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Comment by paulsutter | Hacker News Reader

The individual pays the cost. Today Uber drivers get like 80% of the fare. If Uber needed to pay benefits, give vacation time, etc, the pay rate would be much lower. That would all come out of the 80%. Just like how contract programmers bill a higher rate and get no benefits. Calling someone an employee doesn't suddenly create new money.

I can't imagine uber drivers would prefer a lower rate of pay, but hey, I guess that's what all these advocates of making them employees want us to believe.

Or maybe it raises the question, who is driving all this PR anyway? I can't see it as a grassroots thing from Uber drivers.

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> Calling someone an employee doesn't suddenly create new money.

But not calling them employees somehow magically creates money out of thin air to be labelled "profit" for Uber, without any detrimental effects to the rest of society?

There's no intrinsic reason Uber's take is fixed at 20% - maybe their business can only viably employ humans (with all of their attendant needs like health insurance) with a smaller take.

It would be likely for drivers pay to be cut in half, if Uber had to pay them as employees (just based on comparable differences between paying contractors and employees in other fields). Their taxes would also go up since they could no longer deduct the cost of their car and other expenses from their income.

Even if you pared Uber's take back to 10%, or 0%, it wouldn't cover the costs of making them employees. And it's the drivers that would take the hit.

Uber provides a tremendous lead-gen service for drivers. Everyone here who's tried to run a business knows that finding customers is the central challenge of a business. Uber completely handles that challenge for drivers, for a risk-free 20%. That's a pretty good deal.

Where are you getting the 80% number? The drivers I talked to have told me it's much lower.

Maybe they were talking about net[1], or maybe they have a large number of short trips? From memory (from talking with drivers), the formula is:

driverDollars = (fareDollars - 1)*0.8

If a driver is mostly taking people one or two blocks, the fares are going to be in the $3-5 range. That means the $1 "safe ride fee" (or whatever it's called) is already 20-30% of the fare, so Uber's total take on short rides is closer to 50%. It's one of the reasons drivers don't like short rides.

[1] edit: By net I mean after driving expenses, not after Uber's take.

I just talked with a driver. He said the 80% is correct, gross. Because everyone is a contractor the government takes another 30% on top of it. Plus they have to pay their own insurance, repair, gas, etc. so after everything is said and done, he makes about $13/hr. (This is inside San Francisco.)

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