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Does anyone know why I would be downvoted for taking the time to explain what is going on. Does someone have a problem with lowering overly high taxi fares. Uber has been doing that which is a good thing.
This is standard Uber practice. Use billions in its warchest to incentivize drivers into joining it, and offering huge benefits that gradually become less generous as it comes closer to market saturation.
What's a warchest?
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Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and th…
Read the article more carefully, "they might be willing to switch to a co-op model that offers a cheaper price and solid service". A co-op can have lower prices and pay it's members more because they don't have to funnel profits to support the bloat of a central corporation like Uber.
The corporation isn't some money-sucking black box. It's dispute resolution, software development to match rides efficiently (Uber Pool is tricky), and advertising.
Yes, it also skims money off the top to pay for things like driverless car R&D, but is a small, likely disorganized co-op going to be efficient enough at all the above to take advantage of that margin?
Earlier quoted context omitted.
What is so hard to understand about this? These drivers could create an app that results in the exact same price for consumers, except that any profits go to the drivers instead of Travis Kalanick's pocket.
If they create their own app, they would have to offer lower prices than Uber which they'll be able to do from the money Uber was taking from them. Otherwise, people will use the incumbent service (Uber/Lyft). Is that easy to understand?
Assuming that Uber is profitable (this is not clear) then costs to riders could be lowered and drivers could be paid more, simply by splitting the profits going to Uber between these two ends. That's what a co-op is designed to do.
I didn't downvote you, but if I had it would have been because you applied the standard arguments about Uber/Lyft without considering the specific argument here: that co-op systems can benefit both the consumer and worker.
Earlier quoted context omitted.
Economic rents apply to workers as well: guilds and labor unions. Licensing for any work including barbers and hairstylist with licensing requiring expensive courses. Even in medicine, it is much harder for foreign doctors to work in the US than in Israel, a country with lots of competent medicine. It really applies to any group that uses politics, regulation, to give profits beyond those in a healthy, efficient mark…
The phrase https://en.wikipedia.org/wiki/Regulatory_capture applies to what you're describing here more than "economic rent" does.
The wiki article you supply gives many examples of this from the FAA, to the NRC, to the Fed regulating investment banks, ....
The economic rents frequently are political laws passed to create special licensing requirements to create politically induced barriers to entry for people wishing to have a job. The economic rents also apply to other politically induced scarcities such as limitations on zoning density to create housing scarcity or taxi medallions to create taxi scarcity.
Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and th…
Read the article more carefully, "they might be willing to switch to a co-op model that offers a cheaper price and solid service". A co-op can have lower prices and pay it's members more because they don't have to funnel profits to support the bloat of a central corporation like Uber.
Earlier quoted context omitted.
It's much easier to down vote something you don't want to be true than to engage in intelligent discussion. And to answer your question: everyone wants the benefits of economic efficiency but none of the costs. It's much easier to say "low skilled labor should be paid more" rather than "let's increase the value of labor". Also, an easy counter argument is that Uber is engaging in rent seeking against it's drivers. I…
Downvoted with no comment! Oh, the irony.
Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and th…
Read the article more carefully, "they might be willing to switch to a co-op model that offers a cheaper price and solid service". A co-op can have lower prices and pay it's members more because they don't have to funnel profits to support the bloat of a central corporation like Uber.
It seems like a few lines later, it says:
By turning to co-op apps, drivers can retain the flexibility of working under a model like Uber’s while also having a say in their own wages and conditions.
If the workers have a "say" in their own wages that means increasing prices, unconditionally. And who is going to provide the assurances that drivers won't lose money if they drop prices. When Uber drops prices, they guarantee wages as per:
https://newsroom.uber.com/beating-the-winter-slump-price-cut...
How will this happen in a co-op? Spoiler alert: it won't.
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…
This is exactly the argument for minimum wage: by raising prices and limiting # of employed (which could mean more people at fewer hours for the same total pay, OR fewer people at more hours for the same total pay), there is more funding for the overall labor pool, instead of more worker-hours sharing a smaller pie of funding.