Uber wants to redefine employment, labor groups are fighting back
latimes.com
latimes.com
#1 Our current system of coupling healthcare and other life essential benefits with employment is broken. It makes it difficult for people to work small jobs or switch jobs. In order for gig jobs to be viable, people need to be able to get survive a broken foot without going bankrupt.
#2 Gig-style businesses tend to vastly underpay employees. The early claims that Uber drivers were averaging $15-20/ hour or more were completely fabricated. The reality is most gig jobs require people use their own vehicles and don't pay them for inevitable downtime which means they are vastly underpaid. Minimum wage for gig workers should include payment for expenses (including a reasonable $0.50+ / mile for travel) and downtime between gigs.
If those things are fixed, then suddenly gig work is amazing, but that's a pretty big ask.
There is no fixing these things. They are a feature, not a bug. The entire viability of these businesses exists within the margin created by stripping away any vestige of traditional employment stability, allowing desperate people to exchange their long term wellbeing for short term cash.
This is a big part of the problem, but I don't think it would fix everything by a long shot.
You're gonna have to work a lot harder than you are here to make this point pass muster. It's pretty blatantly untrue.
Yes, supplemental insurance is often a thing that exists. It's generally nothing like the US system's insurance though.
In the Netherlands and Switzerland, all health insurance is provided by regulated private payers.
That's a stretch. Even if Uber/Lyft were forced to employ their drivers, they would most likely just raise prices and cut marketing costs. Sure, they'd be much smaller businesses, but they'd very likely still live on.
Uber pays their drivers ~$7b a year. Employing them would cost an extra ~$2.1B/yr. Self driving cars are probably coming in 10 years, so even if they didn't increase prices or make any other changes in their operating model, they'd need to raise $21B to hold them over. That's not a small amount of money, but Uber's market cap is $54B.
Is it not possible to purchase your own healthcare independently of an employer? And opt-out of employer healthcare? Or are only employers allowed to insure you?
If it's a matter of scale could a buyer's union buy it bulk like an employer but not linked to your employment?
The ICHRA[1], which came into effect on January 2020 allows employers to do just that.
There's even a YC company that offers ICHRA functionality for employers[2].
This is a common refrain, but it's actually not true. Individual plans operate as a giant "group" with other individuals, and the size of that group is often larger than most employer groups.
There are a host of reasons why healthcare is expensive in the US, and the "bulk purchasing" is not really one of them.
Source: I work in health insurance.
The ICHRA[1], which came into effect on January 2020 is an interesting step in this direction. It allows employers to provide a pre-tax cash monthly allowance to buy health insurance on the individual market in lieu of the monthly premiums they would pay anyway as part of the employer mandate to provide group health insurance directly.
There's even a YC company that offers ICHRA functionality for employers[2].
I work in health insurance.
In some ways, having a union provide healthcare makes more sense than having the employer do it. In industries with many small firms, and fewer large unions (like construction), the union will probably have better bargaining power. Members of a given union also probably have more (means and needs) in common with each other than employees of a given company.
There's even a YC company that offers ICHRA functionality for employers[2].
Yes, it is possible to purchase your own healthcare independently. Prior to the ACA, however, things like preexisting conditions were not covered, which is how I know a Symbicort asthma inhaler costs about $700/ea.
Have you priced outside insurance?
If you are making the wages Uber is paying drivers, it is not possible to purchase healthcare independent of your employer and pay rent.
Low-productivity services tend to vastly underpay employees. This is to be expected. The question is whether one can have "gig"-like work that's more worthwhile than driving around for services that can't even make a decent profit and are just spending money they get from their VC funders.
Specifically, running their car into the ground doing driving.
Yes and as said below, that's by design. Uber/Lyft for example would not survived if they priced their service to allow a fair pay for the gig worker after accounting for vehicle costs. This whole system is built on underpaying workers and making people believe that a ride could "really" be that cheap. It isn't. There is a reason why taxi rides were expensive before Uber became a thing.
