CEO of Uber: Gig Workers Deserve Better | Hacker News Reader

CEO of Uber: Gig Workers Deserve Better

nytimes.com

335 pointsmitchbob668 comments

It seems odd that our public discourse has settled on the following set themes:

- Every person deserves a baseline quality of life and benefits

- The person's employer is tasked with the above responsibility

- If a corporation pays their workers less than the above baseline, they are bad. We should shame them, and pass laws to ensure that they pay their workers better

- If a corporation decides not to hire someone at all, and operates with a smaller workforce by tweaking their business model, that is perfectly acceptable and even laudable

Combine all of the above, and you end up with a world where corporations go above-and-beyond to reduce their headcount, and entrepreneurs specifically avoid labor-intensive business models. Firms like DE Shaw are publicly lauded for making lots of money with a tiny elite workforce, while spinoffs like Amazon are publicly shamed for actually employing hundreds of thousands of middle class workers. All this only worsens the situation for those in the lower-middle-class in the long-term, because now they have fewer work opportunities, and less demand for their labor.

Clearly every person deserves a baseline quality of life and benefits. But instead of heaping this responsibility on the subset of corporations that hire low-skill workers, this responsibility really should lie with everyone. Tax billionaires, tax the upper-middle-class, tax profitable corporations, and use the money to strengthen the social safety net for low-skill workers. That would eliminate this entire mess.

This whole tax the billionaires is misguided and won't solve anything.

- US Population 2000: 280 Million - US Population 2020: 320 Million - +15% increase in population

- Tax revenues 2000: $2.03 trillion - Tax revenues 2019: $3.50 trillion - +75% increase in tax revenue

Population grew 15% and tax revenue grew 75% and yet we still can't solve any of the real problems we had since 2000. So what is increasing taxes going to do if we already collect 75% more and can't make a dent.

Now let's say you tax the billionaires: - Jeff - $200B - Larry & Sergey - $130B - Bill Gates - $120B - Zuck - $100B - Warren Buffet - $80B - Larry Ellison - 71B - Elon Musk - $70B That's $770 Billion - let's say we double this for the remainder of billionaires to $1.5 trillion and add in a 70% tax.

$1.5 trillion in wealth = $1.05 trillion in year 1

Now what about the following year? Well you reduced their wealth substantially so now you only have $500B and that would only yield $350B in tax revenue the following year.

$350B in tax revenue year 2.

And there after it basically trickles down to nothing.

So you end up with a total of $1.5 trillion and then nothing. Well that $1.5 trillion is 42% increase over what we have today, but remember that tax revenue already increased 75% and we still couldn't get anything right.

So while it may sound good to say tax the billionaires the reality is if we couldn't figure out how to spend the additional $1.5 trillion from taxes between 2000 and 2020 a one-time 2 year increase of $1.5 trillion won't do much because the underlying system is broken.

I think you need to account for inflation, which from 2000 to 2020 is 50% [0].

So 175%/150% => 116%, or 16% increase in tax revenue for a 15% increase in population.

Which means inflation adjusted tax revenue/capita has not meaningfully changed from 2000 to 2020.

[0] https://www.in2013dollars.com/us/inflation/2000?amount=1#:~:....

Putting a very high tax on wealth would have the benefits of a one-time infusion of tax revenues, AND a future disincentive for the ultrawealthy to seek to enrich themselves infinitely using business practices that take money from everyone else.

The problem isn't just that the ultrarich have too much money. It's that they get this money by doing things that make the lives of everyone else measurably worse. Selling us poor-quality products, paying low wages to work in stores selling those products, treating real estate like an investment instead of a human need, overcharging for healthcare, invading our privacy to find ways to more efficiently get us to buy their garbage, etc.

Without the incentive for the ultrarich to rip us off coming and going, we have a chance to improve our quality of life and change the things that are wrong in society, without leaving it to the rich to "fix".

1 USD in 2000 = 1.51 USD in 2019. This combined with population growth accounts for almost all of the 'increased' tax revenue.

The government is an incredibly poor & wasteful allocator of capital. Full stop.

The founders of the country would shudder at at the size, scope and over-reach of the government...

Also remember, income tax was introduced as a "temporary" measure... the country had roads, hospitals, and orphanages before that.

IMO it's a sure sign of a smooth brain to think that these people will just sit and wait for their wealth to be taxed to such an extent. They're only here because the tax regime is favorable. They can leave, and while they will lose some wealth, it's unlikely to be anywhere near 75%.

Yeah, targeting billionaires shows a deep misunderstanding of the problem.

It's like when leftists talk about raising the inheritance tax. Almost no one with money lets their money go through probate! The wealth is held in trusts and common property. When two people own a bank account, and one passes away, the other person gains full ownership but there's no inheritance and no taxation. Trusts are more or less a sophisticated version of the same thing.

What we have seen over the past few decades is increasing productivity without increasing wages, and that's because returns to equity are so high. That is what is imbalanced in our economy.

You're using the net worth based on their stock holdings, which is not taxable unless they sell all/part of it.

There's a slight misunderstanding here: the main purpose of tax is not revenue for government spending, but to impose a policy on the actors in the economy. It's a way to take out the excess money from circulation that central and retail banks printed, effectively controlling inflation.

I don’t want to subsidize Walmart with my taxes. That’s exactly what you’re proposing, and in fact what happens. Companies underpay their workers, who end up needing government assistance. In the end my taxes go to supporting a company that I would never shop at.

This reply comes from completely internalizing the perspective the above post describes. It only makes sense if you accept that the employer is supposed to completely care for their employees. But if you view it as society’s job, then everything changes. For one thing, small mom n pop stores can compete with Walmart a lot easier if healthcare is provided by the state. Also employees can quit if they’re not treated well, etc.

From a startup perspective, I've always thought it interesting that more people in Europe/rest of the world don't take chances to create companies because of the great safety net there--at least its not as highly publicized. For whatever reason, the US is still the place to be and everyone wants to come to the US to start a company--my current company included (We have Canadian founders).

I quit my job and thanks to the insurance changes in the US a few years ago, I was able to stay on my parents health insurance for a meaningful amount of time. It allowed me to take the chance of starting my own company. Unsure if I would have done the same, had circumstances been different.

In a truly free market with no government fingers on the scale no worker would ever work for less than is required to live or at least they wouldn't work for long at such a wage.

People factor in the assistance they expect to receive when taking a job in terms of food, healthcare, and money when they take a job that will with assistance provide them the means to live. It is not unheard of at some low paying employers to guide new employees to benefit programs to help them meet their needs.

In effect such programs reduce the market clearing price for labor at the expense of other tax payers. Such program often require that the recipients work but not for how much. At the limit sufficiently generous benefits could inspire someone to work for $1 per year and you could subsidize taco bells entire workforce but the minimum wage and the limits of federal dollars both prevent this.

> if you view it as society’s job

It makes sense with a system like a universal basic income.

Where we stand now, society is expecting everyone being supported by one or more (self)employed jobs, so underpaying people is unacceptable.

I'd argue a change like UBI should come first before lifting the need for companies to pay their employees better.

If healthcare was provided by the state, Mom and Pop stores wouldn’t be able to easily afford to operate. In France, it’s extremely expensive for small businesses to hire workers and the advantages go to the large companies who can afford to pay those “social charges.” If you pay a worker €20,000 in France, it costs the employer €40,000 for that worker. Then the €20,000 wage is also taxed at a high percentage. The result is. That France has very low per capita disposable income than does the US. Anytime government “runs” something, there is a non-trivial deadweight loss incurred. We need to find ways to increase efficiency, not hamper it.

You’re not subsidizing Walmart. You’ve decided that workers should enjoy some standard of living but are unwilling to shoulder the costs of providing it (e.g. through taxes). Instead, you’ve kicked those costs to Walmart. Walmart is subsidizing you.

So what you're saying, if I'm understanding you correctly, is that instead of me exchanging money for goods and services from specific companies or exercising my freedom of choice, it's much better for me to be making up the hidden costs of chronically underpaid workers for businesses that I don't like. And somehow Walmart is subsidizing me because I'm exercising my freedom of choice. As opposed to about 5% of my paycheck going to subsidize companies like Walmart who choose not to pay a living wage.

So why not just remove all the money from the economy? I personally find Walmart's business model of chronically underpaying people then making them dependent on a huge bureaucracy to make up the living wage pretty repugnant. Whereas paying them an extra $6.00/hr means they no longer have to spend time waiting in line and on the phone during their off hours. They don't have to look specifically for landlords who accept section 8 vouchers.

The living wage removes a huge amount of hidden labor involved in living off of minimum wage and that's what you're missing here.

Walmart isn't going to run at a loss. They'll raise prices appropriately, or decide that expanding the same exact store into every small town in America is no longer a profitable growth strategy.

In the grand scheme of things society needs things like bridges, electricity, water, roads as necessary prerequisite for Walmart to have shoppers and therefore an income.

In the same fashion society needs people that make enough money to meet their basic needs like food and medicine so that they may spend their additional funds on higher margin items that actually keep Walmart afloat.

Businesses and the wealthy people that own them are vastly the beneficiaries of such policies as maintain a healthy functional society in the same way as they benefit from roads but for any given business if they can shirk their share they can keep the difference so they are incentivized to forget.

It is strange that you consider paying their share a gift rather than a due. It seems worshiping economics is a barrier to understanding it.

