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from the employee-rules-for-contractor-pay dept.
Uber remains unprofitable at the same time its drivers work 80-hour weeks for less than minimum wage and without health care packages. They must also cover vehicle costs including fuel, maintenance, and insurance.
The ride-hailing company Uber has made its long-awaited debut as a publicly traded stock, but investor demand for the May 10 initial public offering (IPO) fell short of the company's hopes. Part of the reason is a lingering question about its workforce: Does the still-unprofitable firm deliver low-cost rides for passengers at the expense of decent treatment for drivers, and could the resulting discontent undermine Uber's business model?
The issue over whether Uber drivers are employees (entitled to company benefits such as sick pay and retirement) or contractors (entitled to nothing) has been at the center of the labor controversy since the company launched a decade ago. It is still largely unresolved.
Earlier on SN:
New Research Confirms That Ride-Hailing Companies Are Causing a Ton of Traffic Congestion (2019)
Uber and Lyft Drivers to go on Strike (2019)
Uber Posts $1 Billion Loss in Quarter as Growth in Bookings Slows (2018)
and quite a few more...
(Score: 2) by bradley13 on Wednesday May 22 2019, @06:17AM (3 children)
In the big picture, Uber has achieved exactly one thing: it has made taxis popular again. Looking at old TV shows, it was once trendy to "hop a taxi". Now it's trendy to call Uber or Lyft. No one ever got rich being a taxi driver, though. And just because Uber is "doing it with a computer" doesn't make Uber worth more than any other equivalent taxi dispatch service. It's nice to see the stock market slowly realizing this...
As far as the employee question, I don't think it's relevant. That's just people realizing that they actually aren't earning much money, and looking for some way to get more from Uber. They could also just go do something else, but it's the "sunk cost fallacy": they have started with Uber and want to somehow make that investment of time and effort pay off.
Everyone is somebody else's weirdo.
(Score: 0) by Anonymous Coward on Wednesday May 22 2019, @06:46AM
Right you are, it's not.
You're right for the wrong reasons.
The actual reason for irrelevance is in TFT: the founders cashed in, the rest should be happy they received a life lesson for their money.
A pity they just could recall the 'a fool and his money' saying and keep their pocket closed; even more a pity if the fool is the retirement funds which has your money.
(Score: 0) by Anonymous Coward on Wednesday May 22 2019, @07:30AM (1 child)
Kind of like being adjunct faculty at a mediocre tech school as a expat American spy, eh? You could do better, bradle13, in the "hot" areas.
(Score: 0) by Anonymous Coward on Wednesday May 22 2019, @02:57PM
Adjunct pay may not be so miserable in Europe.
(Score: 3, Disagree) by Arik on Wednesday May 22 2019, @06:30AM (9 children)
But it clearly no longer makes sense to license taxis at the local level.
Congress should pass superceding legislation to license taxis on the same basis nationwide. The reason they haven't already probably has a lot to do with big influential cities making bank on their own regulatory schemes. NYC is a great example. But even they have to see the writing on the wall. Those taxi medallions were worth a million each just 6 years ago, but the market took a steep downturn after that.
There's no need to make a predatory medallion system like that nationwide. But require a relatively clean driving record, a clean criminal record, regular safety inspections, that kind of thing. And then make Uber and Lyft verify the drivers they dispatch to have valid licenses just like every cab company in the country has to do.
This doesn't directly address the problem of pay, I know, but a certain percentage of the drivers would fail one of those basic tests, and the remaining drivers would therefore be in a stronger position to negotiate, which is the ideal outcome. As is, there's still very little to prevent someone else throwing up another website that does the same job and lets the drivers keep more of their money, or to keep the drivers from simply moving when that happens, is there?
The more you regulate the space the harder that tends to become, at any rate.
If laughter is the best medicine, who are the best doctors?
(Score: 1) by khallow on Wednesday May 22 2019, @11:51AM (5 children)
Is there a need to require that when Uber/Lyft/etc already mostly have such requirements and customers can choose not to use companies that don't have those sorts of requirements?
Why does that problem need to be addressed by making jobs more scarce? My view is that if people are willing to work 80 hours below minimum wage, then there's something wrong with job supply that can be addressed by say, lowering minimum wage and otherwise reducing the cost/regulatory burden on the scarcer side.
(Score: 0) by Anonymous Coward on Wednesday May 22 2019, @02:23PM (4 children)
Nice definition of "willing" you got here, be a
shameblessed relief is something were to happen to it.(Score: 1) by khallow on Wednesday May 22 2019, @11:04PM (3 children)
(Score: 3, Insightful) by lentilla on Thursday May 23 2019, @05:45AM (2 children)
To me, that sounds like an argument for enforcing a minimum wage, and probably increasing it as well. You see, companies still want the job done even if they are required to pay more to have it done. The net effect is that minimum wage folks don't have to work ridiculous hours to survive. There is a secondary effect: it increases the amount of jobs available. Why? Because you can have one person working an eighty hour week or two people working forty hour weeks.