I realize this, which is why I suggest strongly that Uber not be allowed at the table if/ when any legislation around this matter.
to your point, this is a function of information asymmetries in the labor market. based on a rough calculation from a couple years ago, a gig driver needs to make about $18/hour (including downtime between rides) to break even against a minimum wage job. between that and additional tax and benefits burden, it's no wonder most people forgo deeper consideration and focus on the gross income of gig work.
it's obvious that workers need to be given direct and upfront information about this. another remedy is to make it as easy to comply with labor, tax and other regulations as a w-2 job (where the employer does nearly all the work). you could also let workers set their prices, but riders hate having prices fluctuate a lot so maybe the platform needs to take on some of that risk.
lot's of things could be changed to make it a more even playing field between worker and platform.
Is this counting the similar uncompensated costs for ordinary wage labor? Most minimum wage workers can't afford to live in the city center even though that's where jobs are concentrated. If you live 60 miles from work, that's not just 120 miles a day of uncompensated driving expense, it's two hours of uncompensated time.
If you use .55/mile as the transportation cost with that long of a commute for a job that pays $7.25/hour for eight hours, that worker makes... uh, negative $8/day. Which I guess makes the two extra uncompensated hours they spend commuting a benefit because they get to amortize their losses over ten hours instead of eight and lose $.80/hour instead of $1/hour?
This might explain why a lot of people prefer making "less money" working for Uber.
But for #2, you seem to be asserting that there is some method by which it is possible to determine that a particular salary/wage is "fair" and that "fair" wage must be mandated for all people.
You've asserted that gig businesses are underpaying and yet lots of people continue to take those jobs. Are you asserting that all those people are incapable of determining what is best for them? Are you asserting that what works for a college student on the side or a retired person or someone who needs extreme flexibility in their hours is unimportant and that the only the particular compensation package that you declare to be "fair" is valid for everyone?
Not everyone puts the same value on different job criteria. Some people want flexibility, some people want safety, some people want benefits (see #1), some people want to work outside, some people just want to keep busy, etc. Declaring that there is a "fair" wage for any particular job presumes not only that jobs are identical but that people are identical also.
We have a nationally agreed minimum wage.
Expecting that the average person doing a gig job would be able to earn that minimum wage plus expenses is not unreasonable. Since gig type employers, this base wage would need to be 50% higher than minimum wage to account for other expenses paid by employers. (employment taxes being the biggie)
No. For most, it's not even close. The only way to make that kind of money was to collect kickbacks from bringing tourists to strip clubs.
Plus, many states have a minimum wage much higher than $7.25/hour.
Source: Drove for Uber for eight months.
Anecdotal Source: I've driven Uber too.
Actual Source: https://www.ridester.com/how-much-do-uber-drivers-make/
> Full-time UberX drivers can expect to earn nearly $590 per week after tips when working 40 hours in a week. Beyond the aforementioned factors — location, surge, and tips — weekly earnings can also be heavily impacted by the amount of trip requests you receive throughout a seven-day period.
> Uber drivers are known to make slightly less than Lyft drivers. We’ve found that a standard Lyft driver makes about $17.50 per hour, which is nearly $3 more than what Uber drivers make. Of course, your average Lyft wage (just like your average Uber wage) will vary based on location, how much you take advantage of promotions on Lyft, and how much you earn in tips.
> It’s a general rule of thumb for the rideshare industry to budget roughly 20 percent of the total ride fare amount for ride-related expenses. At that rate – hypothetically speaking, after factoring in pick-up, drop-off, and dead time – the UberX driver could estimate to make somewhere in the neighborhood of $15–$20 an hour if they were to get two similar rides each hour they drove.
"These expenses include:
Insurance: This includes personal insurance and a rideshare or commercial insurance policy.
Car/lease payments: The amounts a driver pays to drive their vehicle. Drivers either own their own vehicles or lease one from Uber or a third-party provider.
