them a flat rate, driver pay is just increasing so that when working, the hourly wage will be at least $16 an hour. This ends up being amortized in per-minute increments, so that for every 15 minutes you’re driving a passenger, you make $4. Now, this doesn’t mean that if demand is low in an area or its 2am and no one is searching for a car that drivers still get paid for time they drive around without working. There have been legislation attempts to do that, but they’ve failed (notably in California and other places). You aren’t paid by any of these services for the time you spend seeking out a passenger — which is the same way taxi cabs work. Work time begins and ends with the ride itself. That’s actually one of the criticisms made against these types of requirements, because there is an argument to be made that if fares rise too much, that will suppress demand (and especially suppress demand in lower-income areas), leading to drivers spending more time driving in circles trying to catch rides, so that their net income is less than it was before. The related part of that argument is that it will lower driver availability in areas that are hard to get to, leading riders in those areas with fewer options, regardless of how much they are willing to spend, because drivers are choosing to stick to heavily trafficked areas. So a driver can still use both services, but they can’t double-dip, because it isn’t possible to drive two passengers at once (I mean, I guess it is, but that activity would get a driver banned from both services).
zaroth 6y ago
There’s a huge leap of faith (you could say naïveté) in this logic that imposing a floor on effective wages will actually benefit drivers. The claim that corporations paying legal wages below a certain level are mooching off the state is an oversimplification. People are working for below a “living wage” and so the state provides lower or negative marginal tax rates to support them. It’s an unstated assumption that this is the corporations’ fault. But we cannot presume from where these extra dollars are coming from, when the State legally forces corporations to pay more to these workers. Maybe there ends up being less of the lowest value workers overall, costing the low-skill working population their jobs. Maybe there ends up being a greater incentive and ROI to automate, shifting the cost/benefit analysis and driving greater investment to eliminate manual jobs. Maybe the costs are passed on directly to the consumer, which directly reduces demand and therefore also reduces employment. Maybe a greater share of corporate profits end up being spent on this labor. Certainly it’s some mix of all of the above. You could put elasticity ratios on all of these effects and you can model how much of the added burden will fall on each. The challenge is that of course the corporate profit numbers will move last of all. And that’s presuming that the margins currently in effect even allow for some slack. What we saw here is that the Uber’s operating profit margins didn’t support the regulation, so prices had to move. The fatal error is thinking that the State is somehow in a better position to set prices than the Corporation. A key piece of IP that Uber/Lyft have developed is their pricing algorithm. They know the supply curve for how much they can spend per driver to recruit, they know the demand curve for how much they can charge per ride. They price in real-time dynamically based on supply and demand. And they solve this equation systematically, to induce demand when they know they have excess drivers waiting for fares, and to induce supply when they have too many. Their incentives are fully aligned (based on their commissions) to maximize total fare revenue. My prediction is that this will drive down total fare revenue in Seattle and ultimate earnings per driver will be reduced although this will happen along with a reduction in fares per driver and the number of drivers. It’s possible the driver count will fall fast enough to maintain average earnings per driver, but I doubt it in this macroeconomic environment. Ultimately if the goal is to force ride-share drivers to find alternate sources of revenue, I think this is a good solution. That’s not an invalid goal, but I think it’s the most reasonable expectation. Going back to the original hypothesis, if you outlaw low paying wages, certainly there will be no low paying jobs. The question then becomes, what becomes of the low-skilled workers? I have a theory, I’m not sure if it’s well supported in academia but it probably relates to a kind of Nash Equilibrium. My theory is that people are generally pretty lazy, but that this is not by any stretch an insult. We search for shortcuts, low friction solutions, easy outs. We don’t strive for peak performance, we mostly look for good enough. The best we can hope for under such a hypothesis is this will force the hand of workers to avail themselves to higher paying jobs if they are able. In the context of ride hailing, there is a large demographic where the push-button-get-job dynamic was extremely economically valuable. To the extent that they would accept technically “below-market pay” for the convenience of cramming in a fare between classes and dinner, or going out for a few hours at night to bank some cash. But this is mainly a failure of properly accounting for the opportunity cost. I’ve often felt that working is way more expensive than most people realize. Even aside from the high marginal tax rates when you stop getting free health insurance or food stamps. Working a 40 hour week means you have to endure a flaky and expensive hiring process, you have to endure a flaky and stressful boss, you likely end up procuring food supplies at a higher cost than you might otherwise pay, and most of all you have to keep up your housing, hygiene, transportation, wardrobe, health, household, hobbies, and other engagements (e.g. education) all in a fashion that allows you to be reliably available during business hours in a geographic area that you can commute to which has an excess job available. All of that is actually extremely fucking expensive. Uber lowers the marginal costs of employment very significantly. This is almost never properly factored into the analysis when people consider whether it’s a good idea to reduce the size of the on-demand economy. So in the end, some of those ride-hailing workers will find ways to reduce their expenses, tighten their belts and forgoe the “cheap revenue”. Other workers will be forced to find more expensive revenue sources and be forced what we naively see as “upwards” but from an holistic perspective in a fully priced out economic model is almost surely a short-term loss to that individual. An optimist would say it might lead to long-term gain, by pushing drivers out of a local maxima. I’d say that’s highly presumptuous.
idunno246 6y ago
i can't find the actual minimums, this[1] article suggests that the wait time is 0.56/min. I'm curious how this ends up comparing to taxis, since a taxi has a idle time of 0.50/min in seattle - it seems unreasonable to set minimums higher than taxis(but maybe it wont since i cant find the per-mile fee, and 25% over the current uber per-mile fee is about $1 less than a taxi) [1] https://www.geekwire.com/2020/uber-raising-trip-prices-24-new-year-response-seattles-new-minimum-wage-law-drivers/ https://www.geekwire.com/2020/uber-raising-trip-prices-24-ne...
- treve 6y ago
  The law is based on minimum wage, not a minimum price for wait time. Uber sets that price.
  - idunno246 6y ago
