The Uber Economy Requires a New Category of Worker(nymag.com)
nymag.com
The Uber Economy Requires a New Category of Worker
http://nymag.com/daily/intelligencer/2015/07/uber-economy-requires-a-new-category-of-worker.html
12 comments
Another pets.com I do not understand what is so revolutionary about Uber especially in countries which as good Taxi companies. For me Uber is a hyped glorified black taxi.
$50 billion valuation for a taxi company common!
$50 billion valuation for a taxi company common!
Yeah, the valuation is all in the trademark. "New Economy". There's nothing preventing Uber2 from taking over (except a big ugly pink mustache.)
But the customer service of Uber/etc is night and day different than Taxis. There's no question the takeover will happen.
Taxi drivers and taxi companies seem to see medallions as a license to cheat and steal. Good riddance.
But the customer service of Uber/etc is night and day different than Taxis. There's no question the takeover will happen.
Taxi drivers and taxi companies seem to see medallions as a license to cheat and steal. Good riddance.
From the article: " But it would ameliorate one of the worst problems with the 1099 economy without fundamentally quashing the business model, namely pay that works out to less than the minimum wage."
The entire purpose of labor law is to quash that "business model".
Unions. The people who brought you the weekend.
The entire purpose of labor law is to quash that "business model".
Unions. The people who brought you the weekend.
There's one area where hourly wages are way below minimum wages in a country you wouldn't expect: Animators in Japan. It's not uncommon for them to make ~$2/hour because they're paid "per sheet" that they draw.
(I think minimum wages are 800 yen per hour, or roughly $6.50)
(I think minimum wages are 800 yen per hour, or roughly $6.50)
Seeing that makes me wince. It was not long ago that you would have instead typed "or roughly $10". I'm not sure to what extent that's affected minimum-wage workers in Japan though, if at all.
The church & the productivity increase brought the weekend.
Is this a joke?
We do not need a new category of worker just because a few corporations decide that they do not want to provide their workers with benefits. The benefits that come with the employee designation are the bare minimum. A company that cannot afford to provide those to employees should not exist.
We do not need a new category of worker just because a few corporations decide that they do not want to provide their workers with benefits. The benefits that come with the employee designation are the bare minimum. A company that cannot afford to provide those to employees should not exist.
Imagine that we could eliminate Uber and connect drivers directly to riders with the same experience as Uber's app. Nothing has changed about the nature of the driver's work, but there's no entity to be an employer in the first place.
Employee benefits for this kind of work just won't exist. Technology is making it easier for people to provide services for a wide pool of individuals without needing a company to employ them. The companies make an easy target for this sort of complaint today, but they are middlemen that will be eliminated by decentralized systems.
Employee benefits for this kind of work just won't exist. Technology is making it easier for people to provide services for a wide pool of individuals without needing a company to employ them. The companies make an easy target for this sort of complaint today, but they are middlemen that will be eliminated by decentralized systems.
In the scheme you propose there's also no single entity that defines the pricing at any time, so the nature of the drivers work changes (for example: they can set up their own price structure).
Unfortunately algorithms and implementations for truly decentralized auctions (for the pricing) and trust models (for the feedback mechanism) and actually transferring the money without resorting to cash-in-hand (which, for some reason, seems to be highly unpopular in the US) are hard and by design less profitable than setting up a central instance that controls everything for a fee (eg 20% of revenue).
You're right that under such a system, every driver would be self-employed with as many benefits as they pay for themselves. Uber isn't that system.
Unfortunately algorithms and implementations for truly decentralized auctions (for the pricing) and trust models (for the feedback mechanism) and actually transferring the money without resorting to cash-in-hand (which, for some reason, seems to be highly unpopular in the US) are hard and by design less profitable than setting up a central instance that controls everything for a fee (eg 20% of revenue).
You're right that under such a system, every driver would be self-employed with as many benefits as they pay for themselves. Uber isn't that system.
I've been thinking along those same lines. Is Uber the corporation in any way essential to Uber the service?
I have a feeling this can be done via a worker's coop. But someone will need to take the initiative to start.
I have a feeling this can be done via a worker's coop. But someone will need to take the initiative to start.
There's also the overhead, but a $x fee/year for each driver/user (as part of the first ride fee) would probably cover that pretty easily...
One difference would be that Uber wouldn't be taking a 20% cut of the money involved. That 20% is what people believe pays for the benefits Uber ought to be providing.
That surplus wouldn't go entirely to the driver. Competition would drive down prices. Drivers will make more, but not the whole 20%.
