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Comment by lemcoe9 | Hacker News Reader

While I certainly wish for better conditions for these drivers (and in a grander sense, the entire gig economy), I also worry about the price sensitivity of riders when they go to use these apps: There are tons of users that will make their Uber vs. Lyft decision based on <$1.00 in fare difference. If these drivers get everything they want, I cannot imagine a scenario where fares do not go through the roof, which will likely lead to a decrease in demand, which will have a negative effect on take-home pay for drivers.

The drivers certainly deserve better, however, I think the toothpaste is out of the tube when it comes to what consumers expect and are willing to pay.

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The assumption here is that what consumers expect is reasonable, realistic, and sustainable, which ain't necessarily so. If some billionaire gave away chocolate bars for a couple of years then stopped, would we have any sympathy for people who thought that they should still get free chocolate all the time? The ride hailing companies have deliberately underpriced their product.

At some point their chickens will come home to roost. If you take a price that's too low and multiply it by tremendous numbers of units sold, way more than the competition even, you [still end up with not enough money][0].

[0]:http://www.giantitp.com/comics/oots0135.html

It's probably for the best if there's fewer people driving for rideshare companies, who individually make more money. The negative externalities from all those extra cars on the road are fierce, and if those single occupancy trips were charged appropriately then more trips would be taken by alternate methods.

> The negative externalities from all those extra cars on the road are fierce

It's better to have an Uber idling at some corner than a traditional taxi driving furiously while trying to find a new ride.

That's what the Uber drivers do in the cities I have lived or visited.

Taxi drivers are the most aggressive and dangerous drivers ever. Almost all crashes I have seen involve one or two taxis.

You can't ignore that externality when discussing the only alternative to taxis we have now.

You're still in a car-centric mindset. What I have in mind are non-car transit alternatives, like walking, biking, e-biking, e-scooters, light rail, heavy rail, etc.

Even if the cars are fully electric, they're still dangerous as you point out (until the time they become fully self-driving). So it's best to eliminate as many of them as possible. And a simple tool to do so is to increase taxes on all for-hire vehicle rides, thus targeting taxis and rideshares equally.

That sounds ideal.

It also requires to rebuild some cities, something that is way too expensive.

And yet plenty of cities worldwide predominantly use public transit to get around (including NYC). So it can and is done, thus it's not "too expensive". Once the transit is there, all that remains is to continue deprioritizing cars, which is quite cheap.

>If these drivers get everything they want, I cannot imagine a scenario where fares do not go through the roof, which will likely lead to a decrease in demand, which will have a negative effect on take-home pay for drivers.

With that in mind, revisit page 8 of uber's S1 document(link below), where their momentum towards profitability depends of a circle of arrows where

more drivers/driver availability → lower fares/wait times → more riders → more driver opportunity/earning potential → more drivers

Now just turn the arrows backwards and swap out less/more lower/higher ; if something like unionization occurs that's the path through which uber will (according to their own rubric) spiral down to 0.

The only way they could prevent hemorrhaging drivers and users once that spiral started would be to burn through VC money at a faster rate.

S1 document - https://www.sec.gov/Archives/edgar/data/1543151/000119312519...

What can be destroyed by paying its workers enough to live on ... should be

Do you think the people who made your clothes were paid enough to live on? I highly doubt so.

Uber drivers in question are faced with first world costs of living. You're moving the goal posts in support of economic slavery (comparing third world workers in the third world to first world gig workers in the first world, with first world costs of living).

If you can't pay your first world employees a first world living wage, Bye Felica.

Do you think sweatshops in Bangladesh pay Bangladeshi living wage?

If the only problem you have with this is that this exposes modern slavery in your back yard then you have a problem.

I have a problem with all modern slavery but I'm practical about the parts of the ocean I have enough energy to boil.

I highly encourage workers in third world countries to unionize and fight for a living wage locally through activism and political engagement.

Taxi driving is not skilled labor. It simply isn't worth much; certainly not what its full-time drivers are demanding.

Can we also complain about Mechanical Turk? I'd like to earn first-world wages classifying pictures of cats full-time.

Neither scenario is what the gig economy is supposed to be about. If a job doesn't pay sustainably, don't do it.

We tried to regulate taxis such that driving one paid wages on par with costs of living, but then some asshole company undermined that with a populist smartphone app.

So your argument is allow economic abuse instead of regulating against it? No thank you. I like regulation; with it, we get a better society, not Mad Max Race To The Bottom driven by apathetic consumers and psychopathic businesses.

EDIT: I do see the problem, and still believe regulation is the answer (in this case, California legislation [1]).

"If signed into law, the legislation will codify a landmark April 2018 California Supreme Court ruling, which introduced a three-part test to determine which workers businesses can reasonably classify as independent contractors and which must be treated as genuine employees. Workers considered employees are entitled to key labor protections and benefits—such as a minimum wage, overtime pay, and protections under antidiscrimination laws—which many gig-economy companies have long resisted."

