Uber proposes policy that would pay drivers a minimum wage of $21 per hour
techcrunch.com>Uber is circulating a petition urging people to “protect ridesharing in California.” In the petition, Uber advocates for a policy that would offer drivers a minimum of $21 per hour, paid time off, sick leave and compensation if they are injured while driving, as well as a collective voice and “the ability to influence decisions about their work.”
Uber circulating a petition to ... urge Uber to do a thing?
Why don't they just do that thing?
They believe they can bear the expense of this policy better than their competition, and in particular they don't want to compete with lower-cost-lower-quality firms. So it's both a (presumably sincere) ethical position and a form of anti-competitive regulatory capture. I think most minimum wage laws have some of this Baptists-and-bootleggers effect.
Similarly, Wal-Mart has been lobbying for increasing the minimum wage for years. Most minimum wage earners in retail work for small businesses. Whereas Wal-Mart averages nearly double the federal minimum wage.
Wal-Mart knows that hiking minimum wage would help it kill mom-and-pop stores that it competes with.
[1] https://www.cnn.com/2019/06/05/business/walmart-shareholders...
The more money Walmart customers make, the more they can spend at Walmart. As long as they don't make enough to forego Walmart altogether. So it's a double win for Walmart.
This is odd - Walmart threatened to move out of my city (DC) if we raised the minimum wage
Maybe due to DC already having well above average minimum wage?
> Most minimum wage earners in retail work for small businesses.
Do you have a source for that? I find it a bit hard to believe, given the decline of mom-and-pop stores in general.
I talked to many independent coffee shop workers, and they used to get minimum wage. While Starbucks offered better wages, access to health insurance at a certain level, and now even tuition assistance. Starbucks probably had more unpredictable scheduling, not sure if they have changed that bit.
Amazing story of how a NY Times article caused Starbucks to reverse their immoral scheduling policies.
https://www.nytimes.com/2014/08/15/us/starbucks-to-revise-wo...
> Roughly half the minimum-wage workforce is employed at businesses with fewer than 100 employees, and 40% are at very small businesses with fewer than 50 employees.
[1] https://www.epionline.org/oped/who-really-employs-minimum-wa...
Hmmm. How many of these are franchise-related?
"Some of these businesses are small diners or independent grocery stores; others are franchisees that own a handful of stores affiliated with a recognizable brand. (For instance, over 80% of McDonald’s locations are owned by franchisees.) In either case, the profits and executive pay at the country’s largest businesses have nothing to do with the stark economics these small-business owners face: single-digit profit margins."
If over 80% of McDonald's locations are owned by franchisees, then it's likely that MANY of these are franchise-related (also, profits and executive pay at McDonald's would certainly have something to do with the related economics of franchise fees and the back-end of the supply chain).
I wouldn't assume it comes from an ethical origin. It's more about killing competition. As soon as the competition is dead they'll be talking about how non-viable $21/hr is.
Also, a high minimum wage for drivers really bumps the value of their self driving car arm.
>As soon as the competition is dead they'll be talking about how non-viable $21/hr is.
Won't even have to do that, wait for inflation to take hold (I believe inflation is very likely to explode in the next few years) and just ride it out.
hyperinflation has always "been around the corner" by every financial crank with a blog. It's not coming.
I'm not talking about weimar republic style hyperinflation my feeling is more on the order of 5 - 12% (maybe not even by CPI standards). Essentially 1970's style stagflation again. CA wages are already high a few years of that and Uber will be back at baseline.
What are you talking about? It’s already here. A home in Bay Area is close to 2 mil now lol.
Why is a home in an unbelievably popular place to live, which is also full of massive amounts of new money, your measure of inflation?
A home near me is about 100k for 2000 sq ft main floor. Does that mean inflation doesn't exist?
What a weird argument.
How much is a meal at mcdonalds?
that's localized inflation due to housing scarcity in the Bay, it's not hitting the economy as a whole.
A $21/hour wage in SoCal wouldn't have any noticeable effect on inflation compared to the effect of Silicon Valley and all the tech companies in San Francisco, and the north half of the state has few enough Uber-ers that it wouldn't do anything there either.
The OP is predicting inflation from other causes, not from what uber does. Even the largest company cannot drive inflation by itself.
> I believe inflation is very likely to explode in the next few years
Why?
A number of factors:
1. Money is essentially free at current interest rates and I don't see a sign of that reversing course.
2. Large firms are hording cash and have more than they know what to do with. They are at the point where they are buying their own stock because that is the most productive thing they can do with that money.
3. The democratic party is running on minimum wage increases. While it is debatable if that will have a huge impact it certainly isn't a deflationary measure.
4. Democrats are also running on the green new deal, universal income and medicare for all that I predict will not actually result in higher taxes for the wealthy in any meaningful way but instead the printing of money in order to fund those programs as that is what seems to happen every time. Even if taxes were implemented as discussed, moving money from investment vehicles (where the wealthy have it) to consumers will still probably cause inflation in terms of housing and consumer goods.
5. China is sitting on about 3 trillion dollars that is currently effectively out of the money supply and they will likely deploy that as a weapon in the trade war.
1. Interest rates have been low for a decade now, causing no real inflationary crisis. The localized housing issues are due mostly to income disparities, lack of space for development, foreign investment, and zoning regulations.
2&3. Democrats "running on" some policy does not at all mean it will happen. In the current political climate, it's quite likely their holding a position means it won't happen.
4. Large firms have already been using record low interest rates to finance stock buybacks. This has been going on for years. The last three or four years of stock price growth has been fueled by financed buybacks, with every year breaking the previous year's record. At some point will need to stop.
As an aside, these buybacks are likely going to be the cause of our next stock market calamity.
5. This is sort of legit fear, but 3 trillion dollar is not really enough to make a market-wide impact and selling their bonds would just push interest rates lower, serving to help the US achieve their current monetary policy. They could use this money to selectively certain industries though.
Its more than housing inflating massively in costs, its education and healthcare too. It may be the only reason that consumer good prices arent inflating is because money is being drained away by the aforementioned 3 major factors faster and faster.
And its not just housing in downtown San Francisco, even housing in middle america podunk nowhere has soared
All of the things that cannot be outsourced, real estate, healthcare, and education.
Why single out the Democrats? The people _currently_ running the government are acting as if money grows on trees; just look at the federal deficit over the past couple years.
While that is true it is printing money for distributive purposes that I'm more worried about. Spending a few billion on bombs to blow up houses on other continents, or to prop up the stock of oil companies for example won't really move the inflation needle in regards to consumer goods as much as printing it to throw it out of a helicopter would in my estimation.
Right now the vast majority of money printing is being given to banks and then placed right back into the Fed and earning interest for those same banks.
Just look at the M2 monetary velocity[1]. It fell off a cliff in 1997 and never really recovered. It's now at an all-time low. For all intents and purposes we're operating on a light version of MMT.
All the smart money disagrees with you and thinks the 10 yr inflation rate will be 1.54%
If you click on Max, the chart indicates that the smart money expected the 10 yr inflation rate in late 2008 to be < .5%, which wasn't the case.
So downward movement in that chart can be triggered by two things. The price of TIPS falling or the price of t-bonds rising. That was caused by the price of t-bonds jumping up due to a flight to safe money, much of that flight contractually obligated.
So I don't think it was due to people honestly thinking the average inflation would be .5% but just an idiosyncrasy of how we estimate market expectations of inflation.
They disagreed with me about housing prices as well a decade or so ago as well.
And I presume you made an utter killing by putting your money where your belief were? Because if you didn't I don't believe you in the slightest.
"The market can remain irrational longer than you can remain solvent."
That someone failed to make money on the market doesn't necessarily mean they were wrong, it may just mean nobody gave them a pile of money they could afford to risk.
The Big Short is a fantastic read due to watching somebody who you know is right, and knows that he's right, almost get wiped out because the market teetered on the edge of the precipice for over a year.
With something like inflation over a 10 year period this isn't true. In ten years either it was lower than you thought or it wasn't, and you can make lots of money based on the spread of inflation-protected and non-inflation protected assets.
Being right doesn't mean very much. A broken clock is right twice a day. If I say something will go up I have a 50% chance of that being true. That doesn't mean anyone should take my advice on the future.
Sure, I'm just saying the argument above was fallacious. That an argument against X is fallacious does not mean X is true.
I was about 13 years old I didn't have much capitol to invest. I just put together the two pieces of the puzzle that housing prices were rising much faster than wages and that a products price can't continuously rise faster then the consumers ability to pay for that product. I guess the "smart money" missed that.
Now we have a bunch of presidential candidates that tell me they are going to print money all day long and a bunch of people who "know better" telling me that won't cause inflation to spike. ¯\_(ツ)_/¯
Before we saw a huge inflation, we'd see very low unemployment then inflation would uptick to 2%. And in the current interest rate environment we could probably use an inflation rate closer to 4%.
No candidates are talking about printing money, just spending it in different ways.
>Print money Taxing isn't printing.
The democrats can never seem to manage to tax the wealthy (themselves effectively) when push comes to shove. I'm not trying to be partisan, Republicans similarly are unable to cut spending. Perhaps this time will be different but I'm betting against that personally.
Also it is my belief that moving money from investment vehicles to consumers will have a inflationary effect on consumer goods. The slow trickle of subsidized Uber rides for example probably has less of an effect than a direct cash transfer that happens more rapidly. More so much of that money is invested internationally, by increasing taxes on the wealthy we may be in effect increasing the total money supply in the United States.
Taxing the wealthy wouldn't increase the money supply but if redistributed could increase money velocity.
That was different. If you think inflation is about to sky rocket it's easy to make a bet that pays off if that happens.
It was much more difficult for housing. The Big Short tells a story about how even if you knew housing was over valued it was very difficult to short, and the ones who did almost lost everything.
Uber will just "ride it out"
But Uber's opponents seem to be arguing that $21/hr is too low, and it'd give drivers a worse deal than passing the law. If that's true, passing the law will kill Uber's competition even more effectively.
Considering a 40 hour work week, $21 hour comes out to about $3350 before tax monthly, is that really too low for driving around a car?
It's $42k annually and that's before the insurance, maintenance, depreciation and fuel, so down to the mid-to-high 30's. That seems like it would be poverty level in many California cities.
Not to mention most of those hypothetical 40hrs a week (assuming they can get that much work) would be unsociable hours because that’s when demand is at its greatest (eg people leaving the pub).
Family health insurance costs $24K/yr. Rent is atleast $24K/hr. Those 2 alone will kill you...
> Rent is atleast $24K/hr
Heh. I heard it was bad in CA but wow.
That's a fair point I didn't think about the car maintenance too much.
Neither do most of the drivers, unfortunately. They are going to be the ones holding the bag at the end.
..take a different job then?
> is that really too low for driving around a car?
Depends how you look at it. If you're looking purely at supply and demand of drivers, it's fine. If you think people working 40 hours a week should be able to afford decent housing and health insurance it's probably too low.
I'm not familiar with US salaries I guess it greatly depends on the state/city you're in. But in the UK I don't think this amount is uncommon for some doctors or software developers, especially outside of London.
After tax it's probably closer to $2800, and health insurance is around $600/month for a pretty average plan. For a family of three this leaves you $1000 left over, and even the crappiest one bedrooms in California in small towns start around $1300/month.
Comparing different countries’ wages just isn’t a good comparison. Consider the typical health insurance premium and student loan burden for US workers and you’ll already see why a UK comparison would be apples and oranges.
A 30 minute ride already costs me about $18. I assume an hour ride would be around $40 or so. As a rider I would seriously wonder where those other $19 are going... Not to mention I would still feel the standard pressure to tip.
A 30 minute ride in the Bay Area can be close to $40 (with no peak pricing increases).
You're assuming cab drivers only work 40 hours. That's wildly off base.
I don't follow, is this a "perfect is the enemy of the good" situation where they think the minimum wage should be higher and are opposing a half-step toward that?
For political reasons that can make sense, it's hard to push for a minimum wage bump right after a different one, but I am unaware of other cab companies advocating for a higher minimum wage prior to this.
> I wouldn't assume it comes from an ethical origin.
It's always hard to say where an idea in a company "comes from". We probably don't mean literally the human being who said it out loud first. Most ideas have been around for a long time before they become policy, waiting for circumstances to change or politics in the organization to favor them. If the politics in an organization favor an idea for a combination of reasons, both ethical and self-interested, it might not be fair to say which reason "gets the credit" for the idea.
So first they evade regulations, then they propose regulations?
This is not an uncommon pattern. Regulations hurt experimental young companies challenging a status quo. Evading regulations (not a taxi, not an employer, etc.) allowed uber to become a large incumbent. Regulations tend to lock the status quo in place, and the status quo now is that Uber is a large incumbent.
Breaking the law, not "evading regulations."
I'm fairly sure they meant evading regulations. One means to structure your business in such a way that current laws are not directly applicable. The other means to ignore them completely. Unless you were trying to make an argument that Uber did not evade regulations and in fact broke the law?
It doesn't take a triple digit IQ to understand that Uber has operated a fundamentally illegal business model that does not respect the localities in which they operate.
In the past (pre-Uber), if you made this amount of money by engaging in large-scale, coordinated law breaking, you were called a gangster and got a big old nice RICO charge.
Don't be confused or blinded by the valuation. That is a byproduct of breaking the rules. The rules were not broken because they were unfair - that's a meme - you don't get to pass arbitrary judgement of which laws you do and do not respect (in theory). As a business, if you do not like the legal environment (rules) of a certain location, the logical (and respectable) choice is to not operate in that region/location.
My view is 10x more harsh on companies breaking the law in a coordinated manner than compared to an individual person.
> The rules were not broken because they were unfair - that's a meme - you don't get to pass arbitrary judgement of which laws you do and do not respect (in theory).
Thank goodness it was only in theory. The taxi industry was and is terrible, the only thing propping it up is regulatory capture.
> As a business, if you do not like the legal environment (rules) of a certain location, the logical (and respectable) choice is to not operate in that region/location.
As a consumer, I'm glad that the rules were systematically broken in a way that benefitted everyone except the taxi industry.
> in a way that benefitted everyone
I can definitely get aboard the taxi hate train, but do bear in mind that there has been a higher incident of sexual assaults tied to uber drivers over taxi drivers - it's not a free win for everyone, they broke both rules intended for regulatory capture and those intended for public safety.
This is counter to my experience. Every one of my female friends prefers Uber to taxi's because they feel much safer. They've all had at least one taxi incident where they were afraid for their well being but haven't had a single one with Uber despite using Uber far more.
This makes sense to me because it's far easier to track down the an Uber driver than a taxi driver.
I'd love to see the statistics. That aside, the taxi industry collects zero feedback from customers on their drivers, so taxi drivers had no incentive to be polite, keep their vehicles clean, etc. The worst uber driver I've had was about on par with the best cab drivers.
Not sure about other jurisdictions, but in Chicago, you can call 311 to report a taxi driver. Just need the cab number. I called a few times when cabs nearly struck me as a pedestrian in a crosswalk with a walk signal. Couple of them, I was close enough that I was able to smack a window. Don't know if anything ever happened from those complaints, you dont get feedback after a complaint.
> higher incident of sexual assaults tied to uber drivers over taxi drivers
citation with statistics? I don't know what world you lived in, but there was no lack of local news stories involving crimes by taxi drivers pre-ridesharing and there is a reason why taxi drivers were commonly suspects on crime drama shows like Law&Order.
The lack of meaningful comparison in every article on the topic always bugged me. I'd believe Uber was worse. I'd believe Uber was better. I'm reading your article partly because I want to know which.
Don't forget that Uber is operating at a huge loss. (And it seems they can't even get rid of the competition that way.)
These are good times for the consumer, but of course the situation won't be this way forever.
Not necessarily true. Uber the company maybe operating at a loss but rides are not operating at a loss AFAIK. Kind of like Amazon in its earlier days, where they reinvested their revenue in growth.
Could be true, but I wouldn't be surprised if it's a clever accounting trick.
There are no real magical accounting tricks. At the end of the day (quarter) you will be forced to account for your cashflow. Cashflow always gives the at the moment reality of the company. Before folks reply - Amazon doesn't count. Amazon is an enigma.
Not a big fan of Uber, but on the other hand a lot of cities were operating crony "taxi medallion" rackets that were enriching vested taxi interests and speculators, but hurting drivers and riders.
Ridesharing is more convenient, safer, cheaper, and more environmentally friendly. There's less idling, less aimless driving, less congestion, more carpooling, no clumsy exchange of cash or credit cards, the reputation of drivers is visible, and the ride is fully tracked so your whereabouts are known.
> The rules were not broken because they were unfair - that's a meme - you don't get to pass arbitrary judgement of which laws you do and do not respect (in theory).
This is really problematic for me. If you restrict the scope rightly to only democracies that are truly representative (which many regulatory capture environments are not) I might be able to agree. But many governments in the world are not nearly legitimate enough to deserve this respect.
I have no issue with individuals, businesses, revolutionaries and other for profit or not for profit companies trying to undermine the dictates, decrees, laws or rules or whatever you want to call them of oppressive or authoritarian governments.
Taken to a logical extreme, this justifies for profit companies supporting and entrenching dictatorships, under the excuse of “we were just following the law”.
This is an intensely slippery slope, allowing companies to pick and choose which laws to follow is dangerous - would you be okay with sweatshops existing in the US because it allowed the companies to make more profits? What about outright slavery?
Laws are the social contract that we've all agreed to - I am totally in agreement that a lot of laws were created through corrupt government action, but giving free reign to any private entity to ignore laws they find onerous pretty much removes lawful society.
>Laws are the social contract that we've all agreed to
We have? I may go through the actions of consenting because I fear the repercussions of not doing so, but no part of me consents to giving the average person the right to harm me because of their personal beliefs.
You have, yes. It's one of the oddities and tyrannies of human society but you are beholden to the laws of your locale without ever explicitly agreeing to them - as a dual citizen it was really interesting for me when I went through the process of agreeing to a new set of laws.
The tyranny of this process is that all of the activities you go through on a daily basis are only possible because of this contract and, having grown up within this contract, if you were to leave it it would require you to invest massively in self-sufficiency (the real kind, not "I can grow a garden"), a skill that is not only excluded from general education (both within a scholastic setting and within more traditional knowledge passing routes) nearly everywhere in the world - but is often actively discouraged by societal norms.
This, I think, is a pretty good thing, because all of us being hunter gatherers who fought over bountiful locales would be a lot less interesting than knowing things like agriculture, computers and boats exist.
>You have, yes.
I hope you can see the issue telling someone they consented when they tell you they have not.
>you are beholden to the laws of your locale without ever explicitly agreeing to them
And yet we are free to break them as long as we are not caught.
>if you were to leave it it would require you to invest massively in self-sufficiency
I doubt so, because I find avoiding society is not an option. I guess if you can build your own rocket and launch yourself into space it is possible, but anywhere else in the world and you are subject to the local laws generally set by whomever has the biggest stick. I'm not exactly sure when it happened, but there was one day, not too long ago on the historical scale, where the ability to really live away from people self sufficient became impossible.
I guess there are some places you might be able to move to, not pay taxes on, and be so remote that they don't bother enforcing the laws on you. But that still depends on the idea of breaking laws as long as you can avoid any punishment you find unbearable.
>This, I think, is a pretty good thing, because all of us being hunter gatherers who fought over bountiful locales would be a lot less interesting than knowing things like agriculture, computers and boats exist.
Society has it's benefits, and yet I do wonder if every law was fully enforced would it continue to function? Think of work to rule, at national scale. Laws seem to be a sort of selectively enforced tax that helps keep society from crumbling, but even that isn't guaranteed since it seems to also give us the ability to crumble society in a way that hunter gatherers could never imagine.
All you are saying is the laws are enforced (to some degree) not that we agreed to them, and the fact that I live within a system of rules doesn't mean I agree with all of those rules. Show me a social contract with my signature on it and I will agree with you. Otherwise, I will happily subvert those rules I disagree with where safely possible. Jaywalkers of the world unite!
"People and companies can make judgements about the fairness of laws" does not imply "and they are always correct."
>This is really problematic for me. If you restrict the scope rightly to only democracies that are truly representative (which many regulatory capture environments are not) I might be able to agree.
Even then I cannot. The majority can be wrong at times and a bad law, even one with majority support, is a bad law. In such cases the only value to following such a law is to reduce risk of enforcement (and there is plenty enough evidence that following the law is no defense against being harmed by those who enforce the law).
It is my understanding that many places distinguished between hailed services and on call services, but Uber was able to do on call at an unexpected scale?
I am sure you can dig up illegal acts, but the secret sauce was the new dynamic that bent what people thought was possible at scale.
>In the past (pre-Uber), if you made this amount of money by engaging in large-scale, coordinated law breaking, you were called a gangster and got a big old nice RICO charge.
I'm thinking this isn't actually true. In some cases you definitely were. In others, you become the dominant player and enjoyed becoming wealthy.
What exactly divided the former from the latter? I wish I understood that better.
If they had been operating an illegal business model then they would have long ago lost in court. That they've succeeded means that it's fundamentally legal...
They have been fined, banned and kicked out of the countries all around the world because they showed no respect to local laws and customs.
They had a thing going for a while in Philly where UberX (the normal-car service, as opposed to the limo-type service) was disallowed by the city, but Uber promised to pay any fines if drivers were caught and tried to prevent cops from using the app.
I'd say that's firmly on the "breaking the law" side of things.
Evading a regulation is almost always a violation of the law (the exception being weird industry group things like voluntary audits that result in certifications).
I think most people consider onerous regulations to construct a barrier against entry aimed at any new market entrants[1] to be a different sort of law breaking than normal law breaking (more... morally and ethically acceptable). IMO Uber has flagrantly ignored a number of regulations regarding driver background checks that have allowed it to become less than safe to ride in, especially for single women, there have been a plethora of stories about women being stalked by uber drivers - even within the water-cooler talk at my office.
So technically they've broken a bunch of laws - and ethically they've acted in bad faith.
1. Please note, I think what regulations would be in this group varies extremely across HN, with the more freebretarian folks placing all regulations here, while others may consider labour regulations or environmental regulations to provide real value - and I really don't want to get into this discussion, I just think we can all mentally place a line _somewhere_
Breaking a regulation is not the same as breaking a law. We have two types of law in the US, civil and criminal law. Civil law is enforced through lawsuits by the aggrieved party using the legal concept of tort, criminal law is prosecuted by the state in a process we're all more familiar with due to media attention.
Regulations are enforced by regulatory bodies that operate under a different legal basis than civil / criminal law. Regulatory bodies are not legislative in nature but rather executive. Being sanctioned by a regulatory body is a very different thing than getting prosecuted.
For one, a regulatory body does not enjoy legitimate use of force, and cannot imprison individuals. They can only sanction according to their mandate. If you refuse to pay a sanction, this may escalate to a prosecutable criminal infraction. But simply breaking regs isn't a crime.
For instance, if you're operating an illegal home-based business, you may be subject to sanction by the zoning authority and the entity that you were supposed to register with. Like the local real estate board if you were providing realtor services without a license.
Only in rare situations is it a criminal offense to provide commercial services without the proper licenses, such as providing legal or medical services. It is not, as you say, the norm.
Even in the case of environmental regulations, rarely are they elevated to the status of crimes under criminal law. More usually you'll get contacted by the appropriate environmental protection administration and fined. I recall hearing about one company who would simply call up the authorities whenever they needed to dump into the river and pay the token fine.
There's a lot of room for improvement.
Well, why not both? It would be very Uber to propose a $21 minimum wage law for drivers and then .. just not pay them that.
Probably hired the same legal team that helped wireless firms offer 'unlimited' data.. Or ISP's that offer "up to" speeds (with no mention of caps)
What law did they break? They didn’t break any law when they started. They were operating legally.
I don't know about the US, but in Brazil you are not allowed to give rides and charge for it.
First they evade regulations, then they propose a new policy that is enticing to potential employees (or whatever they call them) - but the policy is so generous that most competitors would have issues keeping up.
How many companies can afford to pay 21$/hr minimum for example?
So somehow it's both a great step forward and terribly anti-competitive at the same time.
I think another question no one is seriously asking is can Uber afford it? They're already hemorrhaging money. I understand they want to eliminate the competition but they might just accelerate the demise of the rideshare industry altogether.
Seems very competitive, not anti-competitive.
Uber paying their employees $21 is very competitive. Uber lobbying for their competitors to have to pay their employees $21 is anticompetitive. The latter is what is happening here.
Uber paying their employees $21 doesn't make sense, they will get undercut on pricing by race for the bottom competitors. There really isn't anyway to grant a viable minimum wage except via legislation. Paying more to the driver isn't the same thing as paying more for top-tier engineer. It isn't like getting a nascar driver in the seat is going to justify higher wages. So what do you recommend?
>> they will get undercut on pricing by race for the bottom competitors
If Uber unilaterally increased minimum salary, then those competitors would have to do the same, otherwise they would lose all their drivers to Uber. So, if Uber really cared about drivers they would just do it. Instead they are making PR stunt by "demanding" government regulation.
I don't think that is true, they'd have a bunch of drivers sitting around not getting paid to give rides because they are being undercut by the competition. It is not skilled work so its always going to be a race to the bottom, the bottom has to be set by some governmental body. Without some reasonable minimum drivers are being sucked into quicksand.
> It is not skilled work so its always going to be a race to the bottom, the bottom has to be set by some governmental body.
It's not actually a race to the bottom because it's still a competitive market. Even unskilled people have a choice between being Uber drivers or janitors or stock clerks or fast food workers, or anything else that someone will pay them to do. If Uber pays less than Walmart then people can quit Uber and go work for Walmart. That creates a floor for the pay of Uber drivers independent of anything the government does.
And if the government is going to do something, it's much better to raise that floor, which minimum wages can actually do the opposite of because people have non-monetary job preferences. If a $21/hour minimum wage appears then you have to pay Uber drivers $21/hour, but suppose they have $15/hour in expenses (fuel, wear and tear), so that's really only $6/hour. Meanwhile a work from home job might have paid $10/hour -- a real $10/hour -- but now that's well below $21, so is no longer available. So now you're paying $15/hour to make $21 instead of paying $0 to make $10, which means you make less, and Uber gets to pay $21 when they would have otherwise needed to pay $25 to actually be competitive. And the same thing (to various degrees) with ordinary commute-to-work jobs vs. stay at home jobs, or jobs with longer vs. shorter commutes or in higher cost of living parts of the city or that require some training or other expense that ultimately has to be paid for out of wages, or the job is just downright less of a grind and people are willing to accept less money in exchange for easier work. By removing options people used to have, you only make them more desperate for the remaining ones and require them to accept worse options even if they're better on paper.
I don't necessarily disagree. This could be a net good for drivers, I'm just trying to point out the validity of the anticompetitive angle here. Regardless I certainly don't think you could argue that Uber is being more competitive by doing this unless they are willing to take the initiative themselves first.
Yes. That's how a disruptive companies operate in outdated regulatory environments, and that can be a win for all. Call it corporate civil disobedience?
Case and point: Uber was basically a (hugely popular) mediator for illegal cabs in my country. They had to shut down, but as a response the government introduced new vastly relaxed regulations to the whole taxi industry, setting the rules under which services like Uber could operate. I am not yet sure if it will actually result in lower rates, but at least they catalyzed a historical change.
What a great company they are. Fast forward 10 years and cab fairs are three times as expensive with literally no competition.
Thanks.
>Call it corporate civil disobedience No thanks, I'll call it corporate law breaking. It's offensive that anyone would equate a corporation breaking the laws of society for MONEY with the emancipation of oppressed human beings.
To be fair, not all civil disobedience is always for emancipation from oppression (think publicly smoking cannabis to protest prohibition.)
See: entire financial industry during and after the 2008 crisis.
The incumbents almost always write the regulations. It protects them from competition.
Self-regulation in action... :/
This seems to be a reaction from Uber because they specifically do not want regulations to come into force on the issue. To me that takes it out of the baptists & bootlegger territory. Absent regulations getting involved, this is simply Uber offering better compensation.
I think you're right (and the article is right) about the particular timing, but I also think Baptists-and-bootleggers is a good way to understand why Uber would prefer this policy over the other regulatory proposals it's reacting to.
If it were sincere, they would do these things without being required by law to do so.
Competitive forces prevent them from raising wages unilaterally, because their customers are extremely price sensitive. They're not going to commit corporate suicide over their ethical preferences, any more than most people would.
>because their customers are extremely price sensitive
The proposal suggests to me that they think their customers are not extremely price sensitive but they're also not loyal to a specific supplier. In other words, they'll take almost as many rides even if the price goes up but they'll still go with whoever is cheapest.
Right, I was struggling with the phrasing for that. The overall demand may be somewhat inelastic, but the cost of switching firms is zero.
I’ve read somewhere ride share companies make more total revenue when prices are cheaper, and people use it less when its more expensive. Since these companies make more money with more total revenue, i’m guessing its in their interest to make it cheap.
It makes sense, if something is cheaper, you use more of it. If its more expensive, you start using substitutes, as the benefits of rideshare gets dwarfed by its extra cost. It’s literal econ 101
It depends on what the price elasticity of demand is. At least in the simple case, there is some price point at which revenue is maximized. Higher prices drive demand down faster than they drive revenue up. Lower prices drive revenue down faster than greater demand drives them up.
They may in fact think their customers are price sensitive (the majority of customers are for any mass service; we already know that most of Uber's customers are price sensitive), while their aim is to capture their customers in a regulatory manner so that they have no or few alternatives.
If they can establish a regulatory framework that favors them (Uber), they can raise prices as competition is further restricted, to more than offset the $21 / hour. Their ideal has to be to establish that favorable competition environment, enabling considerable price increases that get them closer to profitability (ie exceeds the wage cost increase by a large margin). In the current situation, Uber is facing a bankruptcy scenario with their low sales growth, extreme burn rate and with a competitive market where they can't freely increase prices. That tells you what their goal has to be.
If they were certain their customers were not price sensitive, Uber would have already spiked their pricing far higher to push toward profitability.
>If they were certain their customers were not price sensitive, Uber would have already spiked their pricing far higher to push toward profitability.
Many/most Uber customers would use a materially cheaper equivalent service if available because the switching costs are low.
However, that's not the same as price elasticity (of demand) which is what the term usually refers to. Price elasticity is about how much less they'd use any price-competitive service as the price increases.
I'm honestly not sure what that curve looks like. Within reason, pricing wouldn't affect my usage much at all. But I'm a light user of these services and use them almost entirely for business. Certainly I'm a very different profile from a young urban professional who doesn't own a car.
ADDED: Between surge pricing and other pricing experiments I'm sure they conduct, I would imagine that Uber has a pretty good idea of what demand and driver supply curves look like.
uber and ethical preferences? hahahhaha
They think they can survive doing it, but their competitors can't (or can't survive it as well). They probably can't survive doing it if their competitors don't have to. Whether they're sincere about thinking it's a good thing or not is irrelevant to the practicality of the suggestion, and the suggestion only makes sense for them to make as a law.
More cynically, they can survive it as long as their competitors die first :b
Uber lost over $5 billion in one quarter. They can’t afford too much of anything.
https://www.theverge.com/2019/8/8/20793793/uber-5-billion-qu...
Uber didn’t lose $5B in cash. They lost $1.3B in cash at most. Stock based compensation is a cost, but different than straight up losing money.
At the end of the day, if it's part of compensation that they have to pay, doesn't matter? And losing $1.3B is not inconsequential no matter how you look at it.
presumably sincere..
If it were a sincere ethical position, once again, they would just implement it... no need to make a big deal about it
they don't want to compete with lower-cost-lower-quality firms
Such as?
Lyft and traditional taxi service are a couple that come to mind... not that Lyft is necessarily lower quality.
That's what I mean. Taxi services are lower quality but much higher cost (including to the drivers). Lyft (in the markets I travel) is more expensive and higher quality. So I'm struggling to ascertain who is this mythical Wal-Mart to Uber's supposed Target?
The goal is to force every other company to do it as well, protecting the long-term prospects of Uber. A smart thing, and possibly a good one in the short term.
That would basically be suicide bombing the "ride share" industry though. Everyone is losing money hand over fist. Increasing that amount will kill everyone just as dead but do it faster decreasing the amount of time that Uber, or anybody, would be able to figure out how to be profitable. I can see how faced with a binary choice between $21/hr and classifying as employees $21/hr is better but it's not a binary choice. They can pay off politicians (indirectly and with plausible deniability of course) or do other dirty things (this is Uber we're talking about here) to get the law changed.
Ride share, by the strict definition, is just the point of entry. Uber's goal is to become transportation infrastructure, in a 'privatize the gains, socialize the losses' kind of way, as with the rail barons and the car companies and the commercial airlines.
Why do you think they’ll manage to socialize the losses?
So far the losses have been very privatized (VC and bank money) and if anything the gains have been socialized (the general public has benefited a lot in the form of taxi-like transportation, airport rides, etc. getting phenomenally better in most cities where Uber exists).
There have also been public losses. Transit ridership tends to decrease with increased ridesharing. This means more cars on the roads, less money for public transit, and more pollution.
If there was no public transit, there would be private transit. This of course means privatizing roads and not using eminent domain to build transit.
Then, transit will cost exactly what it should cost, and we can lower taxes as well.
Who says they'll bear the cost? I'm not sure forcing all of these services to jack up their prices is bad for Uber if they can increase their overall margin while doing so. They just can't do it today if the competition won't follow suit.
Yes, they lose some volume but Uber/Lyft is probably a pretty strongly engrained habit for many at this point.
The price would get so high that demand would plummet -- more shared/saver rides or public transit or own drive or flexcar/cargo carshare outside of the densest Urban cores.
I'm not sure about "plummet" at least until you get materially more expensive than taxis. But you're right that decreases in demand mean not only fewer fares but also a less viable service at the margins.
When I've looked, it's appeared as if Uber is only marginally viable around where my house is. Decrease the number of riders and I could imagine the number of drivers dropping further to the point where it's not really a usable service.
> but Uber/Lyft is probably a pretty strongly engrained habit for many at this point.
Might be true in the valley, but I see no reason to believe that this is true in many other markets.
Really? "the valley"? I think you'd be closer to the mark if you said it's true in most major metro areas. That still leaves many other markets, but the ubiquity Uber/Lyft is hardly a Silicon Valley only phenomenon.
Ubiquity of Uber/Lyft is a phenomenon across the world, but not all the markets are as flexible on the price. I question the premise that the markets will respond mildly to a significant price increase in most places. The valley just has a high density of high earners who are willing to pay the sort of price Uber would have to set for competing successfully with drivers making decent pay.
Uber has replaced a good chunk of taxi usage in most of the big cities around the world. Even many medium sized ones in developing countries.
And has done so by running its business at a loss, with waves of protests erupting across the world against their anti-labor policies. A quick google search will tell you all about it.
Do you believe that when Uber stops bleeding money, and pays an ultimately somewhat acceptable wage to its drives, it will still be able to compete at the new prices set by these changes?
I sure don't.
> Might be true in the valley, but I see no reason to believe that this is true in many other markets.
I responded to this statement, in which you implied that uber had little market share in other areas. No where in your comment did you state that it was operating at a loss, you simply stated you didn't believe Uber wasn't as strong in other markets.
From the comment above, to which I was responding:
> pretty strongly engrained habit
An ingrained habit and market share are different things. Market share is dependent on price point among many other conditions. I never said or implied that ride share services, and Uber in particular, don't have strong market share. They do at the moment.
It's much easier for a company to do $goodThing if all other companies are also forced to do $goodThing. It's not necessarily good business sense for Uber to unilaterally do it while the competition saves money by doing $badThing.
This is exactly what happened in LA toward the end of 2018. Uber tried raising fares in order to pay their drivers more, but Lyft didn't follow suit and consequentially the market shifted toward Lyft in response. Ridesharing consumers are fickle. It seems the only way for prices to be raised are a) a stable duopoly where both companies' strategy is price matching, or b) through regulation.
Uber would die if they did this without their competition. This seems like a good policy, so I don't see your point really.
That literally is the point of the person whose point you don't see.
"When a large company calls for regulation, what they are really requesting are regulatory costs that serve as barriers to entry, protecting them from upstart competitors. It means nothing else. Ever."
>“the ability to influence decisions about their work.”
Wow...on one hand UBER is in an existential crisis regarding the status of drivers (employee vs independent contract).
On the other UBER is now passing around a petition in order to give drivers rights (which UBER controls) that are commonly understood to be inherent for contractors. Moreover, a contractor generally has complete control over their work, and UBER by passing around this petition is essentially admitting UBER controls drivers work which is typical of an employer/employee relationship.
influence is not control
They didn't say the petition was to give drivers the right to "influence" in a vacuum as it it could be interpreted as anything, such as "influence the company" or "influence their pay scale" or "influence company policy", it was specific "influence decisions about their work."
you could have just as easily quoted any other word, "decisions" "about" "their" "work" as those words are not "control" either, but when you put it all together, "influence decisions about their work" that sounds a lot like control.
Contractors are supposed to have control over their work already, if it makes it easier remove "influence" and if you think there is a more fair interpretation of "decisions about their work" lets have it.
This is a response to a push to unionize and legislate protections. They don’t just want to do this, they want to show that lots of their drivers support it instead of the alternative, and get their drivers to lobby against the legislation and reject unionization.
Yes and no. Unionization would result in unions negotiating against Uber independently. As the dominant player I can see how unions would negotiate harder against Uber than (say) Lyft. A law would mean Uber/lyft/etc. would all have the same playing field - which is better for Uber.
They want the government to force all their competitors to do the same.
That’s not what their petition says, which is linked at the top of TFA. [1]
They are petitioning to change AB5, because of claimed negative side effects of that regulation on their driver pool.
[1] - https://p2a.co/H9gttWA
if you put a survey on your site, or send people a survey via email, asking them do you think we should do this, probably very few people will respond.
But let us suppose that you have developed a reputation for not being nice, if you propose something nice people will think you are being devious, if you send a survey you won't know how many people actually want you to be nice. But if you can get a petition out there then people will think hey, I can force those not nice people to be nice by putting in my two cents. Now you find out how many people really want you to be nice, furthermore then you can market it later - we heard, we responded, and those people all think hey my voice is important and feel good about themselves and maybe feel good about you and think maybe they really are nice after all?
It is a brilliant piece of marketing really, that will of course be taken over by everyone and ran into the ground and poisoned as a method to the point where nobody will believe honest petitions anymore either - but that is years away.
A perfect and logical move for an established company. First, get into an unregulated market. Then, attempt to make that market highly regulated, which discourages and prevents new comers from using the same techniques you used (and thus, lowers competition).
See social networking, see banking, see search engines, see... well, it happens everywhere.
How was the taxi industry an unregulated market? I thought that was the entire uber shtick - ignore the regulations.
Because the goal is to try to end run AB 5 in California, not to actually ... you know ... not be evil.
Knowing the filth of Uber (at many ranks/depts) they could just be testing the waters to see what they can get away with. Politicians do this all the time. They use the media/news outlets to circulate rumors of "10% tax increase on X" and once they measure the outrage they eventually impose the 5% they initially planned. This way the masses are happy for avoiding the 10%, and the politicians are happy because they were really planning for a 3%, so yey.
I woulnd't be surprised if Uber measures the attractions/reactions the same way, and in the end of the day delivers in a similar manner.
Trying to up that stock price .
I don't see how they're going to afford their drivers if they're already blowing 2b on them
They're trying to wield the power of the government to ensure that none of their competitors will be able to survive. It's the same reason why some big companies, like Amazon, are lobbying to increase the federal minimum wage, seemingly against their own interests. Smaller competitors won't be able to absorb the shock of the wage increase and will be forced out of business. The net result will be a less competitive market.
This will if it passes also lead to their demise. Ultimately that VC tap will dry up!
some form of https://en.wikipedia.org/wiki/Regulatory_capture ?
or cutting the grass before the unionizing movement gain too much steam
Because it wouldn't hurt their competition that way. This isn't altruism.
I suspect it's all just PR trying to get ahead of the administration diddling with thoughts of breaking up all the tech cartels.
After all, if no one notices good deeds, they don't count, right? It's the currency liberal American runs on, Virtue Signals ... V$.
There is a push in California right now to clean up the whole distinction between a contract worker and an employee. This is geared toward the California legislature as much as it is other competition.
Somehow I've missed hearing about this push.
"while on a trip" - Uber PR.
Not per hour worked. Not when going to a pickup. Not when waiting for a ride. Only "while on a trip". That alone probably means about 1/3 off. Which puts them below SF's $15/hour minimum wage.
Then, Uber counts the entire amount paid to the driver as "wage", not including their renting the driver's car. That takes off a substantial amount.[1]
And if drivers were employees, Uber would have to buy the bottled water.
[1] https://www.ridester.com/uber-lyft-driver-costs-and-expenses...
You’ve identified what everyone else can’t understand. Kudos.
This is especially damaging to drivers that desire to drive their own vehicles and choose how much they want to drive. The proposed wages are way below what you should be taking home in an area like SF, and you are depreciating your own expensive asset and paying your own fuel and maintenance, auto insurance, health insurance and so on.
The real gem however is this would force drivers to use the rental car program which doesn’t make much sense unless you are driving all week long. It is a way for Uber to control drivers making them unable to reject poor work and working conditions without actually making those drivers employees. As an independent contractor you should be able to turn off your Uber driver app when the pay starts sucking, and go work for someone else at your own discretion. There’s no freedom to do that rolling around in an Uber rental.
How else could they do it though? They'd have to telling drivers they can't work or scheduling them, otherwise there'd be a flood of people chilling in their cars waiting on rides and being paid by uber.
The "gig" economy seems to work by offering people a fairly open choice of pay and work. Though Uber could be more transparent about expected earnings.
They could be paid while they have 'accept rides' turned on and then Uber could stop accepting an infinite number of drivers.
Similar to cloud based server prices.
Paid for time that you're actually online.
If you're only logged on for 20 mins (a third) of the hour - you get $7 min wage ($21 / 3).
Are you seriously comparing a saas service to a service based on real humans? You do realize how different turning a server on from being off vs. getting a driver to pick you up from whatever that person was doing before?
> our community relies on to supplement their income, support their families
While their marketing promotes driving as a fun side gig, their PR defending their labor practices includes supporting families.
It's not surprising coming from corporate PR, but the selective choice of arguments is pretty obvious.
But then again, in a society where the general populace's basic welfare is largely left to market forces, maybe it's not a stretch for corporations to make the claim that supporting families is among their side-effects (but not objectives).
Just like how McDonald's actually recommends it's employees get another job.
Companies in the US are utterly out of control with regards to paying a living wage.
You can't really expect to be paid a living wage at a job that can be done by 14 year olds, can you? There is also a greater supply of low skilled labor available, lowering price of labor. I think you should work 1 to 2 crappy jobs building skills until you can find a single good job. McDonald's also has programs that offer college tuition assistance.
> You can't really expect to be paid a living wage at a job that can be done by 14 year olds, can you?
I expect everyone to be paid a living wage at every full-time job. That's the very definition.
Do you have a source to back that claim? I can't find anything that states "full time" equals "living wage". Only referring to the minimum number of hours an employee has to work from receive benefits "part time" employees typically don't get, like paid time off or health insurance.
Additionally the Fair Labor Standards Act (for US anyway) does not give any formal definition of "full time" work, and is up to the employer. Only that covered nonexempt workers working more than 40 hours are entitled to overtime.
It's fine to disagree, but at least provide some sort of substance to your argument...
Personally, it is in the name: full-time job.
It takes your full job time, it says that there is a measurable amount of job you can have and that it is full with that one. Following that logic, if you fill all of your available job time, there is an assumption (mine and others) that it would provide simply because if you can't, you need more job to do so, making it not a full-time job.
The problem with your logic, is that you still don't define what "full time" equals. There are 24 hours in a day, so is full-time working 24 hours/day? Obviously that's not practical, but then where do you draw the line?
Any conclusion you come up with is completely subjective, and might fit for some people, and might not for others. Maybe someone's full-time job is someone else's part-time job.
That's not a problem with their logic, that's a problem of your pedantry.
Draw the line wherever you think it should be drawn. Their argument is still true. The argument doesn't change whether full-time is 25 hours or 75 hours.
Every single adult working whatever society agrees is "full time" should be able to live comfortably on those wages.
> Every single adult working whatever society agrees is "full time" should be able to live comfortably on those wages.
I agree that would be nice, it's just not possible in a free market. Is there any country where everyone lives comfortably working full time at any job?
> I agree that would be nice, it's just not possible in a free market. Is there any country where everyone lives comfortably working full time at any job?
I mean, except for historical edge cases, we have minimum wage and social welfare programs in Germany that can be used to supplement income if it's really not enough to drag you over the poverty line. While it is by no means perfect and there of course still is poverty and people requiring multiple jobs, if you work 40 hours you can rely on full social benefits, pay into your pension fund and at least live some form of life. The US isn't really a posterchild of how to treat employees w.r.t. wages, vacation, health care, ... the question of "everyone living comfortably" seems weird, of course not. How a society handles their poor/low-income earners is no black and white question, there's a huge range between giving corporations free reign and at least trying to improve living conditions for the majority of citizens.
That darn free market. If only there was some way to, idk, regulate it, or something. Unfortunately, it's an inevitable law of nature and we are helpless in the face of its wrath.
The free market doesn't leave people helpless, it empowers. With enough effort, you can do nearly anything. Additional regulation usually makes it harder for small business to operate.
Actually, let's just make the minimum wage $30/hr and everything will be great.
>I agree that would be nice, it's just not possible in a free market. Is there any country where everyone lives comfortably working full time at any job?
Yes. In my country (NL) the minimum wage, combined with a progressive tax system makes that everyone can live off one job, have health care for their family and education for their kids.
It's not luxery on minimum wage, but it works.
>Is there any country where everyone lives comfortably working full time at any job?
I was probably a bit hasty in asking this question, it's a bit silly.
That being said, I don't know if you can compare NL and US as it's population is 10x lower and as you mentioned has much higher taxes and government programs.
Also, for some reason I can't find recent poverty statistics for NL later than 2015, and I saw stats going from 11.6% to 14% which puts it fairly close to US 12.3%. I would expect given the massive social programs and minimum wage for this to be lower.
> Is there any country where everyone lives comfortably working full time at any job?
Every developed country except one. I can't believe you don't know that.
Last time I was in Australia I met a guy and his wife - they both work stacking shelves at Safeway (the very definition of minimum wage job). Not only are they paying for a house and have three kids, he has enough money for a project car (V8 something Australian) AND they fly to Bali every year for a holiday.
Yes, when you work a minimum wage full time job in a developed country you can have a very good life.
Interestingly, Australia currently has the highest minimum wage (in the world) but similar levels of poverty to the United States.
In addition, Australia has much higher taxes overall than US, but lower taxes for low-income earners.
I'm not an expert on economics by any means, but the population of the US is about 13x that of Australia and I don't know if it's possible to make a direct comparison between the two.
That's why we do comparisons per capita.
I think these issues are a lot more nuanced than that. Maybe I'm completely wrong, but it seems like diseconomies of scale could have an impact on how well the US operates and maybe requires a lot more tax dollars per capita than does Australia for the same things.
> that would be nice, it's just not possible in a free market
Source?
I mean, technically it's possible. It makes it hard because the supply of low-skilled labor is very high, and you can't bargain to be paid a higher wage for a position, if someone else is available to do it for less.
It's great that you understand how supply and demand works, but look beyond that.
At some point in the mid-term future, automation will take over enough labor that a sizeable chunk of the (educated, motivated) population won't be able to find a job at all. Supply non-zero, demand zero, ergo price zero.
In that world, should we just let people starve?
That seems like an argument for basic income or similar. The topic at hand is raising minimum wage, which could only accelerate job loss due to automation.
Raising minimum wage might reduce the number of jobs, but 100% * ~0$ < 10% * 15$.
Many companies have wages low enough that people receive significant public assistance while working full time. That’s a terrible trend, either the work is valuable enough to pay a living wage or or does not need to be done. Allowing companies to pay below living wages is simply an inefficient drain on the economy.
That's a completely different situation, and there's no telling when or if that will happen.
Let's not pretend that the US is a model society for work-life balance, and employee rights.
Well work-life balance has to do with the individual. If you don't want to work crazy hours, don't take a job that makes you work crazy hours, or make it clear to your employer that you wont do that before starting your job.
What sort of employee rights is the US lacking?
>If you don't want to work crazy hours, don't take a job that makes you work crazy hours, or make it clear to your employer that you wont do that before starting your job.
Why do you think people have this ability and choose not to use it? Do you think they're all too stupid to think of it?
>Why do you think people have this ability and choose not to use it?
I can speculate but I couldn't know everyone's reasons. Employment is a contract, and people are free to either terminate it and find a new job, or negotiate the terms on getting hired. There will be consequences, presumably you may not get paid as much, or get promoted over someone else but you can still work a livable wage.
> Do you think they're all too stupid to think of it?
I don't think people are too stupid, I'd guess maybe they feel peer pressure to do it if others around them are doing the same thing.
Do you have a source to back that claim?
Why would he need a source to back an opinion?
"That's the very definition" sounds a lot more like a statement of fact than an opinion. I want to know where it was defined, and by whom.
>"minimum of $21 per hour while on a trip"
Am I the only who notice the last 4 words? This will effect very few drivers as most are already making > that "while on a trip (and not stuck in complete grid lock)".
I assume at $21/h the driver has to pay car expenses? How much does that cost per hour assuming a driver does full time driving?
Shouldn’t Uber instead be guaranteeing how much drivers are paid net? If $21 really is before expenses then it’s not even $15 for most drivers after, maybe not even $10?
Also: I was assuming the pay was while working, not while driving passengers. Otherwise isn’t it even worse?
What if Uber instead just guaranteed drivers a living wage plus benefits net?
Using this website (https://usedfirst.com/cars/toyota/prius) and a Prius as the car as a guideline (Since I feel like that's the most common car I see when I take Uber/Lyft) it looks like maintenance + depreciation on a 3-5 year old Prius is about $2000-$2500 a year.
I delivered pizza's full time for 7 years of my life, so I'm well aware of the toll a job like this can take on your car, but even if we triple the high end to $7500/yr to cover the extra wear and tear, gas, and the extra miles/depreciation they are putting on their car, they are still making a little over $17/hr pre-tax. Additionally, a lot of those expenses are tax deductible which means their take home would be a lot higher that most other people making $17/hr.
There are a few major cities where that wage feels a bit light, but for the vast majority of the country, $21/hr feels like a livable wage, even paying for car expenses.
> a lot of those expenses are tax deductible which means their take home would be a lot higher that most other people making $17/hr
That part doesn't seem quite right. Maybe they can deduct more than they actually spend (using standard mileage rates) but they'll presumably have to pay self-employment taxes which would offset that advantage.
The point of contractor work is to offload risk to the employees.
I understand. But the point of organizing would be to shift it back.
The point is mostly just to make more money.
Uber needs drivers to have an incentive to maintain their vehicles as efficiently as they can. They want the overall cost of the fleet to be as low as possible, because one way or another that cost gets reflected in the price. The current structure preserves that good incentive for drivers, but if they went with a "net" structure they'd have to be much more involved in the purchasing and maintenance choices that their drivers make. That's a really difficult position to be in. (See also the entire health care system.)
Uber does not pay for any car expenses right now - drivers pay for their car, insurance, gas, etc.
Right now, Uber offers a rate based on time spent per trip, and mileage per trip. Drivers do not get paid outside of trips.
This is not completely true, there are factors where the price of the trip or a bonus of that trip is larger if the pickup time is over the historical average pickup time.
For example if the trip is 10min pickup time and 10 min travel, Uber might bump up the price to make drivers be more willing to accept that trip.
I don't think it costs anywhere near $10/hour to operate a passenger vehicle, even after insurance and maintenance.
Depreciation is a large cost as well.
The IRS sets a standard rate of 58 cents/mile for deduction of vehicle-related expenses. There’s obviously a wide range of actual costs, but that’s in the ballpark for an all-inclusive amount. If you average 20MPH then you’ll exceed $10/hr.
The IRS numbers are very generous.
They almost perfectly match the TCO numbers from AAA. They show an average of $8,849/year at 15,000 miles/year, which is 59 cents/mile. The cheapest vehicle type they list is small sedans, which are $6,777/year or 45 cents/mile. https://newsroom.aaa.com/auto/your-driving-costs/
It seems large because we aren’t used to looking at TCO per mile, and only think about the cost of fuel.
I meant 59 cents/mile is generous for estimating your Uber driving costs.
The AAA average includes pickup trucks, which hopefully you wouldn't be using for Uber.
Edmunds puts the TCO for 5 years (includes insurance and gas) for a Prius @15,000 miles/year at $30,600. That is 40.8 cents/mile. 59c is 45% higher.
(This assumes you start with a brand new Prius; you may optimize better as an Uber driver)
The IRS rate is 58 cents a mile (for business). A net speed of 20 mph would easily put you in that neighborhood.
I think it would be a good campaign to get Americans to reduce vehicle miles if we pointed out how much it costs a mile to drive the damned things.
Like is it really cost effective to go to the theater on the other side of town because the tickets are $1.50 cheaper? Or this grocery store versus the other?
Between the 2006 gas shortage and 2008 recessions, we actually started to see this. As gas approached $4 and $5 per gallon, all of sudden, TCOs were approaching $1/mile
Let's not leave the rest of it, threatened with its drivers unionizing Uber tries to play the individualism card to dissuade collective action.
"California drivers deserve access to flexible work." https://www.independentdriver.org/
I wish rent was flexible. How about food prices, they should be flexible. Car repair costs. Flexible. Gas prices should be flexible. In general life should be flexible. Everyone should negotiate. Things should not be that predictable. It's better for everyone.