    https://seattle.legistar.com/View.ashx?M=F&ID=8811142&GUID=E5A95BE2-AB28-45F3-9C41-C15FD3293521 https://seattle.legistar.com/View.ashx?M=F&ID=8811142&GUID=E... https://seattle.legistar.com/View.ashx?M=F&ID=8807285&GUID=66FB7409-8761-48CB-BE85-410F4AC2BEB3 https://seattle.legistar.com/View.ashx?M=F&ID=8807285&GUID=6... I think think this is the actual bill. So it is minimum pricing on time and miles backed into by hourly wages after utilization. So 1.33/mile, but I think the time is total time not idle time like taxis, if so assuming an average of 30 mph add another dollar which puts it right at taxi pricing, and probably doesn’t include ubers fee.
- filmgirlcw 6y ago
  For reasons too complicated to get into in a comment, the taxi industry has typically avoided most of these minimum-wage arguments because of the way those systems are designed. The taxi lobby is a lot more entrenched than the ride hail lobby (and for some bizarre reason, it isn’t criticized the same way, even though it is every bit as awful and exploitative — and more so in some areas - than ride share giants ) is my guess for one. Even our dysfunctional city council won’t want to take on the taxi lobby, not that Seattle has much of a taxi ecosystem anyway. Taking a taxi in Seattle is one of my last-resort options, and I moved here from New York City, and am not anti-taxi as a concept, the Seattle cabs add just terrible. Of course, Uber and Lyft didn’t help themselves any by arguing vociferously for years that they weren’t anything like taxis, largely as a way to avoid having to pay drivers similar to medallion systems. Now, there were some good reasons for this, especially in markets like Portland, that used to have really restrictive pick-up policies for taxi cabs — and in areas like New York and Chicago, that have strict limits on how many medallions are issued and how many cabs can be on the road at once, but these companies can’t have it both ways. They can’t argue for years that they aren’t taxi companies and then complain if legislation means they have to pay more than taxi companies.
testfoobar 6y ago
Price controls create dead weight loss. Price controls are great for politicians but don't actually do what they are supposed to do. Doesn't matter whether it is rent control or minimum wage laws. Government set price controls distort markets negatively. In this case, the total number of trips taken on Uber in Seattle is going to drop because a certain percentage of trips will now become uneconomical to those riders: they will cost too much to be worth it. Two negative things will happen: 1. In aggregate drivers in Seattle will make less money due to fewer trips. Demand for Uber drops as the price increases. A simple thought experiment confirms this: lets say that Seattle demands a flat $25/tax per ride. A lot of potential riders will pass. 2. Some percentage of riders will forego the benefit of uber trips due to the higher cost. Whether it will be drunks leaving bars or whomever. Some people who would take Uber at a lower price will not take it at a higher price. Seattle may see an uptick in drunk driving as a result of this. Governments love price control because they give the illusion of helping: uber drivers will earn more per hour. BUT - they may work fewer hours and there may be fewer Uber riders working. In summary, this will reduce the total income of Uber drivers in Seattle. It will also reduce the number of Uber riders - some of whom are likely to become drunk drivers instead. This is bad public policy.
- missedthecue 6y ago
  Why does so much of politics benefit the person passing the bill at a cost to everyone else. (on net). It's like a market failure, but for the political system.
  - hnracer 6y ago
    I think there's two reasons. First is that the costs are hidden and complicated. We need a decent understanding of economics combined with an honest and deep analysis of the consequences of the specific policy to conceptualize why it's deleterious. Very few people will tick both boxes. Second is that politicians want to be seen to be doing something. Even if leaving the market alone is the best of all options.
  - testfoobar 6y ago
    I suspect because most people do not understand dynamic system and equilibrium. They do understand individual data points such as: my rent is too high or my wage is too low. Therefore it is easy to sell a remedy that claims to address this. Unfortunately, when the dynamic system finds a new equilibrium, people are surprised. To this day, people don't seem to understand that rent control suppresses supply leading to higher overall rents.
poxwole 6y ago
There should be a law banning this offloading of expenses directly to the customers. Uber earns enought to pay it's drivers fairly. It's basically doing what the super car manufacturers did when EU slapped them with penalty for fuel ineffeciency, they just transferred it to the customers by raising the prices of the cars.
- AlphaSite 6y ago
  I’m not sure this is practical, if this were truly an unnecessary charge wouldn’t there be about margin for a competitor to undercut them, as they once undercut taxis?
underseacables 6y ago
At those prices you might as well take a taxi...
peignoir 6y ago
In a demand and offer model we should expect a drop of offer as the result of the price being artificially raised therefore a loss of revenue for the drivers. I tend to disagree with Socialist laws, Seattle did benefit a lot of Amazon extension but like California we should see many tech company leaving.
peignoir 6y ago
In a demand and offer model we should expect a drop of offer as the result of the price being artificially raised therefore a loss of revenue for the Drivers...
santamex 6y ago
I don’t get it. “Uber points to a study from Cornell University’s Industry Labor Relations School that found the median driver made about $23 an hour after expenses” Then they raise the price by 25%, because minimum wage adjusted to $17? Uber, just admit that you faked the study.
deleted 6y ago
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BMSmnqXAE4yfe1 6y ago
Why do we need Uber in the first place? Where I live, there is an app that directly connects drivers to riders who pay cash, and nobody takes 30% fee fro mdriver's wages.
- thehappypm 6y ago
  As a driver, collecting money sounds awkward, slow, risky for a dash, and certain to change the dynamic with the passenger. As a passenger, cash is far less convenient, and paying at the end of a ride is awkward, slow, and certain to change the dynamic with the driver.
  - BMSmnqXAE4yfe1 6y ago
    I'm sure 99% percent of drivers will choose 30% more money vs "avoiding risky cash". And they have an option of direct money transfer through mobile phone too.
    - BMSmnqXAE4yfe1 6y ago
      As a passenger, to me cash is far more convenient, as it preserves my privacy and nobody can overcharge me. The bill is usually 20-30% lower than Uber.
- dwild 6y ago
  I never have cash on me and I'm not the only one. Thus that service would be useless for me and for everyone I know. Where I'm from, it's the law that cabs should accept credit and debit, not only does it reduce tax fraud, but it also allow people like me to pay. Transaction fees are not that expensive, but believe me, companies that provide it to cabs drivers, does charge much more for it. Still it's less than 30%. Again where I'm from, dispatcher does charge the drivers, and from what I read, it was not too far from 30% (which makes sense, they have to account for advertising, wage for dispatch by phone, and since Uber, for the development of a badly made app).

