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Uber, Amazon use AI to pay people different wages for same work: Study
- charcircuit 4y agoIt makes sense. Why pay someone $20 for a job they would have done for $10. There needs to be some logic to guess what this value is so AI would be useful. Trying to make this illegal would make the economy less efficient than it could be.
- Fauntleroy 4y agoThe economy will not function if everyone is optimized into poverty.
- charcircuit 4y agoThat doesn't contradict my point. The minimum rate someone is willing to work factors in that they do not want to live in poverty.
- chomp 4y agoMaybe in the fantasy land of an economics text book. In reality, minimum rate is a maximizing function of availability, capability, conditions and the wage. People will usually choose the highest wage job with the best conditions that they can obtain and perform, Dunning-Kruger aside. If the only jobs around pay poverty wages, people will take those. GP is saying that the economy no longer functions when businesses minimize wage. There has to be fat in the wage, or our economy becomes an economy of only basic life sustaining staples.
- saghm 4y agoPoverty isn't a single state; it's a spectrum. If every company making maximally efficient decisions causes people to only have the option to take a wage that isn't enough to lift them from poverty or no wage at all, people will still take it. I'm not saying that I think you're wrong or right compared to the parent comment that responded to you; I just don't think it's obvious that something being more efficient inherently implies that it should be legal. Maybe I'm incorrectly inferring that you're stating that "trying to make this illegal would make the economy less efficient than it could be" is implying that this means that it would be bad to make it illegal, but it definitely sounds like that to me.
- KyeRussell 4y agoDon’t conflate “allows the owner of the means of production to extract the most surplus value” with “market efficiency”. This sort of shit has negative economic and societal consequences. I’m sick to death of naive tech bros thinking that every other field is so easy that their sheltered intuition is enough to understand it.
- Wolfenstein98k 4y agoPrice discrimination is efficient. You don't have to like it, but you can't claim it isn't. Your claim that wages being below someone else's is "societally harmful" requires some proof beyond your intuition. This is not a method of cutting all wages in the country, it is a method of directing wages to higher productivity workers. It only shifts relative amounts. Just as we expect a cleaner to be paid less than the software engineer whose cubicle is being cleaned, there is no "societal" objection to the 3x engineer being paid more than the 2x engineer.
- et-al 4y agoFollowing your example, we should make wages transparent. So that way the 3x engineers know they're being correctly compensated by management, right?
- fn-mote 4y agoI can't tell if this is a sarcastic suggestion or not. This might be controversial in the private sector, but wage transparency is the norm in the public sector in my area of the world... and many people are employed in those positions.
- Dylan16807 4y agoWhen it comes to splitting up surplus value in a transaction, being efficient for one party means being inefficient for the other party. So I absolutely can claim it's not efficient, by not implicitly favoring the employer over the employee. And we're not changing the number of transactions here with these wage calculations.
- lukev 4y agoIt shouldn't be made illegal. The problem is that while the workforce is the most important part of the whole enterprise, each individual worker has very little bargaining power. Workers should be able to form some sort of group, so they can negotiate on something resembling an even footing with huge corporations.
- HPMOR 4y agoWOW it's almost like you're describing a union!
- happytoexplain 4y agoThere is the largest number the employer would be willing to pay, and there is the smallest number the employee would be willing to accept, and in a just world the two parties would have equal footing in the battle to arrive at a number in the middle. However, the employer has powerful systems dedicated to pushing the value toward the lower number, while the employee has only their intuition and fear.
- abigail95 4y agoThere's extreme competition in gig work. It's completely flexible and completely transferable. Companies have very little pricing power. The workers and the customers have all the power.
- panic 4y agoThis type of thinking might be acceptable if access to necessities like housing, health care, food, utilities, child care, and education didn't require you to make money. As it is, the end result of your efficiency is real human suffering.
- chii 4y agoThe fact that those things you mentioned as necessary for life exists today is _because_ of efficiency. Without this efficiency, you'd get even more human suffering. Imagine how your life was back in the dark ages.
- deleted 4y ago[deleted]
- egypturnash 4y agoThis article is making a very compelling argument for unions. Wow. This is cartoonishly evil.
- Wolfenstein98k 4y agoIs it evil that a Google One subscription or a software package costs a lot less in Bangladesh than in America? Are Americans being harmed here? Should a global union be formed to force Bangladeshi prices up to parity with the States? Pricing discrimination is not "evil". It is emotionally unintuitive but that is not the same thing.
