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I used to work for one of the gig companies, and familiar with the numbers. All those angers of people struggling to make survivable wage are valid, but this is

I used to work for one of the gig companies, and familiar with the numbers. All those angers of people struggling to make survivable wage are valid, but this is barking down the wrong tree. 1, people are not stupid, they chose to be exploited by gig companies because other minimum wage jobs pay even less. 2, those companies already pay majority of their revenue to drivers, paying more means charging more, which leads to lower market share, which leads to bankruptcy in a winner-takes-all market. I think the only way to pull gig workers out of their precarious position today is to lift the minimum across the board. So there are better alternatives than slaving away at gig jobs, gig companies will naturally provide better wage/benefits in order to retain those workers. This can be achieved with basic income or higher minimum wage, but both have holes that require more nuanced design to ensure effectiveness and minimize unexpected side effects. This is sadly very hard, and I'm not sure if we have the legislators capable enough to do the right thing.

blakesterz 6y ago
> 2, those companies already pay majority of their revenue to driver I honestly have no clue what these companies major costs are. I've never really thought about it. A quick search seems to say that may not be the case, at least at Uber in 2019 https://www.forbes.com/sites/greatspeculations/2019/05/31/what-are-the-key-drivers-of-ubers-expenses-when-can-it-break-even/?sh=249b995c5b4f https://www.forbes.com/sites/greatspeculations/2019/05/31/wh... Though I'm also not sure where drives are paid in this list, it seems to be "Operations and Support Expenses" but I may be wrong. This says "Cost of Revenue" and "General and Administrative expenses" are just over half. There must be something with some better and more recent numbers that can explain where costs are for gig companies.
- analyst74 6y ago
  They are constantly experimenting with prices/payouts, and different areas have different rate so it's going to be hard to have a concrete number. But I believe Uber takes around 25% + a small fixed fee per ride.
- smolder 6y ago
  Well, there was a recent article which described how the bulk of Ubers ad spend was on click fraud or something like that, where canceling had no effect on business. That's money that could go to drivers. I'm sure they also spend much more on hosting than they need to, because it doesn't often make business sense in the tech sector to spend a lot of developer time on cost reduction. When it doesn't, developers overall don't focus on reducing costs as much, and consequently, they're less skilled at it... to the benefit of cloud providers and to the slight (or sizeable? I'm unsure) detriment of our planet.
- rekognition1206 6y ago
  It has to do with revenue recognition. What the riders pay is not Uber's top line revenue, instead what the driver pays Uber back from that fare is. See Uber's 2019 annual financial report [1]. That amount you are thinking of as revenue is referred to as "Gross Bookings": > Gross Bookings. We define Gross Bookings as the total dollar value, including any applicable taxes, tolls, and fees, of Rides and New Mobility rides, Eats meal deliveries, and amounts paid by Freight shippers (p. 61) Uber's cut of the transactions is defined as the Take Rate, and was 21.4% in 2019. That means that 79.6% of the fares Uber collects was paid to drivers. [1] https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar/Uber-Technologies-Inc-2019-Annual-Report.pdf https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar...

blakesterz 6y ago

> 2, those companies already pay majority of their revenue to driver I honestly have no clue what these companies major costs are. I've never really thought about it. A quick search seems to say that may not be the case, at least at Uber in 2019 https://www.forbes.com/sites/greatspeculations/2019/05/31/what-are-the-key-drivers-of-ubers-expenses-when-can-it-break-even/?sh=249b995c5b4f https://www.forbes.com/sites/greatspeculations/2019/05/31/wh... Though I'm also not sure where drives are paid in this list, it seems to be "Operations and Support Expenses" but I may be wrong. This says "Cost of Revenue" and "General and Administrative expenses" are just over half. There must be something with some better and more recent numbers that can explain where costs are for gig companies.

analyst74 6y ago
They are constantly experimenting with prices/payouts, and different areas have different rate so it's going to be hard to have a concrete number. But I believe Uber takes around 25% + a small fixed fee per ride.
smolder 6y ago
Well, there was a recent article which described how the bulk of Ubers ad spend was on click fraud or something like that, where canceling had no effect on business. That's money that could go to drivers. I'm sure they also spend much more on hosting than they need to, because it doesn't often make business sense in the tech sector to spend a lot of developer time on cost reduction. When it doesn't, developers overall don't focus on reducing costs as much, and consequently, they're less skilled at it... to the benefit of cloud providers and to the slight (or sizeable? I'm unsure) detriment of our planet.
rekognition1206 6y ago
It has to do with revenue recognition. What the riders pay is not Uber's top line revenue, instead what the driver pays Uber back from that fare is. See Uber's 2019 annual financial report [1]. That amount you are thinking of as revenue is referred to as "Gross Bookings": > Gross Bookings. We define Gross Bookings as the total dollar value, including any applicable taxes, tolls, and fees, of Rides and New Mobility rides, Eats meal deliveries, and amounts paid by Freight shippers (p. 61) Uber's cut of the transactions is defined as the Take Rate, and was 21.4% in 2019. That means that 79.6% of the fares Uber collects was paid to drivers. [1] https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar/Uber-Technologies-Inc-2019-Annual-Report.pdf https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar...