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Uber and Employment

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Stephen Greenhouse has your must-read long-read of the day in his exposé of Uber and the argument that their drivers are not employees. He discusses several key points that observers of the Uber economy have noted–that there is nothing new about this employment relationship, that despite their claims, Uber and other companies control almost everything about this employment relationship, that if Uber drivers were classified as employees instead of independent contractors there is no reason why Uber would have to follow through on its claims of placing people on set schedules, and that the lack of any benefits is a major problem throughout this economy. Greenhouse also discusses how much worse conditions are getting for Uber drivers.

Parmar, 53, who immigrated to the U.S. from India at age 16, receives no benefits through Uber, but he says he is fortunate because his family gets health insurance thanks to his wife’s job at a bank.

He, too, did well in his first year with Uber, but then the company dropped its New York prices by 30 percent. His pay receipts show that he used to average around $2,000 a week, driving 2 p.m. to 2 a.m. six days a week—but by last summer, his weekly gross fell to about $1,500 a week. From that he had to subtract around $100 a week for gas, around $100 a week for tolls, and $400 a week to rent a Toyota Camry with insurance.

For Parmar, grossing $1,500 a week for 70 hours of driving comes to around $21.50 an hour, before factoring in his many expenses. That was substantially less than the $28 an hour that two researchers—Alan Krueger, a Princeton economist, and Jonathan Hall, Uber’s director of policy research—found to be the median gross pay for Uber drivers in New York in an analysis of October 2014 data. (The $28 an hour they found comes to $58,000 a year for a 40-hour-a-week driver, and is far below the $90,000 a year that Uber was boasting its drivers in New York averaged in 2014.) According to Krueger and Hall’s Uber-backed study, the median gross pay for Uber drivers in 20 cities was around $17.50 an hour—including $16 in Chicago, just under $17 in Los Angeles—and that was before subtracting the drivers’ costs and before Uber further reduced fares in 48 cities in January 2015.

“I went personally to Uber’s office in Queens and I said, ‘How do you justify this 30 percent cut in fares?’” says Parmar, who recently cut back his Uber hours to part-time so he could also drive for a friend’s black-car service. “They said, ‘Since we’ve dropped the price, we’re going to have more customers.’

“I told them, ‘I’m not selling apples, I’m not selling donuts. I’m driving a car. I can do 15 or 16 rides a night. If the price is 30 percent less, I get paid 30 percent less.’

“They said the cheaper the price, the more customers you’ll have. I can’t drive 100 customers a night. I’m not a machine. I cannot work 18 hours a day.”

In other words, there is nothing here that you don’t see from other employers. They are going to drive down wages as steeply as possible. Denying they are even employers is a neat trick to doing this. Hopefully the courts step in here.

The Seattle City Council recently voted 8-0 to allow Uber and Lyft drivers to unionize. Several hundred are interested in doing so and the Teamsters are organizing them. And not surprisingly, Uber treats these unionizing workers like other employers and tries to fire them for organizing:

Last August 31, Takele Gobena, an Uber driver, stood alongside Seattle City Councilman Mike O’Brien at a news conference, complaining that his Uber earnings came to less than the federal minimum wage after factoring in gas, insurance, and other costs. At the press conference, Gobena, a 26-year-old immigrant from Ethiopia, hailed O’Brien’s plan to introduce legislation that would allow Seattle’s Uber and Lyft drivers to unionize and bargain collectively, even though those companies insist their drivers are independent contractors and not employees. A half-dozen drivers flanked O’Brien, holding signs saying, “Drivers need a voice.”

Toward the end of his remarks, Gobena, a member of the App-Based Drivers Association, said, “I know Uber will probably deactivate me tomorrow, but I’m ready because this is worth fighting for.”

It didn’t take that long. At 6:50 that evening, a few hours after several websites posted stories about the news conference, Uber emailed Gobena to notify him that he had been deactivated as a driver. The reason Uber gave: His auto insurance had expired.

Gobena rushed to inform the news media and Councilman O’Brien about his being deactivated (Uber-ese for dismissed). Not only that, Gobena sent them iPhone photos of his insurance certificate, which wasn’t to expire until December. Several reporters contacted Uber to ask about the sudden deactivation, and as if by magic, Uber re-activated Gobena around 9 p.m. (Uber denied deactivating him, even though news websites later posted a screenshot of Uber’s deactivation message on Gobena’s phone.)

