Target’s gig workers will strike to protest switch to algorithmic pay model
vice.com
vice.com
That's not going to fix it. If you artificially raise the compensation rates, you're going to increase supply (i.e. incentivize more people to be Uber drivers), leading to more downtime for Uber drivers because the supply of drivers outstrips demand for them. So the per-hour salary isn't going to go up for the drivers. Uber would have to limit supply or create some sort of tiered system - but those aren't perfect solutions either.
I know for me, pre-uber I probably rode in taxis once a year. I would usually have rented a car at the airport in most cases.
The inability of drivers to calculate depreciation prevents them from being able to assess whether or not the contract they're agreeing to is fair. If they actually knew how little they were being paid after depreciation they would probably sit at home and try to find a better job.
This is a market inefficiency in that the actual cost of delivery is not properly reflected in the primary market (between Target & customer) price and instead offloaded on another party. The delivery costs are being artificially lowered by Target taking advantage of workers with low financial acumen. If the cost of delivery as paid by Target to their delivery drivers was closer to the cost + wages it would most likely result in higher prices paid by the consumer. This would end up as less people using the service and getting off the couch and into Target. Or they wouldn't buy stuff.
If a product or service is only sustainable by exploiting people's ignorance and paying them below minimum wage then I don't think that product or service should exist.
That's just a factually wrong statement. But it also don't apply here. Google restricts the number of people it hires, Uber/Target do not restrict the number of people that register to drive for them ... yet.
>The delivery costs are being artificially lowered by Target taking advantage of workers with low financial acumen.
Yes. I agree with that, but fixing this is harder than you think. Let's say Target (or Government) decides to raise the rates from, equivalent of $10/hr to $15/hr, to properly account for delivery costs (and let's assume this has no impact on demand, which it will to the detriment of the drivers). At that point, you're going to attract the delivery drivers who weren't willing to drive for $10/hr but are willing to drive for $11/hr or $12/hr or..etc. Meanwhile demand hasn't changed, which means there is less work for individual drivers, and their wages do not go up, or go up much less than you would expect.
The only way to mitigate this is for Uber/Target to become a gatekeeper, and control the supply of drivers. This means that this gig-economy business goes out the door. Not everybody would be able to just start driving for Uber.
But are there enough people who are willing to drive for $11/hr but not for $10/hr to balance out the ones already driving for $10/hr?
We don't know.
It's possible that all or most of those willing to be delivery drivers for $15/hr are already driving for $10/hr, and raising the wage to $15/hr won't have an appreciable impact on the supply of drivers.
They just don’t have an option for better pay:quality of life at work ratio. Which generally applies to the work of 95% of the people in the world, they simply don’t have a better option.
In some sense that's a tautology. Everything that anybody is doing is because they've made the decision that that is the best thing for them at that time given their current circumstances. Outside of that I wouldn't label it this way. Driving Uber is not the only option in America.
Because remember that most jobs require you to show up daily at your own expense during off-the-clock time causing vehicle depreciation all the same.
And that is a difficult reality.
I'm sure some don't understand the real costs. But most are doing what they think they need to do in the here and now and, to be honest, if people are really trying to minimize car costs, they're probably at least a bit less than IRS allowances.
It doesn't cost that. That number is what the IRS accepts for deducting mileage expenses. That doesn't mean that's what it costs everyone. An older model and fuel efficient car will be less than half that on a per mile basis.
Those poor dim-witted drivers. Seriously though, it only take a couple of seconds of Googling to calculate the depreciation of a vehicle. "Financial modelling" is a pretty grandiose word for "subtract $0.50 for every mile you drive".
Don't assume everyone who takes a lower-paying job is stupid.
And that doesn't make them stupid or dim witted.
Math is a skill, just like kindness or empathy.
Because if you are using your already well used car or a newly purchased well used car, the vast majority of the depreciation has already happened. The main reason you keep it is for tax reasons, not to calculate profit.
My 10 year old car is in great shape but has 175k miles on it. It would work fine to drive for Uber with. The resale value is $3500 at best. Putting another $100k driving for Uber would not affect that resale value very much and even if it did, it can only go to zero.
And no, maintenance doesn't become significantly more expensive on a higher mileage car. In fact, as a 10 year old vehicle, it is significantly less difficult and expensive to have it repaired and the replacement parts are significantly less expensive as well due to the availability of aftermarket and salvage options.
In regards to your question about cars, there's tons of gig workers in NYC that either bike or walk. It's pretty rare to get your food or shopping order by car, at least in Manhattan.
(Also gets us almost 360 degrees back to the way the Taxi industry functions).
Simple things like "oh, I'll drive my daughter's car to work today because she doesn't need it and it's more economical" end up not happening because insurance is too prescriptive on who can drive.
Instead insurance should either be for a car (and anyone with a license can drive) or for a driver (who can then drive any street legal car).
In the case of the car, they should provide a window sticker saying 'Insured for all drivers' so everyone is aware that the car can be borrowed (with the owners permission obviously).
For example, an expensive vehicle will have a higher insurance premium than a cheaper vehicle because repairs will be more expensive. But a better driver behind the wheel of that expensive vehicle will minimize the chance of a payout. There could be instances where a bad driver of a cheap vehicle is paying close to what a good driver in an expensive vehicle pays.
i.e. [Higher payout but lower risk === lower payout but higher risk]. So it's not just enough to put insurance on the vehicle or just the driver. Both must be used to calculate the premium.
Still, what you're saying sounds interesting and would be an interesting experiment if insurance companies could offer that as an option.
it seems from the reply thread that there is no marketplace for lending your car out to the gig economy. (Which is a shame, because if there were, gig workers could calculate their hourly more easily.)
of course, even if there were such a market, it could be mispriced - maybe all the people who are lending their cars out on that economy are either losing money, or they're getting money but the market is artificially inflated by VC dollars the way uber was.