Do you just oppose the use of tax dollars to support anyone or anything other than what you personally happen to use and like? What do you think about Medicaid, food stamps, the child tax credit (especially if you don't have children)? Assuming you aren't a student, do you oppose tax dollars going toward financial support for students? Do you oppose UBI?

Do you vehemently oppose the US federal electric-vehicle tax credit of up to $7500 until the day you decide you'll buy a Tesla, when you'll switch to staunchly demanding that it be radically increased? (https://www.fueleconomy.gov/feg/taxevb.shtml)

These all represent your taxes going to support things that you are unlikely to benefit from personally, after all.

If you remove the impact to other people from the calculus of where you'd want tax dollars to go, then I think most people would opt to enrich themselves rather than not. But that's just not how the world works. The reality is that any given person's tax dollars are used on all kinds of things that will never directly benefit them, or even their families or even socioeconomic class.

I don't think anyone is against your examples. The issue is WHERE the tax money is coming from and the PROPORTIONS of tax paid in relation to overall income.

Unfortunately right now the middle class is being stuck with most of the bill on a PER-CAPITA income basis. And considering the wealth gap between the rich and the middle class is SUBSTANTIAL, it means we're essentially having relatively poor people (middle class) pay the bills of very poor people (lower class).

When you zoom out a little (and remove irrational emotions about the topic clouding your perception), it's easier to see the disconnect.

> Do you vehemently oppose the US federal electric-vehicle tax credit of up to $7500 until the day you decide you'll buy a Tesla, when you'll switch to staunchly demanding that it be radically increased? (https://www.fueleconomy.gov/feg/taxevb.shtml)

It doesn't negate your point, but for Tesla specifically, no vehicles bought in 2020 or later are applicable for the federal tax credit at all (the page you linked acknowledges this). Raising the $7500 amount wouldn't benefit any Tesla buyers.

An entirely self-interested Tesla buyer would first want the per-manufacturer limit on the tax credit removed or increased. Then maybe have that credit amount increased.

I agree with other replies that this is just a matter of perspective. Here’s an alternate one - if you hate Walmart and/or you hate the idea of unskilled workers in lower paying jobs, why do want to make them solely reliant on big employers like Walmart?

A better safety net, in addition to achieving the same immediate outcome of workers living with better conditions, also means workers have more options. It might lower the supply of potential Walmart employees and actually also increase their wages or working conditions. But more importantly it would mean they could leave Walmart and still get by. Or they could work fewer hours without worrying about things like losing their employer sponsored health insurance. More people could live more fulfilling lives rather than being so reliant on their job at Walmart.

I imagine part of this would be ensuring that companies do not underpay their workers by enforcing strict standards on minimum wage and changing corporate tax obligations.

Having employers provide benefits like healthcare is crazy. The US really needs to move beyond it. I’m surprised there isn’t more agreement politically, the benefit obligation is a huge drain on small companies and solo entrepreneurs.

==Having employers provide benefits like healthcare is crazy. The US really needs to move beyond it.==

Not to mention the cost of staff needed negotiate, maintain, and explain the options to employees.

Yes, that's how welfare works.

When you pay taxes for a single payer healthcare system, you're absolving the company the responsibility to provide health insurance to their employees (read: "underpay their workers"). Many societies are okay with this because the end result is actually better/more efficient for everyone.

If people had more social welfare they wouldn't bother to waste their life at Walmart for tiny incremental wages. So Walmart would pay more.

I agree. If we give say everyone 5 dollars an hour for no work. Livable wage is say 10. Then companies only have to pay 5. They can pocket the other 5 or lower their prices. Which is more likely? This also has other knock on effects. It is only possible in the very short term. In the long term inflation will wipe out the extra 5 and things will go back to steady state. It sounds nice, heck I would not mind it personally, but the knock-on effects for something like that could be a terrible creation that would take years to fix. Just first order effects do not seem great.

Why not pay them 10 and use the labour in the community? Then if Uber et al wants labour they have to bid it away from the "common good".

Once everybody has an alternative job to go to outside the private sector, it no longer matters if Uber decides not to pay people and instead automates all the vehicles.

Then everybody wins due to improved productivity - Uber and the people with community jobs.

I prefer UBI to phase out based on how much you make. You give everyone five dollars an hour. if I make 6 dollars an hour, UBI only pays me an extra 1 dollar. So there is no cutoff like with welfare today.

I think UBI would function as a replacement for minimum wage, in this case. Why would anyone take a job paying less than 5?

THIS x 1000.

Walmart used to have a page for employees telling them how to apply for food stamps.

Those costs should be charged back to the company.

Yes, the ideal thing would be for Walmart to go out of business and all those people who currently need partial government assistance instead requiring full government assistance. Think of the tax savings!

By that logic you’re subsidizing any company that takes a risk, fails and employees go on unemployment.

> Tax billionaires, tax the upper-middle-class, tax profitable corporations,

Where do you think our tax revenue is coming from? the 12% tax bracket of someone making 20k a year in government-subsidized housing, or the 37% tax bracket from someone making $10million a year paying property taxes on their 20 million dollar house?

a serious, informed discussion starts with an honest recognition of reality. if you think taxes need to change thats fine, but acting like billionaires and successful companies pay no taxes when they represent the overwhelming majority of tax revenue, you sound like a blind ideologue rather than someone who knows what theyre talking about.

Nope, no blind ideology here.

It’s just ridiculous that C-suites and their direct entourage get paid billions (and can afford to buy mansions that used to be the final reward to a successful career with what amounts to pocket money to them) for funneling more and more taxation to tax havens.

Plenty of companies live off government subsidy and refuse to pay their share; costing government revenue and forcing it to cut services and squeeze the suckers that don’t have the resources to hide their stash.

And seriously, you Americans should ditch company paid health insurance and switch to any of the systems here in Europe...

But also look at where our tax revenue used to come from:

> In 1981, Reagan significantly reduced the maximum tax rate, which affected the highest income earners, and lowered the top marginal tax rate from 70% to 50%; in 1986 he further reduced the rate to 28%.

Agreed. The median person is a minimal contributor to government already.

https://taxfoundation.org/summary-latest-federal-income-tax-...

You're jumping to a pretty unsubstantiated conclusion. OP never said the were currently untaxed.

You would also need to account for long term capital gains tax being at most 20% cap which is where much of the wealthy make the bulk of their wealth. And if you have a good accountant then you can easily find ways to even offset this.

Every year I get an $800/month raise in September because the feds stop taking social security out of my paycheck once I have earned a certain amount.

It makes zero sense. Eliminate that one thing and it would be the single largest tax increase in history. That tells me that people making $150k/year or more can live without being social security tax free every year after earning X amount

Social Security retirement distributions are related to how much you pay in. Thus the limit. You're allegedly paying for your own retirement.

This isn't how I see the discourse. The way I see it is people are starting to question if executives and shareholders deserve the pay they get. Instead of the majority of profits going to them, more should go to workers.

The author of this article was paid $42 million last year. Uber's top 7 executives received: "$11.4 million in salary and cash bonus, plus $71 million worth of equity awards." [0] Maybe instead of paying their CEO and executives that much, Uber should pay their workers more?

[0] https://observer.com/2020/05/uber-ceo-pay-shareholder-backla...

I think OP's point is that if the US had a better social safety net, this problem wouldn't be as bad.

So many people in the US - arguably still the world's most prosperous country - live on the precipice of ruin and failure because their country just doesn't give a shit about them (hence the ongoing push to make their _employer_ give more of a shit about them), and it's really heartbreaking.

That compensation divided among Uber's approximately 27,000 employees results in about $3,000 per employee, but Uber's employees are probably mostly software engineers, so $3,000 per person is mostly not life-changing.

A quick googling says that 3 million people "drive for Uber." Paying them what the high-flying executives make would mean a few dollars per person.

I completely understand the impulse to question the huge disparity in salaries, but for the most part, executives that get paid that much work at gigantic companies, where hundreds of millions of dollars is an almost irrelevant pay increase when distributed across all of the employees.

> The author of this article was paid $42 million last year. Uber's top 7 executives received: "$11.4 million in salary and cash bonus, plus $71 million worth of equity awards."

it's misleading to call equity compensation "getting paid". there's a strong argument that executives are being over-payed, but say the CEO receiving a salary of ~1.6M (11.4/7) is a lot less egregious than them being paid $42M. surely the equity conferred to the execs gets them some cash availability in various ways, but it isn't exactly the same as just giving them money (eg what would happen if the CEO uber sold off all of his stock?).

maybe the cash portion of exec salaries ought to be much lower or maybe their equity compensation ought to be much lower, but i don't think either of these things by itself or in combination is going to solve the structural problems of the american economy such as healthcare being tied to employment.

Uber's cost of revenue for 2019 was $7.2 billion [1]. That's not all driver payments, but it's fair to assume that a big chunk of it is.

If the executives received no salary they could pay the drivers an extra 0.2% or so. If the executives received no compensation whatsoever they could pay the drivers an extra 1-2%.

[1] https://investor.uber.com/news-events/news/press-release-det...

The irony of statements like this, is that by directing a huge amount of the energy created by a sense of the unfairness of how modern large corporations work to absolutely stupid proposed solutions like this which are so detached from the reality of how the modern economy works that they have 0 chance of ever being enacted at scale, you actually enable the corporations to get away with more because the people opposing them look like a bunch of morons who don't understand the system they are fighting.

It’s also not that simple. Uber does not operate in a vacuum. There are other companies against which Uber is competing for executive talent and one of the variables is compensation. If Uber started offering much less than its competitors, then they would be at a significant disadvantage in hiring.

