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I'm kind of torn on this. My father has been truck driver his entire life and for the last 20 years worked as a contractor, while driving his own truck and trailer, since it gives him more $$$ than average driver who works as employee. However, he has non-existent social net. No health insurance, no pension benefits. If he out of work or has serious health issues that ground him for months, he has to dig into savings and I also have to help him.

So, if Lyft driver who was "gigging" for them for years gets sick and he is out of work, what kind of help would he get ? None, at least in US.

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If he's earning more than average, and professional truck drivers are pretty well paid, then can't be purchase that social net himself?

He can buy health insurance, pension, group income protection, everything you mentioned.

I know poor people can't do that, and that's the issue, but why can't a well-paid truck driver do it?

He probably can. However, there's a BIG difference in the cost and coverage he'll pay and get between what he has for options as a self-employed person doing gigs, and what he'd get on a group plan with a company, as an employee.

Here's some data.

I've been contracting for 4 years, and paying for my own insurance. Mediocre medical for a family of three:

Year 1 & 2: $970/mo.

Year 3: $1167/mo.

Year 4: $1410/mo.

$BIG_CLIENT just told me after 4 years, to fish or cut bait. I took a full-time position with them.

My cost for health insurance on the group plan? $560/mo. for the same family of three. The coverage? AMAZING by comparison.

Insurance options for self-employed people aren't the best, in my opinon. Costs are very high, coverage is crappy.

> My cost for health insurance on the group plan? $560/mo.

Is that the full cost, or is your employer also paying something?

That's his cost. The employer is probably paying twice that much more behind the scenes. Money they could otherwise be paying him.

Money spent on healthcare for employees is untaxed, effectively a 30% bonus.

Premiums are also untaxed if you’re self employed.

This isn't standard worldwide. In Canada, health, dental, and other benefits are considered taxable.

Not when health/dental premiums are paid by the employer.

Employer negotiated insurances tend to cost less than individually bought ones, because the employer gets a group discount. The larger the group, the bigger the collective discount.

Just like toilet paper, insurances are cheaper when bought in bulk.

Imagine the awesome coverage you'd get as a Lyft or Uber driver if you were actually employed by them.

More so than with toilet paper.

Suppose two people, Alice and Bob, are both shopping for medical insurance in a country like the US where there is no safety net.

Alice is basically healthy, except she seems to always catch everything. She got flu twice last winter, crazy!

Bob is proud to have never taken a day off in eighteen years.

You show them the same price, Bob winces, and decides he'll risk it without insurance but Alice, conscious that she always seems to catch everything, pays anyway.

Six years later Alice gets really sick, turns out her immune system was shot but she didn't know it. Insurance company loses money on her. She was a bad investment. Bob's still fine, touch wood.

Group insurance is cheaper because you're insuring Bob, who wouldn't have bothered except he's part of the group, as well as Alice, who it turns out was a high risk.

This is one reason why countries with universal healthcare don't bankrupt themselves the way typical anti-healthcare models suggest they should. A group with everybody in it is relatively cheap _overall_ to cover because it has loads of healthy people in it, and they don't need much healthcare, not just all the sick people who have no choice but to get into any system they can to avoid dying.

"We must, indeed, all hang together, or most assuredly we shall all hang separately". Maybe Franklin never said that, if he didn't he should have.

More anecdata: My company pay Regence $2000/mo for me+2, 3 employees + 1 spouse.

The supply side dynamics of trucking is crazy. There has been a driver shortage for 10+ years, easy. About 2/3 of the trucks on the road are owned by fleets of 5 or less, with most trucks being a 1 unit, owner operator.

The entire industry, small and large fleets, use owner operators as perverse cost savings. In some cases, you lease the truck from the large fleet, they charge you for gas and maintenance, insurance, etc; deducted straight from your check. You integrate with their comms / cpu systems, their tracking systems, etc. all for a price. You go where they tell you and when.

It's an industry that's almost impossible to run profitably as an owner operator, because those folks are skinned. But, people are in love with the idea of owning their own business - it's kinda like an MLM that way.

Now, I founded a trucking company that had as many as 15 trucks that ran over the road, both owner operators and company owned vehicles. At my size, there were very few economies of scale and we ran at a break even, at best - closing after a few years. We paid teams .40 cents a mile, all miles, backing out the per diem and paying SS / payroll taxes on the balance - an ridiculously high workmen's comp (first year was 24%, went down to 16.5% later).

I could go into more detail, but you get the point.

I would be very interested in the details. I keep hearing about friends of friends who pull $80,000 driving a truck, $120,000 when they own one and half a mil once they own a couple. Too lazy to actually do the research, but curious how close these claims are to the truth.

Obviously you are seeing a very different picture, and yours actually comes from experience.

Maybe they are quoting the money coming in before expenses like gas/lease etc? Maybe they put it an above average investment of time?