The story of the fired worker rehired because of public attention is a nice one. But how many are being fired without this public attention? Hard to know.

In any case, there is no reason why Uber, Lyft, and all these other services shouldn’t be held under traditional employment law. The more we know, the more exploitative these companies seem. Let’s hope politicians and the courts see this too.

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  • Joseph Slater

    Excellent article, thanks for the link.

  • We won a similar court case concerning our over-the-road truck drivers.

    We classify them as “independent contractors” except they have to wear the company uniform, drive a truck painted with the company logo, and can only carry our freight in their truck.

    Common sense to me would dictate that they’re employees but the courts ruled otherwise.

    • Murc

      Depends a bit. Are they under contract with your company specifically, or did your company hire another company which then employs them?

      If the latter then they are in fact employees, just not with you guys.

      If the former, it’s complete bullshit that they aren’t considered employees.

      • They’re specifically contracted with us.

        Supposedly as “Independent Owner-Operators”.

        • Murc

          That’s a bullshit ruling, then, given the restrictions on their behavior you just described.

    • L2P

      I’ve seen far more cases go the other way on those facts.

  • howard

    i think there’s no doubt they are employees, but i’m not sure that all the drivers think that they are employees.

    we are a one-car household, and i go to the airport a good 45 times a year; i used to take a cab and then i transitioned to uber. while of course anecdote is not data, i usually try and chat a little with the driver just to get a sense of how uber-driving fits into their work lives.

    and in all honesty, i have yet to talk to a driver who sees uber as anything more than a way to “make” a few extra dollars (i never pursue the question of “are you really making anything once you consider gas and depreciation on your car?” because who needs a depressed driver?) in spare time. i hear over and over again “i drive a few hours after work” or “i fit this in around my classes” or “i’m retired but this is a way to pick up a few extra bucks.”

    now i’m sure even in my community i have only spoken with a tiny percentage of drivers (although what they tell me fits the handful of analyses of drivers’ hours i’ve seen) so possibly what i’m hearing isn’t representative, but if it is, it does strike me that it’s going to be hard to convince people who see themselves as making a few extra bucks whenever they feel like logging in that their interests are best served by a union.

    p.s. because i haven’t provided erik a zelig-moment in a while, let me mention that steve greenhouse was a college classmate of mine, a really good guy despite the fact that in september of our senior year, when steve was the editor of the campus newspaper, he insisted on running a story on my friend jason and me being busted for reefer on the front page, which in 1973 wasn’t necessarily the story you wanted to see printed in your college paper!

    • Linnaeus

      it does strike me that it’s going to be hard to convince people who see themselves as making a few extra bucks whenever they feel like logging in that their interests are best served by a union.

      That’s the job of the organizers, though. They can’t even attempt that if the people whom they want to organize aren’t allowed to collectively bargain because of how they’re classified as employees.

      • howard

        oh i agree completely, that’s why i began by saying there’s no doubt in my mind they are employees.

        • Linnaeus

          It may be true that many Uber drivers don’t see themselves as employees, as your experience suggests. I’m not expecting many initial organizing attempts to be successful, but this is a long game, so to speak.

    • Manny Kant

      I definitely had one driver recently who seemed to be pretty full time, drove both Uber and Lyft, and was pissed off at the way Uber took so many of his earnings. But most of the ones I’ve talked to have been more as you describe. I’d say, though, that the ones interested in talking to passengers are almost certainly more likely to be the more part time ones.

    • junker

      I guess I have a hard time reconciling this with the idea of labor protections in general, though. I’m sure, for example, that you can find workers who wish there was no minimum wage so that they could work more, even for less money. Or workers who wish that overtime restrictions didn’t prevent them from working, etc. But in spite of the fact that this may characterize some workers it’s not really an argument against labor protections in general. Over on Slate one of their writers was complaining recently about salaried workers getting overtime because he loves writing for slate so much that he does it even without the extra pay, and the overtime rules will require him to cut back; but I don’t find that to be a particularly persuasive argument.

      • NewishLawyer

        I can think of one guy from another blog. He allegedly comes from a blue-collar background. He is opposed to wage and hour regs because he thinks they lead to irregular employment and gets touchy when people push back at him for this belief. His open policy is more bad jobs is better than few good jobs.

