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Comment by untog | Hacker News Reader

Couldn't you apply this logic to absolutely any regulation? A company is losing money, yet you expect them to pay minimum wage? You expect them to provide health benefits?

Right now, Uber customers have a very affordable ride. And Uber's drivers suffer from their "gig economy relationship" that does not offer the same benefits as a full time job. If Uber were forced to employ them properly, the price customers pay will go up. If the product is good enough, people will continue to pay, and Uber will be fine. If it becomes unaffordable for customers, then maybe it wasn't actually affordable at all in the first place, it was just that the unaffordability cost was placed on the drivers, not the customers.

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Plenty of companies manage to make money and provide well above minimum wage and health benefits. If Uber were "forced to employ them properly", there very well may not be an Uber (at the very least there will be fewer drivers), and the drivers you're worried so much about will have one less option.

The beauty of capitalism is that no one is forced to do anything, but no one is entitled to anything either. Uber isn't conscripting it's drivers, they're free to seek out higher pay, better benefits, and the best deal they can somewhere else, or, if they can't, invest in their own human capital/move etc so that they can.

So given their current losses, I think we can agree that at their current revenue - costs the business model isn't sustainable.

We can also agree that these aren't exactly great jobs, and that they provide no benefits.

I don't think your first scenario is likely, where the added costs from driver benefits are passed onto consumers and the business remains successful, given it already isn't successful. I think we can also agree that if uber were to do this they would indeed lose even more money.

So then we're left with your second scenario being most likely, that we add the benefits but that it turns out this simply isn't affordable at all, at which point the company goes under and all these jobs are lost.

At this point, do the drivers somehow find better jobs that they had been passing up this whole time, now that they are relieved of the burden of being forced to work for uber?

I'd contend that the drivers are better off having the option, and that destroying these jobs won't magically create other better jobs that the drivers can then flock to.

I'm not the person you are responding to. I see where you are coming from, but I have a hard time seeing things like unionization resulting in this. I think the drivers are likely to advocate for their own interests, and would probably not try to negotiate for things that would hurt Uber so significantly that the company would go under. And if they do, wouldn't that just be the free market at work?

People can easily (and rationally) advocate for things that are in their own interest individually, but ultimately lead to them being worse off when everyone acts similarly. See the prisoner's dilemma.

What's "free market" and what isn't is subjective, but I don't think labor unions nec are. It's basically a cartel, but from the worker's side. If I had to describe a true free market for the gig economy, it'd be: every driver has full information about their wage, and can take it or leave it. Uber can set the wage at whatever they want, with the full understanding they won't have enough drivers if it's too low.

When you add in union or government mandated benefits I'd argue it's NOT a free market because there very well could be drivers willing to drive at some wage or rate who wouldn't be allowed to per the union or gov rules.

> People can easily (and rationally) advocate for things that are in their own interest individually, but ultimately lead to them being worse off when everyone acts similarly. See the prisoner's dilemma.

Union bargaining is collective bargaining. It is the antithesis of what you describe. It gets everyone on-board with the same deal, rather then everyone making individual deals.

> What's "free market" and what isn't is subjective, but I don't think labor unions nec are. It's basically a cartel, but from the worker's side.

I guess in my mind, cartels are free market. The government is interfering with the free market when they break up monopolies or cartels. Unions are the government's way of saying "we don't normally allow cartels or monopolies, but this is okay because it results in a net positive on society."

> When you add in union or government mandated benefits I'd argue it's NOT a free market because there very well could be drivers willing to drive at some wage or rate who wouldn't be allowed to per the union or gov rules.

What the union negotiates is just like whatever you negotiate with your boss. Maybe someone would do your job for less, but thats not how it worked out. Thats how markets work sometimes.

Also, specifically about minimum wage, raising it much more often than not has negative outcomes. There is clearly mixed research, but most studies including this meta-study make the case that at best there isn't much benefit, and more often than not it has a negative impact: http://www.nber.org/papers/w12663

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