Actually, time is pretty strictly regulated by the DOT. No more than 60 hours duty hours a week, no more than 14 duty hours in a row, of which no more than 11 hours can be actually driving, and must go off duty for at least 10 hours to reset the clock.

Sounds more complicated than it is... once the duty period begins, any stops (fuel, breaks, meals, etc) do NOT stop the clock.

This is why most long-haul operations use pairs of drivers... one will sleep in the bunk while the other drives.

By most jobs definitions how much of an individuals waking life is consumed by work in this scenario over the course of a year?

Trucking is a little different. I'm not sure the current regs, but driving time is logged differently than "on duty not driving" different than off duty. Typically, drivers are paid by the mile, so on duty not driving is unpaid, while doing tasks like DOT inspections, vehicle walk around, fixing stuff, tire pressure, break adjustments, shifting trailer pins, etc.

Long haul teams can drive as much as 300+k miles per year. This typically consumes 50 weeks of being in the truck at least 6 days a week, simplifying at little.

Many ethnic enclaves have programs that get people their licenses and they get hired by trucking companies owned by folks from those enclaves. In my experience, thise types of drivers get between $500-$800 per week, cash.

The owner of the truck's pay varies based on how they acquired their shipments, direct to shipper or via a broker. Their is a huge spot shipment market for small companies, which fluxuates wildly, at times. Ultimately, the rates vary greatly.

Now, you can drive for a big outfit and make upwards of 70-80k gross, depending on experience, specialization, endorsements, etc.

I‘m not sure I get the point. So you‘re saying most truck drivers can‘t afford health insurance, income protection, etc.? Are they in the group of the „working poor“?

>There has been a driver shortage for 10+ years

How does that square with the low net compensation of the drivers? Is there perhaps a secondary mechanism, other than the (asserted) labor supply shortage, that depresses the wages?

This is actually one of the cases where supply side economics breaks down.

People refuse to pay more for this and if you've invested so much for truck, car insurance, etc...

To me, the question still stands: if people refuse to pay more for the service, then in what sense is there a shortage of the service?

Can you expand on what you mean by "supply side economics breaking down"?

A lot of trucks are owner operated. They can't afford to not work - even though they know they will be able to potentially make more money.

Owning a truck is a lot of maintenance - insurance, parking costs, etc. A lot of owners also have to pay lease, loans, etc. They can't afford to negotiate for better rates.

Just because there isn't a lot of supply doesn't mean that rates go up!

I can see that small businesses aren't in a great position to negotiate with large businesses. But if there were really a substantial shortage, you wouldn't have to engage in high-risk, high-stakes negotiation to get a better rate. People will offer you a higher rate to secure your service, if your service is _really_ in short supply.

If the people hiring these independent trucks can afford not to pay more, because they know someone else will take the lower rate, then there isn't a shortage. This could just about be the definition of whether or not there is a "shortage".

I am sorry, this doesn't make any sense to me. If "people refuse to pay more for this", it means there's either over-supply of service at the current price-point, or there are easily accessible, low-cost alternative services. There is no third way, barring country-wide air-tight collusion of all transportation buyers, which is an unrealistic scenario.

You don't understand this do you? When you've spent a ton of capital, have loans to pay, paying insurance, etc. You are not in a position to negotiate.

It doesn't make sense because we keep getting fed a simplistic view of "supply vs demand." That is a general trend, but not a rule.

If you know you have to work to keep your means of survival, you don't negotiate. We've seen salaries/bonuses/rates slowly go up, but there's always some other sucker who has to be able to pay their bills. Even if this means stuff getting to their destination later than usual.

A lot of truck businesses are owner operated, they simply don't have the means to say "no."

Every concern you mention is true for both sides of the market - seller and buyer. The buyer has spent a ton of capital on infrastructure and marketing, has loans and other bills to pay, and also has to provide service to their customers at good conditions - and timely - lest the customers go to their competitors. The buyer can't simply wait out indefinitely.

Unless there's a significant over-supply of the sellers. In which case the buyer can wait out any given seller, and get better deal from the next seller that comes around.

>If you know you have to work to keep your means of survival, you don't negotiate.

The very same concern goes for the buyers. They are just as well under the pressure of contractual deadlines and bills to pay.

I am sorry, but your post strikes me as example of "magical thinking" - "there must be something special about the owner-operated transport businesses". Yet nobody has provided any serious arguments towards that.

Just for the sake of contrast - you could imagine brain surgeons in the very same predicament. Suppose there were plenty of brain surgeons on the market - their prices (wages) would be very low, sometimes even below the costs incurred. No matter how pressed a patient would be for a life-saving operation, if there were multiple surgeons fiercely competing for this work, the price would be low.

The only reasons the brain surgeons are earning well is that the demand for service is higher than the supply - and there's little to no alternatives to a life-saving surgery.