I have no problem with people working hard to get ahead but to me; if regular people are being required to work eighty-hour weeks just to survive; it says that something is very wrong.
(Score: 1) by khallow on Thursday May 23 2019, @11:17AM
They still have three other choices: 1) not do the work even if they want it, 2) automate it, or 3) move the work to a cheaper place.
(Score: 1) by khallow on Thursday May 23 2019, @11:53AM
The huge thing missed here is why aren't these people already working jobs that make more than minimum wage? Those companies that allegedly need workers and would be willing to pay more than minimum wage to get them are already not doing so.
What again is the point of making the labor market even more wrong?
(Score: 2) by PartTimeZombie on Wednesday May 22 2019, @11:04PM (2 children)
I don't agree either.
Where I live, the taxi industry was completely deregulated* in the 1980's. Anyone could become a taxi driver, and so lots of people did.
To the point where there were taxis everywhere, and the prices were stupidly low so no-one was making any money.
This corrected itself pretty quickly however.
All the taxis companies with dirty, unreliable rustbuckets, driven by rude idiots who did not know where they were going went out of business pretty quickly, even though they were really cheap.
There is now a thriving taxi market, and if I want I can pay extra to get a luxury type car, or I can pay a bit less for a standard sort of car.
We also have Uber, but they can't really compete on price, and from what I understand are often much more expensive than a regular taxi because of their opaque pricing model, so people get annoyed and go back to using a taxi.
* To be clear, there are still regulations, but it is the drivers who are licensed as commercial drivers. Any group of drivers can form their own taxi company.
(Score: 2) by Arik on Wednesday May 22 2019, @11:42PM (1 child)
What I'm suggesting is exactly what you tell me happened locally, and you praise, except on a nationwide basis. What's wrong with that?
If laughter is the best medicine, who are the best doctors?
(Score: 2) by PartTimeZombie on Thursday May 23 2019, @12:32AM
Yes, you're right I did misunderstand you.
I re-read your comment and what you are suggesting is what we did. When there were too many drivers, the market took care of it by putting the worst of them out of business. (Not the cheapest which is interesting).
There was a period where there was a risk of your cab breaking down before it got to your destination or your driver asking how to get there which was annoying.
(Score: -1, Troll) by Anonymous Coward on Wednesday May 22 2019, @06:44AM (1 child)
I called a Uber once. When they showed up, I pulled my Casull .454 with the armor-penetrating rounds, and put one through his engine block. There is one taxi scab that will not drive again, until he can afford a new engine, on his own dime, for being so stupid as to listen to the "Disruptive Tech" sirens. A .454 Casull is disruptive tech. Uber is not. Suckers!
(Score: 2) by Snow on Wednesday May 22 2019, @03:10PM
Wow, you are cool.
(Score: 1, Insightful) by Anonymous Coward on Wednesday May 22 2019, @07:25AM (2 children)
It's amazing how much "news" is manufactured to manipulate stock prices.
(Score: 0) by Anonymous Coward on Wednesday May 22 2019, @07:32AM (1 child)
luftputefartøyet mitt er fullt av åler
(Score: 0) by Anonymous Coward on Wednesday May 22 2019, @02:59PM
My møøse is pregnant.
(Score: 4, Insightful) by Anonymous Coward on Wednesday May 22 2019, @11:50AM (5 children)
A lot of these things smell like pyramid schemes.
Technically they aren't but how different is it when it's often some "charismatic person" telling investors to pump in money so that they'll get rich by selling to future investors repeat and rinse, all while the actual product is not profitable and might never ever make money...
And in a way it's anti-competitive dumping too. Of course the taxis/etc can't compete on price and service when the competitor can burn BILLIONS of dollars per year.
The customers love it of course while the burn rate is high and many ironically defend these companies with talks about competition or even "fair" competition...
Not saying the incumbents companies are great but is it really innovative when the main reason why things are better than the incumbents is because billions of dollars are being lost every year? And regulations are being avoided/evaded.
In contrast plenty of the other "new" stuff is actually profitable while benefiting their customers.
(Score: 1) by khallow on Wednesday May 22 2019, @12:05PM (4 children)
What's anti-competitive about the dumping? It's quite competitive. And if the dumping doesn't work and the company goes out of business as a result, then the disease is the cure.
What's also missed here is that the business was really bad and noncompetitive prior to such ride hailing services. Uber and company aren't generating many billions of dollars a year because of dumping, but rather because of really sweet cartel situations across much of the urbanized world.
