Why Startups Are Making the Expensive Switch to Traditional Employment • Hacker News Board

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#11

Post by andyidsinga » Thu, Aug 06, 2015, 4:16 PM UTC

JoshTriplett wrote: post #5

ocdtrekkie wrote: post #4

I feel like Silicon Valley tends to think they can save money by skipping out on whatever big businesses have always done, until they find out later that it was a bad idea, and businesses did things that way for a reason. It's what happens, I think, when 20-somethings think they know what they're doing over experienced people with 20-something years of experience in the business world.

There's something to be said for experimenting. Some experiments turn out to be a bad idea; other experiments end up making sense. Always good to figure out which practices have a sensible reason, and which are just "the way we do things".

yes, the experiment is key ...and means a hypothesis and means to test and measure results is also required.

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#12

Post by visakanv » Thu, Aug 06, 2015, 4:24 PM UTC

DarkTree wrote: post #8

ocdtrekkie wrote: post #4

I feel like Silicon Valley tends to think they can save money by skipping out on whatever big businesses have always done, until they find out later that it was a bad idea, and businesses did things that way for a reason. It's what happens, I think, when 20-somethings think they know what they're doing over experienced people with 20-something years of experience in the business world.

You have to imagine that those with 20 years of experience in the business world inherited their practices from the people above them. This means people are prone to getting trapped in a certain mindset and a way of doing things, because that is just "the way it has always been done". Whether or not SV is improving on these traditional practices is certainly up for debate, but you can't fault them for breaking from t…

Yup, especially considering that new technologies emerge that break old assumptions about how things work. "The way it always has been done" works until it doesn't.

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#13

Post by ta119a08 » Thu, Aug 06, 2015, 4:27 PM UTC

ocdtrekkie wrote: post #4

I feel like Silicon Valley tends to think they can save money by skipping out on whatever big businesses have always done, until they find out later that it was a bad idea, and businesses did things that way for a reason. It's what happens, I think, when 20-somethings think they know what they're doing over experienced people with 20-something years of experience in the business world.

It's often rooted in just saving overhead in the the slimmer startup days by experimenting with shortcuts and "innovations".

Big business processes and techniques often take big business capital and big business experience. But as demonstrated by the success of many startups that avoid traditional processes in those early days, the processes are not strictly necessary.

Avoiding them may prove brilliantly competitive, or may prove to be some organizational debt that gets carried forward. Either way, the early days of a startup are very sensitive, and a little savings can make a world of difference.

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#14

Post by littletimmy » Thu, Aug 06, 2015, 4:27 PM UTC

> "Under the contractor model, Lee says, the leaders at Luxe hadn’t been able to schedule workers for unpopular hours like late nights on Friday and Saturday; they could only bribe them to come online with higher rates of pay, as Uber does with surge pricing."

Seriously? If someone is working Friday nights or Saturday nights, he SHOULD have higher pay. What it is with CEOs that they feel they are entitled to their worker's entire existence?

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#15

Post by chaos_monkey » Thu, Aug 06, 2015, 4:27 PM UTC

Please, this is just click bait. The startups cited in this article are just series A companies bleeding money. A very unsubstantiated article. It's the same thing as when that one Uber driver in California was declared an Employee, there was a slew of news articles saying it was uber's downfall. But if you actually read the coverage of the case, you'd see that that court case applied to that driver and that driver alone and has not really had any repercussions through now. Then again I guess Time.com isn't the go to place for tech journalism, but still it's just not good journalism to speculate like they do in this article.

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#16

Post by paulsutter » Thu, Aug 06, 2015, 4:32 PM UTC

The individual pays the cost. Today Uber drivers get like 80% of the fare. If Uber needed to pay benefits, give vacation time, etc, the pay rate would be much lower. That would all come out of the 80%. Just like how contract programmers bill a higher rate and get no benefits. Calling someone an employee doesn't suddenly create new money.

I can't imagine uber drivers would prefer a lower rate of pay, but hey, I guess that's what all these advocates of making them employees want us to believe.

