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

71–80 of 131 posts

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

#71

Post by notus »

gotocake wrote: post #33
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 p…

The technology is very much there and they are spot on that the gig economy was always meant to be temporary. Self driving cars are being used already and doing significantly better than human drivers.

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

#72

Post by ryanwaggoner »

StudentStuff wrote: post #54
ams6110 wrote: post #45

Earlier quoted context omitted.

That's his cost. The employer is probably paying twice that much more behind the scenes. Money they could otherwise be paying him.

Money spent on healthcare for employees is untaxed, effectively a 30% bonus.

Premiums are also untaxed if you’re self employed.

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

#73

Post by noitsnot »

alkibiades wrote: post #53
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…

he can... buy insurance?

A driver in the U.S. is banking by owning his own truck and trailer. There is little reason someone working even a half a year can't afford the best insurance on the marketplace.

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

#74

Post by subroutine »

temp1928384 wrote: post #20

Lyft can be profitable today if they wanted to. The only reason they aren't is because they are fueling growth by propping up the supply of drivers through driver signup bonuses. Ride sharing is generally supply constrained (meaning there's plenty of demand but drivers are in limited supply). If they stopped paying driver bonuses to expand in new markets or maintain share of drivers in mature markets, then the number…

I took a look at some of Lyft's metrics [1,2,3], but would be interested in seeing a more nuanced breakdown of their expenditures. You mention driver signup bonuses are a major expense, and is "The only reason they aren't" profitable today. Is this a fact?

[1] https://craft.co/lyft/metrics

[2] https://dashboards.trefis.com/no-login-required/zrRBRShU

[3] https://www.forbes.com/sites/greatspeculations/2018/10/10/a-...

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

#75

Post by fzeroracer »

viscanti wrote: post #58
zbentley wrote: post #32

Earlier quoted context omitted.

> 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 employee…

> 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. It appears that lots of people choose to drive for Lyft knowing they won't get those benefits. Why ignore their choice? If they're choosing to do it and Lyft can't give them the same opportunity along with the benefi…

A lot of people choose to drive for Lyft because there aren't many other options to make money. When you have a choice between $0 and $Something, you're going to choose $Something. Companies know this and take advantage of this in order to underpay people who might not have other options. It gets even worse if you consider people who already have a job which can't support them or their family.

People can and do make bad choices, such as people who choose to forgo health insurance which then burden hospitals and tax payers in a way that affects everyone else.

The solution is to either force Lyft to play ball and not allow them to avoid things like minimum wage laws by calling their workers contractors, or to ensure that the government covers their healthcare.

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

#76

Post by Joe-Z »

relaunched wrote: post #35
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?

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,…

I‘m not sure I get the point. So you‘re saying most truck drivers can‘t afford health insurance, income protection, etc.? Are they in the group of the „working poor“?

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

#77

Post by [deleted] »

relaunched wrote: post #35
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?

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,…

[deleted]

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

#78

Post by fulafel »

temp1928384 wrote: post #20

Lyft can be profitable today if they wanted to. The only reason they aren't is because they are fueling growth by propping up the supply of drivers through driver signup bonuses. Ride sharing is generally supply constrained (meaning there's plenty of demand but drivers are in limited supply). If they stopped paying driver bonuses to expand in new markets or maintain share of drivers in mature markets, then the number…

I think it's actually less labour supply constrained than most businesses, since it's a job almost anyone can do without training other than a driver's license. And there are no big discomfort factors compared to jobs like long haul trucking or working in a mine.

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

#79

Post by michaelmrose »

ohaideredevs wrote: post #62
relaunched wrote: post #35

Earlier quoted context omitted.

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,…

I would be very interested in the details. I keep hearing about friends of friends who pull $80,000 driving a truck, $120,000 when they own one and half a mil once they own a couple. Too lazy to actually do the research, but curious how close these claims are to the truth. Obviously you are seeing a very different picture, and yours actually comes from experience.

Maybe they are quoting the money coming in before expenses like gas/lease etc? Maybe they put it an above average investment of time?

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

#80

Post by jonknee »

temp1928384 wrote: post #20

Lyft can be profitable today if they wanted to. The only reason they aren't is because they are fueling growth by propping up the supply of drivers through driver signup bonuses. Ride sharing is generally supply constrained (meaning there's plenty of demand but drivers are in limited supply). If they stopped paying driver bonuses to expand in new markets or maintain share of drivers in mature markets, then the number…

> Lyft can be profitable today if they wanted to. The only reason they aren't is because they are fueling growth by propping up the supply of drivers through driver signup bonuses.

Maybe, but subsidizing new drivers might be key to having enough drivers to satisfy rider demand. They're a commodity with very little stickiness, if Lyft has a wait people will use something else.

Post reply on HN