It's interesting that there is no such market - seems like a pretty natural niche. according namecheap, as of this moment lendmycar.com is available and $8.88/yr ... hmmmm.... https://ibb.co/2ZQ9q3Z
This whole it costs 60 cents per mile to drive a car in the US is total garbage. Seriously, these are rich folks driving new mercedes I think. Folks driving for shipt are not driving late model mercedes.
1) A car get's old sitting in your driveway, if you have an unused asset and put it to use your variable depreciation is actually lower.
2) You should be able to get a car cost (excluding gas) per mile down to 10-25 cents.
3) Fuel is $2.2/gallon. Assuming 30mpg (no prius etc) that is 220 cents / 30 miles = 7 cents per mile.
4) You get a tax break as a result as well.
5) You need to reduce business net costs by costs you'd incur just in general for car ownership (ie, you might still need plates, registration etc).
For folks doing 50,000 miles per year, 60 cents per mile less 7 cents per mile for gas is 53 cents a mile to own the car. On a new car with a 3 year life that is $80k for a new car every 3 years? Let's say $20K repairs and overhead still is a $60K car.
Outside the context of algorithmic pay models, I’ve always had a lingering doubt in the context of the restaurant industry. I typically tip 20% across the board, more for great service. If I order a $120 bottle of wine versus a $20 bottle of wine, the wait staff is getting an extra $20, but what did they do to get this extra $20? Everything else is the same. (Putting aside the situations where you order a very nice multi-thousand dollar bottle and a special person with wine knowledge comes out and handles everything, etc.)
Analogizing now to Shipts situation, should one person get paid more because I got the fancy cheese rather than the store brand? They’re next to one another and everything else remains the same. I’m not surprised pay drops substantially when algorithmic pay only considers effort.
However, tipping 20% on a $120 bottle would be more than half of what I tipped the last time I went to a fancy place where the staff folded the napkins every time someone got up to go to the bathroom. That was a 40% tip on a $100 meal for two (with corkage fee) where I felt the service was excellent and included far more than just pouring a few glasses.
What should happen is restaurants should pay their workers a living wage and charge customers accordingly, so there's none of this stupid guilt trip stuff.
When I asked if they'd prefer wages even if they made the same per hour, every single one said they prefer tips.
If so, that's a really twisted form of price discrimination.
The economic choice for the customer is, how much do they value their money versus not being an asshole...
No, it's that these algorithms will squeeze every living cent of inefficiency out of a system and pit person against person on who's more willing to work just a little harder for a little less. To take the momentary breaks out of your day, make sure you're working every second. Because those things mean real cash to some person watching the dollars flow in. Turning up the person-utilization % factor or job bid price -- who's going to police against that? Go and celebrate the equality of working to the bone for an unspecified wage.
It's interesting how society goes in waves of dog-eat-dog, every-man-for-himself, until you reach some period of relative prosperity, rest, relaxation, and then something happens to turn the clock back (or forward) some more.
In the meantime, let those profits flow in!
Shipt has something like 100k shoppers, the fact that they are going on strike is HUGE - it's so hard to organize a group of 100,000.
One thing that I think is better about shipt vs uber etc. YOU get to pick which orders to take I think. Rush hour traffic across down for a $10 order? Forget it.
Here's an account from a shipt shopper:
"After 4 orders (remember, this is about 4 to five hours of work), I have made a total of $110.55. If you do the math, that’s averaging out to be $27.63 per order. Now, you also have to take into consideration gas and wear and tear on your car, but I think I may have driven a total of 50 miles between these four orders. And if you don’t want to deliver to a place far away, you don’t have to. You get to pick which orders you want to accept."
Has Shipt announced any fallback planes when their 100K shoppers walk? Will be interesting to see how they handle this - it may be the largest strike by any workgroup in a long time!
My only worry is sometimes the headlines turn out to be basically total lies. Hopefully that is not the case here. ie, they write a headline saying shipt shoppers are striking, but it turns out to be actually 0.5% of shipt shoppers.
When fords union employees went on strike, they virtually all were on strike as well.
Is the headline really 99.5% of target gig workers do not go on strike? 0.5% go on strike? That's a BIG difference then everyone walking. They should at least do a follow-up with how many people quit or struck (50,000 or whatever).
Now now this is my claiming this app isn't playing games here but some of that can come down to over paying to get people on board and then pulling back once they realized they started out far to rich to sustain.
We really need a better source of income that was being earned to give the article any credence.
> And after all, doing otherwise would be irrational.
...Please...
- Psycological harm results from trying to recruit strikers when you are a secret scab. Unless you're a psycopath
- You could organize a protest on the day you are striking to confirm each others loyalty
- You might already know other people who work for the app even if you don't work with them (e.g. if you learned of the gig work through word-of-month). Those people you already have social connections with.
Saying it's hard is valid. Saying it's impossible without real evidence reeks of the stereotype of the freshman straight out of econ 101 who thinks they now understand all human behavior.
edit: changed shipping to delivery, to avoid confusion.
I would say not exactly based on weight, but similar to that: total dimensions&weight converted to dollars + miles converted to dollars + hours converted to dollars.
> What about 100, 1-lb boxes vs 1, 100 lb box?
Nit: Very few services will allow you to send a 100 lb box. Anything over like 40 lbs is a hazard per OSHA and requires special treatment.
Anyway, besides that, delivering lots of small boxes isn't harder than delivering one giant box if the fulfillment side is doing its job.
> But then you also need to have accurate weights and dimensions.
Everything you buy from Target already has these.
Full Disclosure: I work for Target/Shipt and my opinions are my own.