You may balk at the example of highly skilled specialist surgeon, but it's true story of the eastern block [i.e., communist] countries, where supply of doctors was high, and the demand - which was only the state-funded healthcare - was fixed[1]. The surgeons earned rather low wages, and many supported themselves with bribes for access and expedited treatment.

Please don't tell us there's been "driver shortage for 10+ years". It's just fantasy.

[1] from the layman's POV "demand" for surgeries was high and nearly insatiable, but from the economics POV, demand with willingness to pay was fixed by the centralized healthcare planners.

Regulators should set a minimum contractor comp that is significantly higher than the total cost of minimum wage + necessary other costs for security (pensions, healthcare). Obviously minimum wage for employees should also be required to include these benefits (if it doesn’t already).

Otherwise the minimum wage regulation is possible to circumvent with contractor arrangements.

Earning = get more cash. From a total compensation perspective, you’re better off with a larger operator.

A well-paid truck driver can't do it because in many states, such as NY, a comparable health insurance plan is about $800 a month [1], and that's before you even see the doc or pay deductible.

[1] I have a broker's license I don't use anymore

>more $$$ than average driver who works as employee. However, he has non-existent social net. No health insurance, no pension benefits.

And when those essentials are factored in, does he actually earn mire or less $$$?

On the plus side, can't an independent truck driver or an Uber/Lyft driver claim tax deductions for all business-related expenses? From talking to a couple Uber drivers, my sense it that many are aggressive with the definition of "business-related" and deduct most of all their expenses. Appreciating the downsides (need to provide for one's own health insurance and retirement) I don't often see this increase net pay discussed.

Deductions are not like free money. There is not so much an increase in net pay, that's why it's not talked about.

The only way you deduct most of your expenses is to lie on your taxes and risk prison. Your friends are probably either exaggerating or criminals of the white collar variety.

Furthermore say you are able to deduct $100 from your taxable income that you would have paid $30 taxes on you have saved the $30 not the $100 a tax deduction is a reduction on the amount taxed not in most cases free money remitted to the taxpayer.

Most peoples expenses are heavily weighted towards, food medical, savings, living space. Whatever they can deduct will be a small portion of their overall expenses.

So in turn you don't see this increase in net pay discussed because

A) Its not an increase in pay its a tax deduction

B) Its a small benefit that is absolutely dwarfed by the additional tax burdens + medical expenses.

In short its not discussed because its imaginary.

Seems like the problem here is that the various safety nets don't extend to such people in the first place. It would also probably go a long ways to curbing the "employ ten people for 4 hours a week each" strategy we see used to avoid similar obligations.

Is an ACA marketplace plan available to him? And subsides based on income? I know people in their 60s not yet on Medicare with $800/month premiums with $600/month tax credits based on their income, so their premium nets out to $200/month.

Yes none, at least from Lyft. Because its not Lyft problem to ensure health care, thats more of goverment job.

In the US, the government has somehow convinced us that it is employers' job.

> So, if Lyft driver who was "gigging" for them for years gets sick and he is out of work, what kind of help would he get ? None, at least in US.

Honestly, the same is probably true for most full-time and part-time employees in the US.

Employers are mandated to give health insurance to full-time employees after they reach a certain size in the US. So no, it is "probably" not true.

They're not required to pay you while you're unable to work. And aside from some fairly narrow exceptions in FMLA, they could just fire you for being sick.

How much help did he earn? How much does he deserve? The money a driver gets paid is the help. There is a market for non-fulltime jobs that would not exist at all if it was forced to be full time. Forcing Lyft to hire employees instead of contractors won't mean there will be more workers with a safety-net; it means there won't be any Lyft. That would be bad for both drivers and the people being driven.

“How much does he deserve”. Welcome to America.

Honestly. This market is not a problem in European country where you get free health care. Why would uber/lyft make an exception for the US? If they can get away with it of course they will.

It isn't free.

As a rider, I am going to pick the cheapest ride. If Lyft pays their drivers less, it's because I pay Lyft less. If society as a whole picks Lyft, then it's society as a whole paying Lyft drivers less. I view Lyft more as a market maker rather than a company. In that sense, I agree with you, the market isn't the problem. The people to blame are riders, who got fed up with expensive and bad service taxis, and wanted cheaper rides. Lyft (and Uber) delivered on that, but they are only reflecting the will of us as riders.

That’s why some stuff like health care should not be privatized. Because the market will always go against it.

That is absolutely not true. You're generalising too much. There are many people that are trying to democratise healthcare the private way.

Look at how it's doing

It's doing very well, just not in the USA (if you mean healthcare in general). The attempts I've been talking about are doing well as well.

> “How much does he deserve”. Welcome to America.

I'm assuming there's sarcasm in that statement. However...