Competition would drive down prices.
I not sure that's true. The equilibrium price could actually be higher than where the market rate is now. Uber, Lyft, etc are subsidising their products with massive amounts of venture money in order to increase their market share - if they were removed from the equation it's entirely possible that drivers would get a higher fare and the cut Uber takes.
I not sure that's true. The equilibrium price could actually be higher than where the market rate is now. Uber, Lyft, etc are subsidising their products with massive amounts of venture money in order to increase their market share - if they were removed from the equation it's entirely possible that drivers would get a higher fare and the cut Uber takes.
Isn't that having it both ways? Either Uber takes a 20% cut, or it's taking less than that to lower fares. I don't have facts, but I don't think Uber is paying its drivers more than the fares it collects over a significant period of time in established markets.
Nothing would change, except that there'd no longer be an Uber controlling the prices they charge and the cars they use and taking a cut. In other words, the thing that would change is that they'd actually be independent contractors with control over their own working conditions.
[deleted]
That's kind of similar to oppose the employee status because eventually employers will meet candidates who don't demand the benefits required by a legal contract. That's why that is simply illegal.
> Imagine that we could eliminate Uber and connect drivers directly to riders with the same experience as Uber's app.
Hailo.
Hailo.
My company cannot afford benefits at the moment. It may one day, but not today. I very much like its existence.
It should not be a company's job to take care of an employees general welfare. Other developed countries seem to have a more elegant solution to this issue...
It should not be a company's job to take care of an employees general welfare. Other developed countries seem to have a more elegant solution to this issue...
Most retail places have been doing this sort of "just in time" hiring for years now. This just takes it one step further. :(
The more I learn about Uber, the less I want an Uber Economy.
Talk to the actual drivers, not the press.
This is a good read from a driver's perspective:
http://citypaper.net/uberdriver/
http://citypaper.net/uberdriver/
Is that category a robot?
I don't see anyone besides Uber winning in the Uber economy. It's right in the name. Forcing Uber and other ride-sharing companies to classify their resources as employees will only give them further incentive to automate. Once that happens (5 years, 10 max) it will be a moot point how a driver would be classified.
Very few people wake up in the morning and say "Gee, I'm so excited to drive for Uber today! I don't need the extra money, I just love it!" The sharing economy is only possible because of income inequality. Granted, ride-sharing is letting a tiny drip of income back into the driver's wallets, but it's temporary.
Very few people wake up in the morning and say "Gee, I'm so excited to drive for Uber today! I don't need the extra money, I just love it!" The sharing economy is only possible because of income inequality. Granted, ride-sharing is letting a tiny drip of income back into the driver's wallets, but it's temporary.
What % of jobs do you think people would do even if they didn't need the money?
I spoke with an old friend from university recently.
Apparently his younger brother (also at university with us in the late 90's) struck it lucky with a company he helped start up, and is now rich enough that he doesn't need to work. He is planning on consulting part time, as he wants something to fill his days (other than just kayaking - we all met through the university kayak club).
Apparently his younger brother (also at university with us in the late 90's) struck it lucky with a company he helped start up, and is now rich enough that he doesn't need to work. He is planning on consulting part time, as he wants something to fill his days (other than just kayaking - we all met through the university kayak club).
Sure - I know a guy who retired from trading in mid 40s and is now a math teacher because he likes that. But if our society relied on people working because they chose to (as opposed to needed to) we probably wouldn't have one.
That's one thought experiment I conduct - imagine we find out that a comet is going to approach Earth in 6 months. My main problem is us having to deal with 6 months of chaos (since nobody will be working) rather than instant annihilation.
That's one thought experiment I conduct - imagine we find out that a comet is going to approach Earth in 6 months. My main problem is us having to deal with 6 months of chaos (since nobody will be working) rather than instant annihilation.
It really is not ride-sharing. Blablacar you share the ride and part of the costs. Uber and similar are taxi companies.
"Gee, I'm so excited to drive for Uber today! I don't need the extra money, I just love it!"
I've never taken an uber, but I've met many uber drivers, and I've actually heard this several times.
It's not like they are being forced to work, and many like the random interaction with people better than sitting at home.
I know one retired guy that drives for Uber on occasion. He sold his family business to his son and has more money than I wold know what to do with, but drives Uber just for fun.
Anyway, I have no real point, but these people exist.
I've never taken an uber, but I've met many uber drivers, and I've actually heard this several times.
It's not like they are being forced to work, and many like the random interaction with people better than sitting at home.