        • Murc

          His open policy is more bad jobs is better than few good jobs.

          If he doesn’t believe we can provide a good job to everyone who wants one, that’s an open admission on his part that capitalism has utterly failed, is it not?

          • Linnaeus

            It never fails. It can only be failed.

  • TribalistMeathead

    I was generally supportive of Uber at the start, given the alternative at the time was DC’s generally horrible network of taxicabs, but having used them extensively in Chicago, and having watched the UberX cars get older and the drivers get less knowledgeable of the city, I’m beginning to hate both the company and its drivers.

    • Amanda in the South Bay

      Uber is also ground zero for the tech gentrification of downtown Oakland.

    • Tyro

      Basically what Uber’s strategy seems to be is to win the fights with heavy subsidies from investors and shiny new cars rented by drivers, and then after a few years, things will settle towards the bottom as the cars age, the drivers get disillusioned, and there’s no more incentive to undercut anyone.

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  • I tried Uber the other day to get home from the airport.

    The driver was a guy I’d place in his mid 40s. He’d recently lost his gig as an IT director and was driving for Uber while trying to find another job in his career field.

    • Linnaeus

      A friend of mine who drives for Uber occasionally is also an IT guy – he has a regular day job, but is quite underemployed given his training and experience in the field.

  • NewishLawyer

    The thing about economics is that it is largely and passionately concerned with reducing costs. This is often good. Lower prices means more access to goods and services.

    The problem is that wages and benefits are things that raise costs and libertarians would argue need to get cut. Plus add that important things seem impossible to cut costs on like health and housing. So we have a ideological problem: Do we want to live in a high wage/high cost society or a low wage/low cost society? This is an ideological divide? Or are there ways to have high wage and low cost societies?

    • Tyro

      Low cost never seems to apply to college tuition or medical care.

    • Schadenboner

      The problem seems to be that, in aggregate, your “costs” are my “wage” (or at least my wage is a large portion, even a majority, of your cost). Like how someone’s asset is someone else’s liability.

      As an economic or regulatory matter it wouldn’t be that difficult to imagine a very comprehensive set of subsidies to work around this problem, but politically it would be extremely difficult.

  • hubert horan

    By myopically focusing on the “are Uber drivers employees?” question, the Greenhouse article totally misses the most important Uber issues, and the approach the article takes to these issues makes it less likely that those Uber drivers will ever get legal redress.
    Uber’s business model (the combination of the app/platform and the allegedly “independent” drivers) is fundamentally uncompetitive. It cannot produce urban car service at lower cost (or at higher quality) than a typical Yellow Cab or limo company. The Uber business model has higher vehicle, maintenance, insurance and driver costs than the Yellow Cab business model, and does a worse job of managing assets against the peaks and valleys of market demand. When Uber sold $1.2 billion in bonds last year, the prospectus admitted the company was losing 50 cents on every dollar of revenue. It has created the false impression of superior service and lower costs thanks to staggering levels of investor funding to subsidize operations ($8 billion cash invested to date, producing a venture capital valuation of $50 billion) and a massive PR/propaganda campaign portraying Uber as a paragon of competitive efficiency. Uber’s investors believe the company can provide massive returns on the cash they invested, by achieving quasi-monopolistic control of worldwide car service markets, with the Uber app/platform the only way that drivers can find work and the only way that customers can find rides. Uber’s business model requires destroying the existing (much more efficient) industry, in the hope of eventually achieving the scale and artificial market power needed to produce actual profits. To get there, Uber has to demonstrate that it will be utterly ruthless in its pursuit of world domination until regulators, competitors and labor law judges realize that its success is inevitable and resistance is futile. This argument is spelled out in more detail in a piece published at Pando, https://pando.com/2015/12/01/has-pando-missed-heart-uber-problem-transportation-industry-expert-writes/e20ad1113f54b984e1b610e4b86940332f4bfec4/ (link should work for a couple days)
    As with most pieces on Uber, Greenhouse focuses on symptoms, but ignores the underlying causes, so readers can’t see that the seemingly disparate Uber “issues” (attacks on riders, driver exploitation, journalist harassment, huge lobbying expenditures to crush opposition, etc) are all directly related. In fact, Greenhouse (and most others) frame the question exactly the way the Uber PR department would want it framed, in terms of demands for higher driver wages, benefits and conditions. Which 90% of all readers will see as a secondary problem to be weighed against the major efficiencies and service improvements Uber has created. By ignoring the uncompetitive economics of Uber’s business model, Greenhouse totally misses the point that there is no such tradeoff here. Nothing in the Uber business model enhances society or economic welfare, and a reader doesn’t have to have strong affinity for unions or employment law protections to see that Uber’s driver exploitation is a serious problem. Greenhouse also plays into the hands of Uber PR by pointing out the crappy service levels existing companies provide, without explaining the underlying industry economics (the high cost of providing capacity to serve big demand peaks) that explain those service problems. Nothing in Uber’s business model allows it to provide peak capacity more economically than Yellow Cab, and if Uber ever achieves the level of market dominance its investors are pursuing, it already has the tools (e.g. “surge pricing”) to ruthless gouge people who want cabs after a concert or a rainstorm.
    Uber’s driver exploitation (and the broader 1099 employee rights erosion) are legitimate, important issues. If you want to mobilize awareness and support, you need to explain problems affecting a wide range of people. People who already disliked Uber may nod in agreement with the points in Greenhouse’s article, but I’m not sure why anyone else’s thinking would be changed.