Tolls, license, permit fees: Drivers pay for all of these fees. Passengers pay an added surcharge when drivers must incur toll fees.
Gas: Since drivers are considered independent contractors, they must pay for their own gas, and are not reimbursed.
Vehicle maintenance: Drivers are responsible for their own vehicle maintenance and upkeep. They will be reimbursed if a rider damages their vehicle, however."
For the majority of Uber/Lyft drivers, the vehicle is a sunk cost — they would have bought a car Uber/Lyft or not. These drivers use these cars for personal use when they're not driving on gigs. There are even drivers that buy cars just so that they can drive for Uber, but if Uber/Lyft didn't exist, those folks would still need to buy a car to meet their own personal transportation needs.
Depreciation is going to inevitably happen to anyone that owns a car, whether or not they are a rideshare driver. It's like saying that you need to include the cost of a daily lunch in the equation.
Depreciation is partially a function of miles put on the car. Rideshare drivers put miles on their cars a lot faster than they would have otherwise.
Either way, sfkdjf9j3j is right. Your source doesn't account for vehicle depreciation.
~$2500 amortized over 880k additional miles is <0.003/mile, and even less in net present cost because you don't lose it until you sell the car.
Now, or when they stop using it?
The average car in the US is 11.8 years old.
> and isn't going to make it to nearly a million miles either
This is a completely plausible number of miles for a vehicle driven full time over the course of several years.
> and you did the calculation wrong besides (you need to use the starting value of the car, not the ending value).
No, you use the difference in value between the car with fewer miles vs. more miles at the point where it is replaced, i.e. the amount you lost at resale by having more miles on it.
The difference in value between the starting value and the ending value independent of miles is the loss due to age/time, which is a sunk cost since the car ages whether you drive it or not.
> Do it again for a newer more valuable car, and a lot fewer miles put on it. You can easily see depreciation amounts in the thousands of dollars per year.
Because then you're measuring the depreciation due to time (the sunk cost portion) rather than the depreciation due to additional miles, and the depreciation due to time is much higher during the first years of the vehicle's life.
It is also naturally much less efficient to do that in general. How many taxi companies are you familiar with that buy new vehicles, drive them for 10,000 miles/year for two years and then sell them? You can make anything cost a lot if you're willing to waste money.
The typical rideshare car here in NYC is purpose-specific (needs different plates), has an average new cost of at least $30k, and is pretty new. It's absolutely correct to count the full cost of the depreciation of this vehicle as a rideshare expense.
And the average stats for cars in general in the US are irrelevant; what matters is what's being used for rideshare. You can't use old clunkers for that.
You don't buy a new car unless you have money to burn. Even if you need a "new" car, you buy a three or four year old car, which is still plenty new but lets the other guy take the lion's share of the depreciation. Half the difference is from having less time on the factory warranty which you would exceed on miles before that anyway.
Even with "newer" cars it's still not huge. A 2016 Camry with 60,000 miles is worth about $5000 more than a 2016 Camry with 500,000 miles, which is ~$.01/mile. But you don't sell a four year old car, you buy a four year old car.
> The typical rideshare car here in NYC is purpose-specific (needs different plates)
Who is to blame when cities pass rules that increase costs on drivers?
> It's absolutely correct to count the full cost of the depreciation of this vehicle as a rideshare expense.
It is absolutely incorrect when the owner is also using the vehicle as a personal vehicle, which they would need anyway, which makes the age-related component of the depreciation a sunk cost.
> And the average stats for cars in general in the US are irrelevant; what matters is what's being used for rideshare. You can't use old clunkers for that.
Which is why you stop using them for that when they're ten years old and not twenty or thirty. Notice also that this doesn't mean you're driving a ten year old car most of the time, it means you're driving a five or six year old car most of the time because when it's ten years old is when you stop driving it.
Removing the negative consequences from making unwise financial decisions 1) is a moral hazard, and 2) punishes those that are using their resources more wisely.