I know one retired guy that drives for Uber on occasion. He sold his family business to his son and has more money than I wold know what to do with, but drives Uber just for fun.
Anyway, I have no real point, but these people exist.
The sharing economy is not caused by income equality, it is caused by entrepreneurs doing new things, finding ways around regulation which normally prevents competition and protects established business, and finally because many people are always looking for a means to supplement their income. That last point is usually most important as many tend to over extend their resources let alone many who do operate as uber drivers are not poor considering they own and insure a car
People work for money, not a shocking revelation.
>'Tiny drip of income into the drivers wallets'
80% goes to drivers.
>'Tiny drip of income into the drivers wallets'
80% goes to drivers.
80% of revenue and 99.9% of the expenses go to the drivers. So it's quite probable that Uber gets most of the profits.
Where's your post analyzing taxi driver wages? Or server wages.
Because bosses always get most of the profits.
Because bosses always get most of the profits.
[deleted]
It also works out pretty well for Uber's customers, compared with how things were before Uber.
The downside of "the employee designation" for the business is having to pay the employee (the overtime, the insurance, etc). The downside for the employee is ... "far less workplace flexibility". Yeah, those things are totally equal. Tell you what: if it is important for a company to tap the segment of workforce that values "workplace flexibility", it can provide that flexibility on top of the benefits. Offer them less in terms of the salary if you have to and see if anyone bites. ("But I already don't plan to pay them more than minimum wage" Tough luck)
Regular cab drivers are usually classified as independent contractors too. I didn't see a bunch of people lobbying for them to be employees before Uber came on the scene. I also don't see the people who are mad at Uber caring about regular cab drivers (e.g. this article doesn't mention that issue at all and neither do the comments here). This makes me cynically think that the source of all this recent noise about the issue is hardball political tactics from Uber's powerful and connected opponents.
More generally I see a broad media campaign smearing Silicon Valley; spinning a narrative of tech companies as an out-of-touch new elite bent on oppressing the poor and middle class (e.g. the Google bus kerfuffle). That narrative seems popular even in tech circles these days. Perhaps it's an inevitable consequence of success.
More generally I see a broad media campaign smearing Silicon Valley; spinning a narrative of tech companies as an out-of-touch new elite bent on oppressing the poor and middle class (e.g. the Google bus kerfuffle). That narrative seems popular even in tech circles these days. Perhaps it's an inevitable consequence of success.
> This makes me cynically think that the source of all this recent noise about the issue is hardball political tactics
Above attitude is pretty poor. There are many reasons why Uber(Pop) is not acceptable from a European perspective. In various countries in Europe the attitude is more about employees and social security. E.g. if I read the article I just arguments for customers and companies. But who is going to pay taxes? Who is protecting the employees?
With UberPop Uber actively tries to either break laws or skirt them. E.g. they're contractors, but they won't work with the government to ensure that the employees/contractors pay their taxes. Social security requires taxes to be paid. Ensuring that this happens requires cooperation and cross checks.
Airbnb is similar. Assume it is not their responsibility.
Such attitudes totally conflict. I work in an international company, following local laws is standard business practice. It's not a "OMG difficult". If it is too difficult, do it anyway.
In most articles I see Uber described as a "ride-sharing" company, while it is a taxi company. IMO there's a heavy pro Uber bias including the usual assumptions that the taxi situation is the same all over the world.
Above attitude is pretty poor. There are many reasons why Uber(Pop) is not acceptable from a European perspective. In various countries in Europe the attitude is more about employees and social security. E.g. if I read the article I just arguments for customers and companies. But who is going to pay taxes? Who is protecting the employees?
With UberPop Uber actively tries to either break laws or skirt them. E.g. they're contractors, but they won't work with the government to ensure that the employees/contractors pay their taxes. Social security requires taxes to be paid. Ensuring that this happens requires cooperation and cross checks.
Airbnb is similar. Assume it is not their responsibility.
Such attitudes totally conflict. I work in an international company, following local laws is standard business practice. It's not a "OMG difficult". If it is too difficult, do it anyway.
In most articles I see Uber described as a "ride-sharing" company, while it is a taxi company. IMO there's a heavy pro Uber bias including the usual assumptions that the taxi situation is the same all over the world.
In Europe it's not just the social security angle.
There are laws and there's a US company ignoring these laws, with more money than is good for them (much larger and powerful than "Uber's powerful and connected opponents" that the GP spoke of). That matches every stereotype of US companies that try to force the American Way onto Europe.