Prices are indeed flexible.
Prices are mostly driven by market forces. That leaves little room for flexibility.
The flexibility is in what you buy. Rent is flexible in the sense that you can choose what to rent, and whether you have people paying with you (roommates). And so on with other expenses; a new Tesla or a 8-year-old used sedan? etc.
SV's problem is that even the minimum rent is pretty high, but that's a local problem, not a universal.
Ahh, so I have the flexibility to choose to be homeless to save on rent. Great.
> SV's problem is that even the minimum rent is pretty high, but that's a local problem, not a universal.
In my experience almost all of people's problems are local.
To be clear, I have an excellent job. I'm just trying my hand at putting the 'ol empathy hat on.
"Ahh, so I have the flexibility to choose to be homeless to save on rent. Great."
That's hostile misinterpretation. I gave you real-world examples, like roommates.
Hostile? I was quite polite. You’re the person expressing denying the validity of market effects that literally kill people, and you’re pimping it as freedom. That’s hostile.
Everything in that list involves choice: where you want to live is a choice. (based on family size, crime rates, school quality, access to transportation, whether you have pets, etc, but still a choice) Even the things that have static prices involve consumption choices (ie, how much gas you consume)
Living wage covers the floor of these things. Even that is not being offered.
This really only makes sense if you can choose your wage, too.
I hate to be _that_ person, but $21 / hr minimum is more than EMTs, and even most surgical Residents make (at least in the US).
I don't know how to interpret this in that context: is this proposal absurd, or is the medical / labor system in the US absurd? (or both??)
To make it a fair comparison to full-time or even part-time work as an employee, I think you'd need to take into account the cost of car insurance, health insurance, having a car, car maintenance, gas, a smart phone + plan, time spent getting inspected, and other overhead. It's probably closer to ~$15/hr after all of that. I wouldn't be surprised if they derived $21 as California minimum wage + costs of driving.
I mean, its also essentially tax free money as you get a ~.50$ tax relief/mile driven, so IMO with all the costs you probably are equivalent or possibly better than a 21/hour job.
Below ~$45k/yr, the actual income tax rate paid is zero or negative after filing for a return. These are the 47% of Americans that Mitt Romney correctly described as paying no income tax.
A $21/hr tax-free job minus driving costs is still equivalent to a $15/hr job. It's definitely not equivalent to a $21/hr job riding around in someone else's ambulance burning someone else's gas. And from what I'm seeing, residents make ~$60k/yr. That job is also a stepping stone to a much more lucrative profession.
Below ~$45k/yr, the actual income tax rate paid is zero or negative after filing for a return. These are the 47% of Americans that Mitt Romney correctly described as paying no income tax.
That’s only if you believe in the fairy tale that Social Security and Medicare taxes (close to 15% including the employer’s side) go into a separate account and that those taxes don’t go into the same bucket as regular tax revenues.
Mitt Romney talking about only income tax is intentionally myopic. What's their total tax burden including payroll taxes?
I have made $20k/year when I was in grad school and I definitely paid income tax. 18-20% overall IIRC.
Taxi drivers don't work 100+ hour work weeks with 24 hour shifts or have to pay malpractice insurance.
The tax "relief" you state is because it's an actual expense. It costs, on average, $0.58 per mile to operate a vehicle. If you're earning the equivalent of a full time wage at Uber, you're driving 30-50k miles per year and incurring that expense on those miles. It's not some magic money that you just get to use as the basis of a deduction.
But you also have to pay both sides of the payroll tax, I'd be surprised to learn that this ends up being true.
I would argue that EMTs and surgical residents are ludicrously underpaid if that's the current reality.
Correct. The right response here is not ‘pay Uber employees less’, it’s ‘pay EMTs’ more.
Improving society and equalizing society can mean lifting everyone up, not keeping others down.
Unfortunately that is not the approach most people take. Oddly enough I have two friends, one an EMT and the other an RNA, both of which are paid terribly (well below $21hr), but love to share the ever popular memes that make fun of fast food workers asking for higher minimum wage.
It's crazy to me that they feel taken advantage of, but decide the best option is to try and push down those who are even or below their pay grade, instead of focusing their sights higher at those at the top.
https://en.wikipedia.org/wiki/Crab_mentality
>While any one crab could easily escape, its efforts will be undermined by others, ensuring the group's collective demise.
The Principle of Least Action applied to human collective instincts.
Thank you
> Improving society and equalizing society can mean lifting everyone up, not keeping others down.
Unfortunately, that's not exactly how things end up working in practice when it comes to pay because of a pesky little thing called inflation.
Inflation is primarily a terrible thing for creditors, since it erodes the value of the loans they made, but when it keeps pace with general economic expansion, it's fine for workers as long as their wages keep pace with it - i.e shared prosperity.
Inflation is amazing for debtors as it eats away at their debt over time, which is what happened for baby-boomers who were given the opportunity purchase property on credit during the long post-war US economic boom.
Most residents are ridiculously underpaid given the circumstances. Salaries are pretty solidly in the $50k range, but the number of hours (up to 80/week) equates to abysmal hourly pay.
Surgical residents are being apprenticed for their expected $400k-$1m job later in life. They are far from being impoverished, and if they need more than $50k/year, any bank will gladly lend to them at a low rate.
This is a good point, but it does put them in a temporarily highly exploitable position. In some sense they are being paid later in their career for the work they are doing now, and so have lots of incentive to put up with bad behavior. I see this as similar to "lottery ticket" fields like entertainment.
The mean, inclusive of subspecialty surgeons, is somewhere around 375k. The minimum is not 400.
But if it will make you feel any better, the same argument holds for pediatrics residents, who will go on to make an average of about 135 after their decade-plus of training and loans.
They get paid 50-60k a year to work absolutely ridiculous hours. I had a surgical resident for a roommate. He'd get home and if he went from the door to the bed without showering or relaxing he might be able to catch 5 hours of sleep before he had to get up and be off for another shift. We'd buy protein bars so he could eat something on the run otherwise he'd never have anything to eat on a full 24 hour shift. That goes on for 5+ years after already having been in school for 8 years. And it's not like they're just sitting around all day watching real doctors work or something. And the average pay for a general surgeon as of 2017 is 350k (before malpractice insurance).
I got paid even less (around negative $40k) to spend every waking hour 4th year of college to complete coursework, do varsity athletics, search for a job, and do an honors thesis. But these were investments in human capital.
I'm not sure I understand your point. They have already gone through 8 years of school which they definitely didn't get for free. Surgical residents then work for 5 more years working 100+ hours a week.
I think the argument is that one set of roles is highly skilled and requires a lot of education & investment in money & time to get to a $40-50k "apprenticeship" -- the other set of roles is not.
Getting paid equally for both of those positions, regardless of future expectations, indicates that something might be off.
>I think the argument is that one set of roles is highly skilled and requires a lot of education & investment in money & time t
Think of it like grad school cranked to 11. More hours, harder entry requirements, bigger stipend, massive payoff at the end.
Uber drivers don't have a $300,000+ salary to look forward to after surgical residency.
Yeah I don't know how much more people expect to be paid. It's a completely unskilled job that almost anyone can do. Complaining that $21/hr isn't enough would be insane at this point.
>$21 isn’t a living wage for any category of worker in the San Francisco metro area except a single adult or two adults living together
Is it really insane that people should get paid a living wage, regardless of whether it's a 'skilled job' or not?
A "living wage" bundles the assumption that a single wage must pay for all your expenses in maintaining a predetermined standard of living and that there's no other possible arrangement that should be considered.
And that is, in fact, insane, as it's contrary to the experience of anyone who has worked two jobs, shared a flat, budgeted, or otherwise been creative in making ends meet.
"People deserve to be able to live comfortably on a single job at 40 hours a week."
"Nuh uh, some people have been creative and survived under the current system!"
"I'd like to work two low paying jobs that work around my lifestyle."
"Nope, because we care so much, your lifestyle is illegal."
Yep, if Uber pays $21 an hour, you can't possibly drive for both Uber and Lyft, or work a side-hustle. That will definitely be against the law.
Yes, it is. Is it really that insane that doing a job a monkey could do shouldn't be paid the same as jobs that require actual skill?
Why can't that be a job you do on the side for a little extra cash on the weekends? Why does every job need to provide a "living wage"?
People that work should be able to earn a living wage, period, perhaps its an indication the people you mention are paid too little, why not address that, rather than demanding people on the edge of poverty get paid less...
So should my 17 year old son flipping Pizza deserve a “livable wage”?
There was an article posted on HN a while back where they said the average franchise owner makes around $40K a year - and that’s with them working 60+ hours a week. Where is the money suppose to come from?
Usually when I ask this question, I get the response that those companies don’t deserve to exist. Which is saying a lot considering how many people on HN probably work for a money losing startup living off of VC funding.
>So should my 17 year old son flipping Pizza deserve a “livable wage”?
Choose one: "yes", "I want to pay higher taxes so independent adults can survive on such a wage via government assistance", "people who work 40+ hours a week so I can eat cheap burgers do not deserve to live", "I would be okay with much slower service and business hours that don't intersect with school days, as well as high local unemployment and probably homelessness."
>Where is the money suppose to come from?
Raise prices or cut other costs. If that doesn't do it, well, perhaps they should listen to you and develop more marketable skills, right? I find it weird that you arbitrarily decided on a "skill threshold" where flipping burgers isn't deserving of a livable wage, but for some reason entrepreneurship is.
Raise prices or cut other costs. If that doesn't do it, well, perhaps they should listen to you and develop more marketable skills, right?
So the independent pizza shop owner doesn’t deserve to be in business since they have to actually be profitable but the startup founder who can lose money for a decade supported by granddaddy VC backer does?
And by the way, up until the current administration, every Republican and Democratic administration as well as most conservative and liberal economists has said that the best and least disruptive way to support a “livable wage” for heads of household is to increase the earned income tax credit. I would add make that a reverse payroll tax to make it easier for employers to distribute it to workers during the year. Yes, I’m okay with increased taxes if necessary.
Should the small struggling independant slaveowner have a right to stay in business too?
Should the money losing VC backed startup that statistically will fail deserve to stay in business just because the founder “pattern matched” with Zuckerburg - ie a young White guy that went to an Ivey league school?
That really helps “equality”...
https://news.crunchbase.com/news/untapped-opportunity-minori...
> So should my 17 year old son flipping Pizza deserve a “livable wage”?
Is he working 40 hours a week? If so, then yes.
And what about the business owner making on average from statistics $40K a year in gross profits after working 60+ hours a week. Does he deserve to make s livable wage and still be able to work 40 hours a week?
Are we better off if he can’t be in business and has to work for someone else?
Here's a thought experiment I like to use whenever this comes up.
If someone were to approach you on the street and ask you to do something for them that will take an hour of your time, what amount of money do you think would be a fair compensation for just the time expense? Now add to that the fact that it's not just an hour of someones time, it's also an hour of use of an expensive machine they own and maintain.
I've found that when minimum wage is thought of in this way, anything less than $20-25/hour sounds absurd.
Well the CEO of walmart pulls in 22 million a year. I can tell you right now that 21/hr is doable for every unskilled laborer in the US today.
The problem that arises is that if you artificially inflate someone's wages to an arbitrary number like 21/hr, they might not provide enough value to economically justify the wage level they're set at.
It's not, and shouldn't be, an emotional argument. It's an economical one.
Frankly, I don't care about any economic argument that says people shouldn't have the ability to put food on their table, a roof over their head, and have decent healthcare. Any company that cannot be profitable and pay their employees enough to cover basic needs shouldn't exist as a company.
They can go find a different job that pays more. Uber driving is not skilled labor. How it’s justified as a 21/hr job I don’t understand.
I genuinely don't know how to explain that the fact it requires an income of more than 21/hr to meet basic needs is all the justification that should be required.
Maybe if we stopped thinking of employees/contractors as "labor" and thought of them as people it would be easier to empathize with their needs. Do you think that your friends, family, and loved ones deserve a wage that meets their basic needs? Why shouldn't all humans deserve the same?
It only requires that amount if you’re intent on living in the most expensive cities in the entire country.
Yes. All of the Uber drivers and other unskilled labor should move to Montana. That would be super helpful for those needing rides in SF.
Uber was never a career, it was a side gig.
How would you distinguish what job can be a career and what must be a "side gig?"
Sorry, are you not aware with the term "gig economy"?
Uber isn't a "gig" job for a lot of people. That's just marketing.
Or if you'd like to see a doctor sometimes.
That's not how capitalism works and that's not why companies exist. Companies pay you what you worth to them. A company is not a human, it doesn't care whether you have a family and are struggling or not.
The primary purpose of a business is to maximize profits for its stakeholders.
Then the answer is simple, if we want humanism in the way we deal with employees, than businesses that seek to maximize profits for their stakeholders should be outlawed.
Why should skilled laborors be able to raise a family and not unskilled? Like what makes educated people more valuable as human beings?
Almost anybody is able to become a skilled laborer :) all it takes is time and effort.
And a skilled laboror doesn't deserve more than 60-100k/year or more than? Why should everybody's pay be the same or decreasing and not CEOs and VCs?
You should be paid what the market says you’re worth, which is exactly what you can negotiate to be paid.
Which is exactly what we're talking about. Instead of getting paid what we're worth, we have mega corporations like Uber breaking laws, ignoring regulations, and then lobbying for regulations when it suits them. It's rather disgusting.
What laws and regulations is Uber breaking?
Well then the states better get on fining Uber!
They are. It's a problem of the rich not caring and just paying the fines.
We can't all be skilled labourers. Who will perform all the unskilled labour that's needed for society not to grind to a halt?