Or maybe it raises the question, who is driving all this PR anyway? I can't see it as a grassroots thing from Uber drivers.

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#17

Post by michaelochurch » Thu, Aug 06, 2015, 4:33 PM UTC

ocdtrekkie wrote: post #4

I feel like Silicon Valley tends to think they can save money by skipping out on whatever big businesses have always done, until they find out later that it was a bad idea, and businesses did things that way for a reason. It's what happens, I think, when 20-somethings think they know what they're doing over experienced people with 20-something years of experience in the business world.

I don't know why the fuck you were down-voted.

That said, age is only a small part of the issue. I'm older and there's still a lot more that I don't know than there is that I do know. I don't expect that fact to change in a fundamental way: there will always be far more that I don't know.

The problem is that Silicon Valley people are arrogant and don't listen. They call the rest of the country "the paper belt" and think that regulators are just stupid, without taking time to understand why the regulations exist in the first place.

Also, there are a lot of older, man-child VCs who aren't 20-somethings and ought to know better.

Much of the youth/inexperience image that Silicon Valley wants to project is out of an intention to create plausible deniability when these companies do wrong. (The same with "Aspie chic"; Evan Spiegel is a lot of things, but I don't think that he has Asperger's, and I wish these people would stop using a real disease that they don't have to justify assholish behavior.) In comparison, if you're 55 and your company is at the center of a sexual harassment scandal, you can't use the "I didn't know any better" excuse or the "I was crushing code 20 hours per day, but I'll create a token 'Chief Cultural Officer' position and pretend to have solved this" justification.

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#18

Post by michaelt » Thu, Aug 06, 2015, 4:34 PM UTC

mc32 wrote: post #2

It doesn't bother me one way or the other how workers get hired, as temps, contractors or permanents. As a worker, I see advantages and disadvantages in all. Never the less, here it's stated that companies are taking contractors or independents internally as employees in order to have more control over service and presentation. That's something to strive for. As a consumer of good and services, one tends to prefer th…

At least in my country, there can be pretty big differences between being a temp and being an "independent contractor".

If you work for a temp agency and they send you to a warehouse, you'll have managers/trainers a few steps away, you'll get paid by the hour, and you won't have to spend your own money.

On the other hand, if you're an "independent contractor" for a parcel delivery company you'll be working alone, you'll get paid by the parcel, and you'll be paying for your own vehicle and fuel and whatnot.

The different environments make a big difference in terms of things like whether an employee can make a loss/less than minimum wage, how much it's in their interests to cut corners, and how long it takes for someone to spot if they're struggling and give them help.

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#19

Post by jvm » Thu, Aug 06, 2015, 4:36 PM UTC

empthought wrote: post #9

"Under the contractor model, Lee says, the leaders at Luxe hadn’t been able to schedule workers for unpopular hours like late nights on Friday and Saturday; they could only bribe them to come online with higher rates of pay, as Uber does with surge pricing." That's not bribery; that's simple supply and demand.

So absurd to refer to wages as bribery!

Structurally identical: "The leaders at [insert startup here] hadn't been able to employ engineers for free, they could only bribe them with high rates of pay"

Re: Why Startups Are Making the Expensive Switch to Traditional Employment

#20

Post by patio11 » Thu, Aug 06, 2015, 4:38 PM UTC

The biggest issue seems to be control over the work delivered. All of the Uber for X want their service to be a pleasant experience for the customer which is ~98% guaranteed to hit 5 stars or the local equivalent. This generally requires some degree of operational control over the workers. Aside from the (formidable!) difficulties [+] of actually structuring a business to have operational control, that tilts the relationship very, very heavily from "could possibly be an independent contractor" to "presumptively an employee."

Given that one is going to lose a fight with the IRS or local labor department over classification -- and one will, eventually, if you're doing things like e.g. giving the employees checklists or training them on the "company standard" -- might as well bite the bullet early.

[ + ] Many people employed in startups are young and may, how to put this gently, not have experience giving them an appreciation that members of the class which Stanford sources most engineering grads from are not perfectly representative of all Americans in all ways which matter towards employer/employee relationships.