Corporations also like to estimate this number on the high side, or include amortized depreciation due to time rather than miles even if the vehicle purchase was a sunk cost, because business travel is often tax deductible and this allows the company to offer the employee additional tax-free compensation.
You could easily spend many times that amount on maintenance and repairs. One transmission rebuild could cost more than the total amount of depreciation due to miles over the entire life of the vehicle. Just oil changes add up to more than $10,000 over a million miles.
Maintenance is a significant expense per mile, even more if you're using "average" vehicles (as companies setting per-mile rates would) which can have significantly higher maintenance costs than the sort of vehicles people choose when they know they're going to be driving a lot of miles.
If you don't account for travel time between gigs, expenses, or additional taxes, they might, but you can't Uber if you don't fill up your gas tank and change the oil in your car.
No gig in the world covers that.
> Expenses
On average, after vehicle expenses, Uber drivers make as low as $15/hour[1], and as high as $20/hour. And this is also assuming that one concedes the argument that gigs ought to reimburse expenses, which isn't true for most contract work.
So was that just my own naivete? And now that I think of it, buying better gear hurt me, in that it took less time to do stuff. But on the other hand, it allowed me to handle larger datasets, which made me more attractive.
OTOH, some customers are willing to pay for contractors' gear even if it would be used on other customers, for example, if they require you to use upgraded equipment instead of the equipment you already own.
there is one and that is relatively simple, it's what people negotiate under symmetric information. The behaviour of some full-time uber drivers is simply irrational and that is effectively being exploited by companies like Uber.
If one includes the cost of operating and maintaining the vehicle, not to mention the depreciation, the risk of losing work if it actually breaks down and so on you're not arriving at a salary that is even remotely sane or competitive.
And sure you can say fuck them, they know best QED and so on but it's simply not sustainable. Just look at who has to pick up the cost during the corona crisis now because these people are effectively broke if they can't drive, it's everyone else.
In the name of flexibility we are loading social responsibility of regular employers onto the public because drivers overestimate the benefits and underestimate the risks and companies like Uber want to line their pockets.
Irrational to you.
> If one includes the cost of operating and maintaining the vehicle, not to mention the depreciation, the risk of losing work if it actually breaks down and so on you're not arriving at a salary that is even remotely sane or competitive.
There are a lot of reasons why people still make the economic decision to drive on ridesharing platforms, even considering all of this. 1) If the car is a sunk cost (I.e. they would have owned the car, Uber or not), then it isn't accurate to include its cost in the equation. 2) Some people will happily trade-off the slightly less competitive pay in return for not having a boss and not having to clock into a job.
> Just look at who has to pick up the cost during the corona crisis now because these people are effectively broke if they can't drive, it's everyone else.
This is literally true everywhere in the world. Coronavirus is a once-in-a-generation black swan event, and most governments' responses have been mass shut-downs of the economy and forced unemployment. The taxpayers foot the bill for most workers, employee or not. "Employment" status would not have changed that.
> In the name of flexibility we are loading social responsibility of regular employers onto the public because drivers overestimate the benefits and underestimate the risks and companies like Uber want to line their pockets.
This is how safety nets work. In many developed countries, health insurance is decoupled from employees and taxpayers foot the bill. Would you not consider this an abrogation of responsibility of Danish/Canadian employers to provide benefits for their workers?
In parts of Europe the employment situation is significantly less bad, in particular in countries with proper corporatist structures. In Germany unemployment went up by 250k. The US has seen 10 million unemployment claims already, mind you per capita that's worse by a factor of ten.
And yes I would consider this an abrogation of responsibility by Danish and Canadian employers. It doesn't matter though because Denmark has a few million people in it and the government can basically jump in every time anyway.
The fact aside that the US lacks this sort of generosity for many reasons, what the gig economy has produced is a permanent precariat and tech companies without obligations. You have an army of semi-employed service workers who get wrecked by every crisis, be it a mortage crisis or a virus because there is no security in such a society.