- _8j50 4y agoLabor does not get treated like a product or service provides by a business. People have rights and comprise a nation/government. Businessses don't. If Labour is treated like a business the it's time to change society and government. Businesses must adopt to labour needs ans laws.
- 2fast4you 4y agoOkay but we’re not talking about a product we’re talking about humans. Real people’s lives. Throwing out emotion is inherently evil.
- chii 4y agoAre the wolves that eat the young and weak who cannot escape from predators "evil"? The idea that corporations who optimize their costs is evil can be analogous to wolves above. If you believe that corporations cannot be allowed to do this, then change the rules of "nature". Luckily, this rule of nature is easier to change in a democracy.
- ipaddr 4y agoIs discrimination price or otherwise evil... What if you had different prices for different races... probably bad Different genders? Might be acceptable for some products but not others Different states? Sure. Sometimes services cost different groups more or less. That's not evil. Sometimes you can get away with it even if it doesn't. Probably evil
- ratg13 4y agoInteresting Uber commented on whether or not they manipulate the fares paid to drivers, but did not comment on whether or not they actively try to screw drivers out of bonuses.
- codeisawesome 4y agoI found Amazon’s BS non-answer even more offensive. “Our workers willingly go over the barrel and they tell us they love it! What’s your problem…?”
- abdullahkhalids 4y ago> actively try to screw drivers out of bonuses. If you talk to Uber drivers, you will find that they have widely believed this to be true for many years. It's easy to think the drivers can't do stats. But if you get "10 rides in 6 hours and final 2 rides in 3-4 hours" enough number of times, it's not hard to believe.
- abigail95 4y agoYou can't do an eye test on statistics, you need hard math. I could easily say that example tracks with a normal shift starting in a busy period and petering off as demand drops moving away from peak hour. If every Uber driver got the same number of trips every hour, at all hours of the day, something would be seriously wrong.
- nemo44x 4y agoPaying people different wages for the same work is normal. Does everyone taking your order at McDonalds make the same wage? When I have contractors bid on an SoW they all bid different prices. I’m sure they pay their workers different wages too. Some people have weird ideas on how the world works.
- qtzfz 4y ago[flagged]
- happytoexplain 4y agoSupply and demand is a simple phrase to describe a single complex part of a larger complex system.
- 8note 4y agoIts a sign of poor competition. A working free market should tend towards people making the same amount for the same work
- nemo44x 4y agoThat’s just not true. Different people value themselves differently. Someone in a certain location might value their time more than someone doing the same job elsewhere. Why else do you think we have outsourced labor to places where people need less to live on today?
- Wolfenstein98k 4y agoSays who? Unless you're proposing identical output when you say "same work", which is never true anywhere in practice, this is plainly false.
- Spivak 4y agoUnless you're paid on commission or by output it should be same job same pay. You're selling the same hours as everyone else and have the same work expectation which you either meet or don't. If you have different work expectations that's a title difference which is fine. But paying two SWE II's different amounts is unfair. It should be everyone of a given title makes the highest amount anyone with that title was able to successfully negotiate because you've proven the market rate and it smooths over a lot of different biases naturally. Trying to vaguely estimate the output of different employees while not actually paying them directly for that output is silly.
- huitzitziltzin 4y agoEasily one of the least surprising research findings I have ever read. This is completely normal in every firm. Places where everyone is paid the same despite their differences (eg public schools where the PE teacher is paid the same as the math teacher) are the exception.
- capableweb 4y agoRegardless, always good to have research data behind anything that is "least surprising". Besides, are you really arguing that a PE teacher and math teacher are doing the same work? Seems like two different things to me, that requires two different backgrounds.
- Wolfenstein98k 4y agoI don't think they are saying that pay parity is good, just that it exists in relatively few circumstances, and almost always in the public sector.
- stametseater 4y agoObviously different subjects are different things, but there's substantial overlap between the duties and responsibilities of the two. They're both teacher in the educational bureaucracy so they have the same sort of paperwork to file and meetings to attend, and various identical non-classroom duties such as watching over study halls or lunch hour, bus duty, etc. Gym teachers often get tasked with classroom lecturing too (health/wellness, sex ed, etc.)