(Score: 5, Informative) by Anonymous Coward on Wednesday May 22 2019, @03:33PM (3 children)
First off, you're a fucking lazy moron that could have looked that up.
Secondly, dumping has a specific meaning, it's when you price goods at impossibly low prices in an effort to run the competition out of business. If you can't comprehend why that's a problem, you're a grade A moron. That's the business model they're using, after expenses, the drivers wind up with something like 6 cents a mile in pay and no benefits. Taxis that do pay enough for people to support themselves on can't compete with a company that effectively doesn't have to pay it's employees and doesn't have to adhere to any of the regulations that were put into place in order to prevent abuses.
(Score: 1) by khallow on Wednesday May 22 2019, @11:03PM (2 children)
Looked what up? And so what? It's not like you matter enough to research anything.
I think you are the grade A moron here. It's only poor for the inefficient competitors.
So what? I'm fine with ending taxis as an industry.
(Score: 2) by Runaway1956 on Thursday May 23 2019, @01:38AM (1 child)
You don't see an AC moderated to +5 every day, do you? There's a good reason for above AC being modded up. He's right.
I suggest that you try driving for Uber for a while. It seems pretty informal - you can probably do the paperwork in just an hour or two. You don't sign any long-term contracts it seems. Just do it for a few weeks, in your spare time. 6 cents a mile, after expenses? That's enough to keep a guy in coffee - maybe. Uber has learned how to out-exploit the fly-by-night trucking companies - THEY pay drivers upwards of fifty cents per mile these days.
(Score: 1) by khallow on Thursday May 23 2019, @11:50AM
One person can mod two clueless AC posts to 5 every day. The problem here is that these things are merely assumed to be bad. Sorry, but this is a typical problem with economics debate. Label something as bad, then assume it's bad, then conclude it's bad.
Sorry, I don't see the relevance of that. I suspect you don't either.
One of the things missed here is that Uber is spending aggressively on all kinds of things, particularly marketing. For example, it lost $1.8 billion [nytimes.com] in 2018. Its marketing spending that year was $3.2 billion [businessinsider.com]. It spent a quarter of a billion [techcrunch.com] on self-driving cars. Here, two spending items that that aren't costs of supporting the company's present markets are twice as big as their losses.
In other words, Uber isn't dumping. That burn rate goes to attempts to expand their markets not costs of existing ones.
As to the alleged badness of dumping, I happen to be of the opinion that very little in market activities should be illegal. That includes dumping. Save the law enforcement machinery for serious stuff like fraud or murder. Here, it's bizarre how the interests of taxi cartels (or hypothetical people who work 80 hours a week as Uber drivers) are supposed to be more important than the interests of millions of people who travel every day.
So to summarize, I'm not impressed by the AC's quality of argument, Uber isn't dumping in the first place, and dumping doesn't make it onto my list of the evils of markets in the first place.
(Score: 0) by Anonymous Coward on Wednesday May 22 2019, @12:36PM (2 children)
A friend of mine had a car break down. Instead of catching the bus home she caught an uber. The next day she caught an uber back to her car to meet the breakdown guy. Instead of catching the bus.
WTF?
(Score: 2) by Freeman on Wednesday May 22 2019, @03:03PM (1 child)
Have you ever been on public bus transportation? Enough bus rides and you'll know exactly why she didn't take the bus. It might only take one ride, depending on your location.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 2) by Barenflimski on Wednesday May 22 2019, @10:15PM
I've taken plenty of public transportation rides and I don't have a problem with the transportation itself. The buses all have wheels that go round and round, and mostly don't crash. Some of the most convenient buses I've taken were overseas on dirty chicken buses. Comfy? No. But the price was right and they'd drop you off wherever you asked them to.
What could be fixed is the last mile problem.
- Buses in the states don't stop for you unless you are at a bus stop sign. Why not pick up the person walking to the bus stop even if they aren't there yet? Insurance. Liability.
- Your bus may drive right past where you need to be dropped off, but they wont stop for you even if you were the only one to get off at that next stop. They'll make you walk a mile back. Why? Insurance, liability and route times...but who cares about route times if no one rides the bus?
- Bus stops that make no sense. I've seen many bus routes tailored to a driver, and not the riders. Want to ride the bus? Stand in a ditch, and cross a state highway because it looks great on a map. Plus, the union demands this so the drivers aren't fired for missing route times with an empty bus.
- No Benches to sit at to wait for the bus. My city doesn't put them in because they claim homeless people will sleep at them. Seems like a separate issue to me.
- Rarely in the US do I see anyone willing to help someone on or off a bus. They'll sit there, complain the bus is slow while watching the 90lb driver try to muscle 200lbs of person and gear onto the bus all by themselves. Why? I'm told insurance and liability.