You don't need to pray for a potiticized safety net if you have employers and companies that take care of their workers and invest into their long term human capital and don't lay them off during the crisis, that is you have organisational capacity, something the American labour market lacks completely. It's everyone for themselves as soon as the alarm bells go off.
The US saw 10 million unemployment claims because the official policy of all governments (Federal & State) was forced unemployment. The CARES stimulus includes a $600/week unemployment insurance _on top of_ the existing state UI. The state with the least generous UI is Mississippi, at $940/month — with the CARES stimulus clocks in at $3340/month. You can see the full break-down here [1]. In every state, the unemployment benefit is actually higher than the median wage. Businesses know this, and proactively lay off / furlough their employees so that they may collect this benefit (which extends to gig workers as well).
In European nations, the approach has been to offer stimulus packages to employers to keep their employees paid while they temporarily shut down.
The net effect is the same, people are getting money to be able to sustain themselves during a global social distance shutdown. In America, because half the stimulus is in the form of direct insurance payments to people, and unemployment is the means of receiving that, you will see high unemployment numbers. Not only is this expected, it is intended.
> You don't need to pray for a potiticized safety net if you have employers and companies that take care of their workers and invest into their long term human capital and don't lay them off during the crisis, that is you have organisational capacity, something the American labour market lacks completely. It's everyone for themselves as soon as the alarm bells go off.
This seems directly at odds with your point about Coronavirus. In a Coronavirus world, if governments are forcing enterprises to pause their business, the only way to make sure people don't starve is to have a politicized safety net. Either it is in the form of corporate subsidies to keep employees on payroll, or it's in the form of direct cash to people. Right now, the US is doing both[2].
If you give somebody a choice between working a little bit and not having a job at all, most people will take the little bit of work they're offered. The "people continue to take these jobs" argument is only valid if there's an abundance of other jobs available, which there is not.
Whether or not a job is underpaid is not determined by whether or not somebody is willing to do it for that amount of money. If people aren't being paid a living wage, they're being underpaid, and their wages will have to be subsidized by social assistance programs if their basic needs are going to be met.
Prior to the coronavirus, unemployment in the US was at historic lows. That is likely to return rather swiftly once there is no longer a pandemic suppressing economic activity, especially given the amount of stimulus being applied.
So there apparently are other jobs available in general, since most everybody has one (and only a very small percentage of those are working for Uber).
> Whether or not a job is underpaid is not determined by whether or not somebody is willing to do it for that amount of money. If people aren't being paid a living wage, they're being underpaid, and their wages will have to be subsidized by social assistance programs if their basic needs are going to be met.
They also have to be subsidized if they're unemployed, right?
That appears to be the major flaw in your argument. If there are other jobs available then they have other options and are choosing this for a reason (e.g. flexibility), but if there aren't then the alternative, if this work disappears because it can't justify higher compensation, is unemployment. Which is both worse for the worker and requires even more subsidy from the taxpayer. So either way it's better that more flexible but lower paying work be available.
If you change the system so that there is always an alternative job available - and correct the power asymmetry so that individuals can say “no deal” too then wages will correct themselves.
And very likely most gig jobs would disappear as uneconomic.
This is far from the truth. In pretty much every bull market we end up with plenty of unfilled jobs. Even in many bear markets, there is no lack of unfilled jobs.
The problem is the mismatch between skills and desires of those that want a job and the skills and flexibility requirements of the jobs being offered.
A job may require skills not many people have. A job may require you to work in a place or at a time you don't want to work. But to claim that there is a lack of jobs is just wrong.
The problem here is that some jobs offer flexibility and only require a bit more than average human functioning pre-frontal pre-frontal cortex so you can handle doing something like move something from point A to point B. For a job like this, with the benefit of flexibility and the low skill requirements, it's totally reasonable to supply and demand to drive price down as you don't need to pay as much to find people capable and willing to do the job cheaply because it is an attractive job for them.
If you're willing to learn skills and willing to go to where the job is being offered and work when the job needs to be done, you'll find work that supports you.