The bottom line is that the labor market for unskilled workers is not competitive, keeping rates low, to the extreme benefit of Bezos (in this case). Mandating higher wages will result in extreme distortions. I'm not saying we shouldn't do that, as fixing the underlying labor supply problem is messy as hell, I'm just saying culling executive pay is probably just very distorting and probably won't solve the problem anyway. Why would they just give those $$ to employees? It has never been about "we can't pay you because we don't have any money left after paying execs". They would just save more in the bank that they can use to abuse smaller competitors even more. The root issue is for Amazon and many other businesses, the cost of doing business is way too low.

> Maybe instead of paying their CEO and executives that much, Uber should pay their workers more?

So do we task Congress with figuring out the correct compensation for every worker in the US?

Or do we just greatly increase taxes on those high earning executives and distribute to those most in need?

"according to CNN there were 750,000 Uber drivers in the US in 2017. That's an increase from 327,000 Uber drivers in the US in 2015" [0]

So, let's assume that there were 1m Uver drivers in US in 2019 and set aside all other counries' markets. If we split $42m + $11m + $71m between them instead of top managers, they will get ~$10/month.

Will you feel better with this change of Uber expenses structure?

[0] https://hedgescompany.com/blog/2018/10/number-of-licensed-dr...

If we take Uber's self-reported total of 3 million drivers, that'd give them an extra $15 a year. That's not really the scale of change most people are looking for when they say workers should make more.

I don't fully dispute your point, but 42 million divided by 900,000 is 46 dollars per worker per year. And, last I paid attention, my impression was that Uber was already hemorrhaging VC money.

42 million for the CEO strikes me as extravagant, but that alone is a drop in the bucket compared to the amount required to give every driver a noticeable boost in income.

Intuitively, it feels like the only sustainable way to do that is to raise the cost of every ride. Why they don't do that...probably comes down to a spreadsheet that tells them it will lose them money in the long term.

Brainstorming an idea here, but what about a modification to the corporate tax rate based on something like the Gini coefficient of the compensation inequality of the workers. Want to add an extra $10M of compensation for your CEO for adding a one-quarter 2% boost? Pay an extra 0.2% in your corporate tax rate, or similar?

The other end of the spectrum is of course capital gains for shareholders, but any of the wealth taxes proposed recently would help make that more stable.

We are at French Revolution levels of inequality, with a pandemic, a president that despises the majority of US citizens but runs clubs where power-seeking wealthy people pay for admission, and we are not even building enough housing for an entire generation that's growing up. If we don't start addressing this inequality in substantial ways, we will see much greater unrest.

The main aspect missing from these sentiments is risk adjusted return.

As another commenter said, if employees want the profits of shareholders they should also risk a total loss of their investment. Now, I do think more companies should pay with (generous) equity and the government should do far more to support this model. Such as supporting earlier liquidity, less accredited investor rules, mandatory public listings above a certain valuation etc.

Can we do this analysis with a profitable company? The value of the business is currently negative.

I see the discourse being more about bringing some basic morality to this amoral system we live in, we have experienced enough the lack of humanism when this system is left unchecked.

Morality here is about treating workers with a minimum level of dignity based on human rights, it's about paying us more fairly given that we are the ones producing value (the maxim that "an idea is nothing without execution" should be taken up by the investor/entrepreneur class also, without workers your idea is fucking nothing). It's also about making corporations abide by the rule of law that every other citizen has to, we need a more moral and just system, this free for all of Darwinian economics is a shit system given our current technological capabilities as humanity.

tl;dr I am so tired of this stupid idea, it ignores the simple fact of work. Not all work is equal as not all people are of equal ability.

It is damn easy to declare someone is underpaid or overpaid. Especially when you don't have to write the check. Far too many assume they can do the job of the over paid because they truly understand all the aspects of the job.

Sports stars, movie stars, state leadership positions, and more, all follow the same trend. So what is your point exactly? Seriously go look up what some county managers make and get back to me, here is a hint, it is not uncommon for many to make over a hundred thousand and quite a few approach a quarter million or more and you can damn well bet there are people working in your local government earning minimum wage. Why aren't people here bitching about overpaying government employees? Upper admin in any government is big bucks but that school cafeteria worker certainly isn't seeing a fair share are they?

As in, all work is not equal nor does it deserve equal pay. Never has, never will. Would you accept the same pay especially if it had to be lowered to insure the receptionist earns similar to you? What about the cafeteria worker? Yes I am going there. Why not. If we are going to declare a CEO makes to much then we cannot stop there after all we would be hypocritical. If anything the owners, be it shareholders or individuals, decide what is paid our and theoretically could take every dollar after what was decided as fair compensation was achieved

That is not a fair characterization of the discourse.

There are a lot of people arguing that "platforms" like Uber are capturing too large a fraction of the economic surplus created by transactions on the platform.

30% for matching buy/sell orders? Do you have any idea how insane that is relative to what NYSE charges?

Interesting question about the pricing relative to NYSE.

There are many intermediaries between a customer and NYSE which have historically had pretty high fees which are all getting taken by Uber in this case. Those fees (and corrupt business practices) were eliminated by electronic trading, increasing competition, and high frequency trading.

And exchanges such as NYSE themselves only lowered their fees in response to competitor exchanges (there are 13 right now in the US, with 3 more launching this year), which is an obvious way to improve things.

So I'd say the difference is the lack of competition in general.

I guess one obvious reason for lack of competition is network effects. The intermediaries in the stock market at least allowed for a layer of abstraction that could be swapped around without that being visible to the customer.

So, a fairly obvious conclusion in the end: The fact that the exchange component and the end user interface are bundled together reduces competition and keeps these prices high.

I'm sure eventually someone will figure out a clever way to make an independent UI that abstracts over Uber/Lyft/etc despite none of them wanting that, and that should introduce a lot more competition and lower prices.

> 30% for matching buy/sell orders? Do you have any idea how insane that is relative to what NYSE charges?

I imagine the pricing is relative to the scarcity and difficult of matching buy/sell orders. Given that NYSE is a national network, that can meet supply and demand instantly between any two individuals in the world, it's substantially different than the much scarcer order-matching reality that a service like Uber would operate in.

TO fulfill an Uber order for a particular interested buyer involves a much smaller set of potential sellers than the NYSE. Thus, it would stand to reason that Uber gets a larger cut than the NYSE. If all Uber did was find a car for your somewhere in the world, that would make it much cheaper. Of course, an uber user is paying to find a car a few minutes away. If NYSE had the additional burden of having to find a physical person near you to exchange stock certificates, you'd expect a higher premium, and indeed, when this paper exchange of certificates was any kind of reality, the NYSE's prices were higher.

Except that is what such a system costs a the price the market will pay.

Uber doesn’t make money. It is only insane if it can be done for cheaper.

How would those people have found steady income driving strangers every day without Uber? My mind draws a blank. Uber does not have a monopoly like a stock market. If there's a more effecient way to do this, competitors will find it.

the difference is in the details. what you say is incredibly hard. they set up a global service in thousands of legal jurisdictions that let's you use one app. in rome you can only legally get a black mercedes qualified as a limo. in dubai you can order a lexus taxi or an uber helicopter. in chicago anyone with a car can be an uber. in moscow they have to go through yandex taxi. to me, in any city with all its different rules, I pop open an app, order what i want, and it just gets charged to my amex. they handle insurance rules, they handle refunds and disputes, they provide mapping software drivers use - worldwide, so you can look at your route and not get ripped off by a cabbie. they provide car leasing services to drivers like a dealership.

this is an insanely complex feat to accomplish. it's also expensive.

what does a taxi service do? it's a guy sitting at dispatch assigning calls to cabs.

the stock exchange is complex too. not nearly as complex, with much more well-defined and common rules. but even they don't just charge you. they also charge listing fees, regulatory fees, governance, access to data fees, and sell services and software for trading. you are also comparing a trade transaction to a cab ride. sorry, a cab ride is a much bigger and more involved thing than a button you click on a website.

>this responsibility really should lie with everyone

some responsibility should lie with the public, but to capture the diversity of benefits and needs of every single employee with a centralised program is impossible, and it would also be an unprecedented amount of power transferred to the federal government.

Not everyone requires the same benefits or same training and this is why corporations do need to have some responsibility, decentralisation of benefits is necessary.

This sort of technocratic dream of taking all responsibility away from business which then functions in pure form while all social responsibility is transferred to bureaucrats who hand out benefits (but also can cut them at any point), is volatile and essentially has one single point of failure.

Not to mention it completely ignores the messy reality that we can't simply "tax the billionaires and upper middle class" because of the complications of real world politics.

The US is already way too dependent on this logic of having an all powerful government bail out citizens and unaccountable business. It was one of the lessons of the financial crisis and right now during the pandemic it is failing again. Yes, the government can write trillion dollar checks, but it does nothing to combat the mass unemployment and dysfunction that is the result of having no responsibility or organisational capacity within firms, who ought to be the first line of defense.

That's a nice way of thinking about labour intensive business models.

But look at it from a different perspective: A bunch of jobs can theoretically be automated or otherwise designed to require no individual human to do the job. Some jobs can't be automated but aren't really necessary either; the total value add for society is quite low, and it is not necessary (defining 'necessary' as: If nobody does it, some good or service price will skyrocket and soon the wage for this job will go up considerably, possibly via a workaround, such as pressuring government to increase a budget for something).