> Like what makes educated people more valuable as human beings?
On average, educated people contribute more value to the functioning of society. I can drive myself around. I can't perform my own heart surgery.
The argument that all humans are inherently equally valuable is specious reasoning. I can come up with all sorts of trolly car conundrums that if you were forced to choose, you'd make a value judgement about which person to save because they have more value.
We have enough money to make sure everyone can have a home, medicine, and food and water, even if you just drive a cab all your life.
Yes, but not any home wherever they want to live by themselves and not any medicine or medical treatment available.
Some things are scarce resources and should be priced accordingly.
Maybe instead of arguing about who deserves to get hit by the trolley, we should be changing the system that is tying people to the tracks.
> Any company that cannot be profitable and pay their employees enough to cover basic needs shouldn't exist as a company.
There are many ways to cover your basic needs that don't require you to live on your own in a one-bedroom apartment and three square meals a day. In fact, most of humanity survived by pooling resources. The ability to live entirely on your own being common is a very recent phenomena as is three square meals a day.
All your stating is that people shouldn't have options where they can pool resources. As someone supporting two older adults in my household, you're saying that if they can't get hold a livable wage jobs (unlikely given that one has Parkinson's) but still still could earn money and contribute to the household. You've not made my circumstances harder by legislating away opportunities for them to contribute.
Why should a company be responsible for healthcare? It’s not the case anywhere else in the world?
Because that's the system under which we live.
Healthcare should be provided to all by the government for free, but until then we must live under the system.
So instead of complaining about a company should provide health benefits, complain about the government.
Advocating an increased minimum wage is complaining about the government.
Do you think that everyone deserves “a livable wage” - even my 17 year old son staying at home flipping pizza?
Yes. We're an immensely wealthy country
Who should pay for it? The pizza shop owner with a net income of under $50K a year after working 70+ hours a week? Increase taxes on the household making an average of $70K a year so the government can subsidize his pay while he stays in a household making over twice the average household income?
Does the pizza owner also deserve an adequate return on investment to make his risk worthwhile or should he also work for minimum wage at a larger corporation?
Why should we tax the poor? No, we should tax the rich, ramp that tax rate up to 90 percent for the highest brackets, and stop putting half our taxes to military. We'd suddenly have so much money we wouldn't know what all to spend it on.
When you “tax the rich at 90%” it disincentivizes people from working - would you risk starting a business or working extra hours for only 10 cents to the dollar?
Also, how do you classify “the rich”? People in the 90th percentile of household income? That would be approximately $130K a year.
Finally, only 15% of federal spending goes to the military. Most of our spending is already for social security, Medicare, education, retirement benefits, etc.
https://www.cbpp.org/research/federal-budget/policy-basics-w...
This is why capital gain taxes are generally different from income taxes (the previous are lower and can be offset by losses to prevent risk taking).
Social security and Medicare are funded directly via payroll taxes, they are not part of he general fund and you pay for them separately. Comparing them is like comparing medical insurance premiums or 401k savings to military spending.
Social Security and Medicare taxes have always been mixed in with regular income taxes. The government “borrows” money from the social security fund and issues the funds IOUs. There is no separate account where money is stashed away and only spent on SS and Medicare.
> Social Security and Medicare taxes have always been mixed in with regular income taxes
No, they never had. In fact, 47% of the population doesn’t pay income taxes at all, just payroll taxes, which are capped rather than progressive (anti progressive, actually).
The government does borrow money via IOUs to fund things like military mostly, but they also borrow money via treasuries, are you saying China’s export surplus should be mixed with regular income taxes as well?
Despite all of the accounting tricks, at the end of the day, “payroll taxes” are spent to fund every part of the government just like all of the other taxes. We just happen to have a surplus now.
Once the tide turns and social security is running at a deficit, regular income tax will have to pay for social security. It’s all the same money.
We already don’t have a surplus in payroll taxes, and will in a decade or two run out of the money already lent to the general fund. Still, that money has already been allocated and Americans have been paying for it specifically. If congress meant otherwise, they should have included it as a benefit paid for via taxes, but they didn’t set t up that way at all.
Congress only "means" what makes them look good for the next election cycle. But sooner or later, either benefits will have to be cut, or taxes raised. Either way Congress won't be able to do what they said they could do.
> When you “tax the rich at 90%” it disincentivizes people from working
It reduces the incentive to sacrifice other things for additional income once you've already reached the level at which the increased tax kicks in, yes.
Why is this a bad thing?
So what is a “fair” amount that people should earn? I bet the people living in the Midwest would love to tax the “liberal west coast elite” living in Silicon Valley 90%. Should 90% start at $150K? $200K? Or is the definition of the “rich” “anyone who makes more than I think I will make”.
> So what is a “fair” amount that people should earn?
I reject both the concept and it's relevance; no marginal tax rate below 100% is an income ceiling, and setting marginal tax rates at particular levels neither requires nor implies that a single such “fair” amount exists.
> I bet the people living in the Midwest would love to tax the “liberal west coast elite” living in Silicon Valley 90%
I bet most of the low income population of the West Coast (and Bay Area in particular) would like that—and benefit from it, in terms of effects on local cost of living—more than anyone in the Midwest.
> Should 90% start at $150K? $200K?
I didn't actually endorse a 90% marginal rate for federal income tax; disagreeing with a particular argument against a thing isn't endorsing it.
If I were to propose rewriting marginal rates, I'd probably do something like drop the 32% bracket down to start at about the 90th individual income percentile (instead of about the 95th, where it is currently), and drop the existing higher brackets in favor of adding additional +8% brackets at the 95th, 97th, 98th, and 99th percentiles, topping out at a 64% rate.
But more important, I'd tax capital gains as normal income, with options for both advance recognition and deferment to handle irregular streams (whether from capital events or otherwise.)
The CEO of walmart most certainly isn't worth 22 million/year. If you can't bring in 21/hour as a cab driver you probably shouldn't be driving cab, especially considering you should be pulling in, what, well over 100/hr gross?
What evidence do you have that the CEO doesn't bring that much in value to Walmart?
"Bad managers cost just as much as good managers."
https://investorplace.com/2018/07/are-ceos-really-worth-what...
See also: https://www.wsj.com/articles/big-companies-pay-ceos-for-good...
https://www.forbes.com/sites/susanadams/2014/06/16/the-highe...
These articles present an incredibly naive analysis of the situation. The logic is "high pay should equal high stock performance" but this fails to recognize that in an effecient market the ability and salary of the ceo would already be priced into the stock, and thus would have "no effect" on its performance. You can't prove that the stock would've done less-worse if a different (lower paid) ceo was there, which is essentially what these articles try and argue.
I CTRL+F'd for Walmart in each article but didn't find anything. I thought that was the topic of discussion?
You're mistaken
The economic argument however, also includes taxes, the welfare state, etc;
If a job pays less than the cost of living in an area, then the job is somewhere between subsidized by the government or not economically viable.
$21.00 x 40 hours x 52 weeks = 43,680 in pay, for roughly one year.
$3,706 x 12 months = $44,472 in rent.
That's the first number I found on google for "san francisco average rent price" (without quotes).
I agree that those numbers are insane. Accusing someone who makes less than he needs to rent decent housing of complaining seems quite wrong. I understand that San Francisco is at the high end of cost of living. It's also where Uber and Lyft are centered.
The point of the article seems to be that Uber and Lyft support this idea because they're hoping to undermine more meaningful protective legislation, specifically California Assembly Bill 5.
Claiming that this low-ball offer from large corporations would be too hurtful to those corporations, and far too generous to their workers, would be ... insane, right?
Should someone necessarily be able to afford an apartment on their own in one of the most expensive housing markets from an activity that nearly every American adult does?
This is about a California policy. San Francisco makes up 2.3% of California's population. It's not even relevant to this discussion.
While SF rents are nuts, just paying people more doesn't fix it: we need to allow more housing to be built.
There is a fair bit of overhead that comes with being an Uber driver (gas, maintenance, the cost of the car, additional taxes). So if you are being paid $21 an hour your take home will still be a lot lower than someone being paid $21 an hour in a normal job.
Correct.
When I was driving, I could make abut $1000 a week when working 60 hours.
$150 of that would be gas 35 would be insurance 15 would be oil changes $50 per week should be set aside for savings to reinvest into the vehicle in the form of proper maintenance.
the final number, $750 for working 60 hours 12.5/hr
Did you factor in depreciation as well? I would imagine that the additional miles on the vehicle would cause pretty significant depreciation, and would shorten the life of the vehicle, requiring you to buy a new one sooner if you are planning on keeping it until it dies.
It's not as high as it seems because they have to pay for the car.
And they’re probably only paid when they’re in transit to their next pick up and while driving their current pickup, or else when people are double-dipping on Uber and Lyft, they would theoretically be being paid $42/hr
I assume they would need to accept whatever rides come their way under such a scheme, as otherwise they could just idle and collect money
Edit: From the proposal: "drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses"
So yeah, it looks like it would only apply to time spent on a drive. I hope it at least includes the time it takes to get to a customer as well. I had an interesting conversation with a Lyft driver a while back who explained that if you're mainly moving people short distances in the suburbs, you're hardly breaking even. It would be neat if a pay structure could incentivise being available in lower-demand areas but I guess we're not there yet
Sincere question: is this true in the SF Bay and/or California? $21/hr might not make sense in Cincinnati (edit: Cincinnati is just an example)--local context is important.
I think that is the missing piece in all the minimum wage law proposals. It greatly devalues everyone making a similar amount to what the new wage would be. If someone went to two years of a trade school, their investment in increased earning power has been eroded. Eventually, these industries will have to raise their wages in order to continue to attract talent. This does mean that these industries will all have to raise prices to cover the higher costs. In the end, everything will settle down and the people with the higher minimum wage may actually have lost actual buying power. Rich people don't tend to frequent places where people make minimum wage. So raising prices in those locations mostly hurts poor people.
I think we need to just be smarter about helping the poor. How about we get rid of income tax for people under the poverty level (or multiple there of)? How about we give them some basic income to make up the difference? We can tax more on the high side to make up the difference. Also, giving poor people more fluid income will likely increase the velocity of money which should make rich people richer negating any increased taxation.
I worked hard to get where I am, I'd like the same stipend that others would receive.
It's not just about effort.
Doctors work hard, and so does my barista making my coffee. But let's be honest: they shouldn't be paid the same simply because they both work hard.
This is a completely reasonable take. You don't have a right to live in a city that requires $50/hr to live comfortably. $21/hr is an amazing pay rate for what is essentially unskilled labor
I understood the article to say the policy is specifically $21/hr while on a trip. Is their any publically available data about how much time Uber drivers spend waiting to be assigned a ride?
The fully loaded rate is potentially much lower.
Yeah, this isnt a minimum wage because they're not even getting paid a wage. They're getting a slice of each customers payment, and if uber really cares about their drivers, they would call for a minimum percentage that drivers receive.
If they're classified as employees, why should they get a percentage? Cashiers don't get a percentage of the total sale at a retail job.
Im not saying they're gonna be classified as employees. Being classified as employees would make ridesharing horribly unprofitable.
Prediction: If this goes through, there will be such an oversupply of drivers, that in order to beat the competition, drivers will de facto have to adopt unofficial practices like "Ok, you wanted to go 20 miles, we've gone 10 miles, now change the destination to where we are now, and pay me for the 10 miles, I'll drive you the other 10 miles off-the-record."
$21/hr is the minimum wage for when they have a passenger in the car. EMTs still get paid even if they don't have a passenger
Do you have data to support your claim on the EMTs and surgical residents? That sounds surprising to me on the EMT front, though surgical residents presumably are paid quite low because their earnings will exponentially grow in the coming years.
If you Google "EMT average salary" or "EMT average hourly rate" you'll see that EMTs are notoriously underpaid.
In my high CoL state, EMTs make roughly $15-$18.75/hr, work multiple back-to-back shifts and often nights.
Yikes, just looked on Glassdoor, $30k yearly for EMTs in the Providence, RI area. These are professionally certified people with numerous skills, first-contact for emergent health issues, and they get paid barely more than very low-skilled service workers, many of whom are now receiving $15/h (that's great for them, but damn EMTs deserve more).
It's not $21/hr at all. It's 21/hr "while driving". If there are a lot of Uber drivers and low demand, they could spend half of their time sitting around earning 0.
So this wording is essentially fraudulent.
Do EMTs only get paid when they're transporting a patient or during their downtime too?
How much do EMTs make in San Francisco?
EMTs and surgical residents typically have very good health insurance.
I guarantee you that EMTs definitely do NOT typically have very good health insurance, speaking as someone who has worked as one for multiple companies and as an educator in EMS in this region.
If you're talking fire department-based EMTs, then yes, but these make up a significant minority of EMTs who are often running on minimum wage and often given the bare minimum of health insurance.
Well, I suppose "good health insurance" is subjective, but keep in mind we're comparing this to no health insurance.
And they don't pay for their ambulance or the maintenance on that ambulance.
Work out the cost per mile, and the average miles per hour, that number comes down quite a bit. Especially in places where car insurance is higher.
Well, I mean they should - they're highly skilled and paid a lot of time and $ in education and training. And these things are relative: they're specialized and require more training that many other positions - more so than drivers.
If they're going to be paid less, they need to be compensated elsewhere.
I would not consider a basic "EMT" highly skilled. Maybe a paramedic, then yes, but not an EMT. However if you're referring to residents than yes they would be considered a lot more skilled.
It doesn't take much schooling to become an "EMT". However with what they have to deal with and how essential the services are, they definitely should get paid more fairly.
This appears to be a joint effort with Lyft.