> My father has been truck driver his entire life and for the last 20 years worked as a contractor, while driving his own truck and trailer, since it gives him more $$$ than average driver who works as employee.

One of the primary reasons one makes more as a contractor is because the company isn't paying for those safety nets (insurance, pension, etc). That extra money the contractor is making is supposed to be going towards those things. If said contractor is not using it to buy health insurance and contribute to retirement, then it's that contractor's fault.

We have the same stuff in France. You lose on benefits as a contractor. But you do not lose on healthcare. That’s a basic human right.

I wonder what happens when basic human rights can no longer be paid for with hypothetical future cash flows… future gillets jeunes to be mown down by domestic metadata drone strikes under emergency powers acts when they try to demand for their basic rights?

> “How much does he deserve”. Welcome to America.

Sure, that’s a good way to hyperbolically sum up a country or society, but it is very hyperbolic, and one could construct hyperbolic summations of other countries or societies too. Like “everyone deserves everything, regardless of their effort or contribution or ability.”

The truth is probably somewhere in the middle.

> How much help did he earn? How much does he deserve? The money a driver gets paid is the help.

That seems naïve and inhumane. Compensation and benefits are understood to be separate things in the US at this time. From social security to health insurance, the costs of securing such things without an employer (an entity on the other side of the wealth gap, usually) are often untenable.

> Forcing Lyft to hire employees instead of contractors won't mean there will be more workers with a safety-net; it means there won't be any Lyft. That would be bad for both drivers and the people being driven.

The choice between untenably-expensive benefits as a contractor or untenably-unaffordable benefits as an unemployed person is no choice at all--especially for people with health problems/children/debt. Ignoring the people being driven (I'mma say that the benefit to the most needy customers of Lyft is negligible compared to the costs/benefits to the drivers in this scenario--otherwise we should have a different discussion about whether or not rides-for-hire should be a public utility), I think saying "you got paid your safety net in your insultingly-low wages last week" is deliberately obtuse and fails to engage with the issue at hand.

> The choice between untenably-expensive benefits as a contractor or untenably-unaffordable benefits as an unemployed person is no choice at all--especially for people with health problems/children/debt.

It appears that lots of people choose to drive for Lyft knowing they won't get those benefits. Why ignore their choice? If they're choosing to do it and Lyft can't give them the same opportunity along with the benefits it's effectively saying they shouldn't have any opportunity for work until they have the perfect opportunity. I'm not convinced that it's better for someone to starve than to have the opportunity to drive for Lyft.

The people choosing to drive for Lyft do so over all other work opportunities. If there was something equally good that also provided health benefits, then Lyft wouldn't have any drivers as everyone would pick that better alternative. Given there's not a better alternative, why pick on Lyft? They're the most appealing opportunity for work for lots of people.

A lot of people choose to drive for Lyft because there aren't many other options to make money. When you have a choice between $0 and $Something, you're going to choose $Something. Companies know this and take advantage of this in order to underpay people who might not have other options. It gets even worse if you consider people who already have a job which can't support them or their family.

People can and do make bad choices, such as people who choose to forgo health insurance which then burden hospitals and tax payers in a way that affects everyone else.

The solution is to either force Lyft to play ball and not allow them to avoid things like minimum wage laws by calling their workers contractors, or to ensure that the government covers their healthcare.

> It appears that lots of people choose to drive for Lyft knowing they won't get those benefits. Why ignore their choice?

Because we live in a democracy that has some minimal protections for workers(not as much as we should). We have minimum wage laws and child labor laws and worker safety protections.

How could that be inhumane? The worker and the payer agree ahead of time how much is to be paid and what goods and services are delivered. Both parties have to agree, or else one will walk away. You say it's inhumane because one party didn't get something (healthcare) from the other? How is that fair to the other person? I'm asking if the deal was agreed to by consenting parties, nothing more.

The worker has a Sophie's choice to make: earn some money being exploited or starve.

Consent implies both parties are peers.

Since lyft operates at a loss by convincing morons to keep flushing money I'm not sure Lyft or Uber has any long term future of any variety.

Calling drivers morons is not helpful. Realistically, there is no way for me to make money between now and the 2 hours before bedtime. Lyft (and Uber) provide a way for me to work that extra few hours if I want to, which I previously couldn't.

In case it wasn't clear I meant investors.

> Forcing Lyft to hire employees instead of contractors won't mean there will be more workers with a safety-net; it means there won't be any Lyft.

So? If lift fails a better business will come along that can treat employees well. Or someone will make a successful community run app (which gives 95% of fares to employees taking only overhead) will come along to replace uber/lyft since it would actually be treating them as contractors unlike uber/lyft

he can... buy insurance?

A driver in the U.S. is banking by owning his own truck and trailer. There is little reason someone working even a half a year can't afford the best insurance on the marketplace.

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