Minimum wage (or, at least, that 'baseline quality of life and benefits' you mentioned, which includes more than just a wage, but also working conditions and safety) is society's baseline for: Below this line, automate it, and if you can't, don't.

One argument is that you should let each individual choose for themselves what job is beneath them, but it's not actually a fully free market unless you go out, find homeless people and shoot them, or, when someone breaks out their back doing low-pay menial work, that we just let them wallow in pain. Which no sane society ever would or should, which highlights that we don't treat fellow humans as cattle. If they are a drag on society and it costs society considerable resources just to support them.. society does pay that cost, or ought to.

The flipside of that is the existence of jobs which are 'net negative' value for society: The cost of supporting the human that does it will, in the long run, cost more than the job gives society. However, because more or less by design there are externalities involved in caring for our fellow humans, the job may seem net-positive to an employer even if it is not. Society is nevertheless attempting to make sure these jobs do not exist.

Minimum wage is, perhaps, a very blunt instrument to make this happen. One can imagine a completely 'safe' job (both mentally and physically) that pays half of minimum wage, and that would be better to allow that if you combine it with a social safety net _and_ the job unemployment rate is sufficient that the only real alternative is no job at all. But I don't think it is feasible to legislate a complicated 'chart' matching working conditions against allowed minimal salaries.

> Combine all of the above, and you end up with a world where corporations go above-and-beyond to reduce their headcount

On a macro level I think that's a good thing. We create more value with less labour. And eventually yes we'd have to address that and figure out how to move to true post-scarcity society.

But it's not a 100% either or. You can recognise the need for a better social security net while also wanting to regulate corporations into giving labour their fair share of the output.

That's one way of looking at it. Here's another:

- We collectively have created an economy that has generated spectacular amounts of wealth.

- A small group of people is hoarding the majority of that wealth.

- This is harmful to our society and needs to change.

- Arguments that we can't reduce inequality without destroying that wealth are factually and historically incorrect.

"A small group of people is hoarding the majority of that wealth."

That like saying the winners of the football league have hoarded all the points and therefore nobody can now score goals.

It's the playing of the game that matters. Not who owns the pitches.

This doesn't seem so odd to me because it mirrors common human behavior to judge things based on each step and not the total outcome.

One example is when people pushed for a ban on industries using child labor in SEA without first ensuring there was some fall back safety net that would help those children. The end result was children ending up working far worse jobs than the ones that the western industries were providing. Overall, there seems to be a judgment that any employment of a child is to be judged in isolation and not relative to what other options they have. Society has deemed it is ethically better for me to do nothing despite a child experiencing the ravages of extreme poverty than to intervene in a way that is better for the child but not good enough to meet our expected levels of treatment of children.

Another, more IT centric example, is that it is better to not fix any bugs in a known broken part of the system than to touch it and fix one bug, because you assume responsibility for all the bugs you don't fix. Not every place has this mentality, but I've seen enough which do.

So telling me that society deems it more ethical to offer a worker no option than to offer them a below satisfactory offer doesn't not surprise me at all, despite the outcome of such behavior being too painfully obvious.

Though if we were to invert this, I wonder the outcome because the world over there are enough people experiencing extremely harmful situations where even being offered what we would consider a nightmare is better than leaving them in their current situation. Consider if I wanted someone to be a 24/7 live in maid/butler(cook/cleaner/gardener/etc.) and their pay was $5 a day along with a room, food, basic clothing needed for the job, and access to a computer with internet when they have free time. There are people in situations where this would be a significant improvement in their quality of life, yet I'm not sure any one reading this would approve of me having such a live in maid/butler regardless of what sort of situation they were in before I made the offer.

If you taxed all US billionaires at 100% it wouldn’t have even paid the bill for the recent Covid relief bill.

We need more people paying taxes, not fewer people paying more taxes. The other thing is that if we have a “strong” social safety net, that will then incentivize more low wage jobs that don’t pay enough to actually support the person (sort of how Walmart paid low wages, but many of its employees were on food stamps.)

Government should be less involved. Having food stamps available for low wage workers means they can accept a job for lower pay than they would have been able to accept otherwise. (I am not saying to get rid of food stamps, only to illustrate how “safety nets” actually perpetuate the very problems they are ostensibly attempting to solve.) Why should I be subsidizing Walmart workers? If we lowered costs to businesses by reducing taxes but also simultaneously reducing “safety nets,” the market would then require higher wages for a given job or the job wouldn’t get done. Right now it’s sort of some Keynesian system were I pay low prices at Walmart, but those low prices are subsidized by my tax dollars that pay safety nets that then allow Walmart to pay lower wages. So my “low prices” are really the result of a government subsidy that I pay for in taxes.

You also see this in agriculture: we pay lower prices for vegetables, but due to the number of illegal alien employees who are paid less than minimum wage. The costs of a vegetable should reflect the actual cost of picking it, not a cost subsidized by illegal/below cost workers. (Just to be clear, I don’t care about the documentation of a worker, what I care about is businesses leveraging below market labor as a cost savings that really just passes the societal costs of that labor to taxpayers.)

So I don’t agree that business should be taxed more, but that we eliminate the perverse incentives to pay workers less than a truly free market would support.

We should, of course, have safety nets for the truly destitute, but they shouldn’t be a replacement for actual wages.. and that’s what we see in places like Walmart. Safety nets shouldn’t be generational. They should provide temporary help, not as a perpetual subsidy to businesses.

Help me make the connection here. If we cut taxes to the Walmarts, why would that lead to them increasing wages? Would they see the reduction in safety nets and food stamps, and conclude that they ought to be more generous to employees? Wouldn't they rather turn that into shareholder value instead? I agree that it sucks for society to cover the gaps, but what you're describing sounds like trickle down economics, which I don't have much faith in.

I agree with the set of odd concepts taken together and the normal solution being government.

The issue is that the US government is unable to effectively do anything, really, as far as public welfare is concerned. We spend a ton already - our public Healthcare spend, for instance is in line with European public health but we don't get nearly as much for it. Our programs are, dollar per citizen, expensive.

We then task employers with something impossible. No one, therefore, wants to be in the position of employing low skilled workers.

I don't know where the real solution lies but expecting the federal government to spend effectively seems out of the question.

How efficient would the spending need to be before it's considered "effective"? Personally, I would rather the government spend "ineffectively" and cover everyone than the current situation

"Clearly every person deserves a baseline quality of life and benefits."

Quality of life is subjective. The US constitution guarantees the freedom to make of life what you will but not that it will be subjectively 'good'.

Amazon [gets] publicly shamed for actually employing hundreds of thousands of middle class workers.

That's not what Amazon is getting shamed for - as you are perfectly aware.

You should parse the claim like this: "Amazon, on the other hand, who is publicly shamed for the wages they pay, actually employs hundreds of thousands of middle-class workers." (As you are perfectly aware.)

I’m not sure anyone deserves anything. If we flourish and provide for the less fortunate that is fantastic and I am all for that.

We can and do have laws and ethics about what is not permitted to do to people. That’s fantastic and I support that.

For children, I would say they aren’t yet potentially self sufficient, so as a society we should all share the responsibility that they have what they need to grow and develop healthily.

But no, I don’t ‘deserve’ the things you mentioned. I’m an adult human who needs to go try to manifest those things for myself. Including basics like food and water.

OK, imagine you're disabled and unable to procure your own food and water. Now what?

You're getting caught in semantics. Obviously no one deserves anything, the world is chaos. What OP meant by deserve is probably that they believe it's immoral for society to not provide those things. I tend to agree because I believe eliminating abject poverty raises total utility.

Rephrase the second point as "everyone must work for a living", and it becomes clearer. Your second point becomes a corollary: people can only be cared for if they work. Your last paragraph is only possible if we want to allow people to live without working.

But many would see that as morally repugnant. Not everyone, but a majority, and especially a politically powerful plurality. That is what you will need to deal with to make a change.

If a corporation pays less than a living wage then the state is a net subsidizer of their employees.

Its not fair we have Walmart employees on welfare for example.

Increases in quality of life have always required increases in productivity, which intrinsically means reducing headcount. Yes, you should hire people, but hiring 10 people and paying them $100 each is more moral than hiring 100 people and paying them $10 each.

The contradiction (higher productivity = fewer jobs) has been an issues since the industrial revolution at least, but we’ve seem to have gotten by so far with creating new kinds of jobs coupled with a increasing social safety net. The next step might be some kind of UBI, but we should avoid the other routes (de-focusing on higher productivity, or directly paying people more without higher productivity) as unsustainable in the long term. Some mechanisms, like a rising minimum wage, imply higher productivity with each increase, so those work out as well (though increase the need for social safety nets as some people are forced out of the work force).

Is it more moral?

100 families eat tonight vs 10 families eating really well.

Many European countries implement that baseline quality of life at the country/government level.

What you are hinting at has a name, and it's called socialism.

Some people in those European countries do complain about high taxes. But in general, as a country, most are happy with our "social safety net" which includes universal healthcare, "almost free" education system (including University), reasonable minimal wages and "liveable" unemployment benefits.

Socialism seem like a dirty word in the US. It isn't one where I'm from (Belgium).

> while spinoffs like Amazon are publicly shamed for actually employing hundreds of thousands of middle class workers.