A joint letter by Uber and Lyft CEOs: https://www.sfchronicle.com/opinion/openforum/article/Open-F...
Lyft email campaign advocating minimum earnings: https://p2a.co/xcA3Bg3
"wage" is a confusing term to use in this context if they aren't very specific about what things the driver has to pay out of that $21/hr. Self employment tax, employers share of FICA, vehicle wear/tear/depreciation, fuel, health insurance, commercial vehicle insurance, benefits, etc.
They seem to want you to make a straight comparison to a W-2 hourly rate which isn't honest.
This is an attempt to push Lyft out of CA by raising the cost side of the equation but that cost will eventually have to be passed to riders, which will dramatically drop demand. If the minimum wage law passes and they subsidize rides long enough to edge out Lyft then they finally get the monopoly they’ve been promising investors for the last decade but they also lose a huge amount of their TAM. The laws of supply and demand will eventually come into play.
And of course once they get their monopoly they will raise prices further to get profits and at that point I’d guess they would only be slightly less expensive then Taxis were before all this gig economy craziness.
I also think it's an attempt to ward off a nascent unionization push.
Regarding a different, recent "olive branch" type proposal:
"The one thing they don’t want to give you is the thing that you need to get. This offer from Uber and Lyft is like a kidnapper offering you a softer blanket, as long as you agree not to ever escape. No thanks. These companies know very well that once their workers become actual employees, they will get a host of benefits automatically, and they can formally unionize to win themselves many more benefits and increased pay. These companies, which have never made a dollar even while exploiting their workers, fear this. So they offer some concessions." [1]
[1] https://splinternews.com/if-uber-wants-it-its-bad-1835514222
> Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses.
This simultaneously reduces the race to the bottom of pricing for ride sharing while capping what Uber will pay at $21/hour[0].
[0] "While on a trip". Gotta love that.
What is the right payment for Uber drivers? Will 21/hr really cover costs plus give a living wage?
Seems to me that's the starting point before decing whether it's a good wage or not.
The right amount is the amount set by the market. I don't understand these people protesting... no one is forcing you to work for Uber.
The market is to a large extent set by those at the top of it--who unsurprisingly decide that they are worth the most, and pay themselves billions of dollars.
It's true that nobody is forcing you to work for Uber. You can always go to one of the other companies inside the same system with the same incentives that cause them to treat their workers in the same way.
The market is certainly not set by the “people on top” and this weird FUDy argument about some elite ruling class only hurts peoples ability to find better paying careers (a gig economy job is not a career)
My understanding is that people believe the free market is failing to provide a living wage to a certain class of society. One of the root causes of this failure is technology and automation, so they think it’s just to implement a minimum wage for Uber drivers.
One could imagine a world where automation replaces half of the labor force and the free market would essentially allow corporations to rake in enormous profits while the unemployed class gets paid pennies and lives in poverty.
> one could imagine
Sure, we can imagine it, but it would be asinine to take legislative action now when that isn't even a problem.
What's asinine is being so against regulation that we let bad things happen that are easily predictable and preventable. That just makes it easy for the already-rich to stay rich by staying a step ahead of regulation, leaving a path of poverty and other harms in their wake.
Protesting is one of the tool workers have when negociating with their employer. And I don't see why they wouldn't try to negotiate higher salaries, that's part of how market dynamics work.
Sure, that's fine. They're protesting for a government to use force to guarantee their higher wages. I have no problem with someone asking their employer for a higher wage, but just because they aren't productive enough to earn that higher wage doesn't mean the government should be involved.
> [it] doesn't mean the government should be involved.
Yep, I agree with you on this point.
That's more than double (almost 3x) the national minimum wage, and at least in my area, is more than enough to live quite well. Of course, it's barely enough to sustain a weed habit in Silicon Valley, but outside of that bubble, this is quite livable.
Most minimum wage workers don’t have to pay a bunch of money operating their own equipment as part of their job.
It also has to cover the cost of the vehicle
Call me a cynic, but I don't see how this doesn't hurt drivers. It sounds good, but it's too good to be true. I'm wondering if they are factoring in only the amount of time actually driving. So if you have a 5 minute drive in 60 minutes, at 21.00 per hour you only make 1.75. I'm guessing their hourly wage doesn't include reimbursement for car mileage, gas etc. too. That seems like a raw deal to me. Am I missing something?
I don't think people are reading it correctly. They are going to be paying $21/hr minimum while a driver is ON A TRIP. During non-peak times you could wait almost an hour with no ride. You'd still get nothing for that time. The only thing they are promising is that when you're actively on a trip the wage they are giving you is at least $21/hr.
This is not a good deal.
The IRS vehicle mileage rate for 2018 is 54.5 cents per mile. If a driver averages 20 miles per hour, then their effective hourly rate is cut in half from depreciation/fuel/maintenance/etc.
That is true, and the company doesn't have to reimburse you for that. They can leave that to you to factor in your yearly taxes, effectively putting the burden on you to track and submit all of that.
yes, but it's on your taxes because it's an actual unreimbursed expense you've undertaken. It factors into your net income, not just a tax savings.
It's wise to look a gift horse in the mouth when it comes from an amoral corporation, but I suspect this is fairly honest, not because Uber is doing it out of the kindness of their own hearts, but because Uber wants to avoid regulation.
People who claim that regulation only makes things worse should take note of this: even the threat of regulation can be enough to get corporations to at least try to appear to do the right thing.
That said, I think there are two problems with this:
1. Long-term results of this will just be Uber trying to avoid regulation for as long as possible, while figuring out more and more clever ways to maximize profit at the expense of both drivers and passengers.
2. Any payment agreement which doesn't include health insurance in the US needs to be considered as significantly reduced. Back of napkin math ahead: Health insurance can run as high as $700/month and after taxes someone getting paid $21/hour takes home closer to $10.50, meaning some drivers will have to work ~65 hours/month just to pay for health insurance. Assuming Uber drivers drive 160 hours/month (which is conservative), paying for their own health insurance is a ~40% reduction in pay. This means that, pre-tax, that $21/hour looks a lot more like $12.60/hour would in a country with a reasonable healthcare system. Of course, there are some worst-case scenario numbers included here (most people's health insurance isn't that expensive) but at least some Uber drivers, particularly with expensive-to-treat preexisting conditions, are going to be receiving a much lower wage if health insurance isn't included. I suspect this singlehandedly is why Uber is even making the $21/hour offer: as a way to avoid regulation that would require them to pay for health insurance.
$5 that Uber is doing this to avoid regulation AND can use voodoo on their backend to surpress the effective daily wage paid to drivers by spacing out pickup requests.
My (family) health insurance is more than that. If you're paying for all of your own health insurance, it can easily be a lot more.
What's so amoral about it?
Are you asking what's amoral about Uber?
Saying "amoral corporation" is almost redundant and isn't specific to Uber--almost all corporations are fairly amoral.
The article is written confusingly.
It seems to really be, Uber responds to proposed legislation in CA, by asking for it to be changed to allow uber drivers to remain 'independent contrators' -- but they're willing to take legislation, apparently, that would guarantee a $21/hour guarantee, along with paid sick leave and vacation?
Or maybe they're saying if they don't pass any legislation at all, they're willing to do those things voluntarily... presumably just in CA? I'm a bit confused, the article is poorly written.
This is a lot more than many Uber drivers currently get.
There are people quoted in the article saying $21/hour still isn't a living wage in the bay area.
But if Uber is suggesting that $21/guarantee with paid leave is only fair, presumably they'd be willing to commit to that nationwide, not just in CA where they are threatened by legislation? (Just kidding, I obviously don't presume that).
I know many people who do or have driven for Uber in other parts of the country who would find it quite an improvement to get a guarantee of $21/hour and paid leave.
The article was updated and the headline changed to "Uber proposes policy that would pay drivers a minimum wage of $21 per hour while on a trip" to clarify the misconception that drivers would actually receive $21/hr. I think the headline should be changed here to avoid similar misunderstandings
Is this after accounting for gas and insurance? Or are they just hoping everyone confuses them with employees?
From the proposal:
“drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses.”
> “drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses.”
"while on a trip", aka "not really $21/hour", because even in extremely dense areas, drivers have downtime between trips, during which they typically have to either drive around aimlessly, find a place to idle/park, or drive to their next pickup.
Is that different from how normal taxi drivers get paid?
> Is that different from how normal taxi drivers get paid?
Yes, but it's not the point - it's misleading to talk about a minimum wage that excludes some time on the job from the denominator.
It's probably calculated to be ~15 an hour net, 15 being the current magic number.
Is this really a wage or do you have to deduct your petrol and motoring costs from it? Are you working when waiting for a customer Or only when actually driving?
"$21 per hour while on a trip"
As many have pointed out, this is the key. Not possible to have 100% utilization, so most drivers would probably earn 50-75% of this number.
So... it sounds more and more like Uber is going to need to provide drivers insurance, etc... which means they will probably need higher requirements from their drivers at some point. Maybe even licensing and...
wait, is Uber slowly becoming a taxi service?
Anything short of employment with the health insurance and no personal investment in the car it seems like it's going to be bad for drivers in the long term.
"no personal investment in the car"
That seems excessive. Plenty of professions require significant investment in equipment. Many truckers own their own trucks. Mechanics buy their own tools. It's just part of the equation.
This from the same company that hasnt turned a profit..
What do driver expenses look like on a per-hour of driving basis? Gas, oil change, tire wear, etc. on a modest Honda/Toyota type car?
$0.58 / mile according to the IRS.
Depends on the car though. My econobox could turn a profit driving around at those rates but an F-150 might have issues. Hell, for those rates you could turn a profit renting a light aircraft for the trip in some parts of the country if you used the by-road distance (something like Telluride to Denver) as occasionally happens if you are good at bargaining with your expense people.
Wow you maybe could.
Telluride -> Denver is 360 miles by road. At $0.58/mile that's ~$210.
KTEX -> KDEN is 190nm, call it 2 hours in a Cessna 172 with run-up and taxi. I can't find aircraft rental rates there in 5 minutes of search, but anything under $105/hr wet would make it cheaper than driving at IRS rates.
Telluride is at 9070 feet elevation though, so make sure you know how to fly in the mountains!
Really, just do KBJC/BDU/APA -> KTEX and back. You'll save some money and BJC in particular rents at insanely low rates[1]. If you're in a flying club or own an EAB aircraft you can do even better.
Also, yea, mountain training is a must. I wouldn't actually take a 172 up there but a 182 or Archer would be fine in nice weather.
How does aircraft rental work? If I wanted to do the flight you are talking about for the weekend, is the rental fee per hour of flight?
If so, say I have a two hour flight Friday, leave it parked until Sunday, then a two hour flight back. Four hours of flying and 36 hours of sitting. What would the final charge be?
For regular rental it's typically per hour the engine is running ("hobbs time", aka the airframe clock which activates off of oil pressure) and then there's often an overnight minimum if you want to take it somewhere else overnight, often 2-3 hours. That means if you want to fly out Friday and come back Sunday somewhere 2 hours away, you'd be billed 6 hours if there's a 3 hour minimum per night (though often minus the cost of fuel, so closer to 5 hours). Fuel is typically included in the hourly rate and is reimbursed if you have to buy any off field.
If you are part of a flying club (everyone buys in for a few grand and own x% of the aircraft) then the rates are typically said to be "dry" and are just the aircraft without fuel and typically billed with "tach time", or the engine clock rather than airframe time which measures rpm / max rpm * time which is in practice about 0.8 * "hobbs" making it slightly cheaper for some operations. Flying clubs vary a lot but are typically more lenient and often don't charge a minimum for overnights as long as you aren't abusing the heck out of it (ie. fly an hour away, spend a two weeks, fly an hour back).
Is that based on total cost of ownership? AAA claims to have some info on that: https://newsroom.aaa.com/tag/driving-cost-per-mile/
Then the IRS is being generous, as most of the vehicles in that linked page cost less than $0.58/mile.
They're including depreciation which makes sense for small businesses that turn over their fleet every X years.
If you're not swapping cars ever few years depreciation per mile is basically irrelevant because age and what you use the vehicle for will dominate depreciation.
An Uber driver will typically drive 30-50,000 miles/year (looking at a few quick search results). At that rate, your car will wear much faster and require replacement or major maintenance much sooner than is typical.
You can't drive Uber in an old car, can you?
Edit: apparently you can, and drivers leasing new cars to drive are getting creamed.
In many markets, the car can be up to 15 years old.
The AAA numbers are within a hair of the IRS numbers so presumably yes.
Looks like you are correct. As another user has pointed out, those numbers a likely based on average driving of 10-15k per year, I would guess an uber driver who drives full time will easily drive twice that.
What is it that Uber is proposing?
I understand that they're "advocating for a brand-new policy that would strengthen protections for drivers" but what is that policy? What policy are they suggesting be put in place to make sure protections for drivers are strengthened?
Not entirely clear what _policy_ exactly means, does it mean Uber will pay the minimum wage or it wants the government to pay that? (I am not from U.S. so its unclear how it works)
I guess, its the government, since people drive for both lyft and uber.
(Some of) the drivers are advocating for a (California) government policy (law) that would make drivers be treated as employees and therefore require their employers to pay minimum wage while on duty, have regulated minimum and maximum shifts with regulated breaks, etc etc.
Uber is saying don't do that, instead proposing a new government policy (laws or regulation) of a minimum rate of $21/hour while providing a ride. Like minimum wage, this would be paid by the employer/client, but the government sets a price floor.
Note that how this compares to minimum wage for employees depends entirely on the occupancy rate for the vehicle: if you've only got a fare for half of the minutes in a hour, that's $10.50/hour which is under the 2019 California minimum wage of $12 or $11 for small employers.