The only developed country where they are a problem is the USA.
Other countries have healthcare regardless of employment status, and minimum wages high enough to live a good life ($19.48 AUD/hr in Australia, for example).
They can, and have been fixed elsewhere.
Yep. And I should have mentioned that.
Forcing businesses to hire only full-time workers reduces the number of jobs. They won't hire someone unless there's 2000 hours of work to fill up a year.
* Enable robust safety nets so lack of enough gig work doesn’t mean someone is homeless or goes hungry.
Can we find middle ground? People can’t live good lives with excessive uncertainty and stress, and quality of life is what we should optimize for (like New Zealand is attempting), versus GDP. I concede gig work type employment has a place in our modern economy if workers are vigorously protected from exploitation.
Sidenote: I’d also like a 4 day work week, considering productivity gains over the last 50 years, but that might be a separate discussion.
I'm totally cool with decoupling health insurance. I think Uber would love that.
The great thing about the independent contractor life that Uber is expousing is that you can have your four day work week. And you can jump up to six days when you've got the time and drop to one day if you don't.
We're arguing where the quality of life floor is.
What protections does employment have? Hopefully very little.
This line of uncompromising thinking is not really constructive.
Sometimes compromise isn’t possible. Whomever comes with the most leverage wins. I acknowledge my side needs additional leverage. Maybe that’s COVID, maybe that’s the ensuing global recession.
Going the other way around is massively unethical considering the state of healthcare in this country and the dependence on employment for health benefits.
We as a society (rightly) demand a minimum standard of living for everyone, and we collectively pay for that one way or the other. Either we pay taxes to fund a welfare state (single payer healthcare, UBI, food stamps), or we pay inflated prices for goods and services to maintain wage floors.
I'd argue that paying taxes for welfare is more progressive, as the burden falls on richer people. Paying inflated prices for goods and services is regressive as it's a burden that falls equally on the rich and the poor.
What we're clearly seeing is a well functioning market driving down the cost of driver labor to the minimum possible price (ignoring for a moment the need to make sure externalities are included in the price via congestion taxes). This is good for consumers, since the good/service is now accessible to people lower on the socioeconomic ladder. If the problem is that some of these drivers aren't making enough to survive, then wouldn't a more optimum solution be to simply give them a little bit of money (or in-kind services)?
https://www.dol.gov/general/topic/workhours/full-time
Overtime compensation tends to be regulated.
Unemployment is also sort of tied to work hours, but it's not particularly a job benefit (it's operated as insurance, so it's basically coming out of wages...).
Gig work lets the businesses and the workers adapt weekly, daily or even hourly. Full-time work is onerous to startup and so businesses wait until they're desperate before hiring anyone. You would do the same. None of us have extra cash to toss around.
Full time employees get benefits like unemployment, health insurance, COBRA, FICA contributions etc.
And tons of other legal protections that contractors do not normally get.
A huge part of the problem is that full-time employees get benefits like health insurance and COBRA. They're all band-aids on top of one cardinal sin: that benefits are tied to employment.
We don't really talk about employees receiving car insurance benefits, or food benefits, or housing benefits.
I don't know why we don't talk about them, but it's not because they don't exist. These benefits aren't even really uncommon.
They're just more frequently called: 'company cars', 'employee meals', and 'corporate housing'.
Sure, and we are fortunate that such perks are in-frequent, and unexpected. In a world where that's not the case, cars, food, and housing would be prohibitively expensive to those that are unemployed, and we would call for nationalization of the auto, food, and real estate industries.
I don't think we should have employer provided health insurance. But if the topic of discussion is a comparison of W2 and 1099 work, that is an obvious point of differentiation.
Uber's rules do not stack up too well against these guidelines unless you have some creative interpretation:
https://www.irs.gov/businesses/small-businesses-self-employe...