128 points by donsupreme 6y ago

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google234123 6y ago

Took a while for the article to get to the main point but the reason for the raise is because: "Under the new rules, drivers will earn a gross hourly pay of about $30.30 per hour, before expenses." I was very confused why rates were going up if the drivers made 23$ an hour on average now and the minimum wage was only 16$.

adjkant 6y ago
> Researchers from The New School and University of California, Berkeley, in a city-commissioned study, determined that drivers make about $9.73 per hour after expenses. > However, Uber points to a study from Cornell University’s Industry Labor Relations School that found the median driver made about $23 an hour after expenses. That study uses a different definition of working time and makes different assumptions about driver expenses, among other differences. > Under the new rules, drivers will earn a gross hourly pay of about $30.30 per hour, before expenses. The legislation will set new per-mile and per-minute rates for drivers while they’re carrying passengers, which are meant to be high enough to compensate for job-related expenses, time spent waiting for rides and time driving to pick up passengers. The city found it to be just under $10, hence the 50% raise. Uber did their own math and found it to be $23. I haven't read either study but I don't trust Uber one bit with their calculation. Either way, they have to meet the standards of the law, not their own number they can define however they want.
- troydavis 6y ago
  SCC Insight did a great analysis here: https://sccinsight.com/2020/07/21/the-war-heats-up-over-seattles-attempts-to-regulate-uber-and-lyft-drivers-pay/ https://sccinsight.com/2020/07/21/the-war-heats-up-over-seat... It's hard to summarize, but I pasted the closest to a summary below. The Parrott and Reich study is the one commissioned by the Seattle Office of Labor Standards and City Council: > At this point, there’s no real point in groping through the wage, expense or hours calculations for either study; the underlying data in the Parrott and Reich study is garbage, and both studies skew their analysis and recommendations in the direction that favors the one who commissioned their study. Instead, we should be focused on the key policy questions, and forcing city officials to be transparent about who they are prioritizing in the policy decisions they are making in setting a minimum wage. Once the policy questions are answered, there is enough raw data in the Cornell report to calculate out the proper minimum wage. > The key policy question, one that drives so many others, is whether the city should prioritize full-time drivers over part-time and casual drivers. As we’ve seen above, it affects almost everything: what expenses to include, how much the system needs to try to maximize paid hours for full-time drivers, the economic model for the companies. According to the Uber/Lyft data set that Cornell analyzed, only 15% of TNC drivers are full-time, but for them the job is their livelihood. Should they be prioritized over people driving as a second job to help make ends meet or deal with emergency expenses? Should the city try to increase the number of full-time TNC driver jobs? Should the city be picking winners and losers at all between full-time and part-time drivers?
  - godelski 6y ago
    I skimmed the studies since the are linked in the main article. It does in fact seem like they bias towards which position they had as a prior, but I would still say that they are useful. Both provide approximate bounds. So we have a lower bound of $9/hr and an upper bound of $23/hr (now this doesn't mean that we should say it is $16/hr). But the things the studies did bring up a lot of questions. Both did nefarious things (lower wage study is including the vehicle cost as part of expenses and higher wage poorly tries to account for "lurkers" by only counting idle times that directly lead to a ride.) For example, one of the big differences in the studies was how they accounted for "working." One did with app open and the other did idle time that directly led to rides. So if Uber and Lyft are required to pay for idle time, how are they going to handle people that pass on rides and just sit idle? Do you get banned from the platform if you pass on x amount of rides? I'd imagine whatever the policy (not stated in the article) is going to get harsher if they aren't paid by the ride and rather by a combination of hourly and ride. Since it is clearly difficult to actually determine hours working. Or maybe I'm over thinking it and the amount of people sitting idle is actually really low where it isn't a big deal. Does anyone know? [0] Berkeley released this comparison which is kinda odd and biases towards the lower wage study. The odd things are like #4 how they say the high wage study is void because it includes tips and technically the state doesn't count tips as hourly wage, but if we're talking about take-home that's an important number. https://irle.berkeley.edu/files/2020/07/Comparison-of-two-Seattle-studies.pdf https://irle.berkeley.edu/files/2020/07/Comparison-of-two-Se...
hnracer 6y ago
How do they account for the expected lower turnover due to the price increase when they estimate the post-policy gross hourly wage?

