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Who Pays the Price for Selling $10 Bills for $5?

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Re: Who Pays the Price for Selling $10 Bills for $5?

#61

Post by bryanlarsen »

deweller wrote: post #16

I genuinely don't understand the argument that tech companies are hurting society by providing lower paying gig-economy jobs. By providing more jobs, these companies are increasing options for workers looking for jobs. No one is forcing Uber drivers to drive passengers. If there is a shortage of labor, then the prices paid to workers will increase due to market forces. If there is not a shortage of labor, then people…

Desperation and misunderstanding is forcing Uber drivers to drive passengers. The money they're getting has three components: the first part pays off their marginal costs (gas, insurance), the second pays off their fixed costs (increased depreciation on their car), and the third is their wage. How much is left after the first 2 components are taken off? It varies widely and is hard to calculate, but suffice it to say "not much".

Driving for Uber is like selling your stuff for cash. It's better than starving, but it's not a good choice.

Re: Who Pays the Price for Selling $10 Bills for $5?

#62

Post by barry-cotter »

onion2k wrote: post #44
countryqt30 wrote: post #32

Earlier quoted context omitted.

Again, nobody forces you to do this so what's the point?

I think you're demonstrating a point of view that's tragically common here on HN - you're assuming that people are never desperate, and that they always have an alternative to choose instead. Many people are in the position where they only have one option and have to pick that to earn a living. That's not strictly being forced to work a job that sucks, but the reality is they don't have a choice if the alternative is…

> I think you're demonstrating a point of view that's tragically common here on HN - you're assuming that people are never desperate, and that they always have an alternative to choose instead.

Indeed. The minimum wage should be $20 an hour. If you can’t earn that much then you should be on the dole.

Re: Who Pays the Price for Selling $10 Bills for $5?

#63

Post by will_brown »

deweller wrote: post #16

I genuinely don't understand the argument that tech companies are hurting society by providing lower paying gig-economy jobs. By providing more jobs, these companies are increasing options for workers looking for jobs. No one is forcing Uber drivers to drive passengers. If there is a shortage of labor, then the prices paid to workers will increase due to market forces. If there is not a shortage of labor, then people…

>genuinely don't understand the argument that tech companies are hurting society by providing lower paying gig-economy jobs.

For starters these multi billion dollar gig economy tech platforms aren’t providing jobs (at least to the gig workers). Gig workers are independent contractors and by their very nature independent contractors are self-employed.

It’s all a massive fraud that harms society. How many non tech companies go public with $1B/year losses? None. The very same company who on one hand doesn’t give 40+hour workers employee benefits and on the other claim they are job creators.

Re: Who Pays the Price for Selling $10 Bills for $5?

#64

Post by ivanbakel »

howeyc wrote: post #52
fabricexpert wrote: post #41

Earlier quoted context omitted.

Do you really think people doing gig economy jobs have alternatives? It's not a "lifestyle choice", it's literally looking around and saying what can I do that will pay my bills, today. And if these are the only options available this is what you "choose".

Right, but without the gig economy jobs they'd have less possibilities for income.

Which would also mean the need for real jobs is honestly represented.

This is a major debate in West at the moment, and in the UK it's synonymous with the term "zero-hour contracts": is it somehow OK to suppress unemployment figures by nominally employing more people but giving each one a smaller share of all the labour, and so, wages?

If the gig economy unsustainably employs people at cut-throat rates, then the statistics look good, and that spins the public opinion. Why would workers complain that they can't pay the bills if there are so many jobs out there? In fact, employment for peanuts is worse than no employment at all, because it is a lie perpetuated to try to avoid having to really deal with the issue of job poverty.

Re: Who Pays the Price for Selling $10 Bills for $5?

#65

Post by p_roz »

onion2k wrote: post #44
countryqt30 wrote: post #32

Earlier quoted context omitted.

Again, nobody forces you to do this so what's the point?

I think you're demonstrating a point of view that's tragically common here on HN - you're assuming that people are never desperate, and that they always have an alternative to choose instead. Many people are in the position where they only have one option and have to pick that to earn a living. That's not strictly being forced to work a job that sucks, but the reality is they don't have a choice if the alternative is…

If you remove the opportunity to earn some money with gig work, you are forcing them into their next best alternative, which is starving or losing their home. I don’t see how that makes people better off.

Re: Who Pays the Price for Selling $10 Bills for $5?