AND your own gas, maintenance, and depreciation would come out of your $10.50.
Thanks. I get it now. The amount seems on the lower end then since it is against the actual time spent driving and not the time you are online?
Yes, but the headline rate of $21/hr sounds better than minimum wage.
It's a proposal for a law that requires all ride-sharing companies to pay that wage to their drivers.
Now I understand why Uber would want this, thanks.
Minimum wage applies to what the companies pay an individual, not the government paying people.
In context it must be a governmental policy
Generally the government does not pay/augment wages for companies in the US.
I think the person you're replying to is implying that one company cannot just pay their workers a super high wage without losing to its competitors.
Competition will keep the wages as low as possible so this change must be done at the systemic level so that Uber and all of its competitors have to make this change at the same time. The only forseeable way to do this is government policy.
Maybe I'm dense but if drivers aren't finding the expected wage acceptable then why don't they simply choose not to offer their services to Uber? I'm not saying that in the "cruel capitalist" way, I'm observing -- they still choose to work, so there must be demand for it at a low wage level.
Seems to me we have an oversupply of labor of people willing (or needing) to work for pennies. Having a minimum wage isn't going to improve that. It's going to lead to fewer people taking rides, and fewer people being able to become Uber drivers, but slightly better for the ones that can remain drivers. Classic minimum wage problems.
Why don't we make it $30 per hour? or $50? That would be even better.
That's a fair question, but you'd also need to ask it about essentially the entire history of the labor movement. Why did coal miners fight and die for modern labor laws, rather than finding different work? In the big picture, there are structural forces that get in the way of a simple supply-and-demand view of labor. People's lives are sticky, and the next-best-alternative to a person's current job is often much worse, rather than just a little bit worse.
> why don't they simply choose not to offer their services to Uber?
You assume there are other options without barriers to entry. You’ve learned how to drive uber, you’ve got a vehicle and payments to make - now take a risk on some other gig with a million unknowns?
Now it’s possible that uber cannot shoulder this cost by lowering their margins, and it will pass directly to the consumer as you suggest - but it’s not guaranteed. The fact that uber is behind this suggests that they can shoulder the cost.
> You’ve learned how to drive uber
That's a bit of stretch. Also worth noting, many of the jobs did not even exist before Uber created a market for it.
> why don't they simply choose not to offer their services to Uber?
Collective bargaining, aka unionizing, does essentially just that, only with more leverage.
ok...?
I'm sure driving for uber is not difficult, but making money driving for uber is 100% a skill. When to go out, where to be, how long your shift should be, what rides to skip, etc. That's all invested learning.
> Also worth noting, many of the jobs did not even exist before Uber created a market for it.
Their trophey is in the mail. Just because you create a new job, does not mean it's a good job.
> Collective bargaining, aka unionizing, does essentially just that, only with more leverage.
yes! it seems clear to me that uber drivers would benefit from unionizing.
I am led to believe that the turnover for Uber, Lyft, etc. is pretty high. I think a lot of people, after doing it for a few months, realize that after the cost of burning up their car is taken into account it's not making them much.
So, why don't they choose not to offer their services to Uber? Well, I think they mostly do, eventually.
Once VC money is no longer subsidizing rideshare businesses, I'm not convinced that they will stay in existence in any form whatsoever.
> why don't they simply choose not to offer their services to Uber
I agree, they could simply choose to starve.
> I'm not saying that in the "cruel capitalist" way
Yes you are.
> Classic minimum wage problems. Why don't we make it $30 per hour? or $50? That would be even better.
Just out of curiosity, what is your wage? Because these "the poor shouldn't get better compensation" comments tend to come from the well off.
Nope, I'm really not saying it that way. You probably just can't seem to understand that opinion or possibility without putting it in a certain category of belief.
Presumably the $21 per hour is before driver expenses (gas, depreciation etc: drivers often ignore that their shiny new Prius loses about $0.10 in value per mile driven).
Does anyone have a link to the actual policy Uber is advocating? It doesn't appear to be linked from the TC article or the independentdriver site linked from there.
Yes, that's the link from the TC article.
What it says is:
"Instead, Uber is advocating for a brand-new policy that would strengthen protections for rideshare drivers by:
Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses.
Providing drivers access to robust new benefits, such as paid time off, sick leave, and compensation if they are injured while driving with Uber.
Empowering drivers to have a collective voice with rideshare companies, and the ability to influence decisions about their work."
What are they actually proposing? I see what they want their proposal to do.
Key words in this story: "while on a trip".
This isn't actually $21/hr. It could very easily end up being under $10/hr. Just depends how lucky the driver is.
In Brazil the drivers would get better salaries than our doctors... ¯\_(ツ)_/¯
is there an interview process to be an Uber driver? Or do you just download the app and turn it on? If it's just the app then why wouldn't everyone just download the app and start making $21/hr
I have the same question. I'm guessing its $21/hr of driving time?
Thats $42,000 a year.
Are they doing this in only certain areas?
$21/hour only includes time when you're on a fare, not time when you're logged in and available.
And it doesn't include the gas, maintenance and depreciation on your personal vehicle driven 30-50k miles per year to reach that amount. The IRS estimates those costs to be $0.58/mile, which would reduce the income by between $17,400 and $29,000.
Not necessarily, they're not proposing to put their drivers on salary.
That's not exactly a living wage in a lot of places like California.
What is the right payment for Uber drivers? Will 21/hr cover costs plus give a living wage? That's the starting point before decing if it's good or bad.
> What is the right payment for Uber drivers?
Whatever the future union (that the drivers are asking for) can negotiate.
> Will 21/hr cover costs plus give a living wage?
No it won't, see the article.
And what will this do to fares? If they stop being the cheapest fast option between two points, I don't feel like I'd be alone in going another way.
Raise them to the point to create an entitled taxi monopoly ripe for disruption by an aggressive industry defining competitor.
They will still be cheapest fast way by a long shot, but it changes the money vs time calculus. Uber was never about being cheap (except cheaper than cabs in a few places where cabs existed), it was about being affordable and far faster than transit/walking/biking.
I presume they'll talk up the $21/hour price point in PR while pretending gas, insurance, maintenance, etc. don't cost anything.
I'm not defending Uber here and it is very likely they are spinning this in their favor, but they claim that rate does include expenses:
> Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses
They seem to be saying the $21/h is what the drivers would GROSS, not what they would NET after expenses...otherwise they would write "after" and not "including".
Compare to their blog here[1] where they are much clearer. "[T]he median driver in Seattle makes between $19 and $21 per hour before expenses. A typical expense range is between $2.94 and $6.46 per hour"
[1] https://www.uber.com/blog/seattle/a-look-at-driver-earnings-...
This wording is a little unclear. I’d have liked something a little more specific: “in addition to the incurred average costs...”. As is, it sounds like expenses may be part of the hourly rate.
That's ambiguous. Uber could say "we pay them $21 per hour, and they are expected to pay for their gas/expenses out of that" and it what they said is still true.
"While on a trip" is very slippery here.
It's actually very well defined, so I have no idea how it's a "slippery slope"
So there are 730 hours in a month. You're insured for all of them, but you might be driving for only 200 of them, and a portion of that won't be "on a trip". What percentage of the monthly commercial drivers insurance cost are they counting as expenses?
Same thing with maintenance. Yeah, that oil change may have cost $40... but none of it was incurred while on a trip.
ceejayoz didn't say slippery slope - they mean slippery as a synonym for "tricky" or "furtive"
For example, "$21 per hour while on a trip" could mean that, if a driver takes a fare 30 minutes out of town then returns empty, they are only paid $10.50 for the hour's work because returning empty was not "on a trip"
It's not "could" it's clearly the meaning. Out of town drives have surplus charge for this reason.
You can put a price on those things.
Insurance: 2400 / yr (guesstimate, maybe lower) Miles driven per year: 50k [1] Cost per mile (Incl depreciation) = 0.26$ [2] Cost per year to drive = 0.26 * 52k = 13520 Total = ~$16k per year in post tax earnings.
(Assuming numbers above still work ) Min 21$ / hr = 43,680 Minus taxes = 40,175 Minus driving costs = 24175
post-tax income per month ~= $2k
Assuming a single driver lives outside the immediate SF area, "commutes" to work, and shares an apartment, it's enough to survive. There's plenty of other jobs that pay less, so it seems unfair to target Uber on this number. You can expect to get by temporarily or make a bit of extra cash with Uber, but it's not a long term career for a driver - but I expect most drivers know that already.
[1] https://ride.guru/lounge/p/how-many-miles-do-uber-and-lyft-d... [2] https://bizfluent.com/how-5914430-compute-depreciation-based...
> it seems unfair to target Uber on this number
No it's not. That there are worse jobs elsewhere in no way implies these people are asking for anything unfair. Uber got where it is by greedily violating every regulation on the books and now that they are facing these "unfair" unionizers they demand regulation? Please.
I question "Bizfluent" as a good source. The IRS states $0.58 per mile.
[Edit]: I'll add in another source in line with the IRS rate. See AAA: https://newsroom.aaa.com/tag/driving-cost-per-mile/
Did you account for that the drivers can deduct some of the costs as a business expense?
In the other direction, commercial vehicle insurance costs substantially more.
If I understand it correctly Uber drivers must buy and maintain their cars as individuals.
That has to be more expensive than maintaining sizeable taxi service fleet. No matter how you make it Uber is taking 30-40% markup and letting drivers to eat the extra cost from this business model.
Nor their cars and the depreciation on them.
tl;dr Uber/Lyft/gig workers are organizing to get themselves recognized as employees (rather than contractors).
> "These petitions are clearly Hail Marys by Lyft and Uber to try to prevent the passage of AB-5, which seeks to codify the ruling established in Dynamex Operations West, Inc. v Superior Court of Los Angeles. In that case, the court applied the ABC test and decided Dynamex wrongfully classified its workers as independent contractors based on the presumption that 'a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits…'"
Uber's proposed policy is somewhere between what those drivers get now (no guaranteed wages, no benefits, no protection from unfair labor practices) and what they'd get as employees under California law.
Their response:
> "'$21 isn’t a living wage for any category of worker in the San Francisco metro area except a single adult or two adults living together,' Gig Workers Rising tweeted. 'What they’re offering is the floor, while hoping to kneecap any efforts to raise wages down the line & create a real union.'"
Is there a reason you can't commute from Oakland to a SF job?
Maybe SF should ban single-passenger cars and solve this Uber problem once and for all.
if they're employees can they be fired? will the have a driving hours quota to meet? Seems like they'll need to make a lot more for uber than $21/hr to cover the overhead of an employee.
And they arent employees?
You can guarantee a contractor an hourly wage.
How does that account for time waiting between rides? With increased wages, we can expect increased supply of drivers, leading to more drivers waiting. That is unless they apply a cap to the amount of active drivers, which would cause its own issues.
It's not clear from the article, is it a flat fee of $21/hr? Or is it only $21/hr of passenger time?
This makes sense, Uber should be a premium service, back in my day having a private driver on call was expensive as it should be, the wear and tear om the vehicle is ridiculous, the vehicles are nice. You want a cheap ride, get a cab that someone may have shit in OR innovate in your life and buy your own vehicle.
Trollish usernames aren't allowed on HN because they basically troll every thread they post to.
https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...
I've banned this account for now, but if you want to email hn@ycombinator.com with a better username, we can rename it for you and unban it.
This is absolutely the WRONG message. Everyone should not have their own vehicle. That is insane. Especially in big cities.
You’re being downvoted for what, suggesting people buy their own vehicles? The downvoters conveniently skipped that you mentioned the primary option would be to pay the real costs of a private ride . Rideshare is a swindle against gullible, math-challenged contractors while painting the whole affair as a progressive, environmentally conscientious techno-inevitability.
False equivalence: A private driver typically wasn't driving a car that had their kid's car seat in it, blaring the music they prefer, in a 2006 Toyota Corolla, and (rightfully so) treating me like a potential threat (many drivers, especially female, have cameras for their protection).
Kicking away the ladder.
$21 is not enough once you add in operating costs that the drivers must swallow.
Minimum wage policies in this sector are such a boon to self driving car companies. It will accelerate the end of uber and lyft using human drivers dramatically. I hope these unions realize what they're doing.
Unions or not that change is coming.
Ok, now how about a sincere focus on safety and driver accountability?
I started using Uber and Lyft several years ago in NYC because the taxis were horrible. More than half the rides would feature a driver on the phone, severe road rage, and reckless driving.
Now it seems to have come full circle. Ridesharing is almost as bad as taxis used to be. Some drivers are great, but many are rude and seem to use the roads as an outlet for pent up aggression. In SF, around 1 in 10 are obviously stoned. More are overtired and easily distracted.
So I'm back to driving or public transit. I love ridesharing and would use it all the time if it was safe, but I'm not putting my life or a family member's life in the hands of companies that can't guarantee a competent driver.
At least with ridehailing apps you have a feedback mechanism to flag these drivers. If enough people have negative experiences, they won't be able to drive for that platform.
I don't use that feature unless the infraction is very major (like the guy who swerved into incoming traffic while texting). The reason being is I don't want to look like I'm complaining for the sake of complaining or trying to get free rides/Uber credit.
It's important to rate poor drivers with low scores because a) you won't be matched with them again and b) you're potentially helping remove them as a driver to the benefit of other riders.
If they want to give you credits as well, so be it.
Yeah, I agree with this. Ridesharing drivers have gotten SO BAD, its rare I get one that doesn't have at least a few traffic infractions during a 10-15 minute ride.