DerekL 6y ago

Title should be “Uber will charge 25% more …”

dang 6y ago
We've changed the title to be that of the article, in keeping with the site guideline: "Please use the original title, unless it is misleading or linkbait; don't editorialize." (Submitted title was "Uber will charge 25% starting Jan. 1 in Seattle as per minimum wage law". Submitters: please don't do that.) https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

WalterBright 6y ago

"By April 1, as the compensation for drivers fully phases in, fares could increase by 50% compared to today’s prices,"

redwood 6y ago

This should be a great opportunity to test whether at this point we're all so conditioned to rely on these services, will we be willing to pay more? If the answer is yes this suggests that these services can start raising prices and start taking home more profit across the board

zacharyvoase 6y ago
Or paying their workers more?
- freeone3000 6y ago
  Why do that unless you have to?
  - deleted 6y ago
    [deleted]
DeonPenny 6y ago
I'm going to say no. I am most people I know uber way less because uber pool is gone. I don't think making uberx way more expensive will do anything but drive people away from those services unless necessary. I bike a lot more though which is good.
- alisonkisk 6y ago
  Uber pool is temporarily suspended due to rona.
  - DeonPenny 6y ago
    I am point it out as a case study on what happen when cheaper options are removed.
tolbish 6y ago
> This should be a great opportunity to test whether at this point we're all so conditioned to rely on these services, will we be willing to pay more? Uber tested this out years ago when they first launched. In my city they offered ride passes that had a flat fare (of less than $5 per trip, within some threshold...I think it was within 20 miles). Then when they expanded they slowly raised the price of the flat fare before getting rid of it altogether. In short, yes, we are generally conditioned to rely on these services.

ogre_codes 6y ago

The big challenge here is when is someone "Working" and when are they idle. A big part of gig economy profits revolves around not paying drivers for idle time between gigs. The flip side of this is a lot of drivers want flexibility in hours. It's a tricky problem because the gig companies don't set driver hours. As these laws take effect, it's likely flexibility in shifts will decrease.

SpicyLemonZest 6y ago
Seattle's policy avoids that complication by setting very high wage requirements for the actual trips with the expectation that idle time and expenses will pull down the "true" compensation. The requirements add up to about $29.90 over an hour of driving, which the city believes will get drivers to the $16.39 hourly minimum for traditional workers. (https://www.seattletimes.com/seattle-news/transportation/seattle-to-require-minimum-wage-for-uber-and-lyft-drivers/ https://www.seattletimes.com/seattle-news/transportation/sea...)
- godelski 6y ago
  I don't think that answers the question at hand. The question is about if the driver is actually working (waiting for a rider) or just sitting with their phone on. I don't think this is a trivially solvable thing. But I'd also imagine Uber/Lyft would be more aggressive in kicking idle people off the platform. But that will get complicated because "rides needed" is not a uniform or homogeneous distribution throughout the day, week, month, or year. I'd imagine someone driving as a 9 to 5er would be idle much more often than someone driving on the weekends and holidays. I'm fairly certain good actors will get kicked in an attempt to rid the platform of bad actors.
  - SpicyLemonZest 6y ago
    The Seattle rule doesn't require Uber to pay drivers while they wait for a trip to be assigned, only once they actually have one. (This might seem intuitively gameable by making drivers wait longer, but there's no reason for Uber to do that, since one way or another they have to pay out the statutory minimum for every ride.)

