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How Much Are People Making from the Sharing Economy?

priceonomics.com

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Re: How Much Are People Making from the Sharing Economy?

#11

Post by bpodgursky »

jvm wrote: post #4

I usually enjoy priceonomics posts, but this analysis is disappointing. The sharing economy is a way of deploying labor and capital. So the operating question is, is it a good way of doing so on net? In some sense the market is spoken in that many people are willing to sell in these marketplaces. However, an argument could be made that services like Uber actually exploit the hidden costs associated with selling throu…

I think it's pretty patronizing to suggest that people spending 40+ hours a week driving for Uber / Lyft are too incompetent to calculate out their own finances.

I've talked to a lot of drivers who understand in-depth cost per mile they are able to deduct from depreciation for tax purposes, the impact of buying a new car on Uber black, the cost savings per mile of buying a Prius, etc etc.

Re: How Much Are People Making from the Sharing Economy?

#12

Post by isostatic »

ivanbakel wrote: post #8
jvm wrote: post #4

I usually enjoy priceonomics posts, but this analysis is disappointing. The sharing economy is a way of deploying labor and capital. So the operating question is, is it a good way of doing so on net? In some sense the market is spoken in that many people are willing to sell in these marketplaces. However, an argument could be made that services like Uber actually exploit the hidden costs associated with selling throu…

>$500/mo on average would be consistent with $50/hour fully netted earnings Based on what?

10 hours a month?

Re: How Much Are People Making from the Sharing Economy?

#13

Post by frgtpsswrdlame »

bpodgursky wrote: post #11
jvm wrote: post #4

I usually enjoy priceonomics posts, but this analysis is disappointing. The sharing economy is a way of deploying labor and capital. So the operating question is, is it a good way of doing so on net? In some sense the market is spoken in that many people are willing to sell in these marketplaces. However, an argument could be made that services like Uber actually exploit the hidden costs associated with selling throu…

I think it's pretty patronizing to suggest that people spending 40+ hours a week driving for Uber / Lyft are too incompetent to calculate out their own finances. I've talked to a lot of drivers who understand in-depth cost per mile they are able to deduct from depreciation for tax purposes, the impact of buying a new car on Uber black, the cost savings per mile of buying a Prius, etc etc.

No one is saying they're too incompetent. What's being said is that they're not doing the analysis for whatever reason. And while you may know some who have run the numbers I also know some uber drivers who haven't. Furthermore, we shouldn't apply this only to people who drive 40+ hours. I bet as we transition down to people who drive 20 hours, 10 hours and less we'll find a lot of people who are barely breaking even or worse once other costs are considered.

Re: How Much Are People Making from the Sharing Economy?

#14

Post by sidlls »

Simon_says wrote: post #5
sidlls wrote: post #3

Earlier quoted context omitted.

Not that I disagree with the more general point that a loan provider's data isn't necessarily the best, but in what way do you suggest there is selection bias here?

My thinking is that the population of people who are applying for loans in any given month is going to be drastically different than the population who are not applying for loans in exactly the metric, personal finances, that Pricenomics wants to look at. Kudos on Pricenomics for being so upfront about their data, but I wouldn't have titled it "How Much Are People Making from the Sharing Economy?", because it's not.…

Different in what way? Just for example, during the housing bubble of the 2000s, people in any given slice of "personal finances" one cared to measure were applying for loans (purchases and lines of credit).

I suspect the people who are in the gig economy are more likely to be in a class that has lower education, income, and assets. In that sense I'm not sure "personal finances" as a selection bias would apply (that is, it seems likely as a rule gig economy loan applicants might resemble gig economy workers to a high degree).

Re: How Much Are People Making from the Sharing Economy?

#15

Post by sokoloff »

frgtpsswrdlame wrote: post #13
bpodgursky wrote: post #11

Earlier quoted context omitted.

I think it's pretty patronizing to suggest that people spending 40+ hours a week driving for Uber / Lyft are too incompetent to calculate out their own finances. I've talked to a lot of drivers who understand in-depth cost per mile they are able to deduct from depreciation for tax purposes, the impact of buying a new car on Uber black, the cost savings per mile of buying a Prius, etc etc.