If you don’t agree with that framing, then I would argue that the 2 camps are: “Uber drivers are not independent contractors and should receive W2’s”
Vs
“Even if Uber drivers Are not independent contractors, they should be treated like employees AND employees should be functionally indistinguishable from contractors for the purposes of benefits”
All of the reasons we made the concept of 1099s in the first place are still valid. We just have a few high profile companies who are abusing their purpose.
They do not if the employer has fewer than 50 employees. Which is a huge portion of low paying jobs.
FICA contributions have nothing to do with full time employment, nor are they benefits people are eligible for before retirement age.
>FICA contributions have nothing to do with full time employment
Employers have to pay part of the FICA contributions for the W2 employees. 1099 employees have to pay all of this out of their own pocket via the SE tax.
Don't pretend that the rich want universal health care. they don't.
I think the fact that health insurance is tied to employment is one of the few things both sides agree is bad. Decoupling health insurance from employment can go a long way to making the distinction between "full time" and "gig worker" unimportant.
Right now in almost full-time job, if you want to switch to 4 days a week you need to basically get a different job. You'll lose your benefits like healthcare, paid vacation, 401k matching, so even though you'd be working 80% as many hours your effective pay at the same hourly rate would be much less than 80% of what you made previously.
The more that benefits are decoupled from work, the easier it would be view employment on a more sliding scale for many jobs - i.e here's the hourly rate, you can work 2 days a week or 5, it's up to you, but you'll still be a "full" employee in the sense that full-time workers are today.
Obviously not all kinds of work lends itself to this flexibility. If you're trying to climb the ladder and get promoted quickly you'll probably still need to work a lot. But for a lot of jobs, for instance for IC software engineers, I don't see why this flexibility wouldn't work.
No, fix healthcare costs instead. Given current healthcare cost structure, even 'universal' healthcare will not decouple it from employment. Fix the cost problem, and everything else gets way easier, including safety nets.
You do you, but I just wanted to provide an alternative view: that freedom might be great when you're young and equally free, but IMHO it doesn't work as well when you're 40 years old trying to ensure stable income to support your family
It's not like banning gig workers will make those jobs appear. If there's 3000 hours of work to be done, a business will hire one worker to do 2000 hours and turn down the 1000 hours of work. A business can't magically "round up". The money for the extra work needs to come from somewhere.
There's plenty of work to be done if we don't have to pay anyone anything, there is a reason we don't permit that though.
Rapid innovation is great for advancing the state of the art but terrible for all the people in society who had made a life around doing work for a decade or two that is suddenly no longer a viable career.
We (as a civilization) need to take care of the people who aren't the ones making the new fortunes.
OK, outsider here. But it's my impression that people "making the new fortunes" are a much smaller subset of the startup economy than many think. It's arguably similar to the common US middle class belief in being temporarily embarrassed millionaires.
42: "My health insurance premiums are $2000 a month, my automotive insurance is another $500, rent is $1500, and I only make $3000 a month because I'm being out-bid by freeloading 22 year olds."
Right now, it can be challenging to find part time work that I can do alongside my day job, because the laws are just so weird. As a result, I have less choices for part-time work.
Having multiple jobs also provides stability. If one income stream is down, I still have the others. If they are all gone, then I have that 130% income from the last 6-10 months banked away.
I was surprised that the gig economy grew so far before the regulators started to crush it. I hope they don't get to finish the job.
Free market labor has given us, among many other things:
- binding arbitration in labor disputes that heavily tip the scales in favor of the company
- stagnating wages while the pace of income inequality continues to grow
- large corporations that are deemed too important to fail by the Fed and therefore not fully held accountable for egregious mismanagement and worse
- unequal access to benefits like insurance, which corporations lobby heavily to restrict access to
- restrictive non-compete clauses that subject workers to completely unnecessary legal liability and influence over their careers
We’ve also seen huge companies in the tech industry collude to suppress wages (Pixar), insert themselves as middlemen to capture and intentionally maintain a fundamentally obsolete tax collection infrastructure (TurboTax), catalyze genocide in Myanmar (Facebook, internet.org), and spread misinformation throughout the globe in order to interfere in elections.