jelliclesfarm 6y ago

[..] Ahmed Mahamud, 46, an Uber driver from Federal Way, said he’s looking forward to the wage increases, as he’s responsible for nine children, along with his wife who works part-time. “I believe this will help my family to live,” Mahamud said.[..] This man needs another job.

deleted 6y ago
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cultus 6y ago
Easy for you to say.
- jedmeyers 6y ago
  Probably because he considers nine children to be a luxury he cannot afford.
  - cultus 6y ago
    If we reduced having children to pure economic calculation, humanity would go extinct.
    - sokoloff 6y ago
      If people have children without regard to their finances, humanity won't go extinct, but there is likely to be increased suffering and anxiety along the way.
      - cultus 6y ago
        Birth rates go down when people are in a secure situation. The solution isn't to make having children hard through impoverishment. That increases birth rates further. Besides, in the case of this Somalian man, in subsistence-oriented societies having more children is often economically advantageous.

baron816 6y ago

It's easy for middle and upper income individuals with disposable income to advocate for these kinds of laws. If you're using Uber to get home from the bar late at night once a week, an extra 25% is no big deal. But if you're on the lower income scale and you need Uber to help you get between your second and third job (because you can't afford a car and public transit is unreliable) or you need it to get to a doctor's appointment, this kind of change is a big deal. What will also likely happen is that ridership decreases at the margins. People won't cut it out completely, they'll just use it proportionally less. Drivers might make a little more, but fewer drivers will be able to make any money at all.

toomuchtodo 6y ago
This is not an excuse for one cohort of poverty to subjugate the other by way of Silicon Valley. If public transportation is not reliable, make it reliable. If people aren't paid enough, improve wage and labor requirements. Many countries provide for their workers' transportation without Uber, so why can't we? For example: > But if you're on the lower income scale and you need Uber to help you get between your second and third job (because you can't afford a car and public transit is unreliable) or you need it to get to a doctor's appointment, this kind of change is a big deal. If this is the problem we're solving for (getting you between multiple distant jobs that you desperately need to make ends meet), and have determined that Uber is the only or best solution, we have already failed. The solution to poverty is not serfdom.
- baron816 6y ago
  If society decides that everyone should have minimum standard of living despite their skill level or net contributions, then it should be society as a whole that bares that burden, not just the enterprises that employ low/no skill labor or their consumers. A minimum wage is nothing more than a tool in our arsenal to fight poverty. I (and many economists) argue that it is one of our worst tools. A negative income tax is much better. It won't distort labor markets or risk driving up unemployment. And it's fairer in that the burden is shared collectively rather than just by some industries. Goldman Sachs doesn't get hurt by a minimum wage, but small business owners, such as those running a convenience store, do.

causality0 6y ago

It infuriates me that rideshare services have become the poster children for the "contractors or employees" debate because they're incredibly well-suited to being contractors. They genuinely get to work for competing services and pick their own hours. Uber and Lyft are the hammer used to smash people fighting for workers in industries where they're only contractors on paper. Where they aren't allowed to pick their hours or work for another employer in the same field. "Make everybody we can a contract worker" is a cancer eating the blue collar economy alive. Hair stylists, nail techs, estheticians, massage therapists, painters, plumber's assistants, etc are all suffering immensely. There are buildings with a set 8-4 schedule with hundreds of people in them of which only three managers count as employees.

dghlsakjg 6y ago
I think part of the issue is that is difficult and possibly expensive to fight that fight on your own. We need DAs and enforcement actions that favor workers. We need the IRS to automatically flag people with a ton of contractor income from a single source and let them know that they may have been misclassified, and that they may not owe nearly as much in taxes if so. And then we need the IRS to publicly scare employers into erring on the side of calling workers employees. I fought a misclassification with a former employer. I was able to get a ruling from the IRS, but the employer never really faced any real punishment, even though it was in writing that he was playing tax games. I think what it comes down to is that almost no one knows how to dispute it or that they even can dispute. And many employers will immediately get rid of you if you try.
- bestnameever 6y ago
  > and that they may not owe nearly as much in taxes if so. I imagine many independent contractors would be paid less if they were employees.
amelius 6y ago
Yes. It's infuriating how much difference a simple administrative matter can make. I've heard stories from teachers who, working as contractors, make more than 2x the salary of equivalent employees. And they even get to choose their days off. Can we get some economical fairness, pretty soon please?