- huitzitziltzin 4y agoActually I think paying them the same amount is crazy! But I’m glad for the opportunity to clarify in case that was unclear in the original comment. Paying employees differently for similar work is pervasive and can be justified in several ways. Calling it “cartoonishly evil” as a commenter did above is ridiculous. If you don’t like this case, why not mandate a single uniform salary within or across firms? Really looking forward to the inevitable comment from someone who will try to make a case for that wild idea.
- Wolfenstein98k 4y agoBasic pricing logic. Why pay someone who produces less, or can bear a lower wage, the same as someone who produces more or can't? There's a reason subscriptions cost a lot less in the developing world than in rich countries - and everyone seems to think this is somehow fundamentally fair. People are happy for software engineers to earn more than burger flippers, but not happy for 3x software engineers to earn more than 2x software engineers. Emotional reasoning abounds.
- nordsieck 4y ago> People are happy for software engineers to earn more than burger flippers, but not happy for 3x software engineers to earn more than 2x software engineers. I think that it's probably partially due to the historical difficulty of measuring developer productivity. Sales compensation has always been heavily commission based. And for the most part people are fine with that.
- Wolfenstein98k 4y agoCommissions are a good example. They are deeply "unfair", using the logic of objections to the original article.
- deleted 4y ago[deleted]
- klabb3 4y agoThe issue isn’t that the employer measures and rewards work output, which is not controversial itself (although some _methods_ of measuring are). The issue is that they use everything they know about you to determine the lowest possible price you’re willing to accept, on an individual basis with droves of data that exist because of as-tech.
- vba616 4y agoI never took a college-level economics course, but a book I read purporting to be an intro to economic thinking put it something like this (no warranty I'm remembering correctly): If people freely trade something, in an ideal, spherical cow way, then they should both be better off afterwards. Therefore the trade (including trading labor as well as goods) creates value. I think this was called "surplus" value. However, there is generally more than one price where both parties would benefit and should want to trade. Which price is agreed on in that range determines who gets what portion of the surplus value. Therefore if one side of the transaction has superior knowledge of what price the other side will accept, then in theory they could get up to 99.99...% of the surplus value, as long as the other party "rationally" will be motivated by the remaining 0.00...1%. A purely rational actor with no secrets is easily manipulated.
- klabb3 4y agoHuh, who could have thought that indiscriminate data collection could be used against us? I’m convinced this is just the tip of the iceberg, a lot of this stuff of course happens all the time in the shadows. And not just with gig workers but also things like regular employee comp and rental prices. In fact it would be surprising if it didn’t happen, all the incentives and preconditions are in place. Information asymmetry is a highly underrated factor in markets. It’s not something to gloss over.
- huitzitziltzin 4y agoEconomically, this outcome does not require imperfect information. Dispersion in workers’ marginal product of labor is sufficient. In this case workers may be heterogeneous in the value they place on the time - that may be observed by the firm. Imperfect information might play a role here but I doubt it’s a big one.
- jononomo 4y ago"One Uber driver Dubal interviewed, Domingo, recalled being one ride of short of unlocking a $100 bonus one evening, but then said he experienced 45 minutes of "dead time" in a popular area before he was able to get another ride. "It feels like the algorithm is turned against you," he said, adding that it "literally feels like you're being punished by some unknown spiteful God."
- fn-mote 4y agoAfter the greyball scandal nobody should be surprised.
- bluefirebrand 4y agoImagine being an employer and being this petty over $100. My god.
- gorbachev 4y agoYou do that systematically and the executive in charge of that department gets that entire sum as a bonus. That's how these things happen.
- DangitBobby 4y agoOops, that's fraud!
- toss1 4y agoSeems ripe for an app for gig workers to use to aggregate the data and provide info on what to accept/reject to optimize against the Tech-Giants' app. Would probably need to run on a different device, as they'll ban it as soon as they find out...
- chii 4y agoi agree. More information transparency is always good. Something similar to https://camelcamelcamel.com/ https://camelcamelcamel.com/ but for various prices for various companies (including how gig workers get paid) would be invaluable to everyone, and make the free market even more efficient.
- codeisawesome 4y ago> Dubal said these instances could take the form of a food delivery driver being offered a lower rate than another driver would have been — because the AI algorithm predicted the first driver would be more likely to accept that rate. If a driver tends to work until they hit a certain daily mark, say $100, she said the algorithm might offer them lower rates to keep the driver working longer. Wow that is fucking disgusting.