#66

Post by gpapilion »

fabricexpert wrote: post #21
deweller wrote: post #16

I genuinely don't understand the argument that tech companies are hurting society by providing lower paying gig-economy jobs. By providing more jobs, these companies are increasing options for workers looking for jobs. No one is forcing Uber drivers to drive passengers. If there is a shortage of labor, then the prices paid to workers will increase due to market forces. If there is not a shortage of labor, then people…

It’s not the volume of jobs, it’s the quality. Driving a taxi or delivering food is a pretty bad job, doing it as a self employed contractor is almost criminal. You have to cover all your own expenses and have no guarantee of work, with zero progression (ever heard of an Uber driving saving up and staring their own minicab business?). It’s a terrible economic decision. The market does not correct for this as it is en…

the quality of these jobs have changed over time. Originally an Uber driver told me he he was clearing $4000 a week a few years back(incentives, surge pricing, etc). Now not much has changed for me, but there pay structure has changed significantly.

Re: Who Pays the Price for Selling $10 Bills for $5?

#67

Post by barry-cotter »

fabricexpert wrote: post #41
countryqt30 wrote: post #32

Earlier quoted context omitted.

Again, nobody forces you to do this so what's the point?

Do you really think people doing gig economy jobs have alternatives? It's not a "lifestyle choice", it's literally looking around and saying what can I do that will pay my bills, today. And if these are the only options available this is what you "choose".

People do in fact have options. They look at them and they choose. Lots of people choose to work in the gig economy for reasons you obviously don’t value. Working Uber beats working many other jobs, as should be obvious by the fact people continue doing it. People aren’t idiots. You can fool some of them some of the time. You can’t fool many people about their own lives and experiences for long.

> The value of flexible work: Evidence from uber drivers

> Using data on hourly earnings for Uber drivers, we document the ways in which drivers utilize this real-time flexibility and we estimate the driver surplus generated by this flexibility. We estimate how drivers’ reservation wages vary from hour to hour, which allows us to examine the surplus and supply implications of both flexible and traditional work arrangements. Our results indicate that, while the Uber relationship may have other drawbacks, Uber drivers benefit significantly from real-time flexibility, earning more than twice the surplus they would in less flexible arrangements. If required to supply labor inflexibly at prevailing wages, they would also reduce the hours they supply by more than two-thirds.

https://www.nber.org/papers/w23296.pdf

Re: Who Pays the Price for Selling $10 Bills for $5?

#68

Post by 0815test »

dsfyu404ed wrote: post #2

TL;DR: The traditional VC backed tech startup growth curve is an exercise in giving something away for less than it's worth, such as selling a $10 bill for $5. This is done to dominate the market. You will become very popular very quickly and dominate the $10 bull market by selling them for $5. After dominating the market you must find some way to become profitable. Often when a company tries to raise prices and beco…

> For "gig-economy" startups this screws the workers because their jobs evaporate with the market.

Except that it doesn't. Those "jobs" were never sustainable in the first place, and in the meantime the workers make bank.

Re: Who Pays the Price for Selling $10 Bills for $5?

#69

Post by MayeulC »

Wouldn't this scheme be akin to a ponzi one, in some way?

This holds true for startups as well: foster interest in the company, launch it with some initial inertia (VC funds), collect investors' (stock holders) money, and see the stock skyrocket. Little risk for everyone involved (but the buyers).

Of course, that's only a pyramid scheme if the business isn't intended to turn profitable (VC firms do not care), and stock holders are placing a bet.

But I wonder: if one were to look at the whole stock market, wouldn't it also look like a big pyramid scheme, if squinting a bit?

Re: Who Pays the Price for Selling $10 Bills for $5?

#70

Post by golergka »

username223 wrote: post #51
golergka wrote: post #17

So, in the end, the analogy breaks: turns out, the companies found out a way to procure $10 bills for ~$6 and then (after initial growth phase) to get it as low as ~$3-4 and finally make a profit. Now, the logical question is to ask, why is anyone willing to provide this $10 bill for such a low price to begin with? Or, to switch from the analogy back to the subject matter, why are people singing up for the gig econom…

> why are people singing up for the gig economy jobs? Despair and deception. Companies have figured out how to shift costs onto their employees, then claim that those employees are "independent contractors." Uber is a global taxi company that pays millions of employees starvation wages. It sells itself as an SV "technology" company that pays a few thousand employees a few hundred thousand dollars a year to convince p…

Uhm, but these are different companies that start with this proposition for workers from the beginning. That's not what's happening: the old and new models of employment are offered by different companies that compete on the same labour market. And new companies that work with the gig model did not create this labour market.
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