Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

If Lyft can't keep its drivers as contractors, it may never be profitable

latimes.com

Post reply on HN
Print view View original

31–40 of 131 posts

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#31

Post by badfrog »

matz1 wrote: post #28
newprint wrote: post #7

I'm kind of torn on this. My father has been truck driver his entire life and for the last 20 years worked as a contractor, while driving his own truck and trailer, since it gives him more $$$ than average driver who works as employee. However, he has non-existent social net. No health insurance, no pension benefits. If he out of work or has serious health issues that ground him for months, he has to dig into savings…

Yes none, at least from Lyft. Because its not Lyft problem to ensure health care, thats more of goverment job.

In the US, the government has somehow convinced us that it is employers' job.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#32

Post by zbentley »

denormalfloat wrote: post #23
newprint wrote: post #7

I'm kind of torn on this. My father has been truck driver his entire life and for the last 20 years worked as a contractor, while driving his own truck and trailer, since it gives him more $$$ than average driver who works as employee. However, he has non-existent social net. No health insurance, no pension benefits. If he out of work or has serious health issues that ground him for months, he has to dig into savings…

How much help did he earn? How much does he deserve? The money a driver gets paid is the help. There is a market for non-fulltime jobs that would not exist at all if it was forced to be full time. Forcing Lyft to hire employees instead of contractors won't mean there will be more workers with a safety-net; it means there won't be any Lyft. That would be bad for both drivers and the people being driven.

> How much help did he earn? How much does he deserve? The money a driver gets paid is the help.

That seems naïve and inhumane. Compensation and benefits are understood to be separate things in the US at this time. From social security to health insurance, the costs of securing such things without an employer (an entity on the other side of the wealth gap, usually) are often untenable.

> Forcing Lyft to hire employees instead of contractors won't mean there will be more workers with a safety-net; it means there won't be any Lyft. That would be bad for both drivers and the people being driven.

The choice between untenably-expensive benefits as a contractor or untenably-unaffordable benefits as an unemployed person is no choice at all--especially for people with health problems/children/debt. Ignoring the people being driven (I'mma say that the benefit to the most needy customers of Lyft is negligible compared to the costs/benefits to the drivers in this scenario--otherwise we should have a different discussion about whether or not rides-for-hire should be a public utility), I think saying "you got paid your safety net in your insultingly-low wages last week" is deliberately obtuse and fails to engage with the issue at hand.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#33

Post by gotocake »

User23 wrote: post #3

Human drivers are just mechanical turks to build market share while self-driving cars become commercially viable.

Human drivers are just mechanical turks to build market share while self-driving cars become commercially viable.

Don’t they have to exist before we worry about commercial viability? You’re not the only one talking like FSDV’s are just minutes away, when the truth is that when you cut through the hype and wishful thinking, they’re an indeterminate period of time away. The conversation around this subject reads like people in the 30’s planning for the dawn of the fusion age.

The technology is not there yet, we don’t know when it willl be or if the avenues being explored now will lead there. Anyone who tries to tell you otherwise is trying to sell you something, like shares in a fundamentally unprofitable endeavor. I get it, self-driving cars would be very cool, and maybe we’ll even live to see them. Maybe not. It’s still a crazy company that can only profit if nonexistent technology emerges quickly! On the other hand I have some shares in my new space elevator to sell...

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#34

Post by m463 »

Axsuul wrote: post #9

Isn't this just typical legalese that IPO docs are required to say on caveat emptor? It's typically worst case.

This might be like warning labels on the side of ladders. Somebody somewhere did something stupid with a ladder, and then a warning label is added to every ladder to prevent a future lawsuit.

and of course, mentioning things like this then becomes "news", spawning articles like this:

https://www.tesla.com/blog/misfortune

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#35

Post by relaunched »

chrisseaton wrote: post #19
newprint wrote: post #7

I'm kind of torn on this. My father has been truck driver his entire life and for the last 20 years worked as a contractor, while driving his own truck and trailer, since it gives him more $$$ than average driver who works as employee. However, he has non-existent social net. No health insurance, no pension benefits. If he out of work or has serious health issues that ground him for months, he has to dig into savings…

If he's earning more than average, and professional truck drivers are pretty well paid, then can't be purchase that social net himself? He can buy health insurance, pension, group income protection, everything you mentioned. I know poor people can't do that, and that's the issue, but why can't a well-paid truck driver do it?

The supply side dynamics of trucking is crazy. There has been a driver shortage for 10+ years, easy. About 2/3 of the trucks on the road are owned by fleets of 5 or less, with most trucks being a 1 unit, owner operator.