    • malraux

      Nothing in the Uber business model enhances society or economic welfare

      Arguably the one thing uber did in certain markets was to break the monopoly of the medallion system, where there were to few cabs because the supply was artificially limited. And integrating smart phones/app, though that was clearly coming.

      • howard

        the breaking of the monopoly is critical: that’s what i’ll always thank uber for.

        • dr. fancypants

          Pre-Uber, cab service in San Francisco was just abysmal. It was hard to find an available cab to flag down; there was a 50% chance they’d never show up if you arranged for a cab through dispatch; and some drivers insisted they couldn’t take payment via credit card (even though they were required to do so).

          I hate Uber’s employment practices, and I hate their “doesn’t apply to me” approach to regulation. But they’ve really made it possible to get around the city (and to the airport) effectively those times when public transit isn’t a viable option for some reason or another.

        • Tyro

          DC did not have a medallion system. The consequence, ultimately, was that cabs were extremely low quality (they were typically bought from NYC that were no longer allowed to be driven there), and service was poor, since few people could make a living at it. Uber provided two things: a guarantee that you would be picked up, and higher quality vehicles. But that is temporary: soon Uber X will regress back towards the mean.

          • Richard Gadsden

            Manchester (UK) doesn’t have a medallion system in the US sense, but there are proper regulations. To be a flag-down car, you have to drive a London-style taxi that is no more than X years old and both vehicle and driver must have a licence. There is no limit on the numbers of vehicles and drivers that can hold licences, but they can be withdrawn (e.g. drivers that commit a motoring, sexual or violent offence lose their taxi licence).

            For call-hire cars (including Uber), you can use a regular vehicle, but the vehicle must be marked (a yellow sticker on the side with the name of the cab company) and the driver and vehicle have to hold call-hire licences. Again, there’s no limit on the numbers, but there are minimum standards.

            Flag-down cars must charge a set rate (so much per mile plus so much per stationary minute, with additional fees for late-nights and airport runs); call-hire cars can either use a meter, in which case they must clearly display the rate-card, or they can agree a price with the passenger in advance.

            This is typical regulation for the UK. London is slightly different in ways that inflate flag-down pricing and lower call-hire quality, which has created a larger market opportunity for Uber – Uber Manchester is basically a call-hire company with an app instead of a phone number.

            By setting an appropriate minimum standard, you avoid the market-flooding problem that drives down vehicle and service quality, because you don’t get bottom-feeders in the market in the first place, but you also see supply and demand settle so that the number of cars on the road is sufficient to cover reasonable demand levels.