They (and dito Walmart and other such employers) are not paying middle class wages though. Usually it should be possible to feed a family upon a single worker's wage to call it "middle class"... but the harsh reality is that many of the workers, especially those working for subcontractors in fulfillment, are nowhere close to such wages - or to working conditions that are usually associated with "middle class", like being allowed to go on a real toilet and not piss in bottles.

Big companies don't want to be shamed? Then they should not let their employees work in shameful conditions!

Good points. We don't even need to tax the billionaires. Lets go with the MMT jobs guarantee program creating a high floor on the labor market. The MMT jobs program provides a federally funded job to anyone above 18 paying a living wage with full benefits. As such, employers, if they want employees, have to bid up from there. Another benefit? No more unemployment. Today, we have an economic system with baked in involuntary unemployment. This skews the "game" in favor of employers because employee's have to pay rent, food, etc.

MMT is a fringe view considered unscientific by the vast majority of economists.

Interesting idea. Can someone get fired from one of these jobs, for example if they don't show up or if they don't take direction?

In what sense are Amazon warehouse workers, who are not paid enough to do thing like purchase a home in the area where they work, “middle class”?

2 people * $15/hr minimum * 2000 hrs/year = $60,000 household income

US median household income is $61,937.

There are warehouses across the US including areas where houses cost $150k.

Re Amazon, Jeff has a lot of money, he could pay people more and let the unionize so they could engage in the terms of their employ.

Why should he pay more? They signed a work contract. And if that contract says don't unionize, then maybe they shouldn't be surprised to be let go when they try that.

I'm disappointed that only one person here has said the common sense approach -- let them unionize :(

Regarding the public discourse on these points, I think these big companies have long understood that they lost this battle. On the other hand they also understand their internal realities and that as long as they can make their own business models work, the discourse doesn't really matter, as long as it stays out of the spotlight .

So they take their only logical move, they pump out a bunch of ethics marketing statements they don't believe in, but also importantly that they know the public doesn't believe that they believe in, but that give them plausible deniability and keep them out of the spot light for wrong speak and out of the news cycle.

Meanwhile, they do exactly what they are incentivezed to do which is to keep head count low and make sure almost everybody is a contractor.

>Clearly every person deserves a baseline quality of life and benefits.

Whenever I read this I translate it to "I don't want poor people to live near me." That's fine, but let's not feign nobility about it. The global median income is $10k/yr. Nearly half the planet lives on less than $5/day. 1/3 of people on the planet do not have access to clean drinking water. What, exactly, do you mean when you say it's incumbent upon you to provide a baseline quality of life and benefits? And are you really willing to bring yourself down to that baseline so that others can be brought up to it? These Amazon warehouse workers you're so concerned about are quite rich by global standards.

I want to agree with you, but: a company whose employees' lives must be subsidized by the taxpayer (because they aren't earning enough to live on from full-time wages) is a net economic negative to society. If you have a lot of such companies or such jobs then you will have a societal insolvency, won't you? And what purpose do such companies serve, privatizing gains while socializing burdens?

> I want to agree with you, but: a company whose employees' lives must be subsidized by the taxpayer (because they aren't earning enough to live on from full-time wages) is a net economic negative to society.

Err...is it? Some income is better than no income. The more the company pays, the less the worker's life has to be subsidized. Any pay at all reduces the necessary subsidy, not including say, unpaid transportation costs. The pay must at least match the cost of being at work, but no employee would accept payment less than the cost of getting to work.

> If you have a lot of such companies or such jobs then you will have a societal insolvency, won't you?

See: Canada's free health system, or UK's NHS, or literally any other single payer system.

>Tax billionaires, tax the upper-middle-class, tax profitable corporations, and use the money to strengthen the social safety net for low-skill workers. That would eliminate this entire mess.

That is what we do but it doesn't reduce the mess. We have a safety net and a minimum wage, and still you see the "gig economy" type loopholes trying to get labor for even less than that.

You had me until “tax” productivity. This is counterproductive and immoral.

I couldn't agree more with this. Thanks for distilling that so well. I've been trying to articulate variations of this point for a long time.

So let's say where 10 people were needed to do a task, now (due to automation or what have you) you just need 1. What should you do: a) since the same thing is produced with 1/10th of the labour, reduce work hours, implement UBI, etc, or b) invent 9 bullshit jobs to keep everyone busy and working their god-ordained 8hrs a day to "deserve" their existence. Option b) is the answer that capitalism gives, but it's not the right answer in an objective sense.

Capitalism says let people do what they want. If one guy undercuts all the others and says he's ready to do it on his own for cheap, let him, he's probably better at it anyway. This lets the other 9 figure out what they want to do, maybe launch a startup or whatever, there's no shortage of things that need fixing on this planet.

Capitalism lets people with money do what they want, and lets people without do what their masters want.

Also, "Yeah everybody that gets replaced by a machine can just found a startup" is probably the most irrealistic and oblivious thing I've read all week.

great, just the thing we need for UBI, why should anyone work when their job could be automated?

Or solve the real issue and transition from capitalism to socialism, instead of trying to put a temporary band-aid on the issues via taxes.

>Every person deserves a baseline quality of life and benefits

I disagree.

While I agree that individuals in a society should try to provide for those who can't provide for themselves, saying that everyone deserves X, is basically a way of saying that we want to force others to pay for X and I share your disagreement on that front.

Why shouldn't an employer pay their employees enough to live? Why should companies be able to benefit and profit from an employee's labour without providing them enough to even have a home? You sound like you want a work force full of slaves you can drop any time you feel like they cost you too much. Maybe corporations need to understand who the people generating these millions of dollars are, they're the people down their being paid fuck all to make ceo's rich.

> hundreds of thousands of middle class workers

This gigantic exaggeration is the crux of your point, around which all else crumbles. Most of Amazon's workers are badly treated and either actually in poverty or less than a month's pay away from it. There are other companies that are well regarded for employing low to no skill workers en masse, like Lidl, which nobody is complaining about.

Most people also do not believe it's corporations who are responsible for this living baseline, but the state, so yet another either outright lie or exaggeration around which all of those points crumble.

Overall, it's disheartening to see such a flawed comment at the top here in hn.

> Most of Amazon's workers are badly treated and either actually in poverty or less than a month's pay away from it.

The median US based pay at Amazon is $36,640. That is not a poverty level wage except in a few urban centres.

https://www.seattletimes.com/business/amazon/amazon-disclose...

The only downside is that this mindset turns the world into a steaming pile of dog-crap and makes the problem worse.

Think about what you're actually saying here. You're saying we should shift the "quality of life" compensation burden of THEIR EMPLOYEES away from businesses (who are making boatloads of money), and attempt to spread it out across a few subsets of the population. Taxing corporations or billionaires never works out as planned[1][2][3]....so how does it many any sense that the upper-middle-class gets stuck paying this bill? This is exactly why the middle class is disappearing....which is good for no one.

[1] - https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-... [2] - https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey.... [3] - https://www.icij.org/investigations/panama-papers/

There are two points I think that need to be raised here:

1) GDP-Per-Capita has grown steadily and is at an all-time high https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?location...

2) Real wages per capita have stagnated since the 70s https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...

So in general, productivity per worker has increased. Amazon can move more products direct to your home with fewer people than was possible in 1970. Greater and greater value is being generated in the economy due to these increasing efficiencies.

Yet the suggestion that businesses should pay their workers who enable this value proportionately gets responses that we will be squashing economic potential, dragging these enterprises down, etc.

Instead Walmart, Amazon, etc. use these great efficiencies of scale to compete on lower prices. Which totally does have economic benefits, but it also pushes out competition. Local stores can't compete with an international megacorp's productivity leverage, so we end up with a Walmart in every town and Amazon boxes on our doorstep. Is that truly an economic plus? It sure is nice in some ways, but are all those warehouse workers Amazon employs really new jobs? Or are they replacing a similar or greater number of jobs that were previously providing those same goods and services in a decentralized manor?

Your second link is not real wages per capita, it's average real wages for workers (and only non-supervisory workers at that!). A true per capita figure would have to count wages of non-workers as 0. The distinction is important: One reason real individual wages haven't grown with GDP is that a much larger fraction of women are now working than in 1970, and basic microeconomics suggests that as supply (of workers) grows, prices (wages) drop.

There are a bunch of other problems with the implied claim that workers are no better off today than in the 1970's: There have been major demographic shifts. Non-wage benefits make up a much larger fraction of total compensation today. Comparing against the mid-'70s is effectively cherry-picking due to the massive (and unseen since) run-up in inflation over the next decade. Trying to compare inflation-adjusted figures over decades is perilous because even small errors in producing "equivalent" classes of goods to compare will compound over time: This is the "cars are safer / houses are bigger / phones are now SciFI devices" argument ...

The micro supply and demand view that increased labor force from greater participation rate by women causing suppression of wages is incorrect.

Such a view would suggest that any increase in labor hampers wages.

What actually happens is that increased worker participation itself grows GDP, which increases demand of inputs, including labor. Unlike a short-term supply and demand curve, the economy operates on long-term shifts of aggregate labor supply and demand, in which an increase of aggregate supply of labor causes an aggregate increase in demand for labor (by modifying the overall demand curve of goods - consumption goes up), ending in a place where increased labor force participation may actually result in a higher price of labor than before.

In other words, women joining the workforce enhances per capita income. This is also why xenophobia can be damaging: immigration does not actually suppress wages, as would be suggested by a simplistic econ 101 static supply and demand curve; in most cases it grows per capita GDP and has a similar income-enhancing effect as was seen from women joining the workforce.