CryptoPunk 6y ago

An increase in consumer prices, as a result of contract-freedom-violating regulations, is effectively a wage decrease for every one.

wolverine876 6y ago

These stories put out by corporations - that consumers are victimized by %thing-disliked-by-company% because the companies are forced to raise prices - are absolute BS. It's anti-tax/regulation propaganda. Put your business hats back on: Companies don't price based on some 'cost plus' formula (e.g., 'our cost is $100, a 20% markups is 'fair', therefore we'll charge $120!'). If they did, your soda would cost 10 cents (rough estimate). Don't ask what your software would cost. Companies set prices to maximize their profits. When Uber's costs decrease, do they cut prices or take more profit? Do they tell this story when other expenses increase? This expense is no different than all their other ones in terms of its affect on pricing. When competitive SV salaries increase, does Uber whine and say they are forced to raise prices by the cruel demands of software developers? What about when the drivers' expenses increase, such as the cost of gasoline? On an economic level, pricing depends on supply and demand, and price changes depend on the elasticity of demand (among other things). The new law merely causes Uber to share more of its profits with the drivers. If Uber wants to raise prices, that's their problem.

xyzzyz 6y ago
> The new law merely causes Uber to share more of its profits with the drivers. If you actually use the microeconomic model of supply and demand curves that you refer to when you talk about “elasticity of demand”, you’ll see that it is by no means clear that it will cause Uber to share “more of its profits” with the drivers. It all depends on shapes of the supply and demand curves, and the exact amount of minimum wage. You might very well find that the total amount of money paid by Uber to its drivers is reduced, as a result of fewer rides being taken because of higher prices of rides. To know the actual outcome, you’d need the data that you don’t have, and that Uber only partially has. However, you seem very confident about the actual outcome, almost as if you assumed it before making an argument to justify it.
CryptoPunk 6y ago
>>Companies set prices to maximize their profits. When Uber's costs decrease, do they cut prices or take more profit? Profit margins can only absorb cost increases until they go to zero, after which point prices have to be raised. Additionally, it is NOT good if companies are forced to reduce profit margins below what free market forces would place them at. Profit is compensation for investors. Too low profits leads to under-investment and stagnation of productivity/wage growth.

hash872 6y ago

Sorry, how does this work when drivers toggle between Uber & Lyft? Is that now officially disallowed? Literally every driver I've ever met contracts through both services, but obviously they can't both be paying the driver $30ish an hour at the same time. (With that being said- I'm definitely rooting for the driver who figures out how to hack the system and does exactly that....)

deleted 6y ago
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smt88 6y ago
As far as I can tell, the minimum applies only to time that the driver is carrying passengers. I may have misread things though.
filmgirlcw 6y ago
Neither company is paying them a flat rate, driver pay is just increasing so that when working, the hourly wage will be at least $16 an hour. This ends up being amortized in per-minute increments, so that for every 15 minutes you’re driving a passenger, you make $4. Now, this doesn’t mean that if demand is low in an area or its 2am and no one is searching for a car that drivers still get paid for time they drive around without working. There have been legislation attempts to do that, but they’ve failed (notably in California and other places). You aren’t paid by any of these services for the time you spend seeking out a passenger — which is the same way taxi cabs work. Work time begins and ends with the ride itself. That’s actually one of the criticisms made against these types of requirements, because there is an argument to be made that if fares rise too much, that will suppress demand (and especially suppress demand in lower-income areas), leading to drivers spending more time driving in circles trying to catch rides, so that their net income is less than it was before. The related part of that argument is that it will lower driver availability in areas that are hard to get to, leading riders in those areas with fewer options, regardless of how much they are willing to spend, because drivers are choosing to stick to heavily trafficked areas. So a driver can still use both services, but they can’t double-dip, because it isn’t possible to drive two passengers at once (I mean, I guess it is, but that activity would get a driver banned from both services).