      • hubert horan

        The “Uber heroically broke the evil medallion monopoly” is pure PR/propaganda and is not supported by objective economic evidence.
        One can only claim that Uber’s willful violation of laws limiting market entry enhanced over welfare if (a) the protected incumbents were earning big supra-competitive profits thanks to fares significantly higher than actual costs and (b) once in the market, Uber could produce service at much lower cost than the protected incumbents. Neither of these is true.
        The historic justification for taxi entry regulations was that in the laissez-faire environment all cities had at some point, part timers could skim more lucrative peak revenues (Saturday night, after rainstorms). This would make it impossible to economically provide basic service the rest of the time, and the peak service would also eventually collapse because the part-timers priced at the margin and weren’t covering their true long-term capital costs. Entry limits meant that incumbents covered their costs through a mix of peak and off-peak revenues, although there was still no way to economically provide all the Saturday night/bad weather capacity people wanted. To claim that Uber’s willful violation of entry rules enhanced welfare, you have to demonstrate that Uber can produce peak capacity at vastly lower cost than Yellow Cab (it can’t, in fact Uber’s costs are higher), and that a taxi market organized around an unregulated private monopoly will provide cities with more total service at lower fares than existing markets based on entry and price regulations. There is ample empirical evidence that cities that deregulated taxi markets in recent decades failed to improve aggregate service levels, and usually made things worse.
        The PR claims about the “evil medallion cartel” dishonestly conflates the unique situation found in New York and 3 or 4 other US cities with the existing taxi industry worldwide. No one would defend New York’s approach as welfare maximizing, but no one would rationally suggest that a New York taxi industry overwhelmingly dominated by an unregulated Uber would produce better results for consumers and drivers. Inflated New York medallion prices were driven by financial speculation, not by cartel prices that gouged passengers. If Uber is to “enhance consumer welfare” you have to show it has superior service and efficiency (excluding all the massive subsidies that distort current competition) in hundreds of cities, not just New York.
        It is critical to recognize that Uber has never articulated reasons why greater taxi deregulation would benefit consumers, or the local economies that depend on taxis as part of the transport system, and has never proposed specific changes to how the entire industry is regulated. It has done the exact opposite—increasing distortions by refusing to obey entry, pricing, insurance, driver screening and consumer protection laws, that its competitors must still follow.

        • Manny Kant

          Why are Uber’s costs higher?

          • hubert horan

            A reasonably sized Yellow Cab company, can buy vehicles at lower costs (and with better financing terms) than tens of thousands of “independent” drivers negotiating separately can. It can achieve substantial maintenance efficiencies, and much better insurance rates (assuming the Uber driver is not fraudulent claiming insurance rates based on purely personal vehicle use). The biggest challenge for any transport company is managing capital costs and day-to-day supply schedules against volatile demand patterns. Yellow Cab can base driver schedules on its substantial knowledge of local demand patterns, while Uber’s app has no historical knowledge and just transmits customer requests to drivers. The question of whether Uber has any meaningful control over driver schedules is central to the lawsuits discussed in the post; Uber claim that it doesn’t exercise control means its operations will be less efficient than Yellow Cab. Uber clearly doesn’t control the vehicles its entire business depends on, so couldn’t possibly be managing them more efficiently. In reality, Uber has just shifted the capital costs and risks from its Silicon Valley investors onto these “independent drivers” but the costs and risks haven’t gone away. But it is ludicrous to claim that 150,000 “independent” contractors can manage these costs and risks better than professional fleet managers, so once again, the Uber business model has higher costs

            • Richard Gadsden

              Uber might also mean that some of the “independent” drivers subsidise the business out of their own pockets – ie they go bust and their losses do not have to be covered by the business as a whole. While that’s a cost at a societal level, it’s not one that is applied to Uber or to fares.

    • yet_another_lawyer

      Nothing in the Uber business model enhances society or economic welfare. . .

      I am guessing you have never needed a cab at 3 AM in Queens.

      • hubert horan

        I am guessing you did not actually read my original post.

        You can’t get a cab at 3 AM in Queens, or at many other times in lower-density and lower-income areas, because at current fare levels it is wildly uneconomical to provide drivers and cars ready to immediately respond to every possible call. Either you increase fares high enough to cover the cost of the idle capacity waiting for the occasional call (pricing taxis out of the reach of most Queens residents) or you ration service via long waits and poorer service.
        Nothing in the Uber business model solves this problem because Uber can’t provide 3 AM Queens service at lower cost than today’s operators. In fact its costs are actually higher; if you get an Uber at 3 AM it is because 50% of the cost is being subsidized by investors who are hoping to eventually achieve quasi-monopolistic domination of the industry. Unsustainable subsidies do not enhance societal or economic welfare.