- Gigachad 4y agoCompletely predictable and unsurprising though. Only way to fix it would be proper minimum wages.
- codeisawesome 4y agoNo, it’s actually very surprising to me. I genuinely (and super naively, I now realize) thought gig work was ‘fair’: as in subjectively unpleasant, but ‘equally unpleasant’ for everyone having to do it.
- deleted 4y ago[deleted]
- mrichman 4y agoThese people aren't slaves. They are welcome to find other employment if they find the terms unacceptable.
- nine_zeros 4y agoIn a similar vein, the company is not a slave owner. People can vote to unionize against malpractices and force the hand of the law. It's all fair.
- flandish 4y agoThat’s not at all how realistic migration from one to another job works. Be honest and remind yourself, these are humans. Not corporations. There is no “other” employment when, in certain areas, every job at this “level” is like this or when this ai pattern/formula expands to other arenas.
- abigail95 4y agoGig work is the definition of flexible and transferable. If your Uber jobs start paying less throughout the day, you will just start accepting more Lyft ones. Uber gains nothing from underpaying their workers because of the huge competition for these gig workers. IF Ubers AI is inefficiently distributing work to its workers, Lyft will get them for free, without doing anything. That's how a market works. However, if this so called evil algorithm increases productivity for Uber and its workers - everyone will get paid more, Uber, drivers, customers, except direct competitors like Lyft. It's a good thing they do this. Anyone here saying its bad needs to suggest with a model, that this decreases productivity or somehow adds a market inefficiency.
- imtringued 4y agoUber isn't profitable. Their entire strategy to make money is based around the idea that eventually there are no competitors anymore.
- michael_vo 4y agoWorked at BlackRock. Bonuses are announced in person with your manager in the room. I was told this is because they want to record your facial reaction to getting the number. If you were happy they knew they didn't have to give you more next year. If you acted upset, then they knew they'd have to tweak or patch the bonus. I have friends who from then on always acted upset and asked for more :) If someone is perfectly happy with their salary why should the employer pay them more for the same work?
- bluefirebrand 4y ago> If someone is perfectly happy with their salary why should the employer pay them more for the same work? To keep up with rising costs of living, for one. Basically to ensure that the employee remains happy.
- flandish 4y agoConvincing employees that pay not increasing with inflation is “ok” is one of the worst things corps have done. If they can’t match inflation you’re getting a pay cut and they are getting you for less than they did last year.
- chii 4y agoBut that's why you leave when they don't increase your pay inline with inflation (at least). If you can't leave or find a better paying job, then you are actually being paid the highest you could've already - as leaving would leave you worse off.
- bluefirebrand 4y agoYes. Also just in general convincing employees that it's ok for them to act against the employee's interests but the employee acting against the company's interests is a fireable offense. The balance of power has skewed towards employers for far too long and they have gotten really comfy in their spots.
- 988747 4y ago
- sinuhe69 4y agoI always wonder why people are so naive. Do they really think the local engineer hired in a developing country would be payed the same salary as an engineer in New York? And what about outsourcing to the dirt cheap workers in India or Kenia? Or the illegal immigrants doing cleaning, construction or dishwashing in your neighborhood? Even if the multinationals use different entities to hide the fact, it’s only a legal construct to hide the exploitation. Of course there are many subtleties and perhaps minor costs but THAT IS basically the reason why companies outsource/hire in low income countries. That’s the reason for the cheap shirts you can buy and the profit the capitalists enjoy. Exploitation is the most fundamental mechanism for the buildup of the immense wealth people possess today. Innovation is on the other hand a very rare and relatively recent factor.
- imtringued 4y agoRegional prices differences are the result in differences in the ability to pay. Indian companies get less money to pay their workers. It's not like they are earning as much as American companies but decide to pay their workers less because they have a fancy AI price predictor. If Indian companies are as successful as American companies, then wage differences will disappear eventually.
- sinuhe69 4y agoI'm not talking about Indian companies. I'm talking about local Indian hired by American companies or their daughter companies.
- _smfg 4y agoSome of the comments in this thread are heartless.
- genocidicbunny 4y agoPar for the course for HN really; Workers are just resources to use up, and if they don't want to be exploited, they should just stop being exploited and go find themselves a nice high-paying job and be happy. HN due to its demographics has a huge disconnect with the plight of the average person.
- deleted 4y ago[deleted]