No one is saying they're too incompetent. What's being said is that they're not doing the analysis for whatever reason. And while you may know some who have run the numbers I also know some uber drivers who haven't. Furthermore, we shouldn't apply this only to people who drive 40+ hours. I bet as we transition down to people who drive 20 hours, 10 hours and less we'll find a lot of people who are barely breaking even…

I suspect a lot of those low-hour, occasional drivers were going to have all of the fixed costs of the vehicle anyway and are only looking to cover the marginal costs.

That's a perfectly reasonable strategy and the fact that they aren't covering average cost is irrelevant, so long as they're covering the marginal costs of driving Uber/Lyft.

Re: How Much Are People Making from the Sharing Economy?

#16

Post by ceejayoz »

bpodgursky wrote: post #11
jvm wrote: post #4

I usually enjoy priceonomics posts, but this analysis is disappointing. The sharing economy is a way of deploying labor and capital. So the operating question is, is it a good way of doing so on net? In some sense the market is spoken in that many people are willing to sell in these marketplaces. However, an argument could be made that services like Uber actually exploit the hidden costs associated with selling throu…

I think it's pretty patronizing to suggest that people spending 40+ hours a week driving for Uber / Lyft are too incompetent to calculate out their own finances. I've talked to a lot of drivers who understand in-depth cost per mile they are able to deduct from depreciation for tax purposes, the impact of buying a new car on Uber black, the cost savings per mile of buying a Prius, etc etc.

> I think it's pretty patronizing to suggest that people spending 40+ hours a week driving for Uber / Lyft are too incompetent to calculate out their own finances.

Your average person isn't great at calculating out their own finances. I don't see any reason to assert Uber/Lyft drivers are better than average in this regard.

I'd suspect this is one of the reasons 96% of Uber drivers don't last a year. http://www.cnbc.com/2017/04/20/only-4-percent-of-uber-driver...

Re: How Much Are People Making from the Sharing Economy?

#18

Post by Hnrobert42 »

A good example of why the rich get richer. It would be interesting to see this on a per hour worked basis. Of course, the Airbnb host (maybe) had to work to acquire the capital to purchase the residence, and the drivers to purchase the cars, but it's still interesting to see how wealth begets wealth.

All that said, I am not saying whether such a system is good or bad, just that it's interesting to see it here.

Re: How Much Are People Making from the Sharing Economy?

#19

Post by jsemrau »

SirLJ wrote: post #17

The sharing economy is evil. The only making money are the big corporations, the little guy is slaving for bellow minimum wage and taking all the risk on top of that...

Well good and evil is a pretty binary description. You will only have a market if seller (the driver) and buyer (the service operator) are meeting. If the driver do not want to operate under those conditions there is no "invisible hand" forcing them to do so. Of course in lack of alternatives it is a small but easily accessible form of immediate income.

Re: How Much Are People Making from the Sharing Economy?

#20

Post by frgtpsswrdlame »

sokoloff wrote: post #15
frgtpsswrdlame wrote: post #13

Earlier quoted context omitted.

No one is saying they're too incompetent. What's being said is that they're not doing the analysis for whatever reason. And while you may know some who have run the numbers I also know some uber drivers who haven't. Furthermore, we shouldn't apply this only to people who drive 40+ hours. I bet as we transition down to people who drive 20 hours, 10 hours and less we'll find a lot of people who are barely breaking even…

I suspect a lot of those low-hour, occasional drivers were going to have all of the fixed costs of the vehicle anyway and are only looking to cover the marginal costs. That's a perfectly reasonable strategy and the fact that they aren't covering average cost is irrelevant, so long as they're covering the marginal costs of driving Uber/Lyft.

I think those low cost drivers, if they even think about it, believe they're more than covering their marginal costs. They idea that they're essentially paying depreciation plus a small premium to themselves would not go over well if it were more apparent. Perhaps what we need is another anti-ride-sharing calculator where you can plug in a whole bunch of details about your car and insurance, normal driving habits and ride-sharing driving habits and it will tell you how much you make minus the hidden risks/costs.
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