    • Chuchundra

      I’m sorry, but this is just silly. It’s the same kind of logic I used to hear a lot back in the 90’s about Amazon. “They’re losing money! Once they run out of money, they’ll be gone!”

      It’s not great shock that a startup like Uber, with piles of investor cash coming in, is spending a lot of that money to build out their business and gain market share. To characterize that investment as losses shows a real lack of understanding about how businesses grow and operate, on par with politicians who compare the Federal Government’s spending to a family budget.

      Uber is establishing a global brand. That takes a lot of money. But that has no bearing on the question of their established operations making a profit or not.

      • hubert horan

        I’m sorry but it is silly to try and refute claims about the relative efficiency of Uber versus incumbent competitors without any any evidence (and apparently any knowledge) of competitive efficiency. All startups lose money at first. All consumer companies offer aggressive introductory pricing. But if you have a business plan explicitly based on destroying incumbent competition into bankruptcy and achieving overwhelming industry dominance, you need compelling evidence that when your company reaches a reasonable scale it will have an overwhelming efficiency advantage. Even when Amazon was very young, and people wondered about long-term prospects, there was lots of compelling, objective evidence of big efficiency gains. It eliminated all the costs of brick-and-mortar retail locations. It offered consumers incredibly larger selections of books. While it took time to kick in, it achieved massive inventory and distribution advantages over smaller sellers. Its internet platform was infinitely scalable so geographic/product line expansion was incredibly cheap. It developed powerful revenue-enhancing technology tools to streamline sales and drive customers to other products they’d be highly interested in. Reasonable to ask (as people did) whether cash flow would hold out, and they certainly cut some corners (sales tax avoidance, nasty warehouse working conditions) but there was powerful evidence that the business model was fundamentally based on powerful efficiency/service improvements over incumbent booksellers.
        There’s absolutely no evidence that Uber has any comparable efficiency/service advantages that could be a legitimate basis of future industry domination. The big cost disadvantages in terms of vehicles, maintenance, financing and insurance (mentioned elsewhere) will not change with growth. There’s no evidence of big scale economies in the taxi business. Uber has big startup costs for each new market they enter (while Amazon had none). Yes, people obsess over Uber’s app, but apps are readily copyable, and can’t possibly explain a $50 billion valuation. No other company in any other industry has driven multi-billion dollar valuation increases and huge market share shifts based on an app. Amazon funnelled money into technology and bigger distribution systems on the (highly rational) belief that they would drive unit costs low enough to drive sustainable profits. Uber is not making any similar investments in its core business, and has no hope of driving costs low enough to replace the 50 cents-on-the-dollar subsidies currently required.

        • Hob

          More simply: the idea of predatory pricing being an anti-competitive practice is not a new or incomprehensible idea. If your approach to building a successful hot dog vendor is to sell hot dogs for one penny apiece until you’ve driven all other vendors out of business, after which point you’re going to hike the price to $500 per hot dog, you can’t defend that just by saying “We’re a new company so of course we’re spending money to expand our business.”

  • anonymous

    “The thing about economics is that it is largely and passionately concerned with reducing costs. This is often good. Lower prices means more access to goods and services. The problem is that wages and benefits are things that raise costs and libertarians would argue need to get cut.”

    Which means that this “more access to goods and services” doesn’t happen unless somehow other people’s wages are cut to lower costs but yours doesn’t. But if everyone’s wages are cut, then you in fact don’t really have “more access to goods and services” in real terms.

    When wages are cut, some goods and services MIGHT cost less. But NOT ALL and certainly not proportionally. Non-wage related costs like commodity prices, etc are what they are for example and will be priced more or less independent of wages. Thus the low wage/low cost things is worst than high wage/high cost simply because not ALL things became lower cost in proportion to your lower salary.

    Even if EVERYTHING reduced by half (wages, prices), that would basically be just the equivalent of re-denomination of money (exchange 2 old dollars for 1 new dollar). So you gain nothing. But again wages and prices will not reduce proportionally.

    • Tyro

      under the US system, discretionary goods fall in price (restaurants, consumer electronics, fast fashion clothes) while public necessities (education, medical care, transport and transit infrastructure) rise in price.