zaroth 6y ago

There’s a huge leap of faith (you could say naïveté) in this logic that imposing a floor on effective wages will actually benefit drivers. The claim that corporations paying legal wages below a certain level are mooching off the state is an oversimplification. People are working for below a “living wage” and so the state provides lower or negative marginal tax rates to support them. It’s an unstated assumption that this is the corporations’ fault. But we cannot presume from where these extra dollars are coming from, when the State legally forces corporations to pay more to these workers. Maybe there ends up being less of the lowest value workers overall, costing the low-skill working population their jobs. Maybe there ends up being a greater incentive and ROI to automate, shifting the cost/benefit analysis and driving greater investment to eliminate manual jobs. Maybe the costs are passed on directly to the consumer, which directly reduces demand and therefore also reduces employment. Maybe a greater share of corporate profits end up being spent on this labor. Certainly it’s some mix of all of the above. You could put elasticity ratios on all of these effects and you can model how much of the added burden will fall on each. The challenge is that of course the corporate profit numbers will move last of all. And that’s presuming that the margins currently in effect even allow for some slack. What we saw here is that the Uber’s operating profit margins didn’t support the regulation, so prices had to move. The fatal error is thinking that the State is somehow in a better position to set prices than the Corporation. A key piece of IP that Uber/Lyft have developed is their pricing algorithm. They know the supply curve for how much they can spend per driver to recruit, they know the demand curve for how much they can charge per ride. They price in real-time dynamically based on supply and demand. And they solve this equation systematically, to induce demand when they know they have excess drivers waiting for fares, and to induce supply when they have too many. Their incentives are fully aligned (based on their commissions) to maximize total fare revenue. My prediction is that this will drive down total fare revenue in Seattle and ultimate earnings per driver will be reduced although this will happen along with a reduction in fares per driver and the number of drivers. It’s possible the driver count will fall fast enough to maintain average earnings per driver, but I doubt it in this macroeconomic environment. Ultimately if the goal is to force ride-share drivers to find alternate sources of revenue, I think this is a good solution. That’s not an invalid goal, but I think it’s the most reasonable expectation. Going back to the original hypothesis, if you outlaw low paying wages, certainly there will be no low paying jobs. The question then becomes, what becomes of the low-skilled workers? I have a theory, I’m not sure if it’s well supported in academia but it probably relates to a kind of Nash Equilibrium. My theory is that people are generally pretty lazy, but that this is not by any stretch an insult. We search for shortcuts, low friction solutions, easy outs. We don’t strive for peak performance, we mostly look for good enough. The best we can hope for under such a hypothesis is this will force the hand of workers to avail themselves to higher paying jobs if they are able. In the context of ride hailing, there is a large demographic where the push-button-get-job dynamic was extremely economically valuable. To the extent that they would accept technically “below-market pay” for the convenience of cramming in a fare between classes and dinner, or going out for a few hours at night to bank some cash. But this is mainly a failure of properly accounting for the opportunity cost. I’ve often felt that working is way more expensive than most people realize. Even aside from the high marginal tax rates when you stop getting free health insurance or food stamps. Working a 40 hour week means you have to endure a flaky and expensive hiring process, you have to endure a flaky and stressful boss, you likely end up procuring food supplies at a higher cost than you might otherwise pay, and most of all you have to keep up your housing, hygiene, transportation, wardrobe, health, household, hobbies, and other engagements (e.g. education) all in a fashion that allows you to be reliably available during business hours in a geographic area that you can commute to which has an excess job available. All of that is actually extremely fucking expensive. Uber lowers the marginal costs of employment very significantly. This is almost never properly factored into the analysis when people consider whether it’s a good idea to reduce the size of the on-demand economy. So in the end, some of those ride-hailing workers will find ways to reduce their expenses, tighten their belts and forgoe the “cheap revenue”. Other workers will be forced to find more expensive revenue sources and be forced what we naively see as “upwards” but from an holistic perspective in a fully priced out economic model is almost surely a short-term loss to that individual. An optimist would say it might lead to long-term gain, by pushing drivers out of a local maxima. I’d say that’s highly presumptuous.

idunno246 6y ago

i can't find the actual minimums, this[1] article suggests that the wait time is 0.56/min. I'm curious how this ends up comparing to taxis, since a taxi has a idle time of 0.50/min in seattle - it seems unreasonable to set minimums higher than taxis(but maybe it wont since i cant find the per-mile fee, and 25% over the current uber per-mile fee is about $1 less than a taxi) [1] https://www.geekwire.com/2020/uber-raising-trip-prices-24-new-year-response-seattles-new-minimum-wage-law-drivers/ https://www.geekwire.com/2020/uber-raising-trip-prices-24-ne...

treve 6y ago
The law is based on minimum wage, not a minimum price for wait time. Uber sets that price.
- idunno246 6y ago
  https://seattle.legistar.com/View.ashx?M=F&ID=8811142&GUID=E5A95BE2-AB28-45F3-9C41-C15FD3293521 https://seattle.legistar.com/View.ashx?M=F&ID=8811142&GUID=E... https://seattle.legistar.com/View.ashx?M=F&ID=8807285&GUID=66FB7409-8761-48CB-BE85-410F4AC2BEB3 https://seattle.legistar.com/View.ashx?M=F&ID=8807285&GUID=6... I think think this is the actual bill. So it is minimum pricing on time and miles backed into by hourly wages after utilization. So 1.33/mile, but I think the time is total time not idle time like taxis, if so assuming an average of 30 mph add another dollar which puts it right at taxi pricing, and probably doesn’t include ubers fee.
filmgirlcw 6y ago
For reasons too complicated to get into in a comment, the taxi industry has typically avoided most of these minimum-wage arguments because of the way those systems are designed. The taxi lobby is a lot more entrenched than the ride hail lobby (and for some bizarre reason, it isn’t criticized the same way, even though it is every bit as awful and exploitative — and more so in some areas - than ride share giants ) is my guess for one. Even our dysfunctional city council won’t want to take on the taxi lobby, not that Seattle has much of a taxi ecosystem anyway. Taking a taxi in Seattle is one of my last-resort options, and I moved here from New York City, and am not anti-taxi as a concept, the Seattle cabs add just terrible. Of course, Uber and Lyft didn’t help themselves any by arguing vociferously for years that they weren’t anything like taxis, largely as a way to avoid having to pay drivers similar to medallion systems. Now, there were some good reasons for this, especially in markets like Portland, that used to have really restrictive pick-up policies for taxi cabs — and in areas like New York and Chicago, that have strict limits on how many medallions are issued and how many cabs can be on the road at once, but these companies can’t have it both ways. They can’t argue for years that they aren’t taxi companies and then complain if legislation means they have to pay more than taxi companies.