The entire industry, small and large fleets, use owner operators as perverse cost savings. In some cases, you lease the truck from the large fleet, they charge you for gas and maintenance, insurance, etc; deducted straight from your check. You integrate with their comms / cpu systems, their tracking systems, etc. all for a price. You go where they tell you and when.

It's an industry that's almost impossible to run profitably as an owner operator, because those folks are skinned. But, people are in love with the idea of owning their own business - it's kinda like an MLM that way.

Now, I founded a trucking company that had as many as 15 trucks that ran over the road, both owner operators and company owned vehicles. At my size, there were very few economies of scale and we ran at a break even, at best - closing after a few years. We paid teams .40 cents a mile, all miles, backing out the per diem and paying SS / payroll taxes on the balance - an ridiculously high workmen's comp (first year was 24%, went down to 16.5% later).

I could go into more detail, but you get the point.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#36

Post by blihp »

marcosdumay wrote: post #15
Judgmentality wrote: post #8

Earlier quoted context omitted.

I never understood why anyone thought otherwise, unless you believed self-driving cars would be ready by now. I'm not going to pretend to understand the intricacies of Lyft and Uber and their experiments with food delivery, carpooling, and other endeavors. But scaling up does not solve the problem of paying your contractors more than they're making you - in fact it only scales up the problem. Granted, I've thoroughly…

My impression is that the rationale is that they monopolize the market first, and exploit it latter. Of course, that depends on a large barrier to entry, and I can't see how the barrier to entry on that market could be large. But well, VCs clearly disagree with me.

Scale and consumer behavior would be their moat. See Amazon, Google and Facebook for examples of what they have in mind.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#37

Post by badfrog »

akulbe wrote: post #29
chrisseaton wrote: post #19

Earlier quoted context omitted.

If he's earning more than average, and professional truck drivers are pretty well paid, then can't be purchase that social net himself? He can buy health insurance, pension, group income protection, everything you mentioned. I know poor people can't do that, and that's the issue, but why can't a well-paid truck driver do it?

He probably can. However, there's a BIG difference in the cost and coverage he'll pay and get between what he has for options as a self-employed person doing gigs, and what he'd get on a group plan with a company, as an employee. Here's some data. I've been contracting for 4 years, and paying for my own insurance. Mediocre medical for a family of three: Year 1 & 2: $970/mo. Year 3: $1167/mo. Year 4: $1410/mo. $BIG_CL…

> My cost for health insurance on the group plan? $560/mo.

Is that the full cost, or is your employer also paying something?

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#38

Post by freefal »

newprint wrote: post #7

I'm kind of torn on this. My father has been truck driver his entire life and for the last 20 years worked as a contractor, while driving his own truck and trailer, since it gives him more $$$ than average driver who works as employee. However, he has non-existent social net. No health insurance, no pension benefits. If he out of work or has serious health issues that ground him for months, he has to dig into savings…

On the plus side, can't an independent truck driver or an Uber/Lyft driver claim tax deductions for all business-related expenses? From talking to a couple Uber drivers, my sense it that many are aggressive with the definition of "business-related" and deduct most of all their expenses. Appreciating the downsides (need to provide for one's own health insurance and retirement) I don't often see this increase net pay discussed.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#39

Post by [deleted] »

akulbe wrote: post #29
chrisseaton wrote: post #19

Earlier quoted context omitted.

If he's earning more than average, and professional truck drivers are pretty well paid, then can't be purchase that social net himself? He can buy health insurance, pension, group income protection, everything you mentioned. I know poor people can't do that, and that's the issue, but why can't a well-paid truck driver do it?

He probably can. However, there's a BIG difference in the cost and coverage he'll pay and get between what he has for options as a self-employed person doing gigs, and what he'd get on a group plan with a company, as an employee. Here's some data. I've been contracting for 4 years, and paying for my own insurance. Mediocre medical for a family of three: Year 1 & 2: $970/mo. Year 3: $1167/mo. Year 4: $1410/mo. $BIG_CL…

[deleted]

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#40

Post by ams6110 »

baby wrote: post #25
denormalfloat wrote: post #23

Earlier quoted context omitted.

How much help did he earn? How much does he deserve? The money a driver gets paid is the help. There is a market for non-fulltime jobs that would not exist at all if it was forced to be full time. Forcing Lyft to hire employees instead of contractors won't mean there will be more workers with a safety-net; it means there won't be any Lyft. That would be bad for both drivers and the people being driven.

“How much does he deserve”. Welcome to America. Honestly. This market is not a problem in European country where you get free health care. Why would uber/lyft make an exception for the US? If they can get away with it of course they will.

It isn't free.
Post reply on HN