I can't think of many ways to make it easier for the media to produce a scandal (which is how they make their money).
And to some degree it looks plausible: Uber is larger than most of the incumbents (I'm pretty sure that they're larger than any of the existing taxi companies in Germany). They're handed injunctions against the way they operate all the time. They don't seem to care to work within the legal framework (There might have been options in Germany - but they require some amount of good will by elected officials, something that probably dried up by now), but simply want to destroy it.
There are laws and there's a US company ignoring these laws, with more money than is good for them (much larger and powerful than "Uber's powerful and connected opponents" that the GP spoke of). That matches every stereotype of US companies that try to force the American Way onto Europe.
I can't think of many ways to make it easier for the media to produce a scandal (which is how they make their money).
And to some degree it looks plausible: Uber is larger than most of the incumbents (I'm pretty sure that they're larger than any of the existing taxi companies in Germany). They're handed injunctions against the way they operate all the time. They don't seem to care to work within the legal framework (There might have been options in Germany - but they require some amount of good will by elected officials, something that probably dried up by now), but simply want to destroy it.
Cab drivers have a union that provides them with services most importantly proper liabilities and damages insurance.
They are also provided benefits through the union such as health insurance and pensions.
Cab licenses are also regulated to ensure that the driver is fit to ferry passengers, some countries even require them to pass a CPR / emergency treatment courses.
The local regulations also ensure that the vehicle that is used is road worthy even in places that do not require a yearly checkup for all vehicles.
They are also provided benefits through the union such as health insurance and pensions.
Cab licenses are also regulated to ensure that the driver is fit to ferry passengers, some countries even require them to pass a CPR / emergency treatment courses.
The local regulations also ensure that the vehicle that is used is road worthy even in places that do not require a yearly checkup for all vehicles.
Aren't Uber drivers basically franchise operator or franchisees?
the problem is that the "independent contractor" category, as most of us know it, doesn't really exist. Nearly all "independent contractor" jobs, in the eyes of the IRS, are actually employee jobs, if you get audited.
Now, employers still want to treat employees like independent contractors, right? So what does this mean?
As a computer nerd, this means that if I work as an independent contractor for a company with a legal department, I have to go through a body shop, a company that takes 30-50% off the top, and then wants to hire me as a W2, of course, but without benefits. Which is a pain in the ass, because that means the benefits I buy for myself need to come out of post-tax money.
(Now, if you find an especially shady body shop, they will often let you go "corp-to-corp" - usually they tell you that they will be telling the client that you are a W2, as that provides better protection to the client. But you can find some honest body shops that will let you go corp to corp, especially if you can demonstrate insurance and revenue for your company that isn't you.)
Of course, labor laws are there to protect the low end, and driving is one of the most dangerous jobs that you can get in a modern economy, so I certainly agree that uber drivers need some sort of "workers comp" like disability insurance, just because their job is so dangerous.
I'm just pointing out that telling companies that they can't hire contractors directly doesn't always end up working out better for the employees.
Now, employers still want to treat employees like independent contractors, right? So what does this mean?
As a computer nerd, this means that if I work as an independent contractor for a company with a legal department, I have to go through a body shop, a company that takes 30-50% off the top, and then wants to hire me as a W2, of course, but without benefits. Which is a pain in the ass, because that means the benefits I buy for myself need to come out of post-tax money.
(Now, if you find an especially shady body shop, they will often let you go "corp-to-corp" - usually they tell you that they will be telling the client that you are a W2, as that provides better protection to the client. But you can find some honest body shops that will let you go corp to corp, especially if you can demonstrate insurance and revenue for your company that isn't you.)
Of course, labor laws are there to protect the low end, and driving is one of the most dangerous jobs that you can get in a modern economy, so I certainly agree that uber drivers need some sort of "workers comp" like disability insurance, just because their job is so dangerous.
I'm just pointing out that telling companies that they can't hire contractors directly doesn't always end up working out better for the employees.
From a European perspective Uber, AirBNB and so on are a setback.
But in some (not all) cities taxi services are ridiculously expensive.
Some regulation of this industry is good, if Uber (and AirBNB for that matter) are willing to get their drivers/vehicles on the same footing as the competition and if they ensure that their contractors are not going to skip out on paying taxes and background checks then I'm fine with it.
The thing that bugs me is that the way both these entities position themselves they essentially leave others to hold the bag while they rid to riches and that's an issue. The new middle men are in that sense not better or worse than the old middle men, they're just different people.