testfoobar 6y ago

Price controls create dead weight loss. Price controls are great for politicians but don't actually do what they are supposed to do. Doesn't matter whether it is rent control or minimum wage laws. Government set price controls distort markets negatively. In this case, the total number of trips taken on Uber in Seattle is going to drop because a certain percentage of trips will now become uneconomical to those riders: they will cost too much to be worth it. Two negative things will happen: 1. In aggregate drivers in Seattle will make less money due to fewer trips. Demand for Uber drops as the price increases. A simple thought experiment confirms this: lets say that Seattle demands a flat $25/tax per ride. A lot of potential riders will pass. 2. Some percentage of riders will forego the benefit of uber trips due to the higher cost. Whether it will be drunks leaving bars or whomever. Some people who would take Uber at a lower price will not take it at a higher price. Seattle may see an uptick in drunk driving as a result of this. Governments love price control because they give the illusion of helping: uber drivers will earn more per hour. BUT - they may work fewer hours and there may be fewer Uber riders working. In summary, this will reduce the total income of Uber drivers in Seattle. It will also reduce the number of Uber riders - some of whom are likely to become drunk drivers instead. This is bad public policy.

missedthecue 6y ago
Why does so much of politics benefit the person passing the bill at a cost to everyone else. (on net). It's like a market failure, but for the political system.
- hnracer 6y ago
  I think there's two reasons. First is that the costs are hidden and complicated. We need a decent understanding of economics combined with an honest and deep analysis of the consequences of the specific policy to conceptualize why it's deleterious. Very few people will tick both boxes. Second is that politicians want to be seen to be doing something. Even if leaving the market alone is the best of all options.
- testfoobar 6y ago
  I suspect because most people do not understand dynamic system and equilibrium. They do understand individual data points such as: my rent is too high or my wage is too low. Therefore it is easy to sell a remedy that claims to address this. Unfortunately, when the dynamic system finds a new equilibrium, people are surprised. To this day, people don't seem to understand that rent control suppresses supply leading to higher overall rents.

poxwole 6y ago

There should be a law banning this offloading of expenses directly to the customers. Uber earns enought to pay it's drivers fairly. It's basically doing what the super car manufacturers did when EU slapped them with penalty for fuel ineffeciency, they just transferred it to the customers by raising the prices of the cars.

AlphaSite 6y ago
I’m not sure this is practical, if this were truly an unnecessary charge wouldn’t there be about margin for a competitor to undercut them, as they once undercut taxis?

underseacables 6y ago

At those prices you might as well take a taxi...

peignoir 6y ago

In a demand and offer model we should expect a drop of offer as the result of the price being artificially raised therefore a loss of revenue for the drivers. I tend to disagree with Socialist laws, Seattle did benefit a lot of Amazon extension but like California we should see many tech company leaving.

peignoir 6y ago

In a demand and offer model we should expect a drop of offer as the result of the price being artificially raised therefore a loss of revenue for the Drivers...

santamex 6y ago

I don’t get it. “Uber points to a study from Cornell University’s Industry Labor Relations School that found the median driver made about $23 an hour after expenses” Then they raise the price by 25%, because minimum wage adjusted to $17? Uber, just admit that you faked the study.

deleted 6y ago

[deleted]

BMSmnqXAE4yfe1 6y ago

Why do we need Uber in the first place? Where I live, there is an app that directly connects drivers to riders who pay cash, and nobody takes 30% fee fro mdriver's wages.

thehappypm 6y ago
As a driver, collecting money sounds awkward, slow, risky for a dash, and certain to change the dynamic with the passenger. As a passenger, cash is far less convenient, and paying at the end of a ride is awkward, slow, and certain to change the dynamic with the driver.
- BMSmnqXAE4yfe1 6y ago
  I'm sure 99% percent of drivers will choose 30% more money vs "avoiding risky cash". And they have an option of direct money transfer through mobile phone too.
  - BMSmnqXAE4yfe1 6y ago
    As a passenger, to me cash is far more convenient, as it preserves my privacy and nobody can overcharge me. The bill is usually 20-30% lower than Uber.
dwild 6y ago
I never have cash on me and I'm not the only one. Thus that service would be useless for me and for everyone I know. Where I'm from, it's the law that cabs should accept credit and debit, not only does it reduce tax fraud, but it also allow people like me to pay. Transaction fees are not that expensive, but believe me, companies that provide it to cabs drivers, does charge much more for it. Still it's less than 30%. Again where I'm from, dispatcher does charge the drivers, and from what I read, it was not too far from 30% (which makes sense, they have to account for advertising, wage for dispatch by phone, and since Uber, for the development of a badly made app).