How exactly does one overcome these kinds of challenges if not through grassroots organized movements?
Don't work for them, don't buy their products, spread the word. It's not easy but nothing worth doing is.
It is a very grey area, but every point of control is an argument for being W2.
https://www.irs.gov/newsroom/employee-or-independent-contrac...
Your uncle may also have been miscategorized. Uber isn't the first company to play fast and loose with worker classification. It wasn't uncommon before the modern 'gig economy' either:
https://hbr.org/2017/07/lots-of-employees-get-misclassified-...
https://www.wsj.com/articles/france-uber-ruling-puts-gig-wor... is similar to this, since it involves employment status.
There are various restrictions imposed on ride-sharing companies across the globe.
Not necessarily labor, but related to medallions / licensure to drive taxis.
https://en.wikipedia.org/wiki/Legality_of_ridesharing_compan...
You can say that again. The result of the medallion systems was that often taxi drivers had to pay to work, by renting a medallion from wealthy owners. Even in countries where the owner of the medallion couldn't rent it, they were sold at very high prices when the owner retired, making it into a middle-class privilege.
May I ask which countries you're referring to?
In USA, I know immigrants who are awarded medallions via lottery and who take a loan and pay off their medallion - like an investment. It potentially helps them break into the middle class.
The medallion ended up becoming an entity that was stable that the freelance economy would peg to something. Not saying it was perfect, but it prevented the system from being flooded with drivers.
NYC medallions used to be $1m in 2013. They're less the $200k these days. There's consequences to people who were just starting out, who saved for medallions, who now have their investment paid for over decades lost.
Working and earning something isn't privilege to me, that's gumption. Whenever I see that word online very rarely does it take into account hard work. 20 or 30 years driving 70+ hours a week? And they're an immigrant just trying to live the American dream?
Let them have happiness in life. And we should be celebrating their work and effort. They are absolute heroes for sticking to something so persistently.
Let's talk about fairness for new drivers. Doesn't necessarily have to be at the expense of others!
Exactly. Which is why most of them are owned by companies (almost 1/3 by a single one: Marblegate Asset Management), not by plucky immigrants pulling themselves by their bootstraps. Those are the ones renting the medallions and not saving anything close to $1M even in 20 years. The average income of a NYC taxi driver in '93 (so long before Uber and such changed the market) was $19k/year!
Sure, in some markets the city occasionally issued some medallions for lower prices, but how is a lottery earning something through gumption? It's literally blind luck!
> 20 or 30 years driving 70+ hours a week? And they're an immigrant just trying to live the American dream?
How can we be criticizing Uber for exploiting their workers, while promoting working 70+ hours a week? How is that not exploitative?
Let's say that employees are protected at Tier 1 and independent contractors are protected at Tier 3. Uber proposed a new category of worker with protections at Tier 2, and it claims its workers fit in that category.
I'm fine with the idea of a Tier 2, but I don't think Uber's workers fit in this category.
Uber claims that there are several things that set its workers apart from employees, but the chief things are the ability to set their own schedules and the ability to work for competing companies.
As to the scheduling, there are lots of employees out there who get to set/request their own schedules; it's just that with ride-sharing gigs, it happens at a more granular level. But while they are on the clock, they have very little control over how they get the job done, which is a key differentiator between employees and ICs.
As to working for competing companies, there are lots of employees out there who work more than one job; it's just that with ride-sharing gigs, it happens at a more granular level. But it's not as if any driver is working for Uber and Lyft simultaneously. They don't get paid by both platforms for the same fare. They can be on-call with both platforms at once, but they're only ever getting paid for one at a time. They're just going from one part-time job to another in more rapid intervals than in traditional part-time jobs.
In both cases, the distinction seems more like one of degree than of kind.
What I'd like to see is the creation of a Tier 2, and then phasing out Tier 3, so that independent contractors get Tier 2 labor protections. But Uber/Lyft's workers should be Tier 1 from the start, because they're employees.