      If you want a lot of land, a big tv, and a powerful car, you can get those in the US at a much lower income than they are available in other parts of the world. If that’s what you want to optimize on in life, great! As long as you are healthy and not to concerned about higher education, you’re golden

    • Ahuitzotl

      “The thing about economics is that it is largely and passionately concerned with reducing costs.

      That seems … a deranged concept of economics, even micro economics. Surelyt that’s the passionate concern of cost accountants?

  • Richard

    I’ve used Uber quite a bit in the last year while in SF and New Orleans. A great improvement in convenience over traditional taxi service. You hit a button on your phone and a car is there within five minutes. But I absolutely agree that it should be subject to traditional employment law rules. The argument that Uber drivers are independent contractors is nonsense even if the drivers I’ve encountered dont seem to consider themselves to be Uber employees (in New Orleans on my last visit, the drivers I got were an actor, a social worker and a real estate investor).

    • Richard

      There was also a fairly recent column by Steve Lopez, columnist in the Los Angeles Times. He took a job with Uber to see what conditions were like, what pay was like, etc. His conclusion was that, after expenses like gas, he made about $12-13 per hour but could probably raise that by a few more dollars an hour once he learned the tricks of what routes to take, what hours to work, etc.

    • Ramon A. Clef

      the drivers I’ve encountered dont seem to consider themselves to be Uber employees (in New Orleans on my last visit, the drivers I got were an actor, a social worker and a real estate investor).

      I’m reminded of a scene in the TV show “Taxi,” when the various drivers each explain that they’re not “really” cab drivers–they’re “really” an actor, a boxer, an art expert, etc. Except for Alex: “I’m a cab driver. What I want to do? Quit.”

    • Hob

      There is a smartphone dispatch system in SF, Flywheel, which covers multiple cab companies. I use it all the time. I hit a button on my phone and a car is there within five minutes, and I can track it while it’s on its way, and it handles credit card payment, exactly like Uber. I’ve had any trouble with this service maybe twice ever.

      Internet dispatching has nothing to do with whether Uber is “a great improvement over traditional taxi service.” It’s a technology that is independent of the company’s business model, and that has already existed for years in many of Uber’s biggest markets… so it’s a little frustrating that I have to reply with some variation on this same comment every time someone mentions how Uber has this great innovative smartphone technology.

      I understand if you’re just visiting, but I also see this from people who have lived in SF for years. The funny thing is that I’ve actually seen a lot more visible advertising from Flywheel than from Uber; I think what continues to drive the “Uber is the only kind of product like this” mentality is basically that people just hear about it from co-workers and have never bothered to find out what else is on the market.

      • Linnaeus

        I think there’s also a component of cultural signaling, i.e., Uber is for “people like me”, taxis are not.

      • Brett

        That doesn’t seem to quite match what the Uber and Lyft apps do. They don’t just summon a car via phone app – IIRC they also figure out a price for the ride in advance, so you can’t get screwed by a driver who knows the roads better than you.

        • Tyro

          Is that really the a significant concern of Uber users? My experience is that Uber drivers are *overly* dependent on the GPS navigation. They don’t know their way around as well as cab drivers do.

          • Craigo

            Why is that a bad thing? I like that the drivers are following GPS, which is going to send you on the best route for current traffic conditions, while a cabbie can take you on whatever route he thinks he can get away with (like the one last month who tried to get me from DTLA to LAX at 4 in the morning by getting on the 710).

            I want Uber and Lyft to be regulated and everybody on a level playing field. I also want a driver who will actually show up when I need one (2 out of 4 so far for LA cabs versus 9 out of 10 for Uber) and not try to rip me off.

  • Brett

    Uber’s definitely an employer, not just a platform. Even if you discount the whole “central to their business aspect” of the drivers, Uber controls their terms of work with minimum ride acceptance rate, minimum rating rates, and deactivation threats.

    A real platform ride-share service would do none of that – you’d be free to set your own rates, work as many or as few hours on it as you want, and it wouldn’t kick you off unless you broke the Terms of Service on the app. Uber would just take their cut off that, and maybe offer a “suggested rate” and hints as to where business was at its thickest.

    • Richard Gadsden

      Imagine if Uber didn’t set the prices, but the drivers did, so different drivers were effectively bidding against each other for your ride.

      Like an eBay auction but with the price going down, not up.

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