I do agree with some of your other points re: the difficulty in calculating improvement in quality of goods, and the basket substitution effect problem of calculating CPI. Accurately comparing wages from the 1970s to now is very difficult.

The basics of life that consume the expenses of most people you had in the 1960s was significantly more affordable back then, and many would wish they could get that. You can't easily today, especially in health care.

In the past, college, room & board was payable with the part time work of a college student working low end jobs. You cannot do that today.

Single income households were a common occurrence, since dual income households competing for housing were not out competing single income houses. And I don't mean this in a crypto conservative way, even Elizabeth Warren wrote a book about it: https://en.wikipedia.org/wiki/The_Two-Income_Trap

Could you buy a 1970s level of service health plan today and expect a similar cost profile? No.

The non-essential extras that didn't consume much of the budget in the past anyway being nicer or cheaper, such as clothing, entertainment and so on? Cold comfort. After you have 10 shirts, 10 more cheap t-shirts have little utility. HD video is nicer, but TBH, old SD TVs also give you %80 of the entertainment value. 2500 sqft of house is nice, but 1500 sqft of house is still giving you %80 of the benefit and so on. There is diminishing marginal value to these improvements.

> Greater and greater value is being generated in the economy due to these increasing efficiencies.

This is very unclear and it depends on what measurements you look at. Lots of economists claim we've had historically low productivity growth in the last two decades - eg Total-Factor Productivity growth has been very low (~0.5%/year) every year since ~2005.

Another measure is major sector labor productivity (labor inputs vs outputs):

https://en.wikipedia.org/wiki/Workforce_productivity#/media/...

But now the economy has shrunk by at least 30% according NPR...

The little device in everyone’s pocket can do is much that required other people’s time and labor. Purchasing travel, researching real estate markets, checking into a hotel, comparing prices, obtaining product information and reviews, etc.

If I need to find something at Home Depot or Target or Lowes, I don’t need a person to help me anymore. I go to their website and it tells me exactly where the item is.

All of these little efficiencies add up to me needing fewer other people to help me.

https://wtfhappenedin1971.com/

There seems to be some dichotomy between what Americans as workers and Americans as consumers want. And they just want corporations to figure it out and fix it.

This is not how socially ethical societies operate.

Both are a form of supply and demand.

1) Consumers want the product which provides them with the most value given the item's cost.

2) Workers and companies want the most value per their capital expenditure (whether personal labor or funds).

I don't see any problem with that, both can be maximized at the same time and work as a balance. One issue is that we've become much better at optimizing #1, and have become worse at optimizing especially the worker part of #2. Workers still relatively rarely switch jobs, which eliminates a good amount of upward pressure on wages.

Stuff like the employer-paid health insurance tax deduction is detrimental to this liquidity. Give the deduction to individuals, not employers.

Thats exactly how a ethical society operate if they know givin the idea that large government programs natural shift towards tyranny and that bad things are inevitable and trying to legislate them out typically works out terribly.

I don't think americans want corporations to solve this either I think they want people to have the ability for people to solve it for themselves for better or worse.

1 + 2 means that just less workers are needed to produce the same amount of value. That doesn't mean that those remaining workers should get more value. No more than capitalist that managed to stay in business do. What about the workers that are no longer needed? Should they get nothing while their peers that managed to cling to their jobs get way more?

I'm not suggesting a specific single solution here. It's evidence of an imbalance between overall economic productivity and what we are paying hourly workers to support that productivity.

Improving base pay and benefits could help, but it also doesn't help if there's no specific wage-paying job for every potential worker anymore.

Most people are looking at this cynically, and I agree that it's a stall for time, he's trying to justify paying people the minimum because otherwise all the other greedy pigs would undercut him, etc etc.

However, my cynicism goes a level deeper. It is in Uber's best interests for laws to change and make the scene more complicated, so that all operators in this space - including Uber - have to pay more to their workers and have more encumbrances.

Why? Well, Uber is an established operator. They have made their bucketloads of money off the back of underpaying their workers, got themselves out of startup status in a way that - if they play their cards right - no other gig operator will be able to replicate. Less competition, less disruption.

I think there is an argument that says that "gig economy" should be enveloped in laws that protect the gig worker rights and ensure fair pay and a safety net, without introducing laws that enforce restrictions on the workers. Governments should work to simplify the burdens on individuals, without creating new loopholes for the wealthy. "It's hard" is a valid statement, but not a reason to reject the concept.

But I would continue to be fully cynical of any solution that has the top gig economy CEO's seal of approval.

Didn't Uber disrupt an industry that was already very well protected by government regulation, and seems much more exploitative?

It costs around $100,000[1] to be allowed (by the city) to drive a taxi in New York ($1.3MM in 2014), for a job that pays on average $43,000[2] per year - which involves driving an average of 70,000 miles per year - which at an average speed of 4.7mph[3] works out to $3/hr (not counting waiting time).

It's still not a living wage, but making $9/hr[4] just by owning a decent car seems like progress.

[1] https://citylimits.org/2019/11/30/need-to-know-taxi-medallio...

[2] https://www.salary.com/research/salary/benchmark/taxi-driver...

[3] https://www.latimes.com/nation/la-na-new-york-traffic-manhat...

[4] https://www.thestreet.com/personal-finance/education/how-muc...

Uber didn't comply with the regulation though. They just ignored it.

Labor laws are much harder to ignore than taxi boards.

I don't think Uber disrupted anything. Private car services or gypsy cabs already existed, they just had a brand name and an app. The result of which is that the same problems remain for workers. Unless that's how disruption in an industry is defined these days.

Update for clarity:

I guess my bigger question is: what really changed? Customers became more comfortable and the business side became more reasonable, but competition and workers still get the shaft.

My experience in London was that Uber radically disrupted things. Yes, private hire cars existed, but the experience was pretty bad. You'd phone a number or go to an office, they'd say "20 minutes" and then, hopefully, a car would turn up. It involved a lot of waiting on streets (especially at night) and sometimes no car would turn up. There was no recourse or way to contact the driver.

Maybe app based hire cars were an inevitable product of smart phones. If not Uber, then someone else. But certainly Uber's business model was incredibly disruptive of that industry. From my perspective it had a really strong effect on how my generation lived in the city.

That's the problem with 'disruption' as the MO for tech startups - they end up creating new business models that may not be any more efficient or better overall for society, and escapes scrutiny during the time that society adjusts.

By the time everybody catches on, the damage is done.

We need a better way to internalise social and environmental costs. Just because human society has been able to adapt to past technological and social upheavals is not an indication that it will be able to continue to do so.

Taxi companies have always been crap places to work. The job is (relatively) dangerous, pay is bad, flexibility is bad, and probably no benefits. Didn't help that most cities had a medallion system that enabled a group of rent seekers. And outside of NYC, Chicago, and maybe a couple other cities taxis sucked.

I think Uber is much more efficient and better overall for society than what it is replacing. Not a great job by any means, but far better than a taxi company. And when I look back 10 years ago Uber/Lyft are probably top 3 things that have made the world better. It opened up an enormous amount of flexibility when going out at night and eliminated concerns around drunk driving.

Uber doesn't just compete with taxis. It also competes with public transport.

Also, there is a chance that sole riders would actually be increasing their carbon footprint compared to driving, as the Uber driver is also involved in your trip. Unless Uber is proven to cut car ownership and vehicular use, it is very possible that it is worse for society and the environment than the previous status quo.

> when I look back 10 years ago Uber/Lyft are probably top 3 things that have made the world better

Really? A car service in your opinion is in the top 3 of what made the world measurably better in the last 10 years?

Indeed. 'Disruption' often translates to inserting an expensive middleman into an existing relationship. E.g. passengers used to order taxis directly and takeaways would deliver food themselves. There are certainly improvements for some of the parties involved (Uber is a lot easier to use than local taxi companies used to be), but that doesn't mean there's magically a lot more money available to pay both the existing and new members of the model.

That's usually referred to as "building a regulatory moat".

Or pulling up the ladder.

Either way, it’s a very common tactic, and undoubtedly part of the motivation.

It’s also a defensive play. If Trump loses, companies like Uber will be facing a regulatory reckoning for things like unemployment insurance. (Some states are paying gig workers UI or pandemic relief)

Better to control the narrative than just wait.

This is commonly done by huge telecoms/ISPs (Comcast, Charter, Centurylink sized) against competition in specific geographic areas. And at the federal/FCC level.

It is among the many issues that are the contributing causes of why residential broadband sucks in many parts of the USA, and why consumers are dissatisfied.

So what's the solution to a regulatory moat? Would gov't regulations made to be only applicable to big businesses, and give smaller businesses a pass so they can compete?

Generally, you make the rules as simple as possible instead of a complex ouroboros of legislation that requires a full team of lawyers to understand. The other rule would tend towards “no need for government approval.” You shouldn’t have to ask the gov for permission to start working in the space, you should just have rules you need to follow while you do. Approval processes that inevitably take years are by far the most dangerous regulatory moat, if a startup can’t enter the space and start making money quickly that startup is many times less likely to exist.

The moat is still gonna be there. Austin TX went through this when they banned lyft and uber and had some "in house" startups launch rideshare apps. They didn't fare that well after uber/lyft came back in.

You can make it difficult for everyone at the "national" level of operation, but then how does a smaller company ever get there from a "local" start?

What even constitutes a "small business" when it comes to gig economy? Most of the workers don't even count as employees.

