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Disrupting Uber

jacobinmag.com

11–20 of 230 posts

Re: Disrupting Uber

#11
post #2

> Yet again, an investigative report has found that Uber underpays its drivers. Aren't the fares proportional to how many drivers are available? If the fares are too low, don't drive. If enough people stop driving, the fare will go up.

I can't even work out what they think they mean by 'underpay'. Is this less than the minimum wage? Less than they were promised in a contract? Less than taxi regulations allow? Something else?

I see they say it's not the same as what some other article claimed, but unless Uber was promising drivers that this still isn't underpaying by any definition is it?

Re: Disrupting Uber

#12
post #4

I still believe that Uber artificially creates a market by subsidizing a price point that is attractive to the drivers.

Definitely. Even as a consumer, I am able to order food from UberEats, and the total costs less than the cost of the food on the menu at the restaurant because of Uber's promotions.

Re: Disrupting Uber

#13
post #5

"The drivers who don’t completely depend on their work with Uber to pay their bills — a group that makes up about half of the company’s workforce — depress full-time workers’ wages." I bet this creates a larger defensive moat than most competitors assume. Uber is a supply/demand driven model (eg success w surge pricing) and even modest additional supply generates lower rates. Lacking that same supply efficiency in fu…

Uber is a investment fueled churn machine right now. Supply and demand(even as overly simplistic that model is) has yet to come into the equation. We will not have any idea the validity of the business model until the never before seen massive expenditures in driver acquisition subsides. Which probably won't be for several years or more.

Re: Disrupting Uber

#14
post #3

It's a bit silly to leave out any mention of self driving cars in an article called "Disrupting Uber". Driving around cars around all day is a silly job, ideally a job that should not exist in 5 years from now. We'd better discuss basic income instead of co-op taxi companies.

[deleted]

Re: Disrupting Uber

#15
post #10
post #4

I still believe that Uber artificially creates a market by subsidizing a price point that is attractive to the drivers.

If their unit economics are positive than this is not true. If their unit economics are negative then it will be a spectacular show when the music stops. This is aside from promotional costs for the first few months when they enter a new market, as long as those costs actually decrease within the first year in a new market.

That view doesn't look at the big picture - it's very possible that they are allowing for, and happy with, losing money to grow market share for many more years, maybe even until they can offer driverless rides to turn market share into profit.

Re: Disrupting Uber

#16
What they're missing is that higher wages depend on some barrier to entry (there are many kinds) that protects the people who have jobs at the expense of anyone who is looking for a job.

As someone who works for a company with high hiring standards and correspondingly high pay, I have mixed feelings about this. It seems like there should be some jobs that are easy to get without much training, and taxi driver is a good candidate for this. If we build fences around every kind of job, life gets even harder for the unemployed.

So I'm not automatically on the side of workers with more "skin in the game." I'd need a stronger argument about why we should support them rather than part-time drivers.

Re: Disrupting Uber

#18
post #7
post #2

> Yet again, an investigative report has found that Uber underpays its drivers. Aren't the fares proportional to how many drivers are available? If the fares are too low, don't drive. If enough people stop driving, the fare will go up.

If you're driving for beer money you won't care that the fares are low. If you're driving as a career you can't just not work and hope the fares go up.

It's an important point, that these concerns are always about careerists, not the beer money group. But there are two groups here.

The beer money group could be significant: retirees, students, people who want extreme flexibility because they have another primary job or responsibility. Half of all drivers is a significant block.

On the other hand, careerists legitimately face an impossible situation, since so much of their life is in the hands of one company that's constantly tinkering with its economics.

The common policy response across similar situations seems to demand every single job must work as a 40 per week career with benefits, killing any pure beer money jobs.

I don't know whether that's a wise policy solution or not. Maybe the benefits do outweigh the costs. But it's certainly not pareto optimal. Restrictive policy responses hurt one group of people in an attempt to protect others.

I'd feel better about such policies if proponents showed awareness of who they were hurting. Like if proponents said, "ok, honestly, we're going to hurt retirees with this jobs protection measure, but we think that's ok, because we value single moms over retirees."

Though if you get that far, you could just reduce it to a wealth transfer. Let Uber do what it wants, then tax retirees and give the money to single moms. Similar effect. One group loses, one group benefits.

Though of course then you'd stop and ask why you're taxing people supplementing a fixed income. Maybe you'd rather tax some other group first.

And that line of analysis is how you end up supporting deregulation combined with aggressively progressive taxation where the benefits are targeted to vulnerable groups.

Re: Disrupting Uber

#19
post #2

> Yet again, an investigative report has found that Uber underpays its drivers. Aren't the fares proportional to how many drivers are available? If the fares are too low, don't drive. If enough people stop driving, the fare will go up.

The article is making an assertion that isn't supported by the facts they themselves cite. They say that "Buzzfeed found that drivers in Detroit, Houston, and Denver “earned less than an average of $13.25 an hour after expenses”"

If that is true then Uber isn't under paying their drivers at all. They are paying them at a slightly above average rate. You can easily look up the average salary for a Taxi / Limo driver in the US on the BLS website[0] and you will find that the national mean hourly wage for this job is $12.53. They also have data by state.

Now, a couple years ago Uber was running adds on Facebook to recruit drivers in average cost of living areas that said things like "Make $70,000 a year driving for Uber". Those were clearly misleading if not outright false when the average taxi driver makes $27k. Perhaps that is where the narrative that they are underpaid comes from.

[0] http://www.bls.gov/oes/current/oes533041.htm

Re: Disrupting Uber

#20

What they're missing is that higher wages depend on some barrier to entry (there are many kinds) that protects the people who have jobs at the expense of anyone who is looking for a job. As someone who works for a company with high hiring standards and correspondingly high pay, I have mixed feelings about this. It seems like there should be some jobs that are easy to get without much training, and taxi driver is a go…

I don't disagree, but why would Uber have lower fences than Swift? At least some of the part-timers must be surge-seeking: do their higher pay requirements reflect that they have higher skills than the 13-hour-day drivers?
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