This will decapitate gig economy companies in California.

[1] https://www.wired.com/story/california-lawmakers-move-protec...

No, I'm for regulation, but Uber drivers themselves are actually the problem here.

We had a regulated industry. Its labor force had collective bargaining power. Its labor pool was capped to limit surplus labor and everyone could get paid fairly.

Uber came along, organized a bunch of scabs willing to work for pennies to undermine all that, devalued the labor the existing industry provided and now those scabs are complaining they're not paid enough.

Do you not see the problem with this?

I think you get my point and I do get yours. I don't believe in exploitation and support efforts to mitigate it.

One negative outcome of that particular regulation will be the games that start getting played to beat around that three-part test, like Walmart delegating hours just a few short of qualifying employees for benefits. We've seen this play out before and I have my doubts about its effectiveness.

> Taxi driving is not skilled labor.

I had a couple passengers who'd tried their hands at taxi driving and couldn't make money. It takes a while to figure out the ropes, where to go for the big fares that pay the bills, etc. Being able to deal with problematic people is a challenge too.

> It simply isn't worth much;

Except when you have somewhere you need to go, and no vehicle to get you there. Having someone to drive you home from the bar is invaluable when you're wasted.

> certainly not what its full-time drivers are demanding.

Economic cancer has many symptoms.

App-based dispatch simplifies driving people around for money. It also hides the cost of driving. If people don't keep track of their mileage and expenses, app drivers are probably losing their shirts on their vehicles' depreciation. The taxi company kept most of its vehicles on the road for 400,000 miles. I doubt many ride-share vehicles will make it past 200,000, as parts on cars are always breaking, and it's expensive to pay someone full shop rates ($75+/hour) to fix it for you. Our crew of 3-4 drivers put 100,000+ miles a year on the taxi we shared. That cab had a head gasket replaced, a battery pack, and a used engine was transplanted when the head gasket failed again. It was totaled in an accident at around 475,000 miles (this was after I had to quit), soon after the owner had paid it off.

I wasn't the best at maximizing my income because I was more interested in people and their stories than the bottom line. I made enough to pay my rent and keep afloat, even after the vulture capitalists arrived with their "not-a-taxi" service.

> We tried to regulate taxis such that driving one paid wages on par with costs of living,

Arizona's regulations are for safety (background checks for drivers, basic vehicle maintenance, etc) and consumer protection (calibrated taxi meters).

> but then some asshole company undermined that with a populist smartphone app.

populist subsidized smartphone app.

What can be destroyed by paying its workers enough to live on should be.

> I cannot imagine a scenario where fares do not go through the roof,

That's what needs to happen if Uber is to actually generate a profit instead of burning through other people's money.

They lose money on every ride; they're MoviePass, except they can hang on by dangling the pipe dream of "self-driving" transport in front of investors. A glittering future where they don't have to bother with pesky humans asking for due process when they're dismissed.

I'd like to believe that a simple fix to at least some of the ills afflicting both drivers and companies associated with "ride-share" is to simply double the prices. A few unprofitable customers drop off but the various professionals using these services to go to their jobs or when they travel grumble but keep on using the services.

However, I suspect a lot of the users of these services are pretty price sensitive, both encouraging a race to the bottom for pricing among the services and leading people to drop them entirely if pricing is too high. And once they're considered more of a luxury service, the supply/demand may well drop to the point where a lot of areas with sufficient density today no longer have.

As someone who uses ride-share while traveling for business, if prices doubled, I wouldn't grumble about it and continue to pay, I'd rent a car instead. That's just how the numbers work out.

I do (rarely) take Uber or Lyft instead of renting a car these days on occasions where I'd just prefer not to deal with renting a car and the prices are roughly in the same ballpark. If the deltas were bigger in favor of rental (incl. parking, gas, etc.) I'd probably go back to renting more.

That said, at least for my travel, I mostly rent when I want the flexibility of renting a car or Uber/Lyft just isn't practical, not based on which is cheapest. And I take ride-share/cabs/private car when rental is inconvenient and doesn't buy me anything. (e.g. just going from airport into a city).

I think that you could make the argument the opposite direction too, that the toothpaste is out of the tube when it comes to convenience. Maybe it's all about price sensitivity, but easily available taxis are such a part of American urban life now it's hard to imagine that it will totally go away if drivers are treated fairly.

Though there's both price sensitivity and competition.

It's hard from the outside to say about price sensitivity (although I'm sure Uber and Lyft have run lots of experiments). Personally, I take Uber, Lyft, taxis, or a private car (or a rental car, public transit etc.) mostly based on what's most convenient to me. But this is predominantly just business travel. I'm sure many daily users have a different calculus.

But there's also the fact that, if Uber doubles their prices tomorrow and Lyft doesn't, a lot of people will presumably shift to the cheaper ride especially given that most of the drivers are the same. (Of course, Lyft could follow suit. At which point, they probably get accused of price fixing.)

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