There's going to have to be a -lot- of legal changes to constitute something worth while. And legal stuff moves slow on purpose (so that it doesn't bork things before they're understood... and also, it's just slow).

Don't let lobbyists for these companies craft their own regulations, and actually listen to academics without a conflict of interest from our world class, publicly funded schools of economics for once.

> They have made their bucketloads of money

I agree with your broader point, but Uber lost some 8.5 billion USD last year. They're not (yet, at least) making bucketloads of money, despite paying their workers badly.

To be clear, they have made bucketloads of revenue, they lost profit. The OPs point was that now that they have practical market dominance, regulations will most likely favor them compared to small start-ups.

I am so confused by Uber's financials.

I do not understand what they spend well over 8.5 billion on.

Their software for riders and drivers is quite good and certainly tons of engineer-hours have been poured into the front and back ends.

Are they paying their drivers more than they're charging riders? Or have all the billions gone into their moonshot projects like self-driving cars? Both?

Because otherwise, to me it's almost like, how do you not turn a profit on rides? Once they've got their app and infrastructure going (again, no small expense) then any rides they arrange should be profit.

Clearly, I am misunderstanding something about their business to an astronomical degree but I don't think I'm alone.

Dara seems to be doing well for himself.

https://observer.com/2019/09/uber-ceo-dara-khosrowshahi-tech...

Doesn't that just mean that Uber's investors are doing badly? I'm assuming most of their (regular) employees are being handsomely compensated.

Indeed, the ultra-cynical view is that they are now desperate for government regulation to ossify the market because without a lock in (similar to what taxi companies used to enjoy pre-Uber) profits drop to 0 and stay there.

Raw capitalism should drive companies like Uber out of business as a billion-dollar company. They can always be undercut by a group of drivers in a locality starting a new app and stealing the local regulars (identical service, lower cost because no Uber premium) leaving Uber with only non-local traffic. Apps are not expensive.

Your deeper cynicism is justified. Regulations always benefit the well-entrenched in a marketplace. In many cases, they are the ones who actually write the regulations.

Politicians do victory laps, big business get their position in the marketplace protected by law, and everyone else loses.

What is the gain in making uber in a taxi company again with all the same corporate math? Uber is turning about to be american arbitrage, giving us the same service but with an app.

Uber has never made a profit in any quarter or year. In fact I believe the best they’ve ever done is lose a billion in a quarter. This past quarter they lost $2 billion.

To add. Uber has bled billions while paying people less than minimum wage. By now they may be established enough. But anyone attempting to compete will be screwed.

The solution is protections and to break up uber.

>bucketloads of money

Uber has yet to make a profit. Some shareholders have made profits by selling stock, but the business is losing money hand over fist.

i suspect the same. we saw the same exact behavior last year from amazon around minimum wages (https://techcrunch.com/2019/04/11/amazon-ceo-jeff-bezos-chal...)

That's 100% it. By Uber advocating for additional regulation, they get to (hope to) design the regulatory capture that entrenches them and makes it harder for upstarts.

It's the same reason Facebook advocates for data protection laws in the US - they're going to happen either way, Facebook wants them to suit them and makes it harder for competition.

I wasn't following recently, but has Uber finally become profitable?

Regulation helps the large incumbents, who have more capacity to bear the fixed costs.

The capitalist solution to the 2008 financial meltdown would be to let new banks bump the old banks. Despite all the Fintech innovation, the old banks are more entrenched than ever. With Dodd-Frank, Barney Frank gave them one more gift on the way out of office.

Ouch, right - basically, "dumping": https://en.wikipedia.org/wiki/Dumping_(pricing_policy)

When Uber started they predicted (falsely) that autonomous driving is going to be ready in few short years. For Uber drivers are a minor annoyance.

If you are able to factor out all the despise you have for Uber, I think the article has a lot of good points.

There is no great option in between full employment and a contractor. There is a trade-off for both employers and employees in both agreements. Different people want different degree of benefits. It seems to me that everybody would win if there was more flexibility here, and this is what the article seem to be suggesting. Seems reasonable.

It is very reasonable, even if it does benefit Uber. He should really be going the step further and saying, “Health Care shouldn’t even be tied to employment in a developed nation,” but that would be too political.

The fact that we have millions who just lost health care during a time when they need it most should be the nail in the coffin of our current system.

It’s been hugely flawed for years, and now it’s just a joke. Some problems have very simple, but very big and different from American status quo solutions.

People who love markets would still be able to pay a premium for what they want, just like they do now with all the care providers who have totally bailed on taking even the best insurance.

Yes! A while back I used different reasoning to reach the same conclusion, based on my best guess about what the employee/contractor distinction is optimizing for. (Can’t believe it was four years ago!)

>>Sadly, it turns out, the law commits the Noncentral Fallacy by acting as if everyone [is] fully in one category or the other... A better way would be to require more [safety net]-type benefits as someone becomes increasingly “employee-like"...

https://news.ycombinator.com/item?id=11670698

It’s reasonable, just hard to take seriously coming from a company that skirts around laws and regulation as a business model.

"There is no great option in between full employment and a contractor."

This begs the question of why there should be an option between those two things.

I'm not sure why there should be, except that employers don't like supporting employees and aren't allowed to treat contractors the same way.

As mentioned in my sibling reply, I tried to unravel the logic there and made my best attempt at an answer a while back:

https://news.ycombinator.com/item?id=11670698

Some of what Uber is describing sounds like a way to keep competitors from entering the market. The best way I know to keep driver's total compensation high is for them to be able to drive for places other than Uber.

Why would anyone try to forget all the reasons we have to despise Uber? The company is corrupt to its founding core.

A lot of issues would be solved with a basic social contract to all citizens: healthcare plus a small living stipend. Do that and people can Gig away. Too much is hard to change when healthcare is so attached to full-time/regular employment, and when it is hard to move between jobs/etc. for fear of loss of income.

Do you have any links to articles/discussions about this proposed direction?

I'm pretty sure I agree... and would like to further develop my opinion about ~this stuff.

It's so dumb for an individual to go bankrupt from a random health issue and/or pay a ton of money each month for "insurance" that is basically useless; and also dumb for an employer to be responsible or in control of anything having to do with an individual's health care decisions.

"I can't possibly act on this without being compelled to by law"

Riiiiight.

> "I can't possibly act on this without being compelled to by law"

I 100% support this... Laws are what keeps business an even playing field. We as people shouldn't hesitate to put laws in place to get what we want. We also shouldn't hesitate to get rid of laws when their purpose becomes less clear.

We shouldn't lobby companies to improve working conditions or look after the environment - we should put laws in place to force them to.

I think he also meant that Uber could not compete, if it does this alone without its competitors doing the same.

My take from the article is thay if Uber were to currently offer its "driver-partners" benefits like health insurance, they would legally be considered employees, which neither party wants.

As I understand, the board could (probably would) fire him if he added a $655M expense without having to legally pay that.

I'm not sure what the alternative is here, other than becoming a social purpose company.

That’s standard tax minimizing behavior from right to left.

This is rather cynical, isn't it? Mr. Khosrowshahi is suggesting that rather than finding ways of making employment more flexible, let's remain in the gig economy and re-invent benefits, conveniently forgetting how long it took to get to the benefits of employment in the first place.

The calculation is ridiculous. According to his example, if someone had been working almost full time for a year, they would have accumulated enough funds for a whopping 2 weeks of paid leave OR medical insurance -- but not both! And they couldn't have done it any other way because they wouldn't be so big otherwise.

Further, his central argument revolves around the fact that since Uber recruited drivers as gig workers promising them flexibility, their survey shows, unsurprisingly, that their drivers want... flexibility. Proof that nobody needs benefits, for sure.

Mr. Khosrowshahi isn't even trying to sound convincing.

I'm currently reading Anand Giridharada's 2018 book "Winners Take All: The Elite Charade of Changing the World" which, while not exactly revealing anything new , does present a good collection of behaviour from the elite class wrapped in a good narrative structure.

There is one thing that never changes in their behaviour; Problems are not solved by acknowledging their underlying root causes (usually erosion of regulation, civil liberties or other social contracts), but by 'inventin' our way out of the problem. Usually to the financial gain of the elite in question.

As someone currently living in a country with strong unions and regulatory agencies, I have a hard time imagining how the U.S society could have eroded to this degree over time without the general populace taking notice and standing their ground against it.

The word "elite" in this context has always bugged me. It's to good of a word to be wasted for such a label. Elite(s) should be something positive.

You might also find Michael Woodiwiss' "Gangster Capitalism: The United States and the Globalization of Organized Crime" interesting.

https://www.amazon.com/Gangster-Capitalism-United-Globalizat...

Yes it is somewhat cynical, particularly that bit you call out, effectively saying that if Uber had to do things properly it wouldn't be so big, people would have to pay more etc etc.

This is what a lot of folks had been saying from the start was a huge negative - you're using a get-out of employment rights to undercut other companies!

I'm sure there must be a way to have both employment rights and flexibility over hours worked. That has to have been done before.

> we support laws that could make that possible

> But America needs to change

He's not here to make a case for what Uber should do to make it better. He's asking for America to change the frame of reference so they can look better without actually changing a thing.

> you're using a get-out of employment rights to undercut other companies!

Uber and the media branded this as "disruption". Uber played by their own rules to get big. With that goal achieved and with no more need to keep running afoul, they're asking for their rules to become the official standard.

He is trying to make it sound like they are trying to do better. Note the layers there. It's tactics.

Doing nothing while sounding like you're trying to do something will maybe be a little more sustainable for Uber than doing nothing while putting on a pair a of sunglasses and yelling "This is capitalism, baby!" with a big grin, which would be my summary of the previous tactic.

The end goal remains to do nothing, of course, but maybe they've accepted that they need to send more people to more meetings with the Government and pay for a ghost-written whiny NYT opinion piece once in a while.

We just went through 4 years of the nu80s again. Which puts us on track for nu90s.

As far as I can remember, "This is capitalism, baby!" didn't play quite so well with the latter crowd.

Then again, free trade and outsourcing did. So maybe Uber's new plan is to complain about the cost of US workers and hire remote drivers in lower CoL nations?

Can someone explain what the right approach would be in terms of benefits, for a typical gig worker use case:

Person with part-time job wants to make some extra money. Registers for Doordash, Lyft, Uber. When their (part-time) work ends midday, they log onto Doordash, as it's lunchtime. Deliver a few meals. Now it's the afternoon, food delivery doesn't pay, so they switch to Lyft. Do two rides, but things slow down. They log onto Uber and finish the day like this.

I am not saying everyone uses the apps like this, but this is also a use case. So who should pay and how much in holiday pay, sick leave? Clearly, this person can't be (and doesn't want to be) a full-time employee of either of the companies. Yet they work with all three.

The proposal made in this article is not a far fetched one: and it gives a possible solution for exactly this setup.

Well to me the obvious answer is that those "benefits" shouldn't be coming from the employer in the first place, especially medical.

And if you eliminate that and things like 401k, what else are you asking the employer to provide that you couldn't get for yourself with your money you earned?

But let's assume that universal medical and retirement are off the table. Why should the employee pony up for that stuff when you're only committing to a dozen hours a week with them, instead of 40? In other words, why should the company commit more than the employee does?

The article seems to be saying that the company should commit proportionally to the work from the employee. Well, isn't that what a paycheck is already? If paying them the agreed wages is "letting them fend for themselves", then the solution is obvious: Pay them properly instead, so that they can help themselves.

And what about all the people who already work 3 part-time jobs to get by. How is that any different, and why weren't we previously worried about that, but we are for "gig workers"?

And let's face it, if you're a gig worker you're not doing a 401k match with your $10/mo left over after expenses.

Health benefits-wise, I think a government approach would be the best. Gig workers are "self-employed," meaning they're paying the 15.3% tax on all earnings + personal income tax, so why couldn't that go towards government health insurance?

The people Dara Khosrowshahi refers to as gig workers that also reside in California should be called, treated as, and receive the full benefits of employees [0]. Uber is fighting this law, and him continuing to call them gig workers only benefits Uber and other companies pretending to be a marketplace between workers and and customers.

[0] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

[1] https://www.engadget.com/2019/12/30/uber-and-postmates-sue-c...

https://en.wikipedia.org/wiki/California_Assembly_Bill_5_(20...

I don’t disagree with you. But also, attaching benefits to employment sucks.

EDIT: by benefits, I'm was intending to refer to health insurance

> attaching benefits to employment sucks.

I don't know that this is something I can agree with. Benefits as value-adds from employers stems from what's effectively collective bargaining power. This is the thing most people can't articulate about their desire for benefits tied to employment - they know how much more expensive it'll be for individuals to negotiate the same rates regardless of how much more they might make directly.

Attaching benefits to employment is fine. What seems to exist in the US is attaching basic rights such as health care to employment, which is what makes this so fraught.

"Gig workers want both flexibility and benefits."

Times have changed. People don't want stable jobs anymore. That's why the industries where workers have a modicum of power (law, medicine, finance, tech) are dominated by "flexible" work schedules.

> Times have changed. People don't want stable jobs anymore

Citation needed; while I do agree / believe that people want more flexibility in their work (choose how many hours / week, when, etc to work around things like child care, avoid traffic, etc), they still want stability. People (read: I) want a max 5 day / week, max 40 hour / week contract that covers cost of living + luxuries, not a "maybe you'll do 10 hours this week, we'll let you know when you can come in" kinda deal.

The gig economy is telling people that their income depends on how much rides they do, basically forcing them to work 12+ hour, 7 day work weeks to make ends meet. You can claim that's their choice, but if a 'regular' work week doesn't cover the cost, it's not a feasible job.

The gig economy is an extension of what seemed to become the new norm in the US, working multiple jobs to make ends meet. This should not be necessary. If a 40 hour work week is not enough, wages are too low and / or cost of living is too high.

If you offer people stable work, with good pay and benefits, pension, healthcare (in the US), you won't have a shortage of applicants believe me. This myth being spread that people want flexible work is perpetuated by the people who benefit.

Tech companies don't give their workers flexible schedules instead of pensions because flextime is more valuable than a pension.

They give them flextime because (a) it costs them nothing (b) it has no impact on the quality of the work done (c) flextime workers are just as if not more likely to overwork and (d) it costs them nothing.

You are conflating income stability with process stability.

Income stability benefits workers, because when their income is stable (same amount in each paycheck, paychecks in regular intervals) it is much easier to make a budget. There is less worry about, "Will I get enough hours this week to pay my rent?"

Process stability often benefits employers over workers, but sometimes it doesn't benefit either employers or workers. Flexible schedules are generally an acknowledgment by employers that they're not losing much (and may even see productivity gains) by allowing workers to have some wiggle room in their hours -- but workers gain a lot from this flexibility.

> People don't want stable jobs anymore.

Sure they do.

> That's why the industries where workers have a modicum of power (law, medicine, finance, tech) are dominated by "flexible" work schedules.

Flexible work schedules and stable jobs are orthogonal concerns. Flexible work schedule is “employee has some freedom to set working schedule without adverse consequence”, stable job is “employee has relative security against loss of income, benefits, and employment”.

People absolutely still want stable jobs (though they are much harder to find), whether or not they also want flexible work schedules.

What has changed is that traditional employment in the private sector isn't nearly as secure as it used to be, which makes the gig-work vs. traditional employment calculus favor the former more than it would have in the past, since the choice is between insecure work without flexibility and slightly more insecure work with flexibility, rather than secure work without flexibility and unsecure work with flexibility.

Also, for many, it's the choice between no work and insecure work, and whether or not people want stable work, they definitely are compelled by our economic system to generally prefer some work over no work.

>That's why the industries where workers have a modicum of power (law, medicine, finance, tech) are dominated by "flexible" work schedules.

Read that as "grueling". I take that's what you meant.

> People don't want stable jobs anymore.

Whoa whoa whoa. Whoa.

That's a heck of a generalisation.

Let start by agreeing that while in some cases gig economy seems to disguise promotion of precarious jobs in name of "flexibility" it is imo obvious that employment regulations need to be updated to more contemporary needs.

That said, I can't help but read this op piece as: "please raise a regulatory moat around us because we are now safely inside the citadel".

This strategy is so common lately (read Facebook, Google, etc) that I wonder if these incumbents should pay a price (of being broken up) whenever substantial regulatory changes happen.

> "please raise a regulatory moat around us because we are now safely inside the citadel".

Exactly. Competition is probably the best way to make sure that drivers get the most total compensation (regardless of whether it is coming in the form of salary or benefits). What is being described here would really limit other companies ability to compete with Uber on the terms that Uber used to compete with taxi services.

I Am the CEO of Nike, child workers deserve better, it's the Government's fault.

Despite your sarcasm, I wholeheartedly agree with this sentiment. Nike provides a better job than than the next best alternative (often child prostitution), and it is the government's job to ensure that the factories are safe. It is also the government's responsibility, not Nike's, to provide education to children and the conditions to pursue it instead of working.

>Nike provides a better job than than the next best alternative (often child prostitution)

So Nike is the next best to child prostitution, i get it :)

But you are right, the next big question is, should a company have the right to do stuff like that. Witch would be illegal in the country where they have the HQ.

Switzerland has a really interesting discussion about that ATM:

https://www.bj.admin.ch/bj/de/home/wirtschaft/gesetzgebung/k...

EDIT: Sorry no English version available to translate use:

https://www.deepl.com/en/translator

It's not Ubers fault that the central banks lowered interest rates to so low levels that assets are a huge ponzi sceme, and people who don't own those assets have to compete for the crappiest jobs to survive.

I have met Uber drivers in Brazil that told me that their job got easier and their pay higher since they started working for Uber. And the CEO is wright that I would prefer renting a car when travelling if Uber would get more expensive.

Yep the Uber reality in Brazil is too different from the US. Working as an Uber in Brazil nets you more than what's available for even those that have degrees.

Also, cheap drives has made it so even poor people take an Uber, whereas taxis are only for the rich. Uber prices go up, poor people stop using Uber. I'll stop using Uber.

Is this without any incentives from Uber?

From what I’ve seen in India, the drivers have to work really hard and do 50-69 hour days to get a decent living.

With Uber taking a 30% cut, and the driver themselves having to cough up the repairs, etc - it does not amount to a huge jump in income.

A CEO coming out and saying "we should do better" is simply an admission that they didn't and still don't. I see it as a personal failure of the CEO, an institutional failure of the company, and an attempt to give it a positive "moral" spin in the media.

This isn't about what Uber can or should do, it's what everyone else should do so Uber can be in a better light without actually changing anything.

Uber Driver here:

Drivers (well, I can’t speak for everyone) enjoy the flexibility of driving. We also hate the prospect of not driving and not being able to pay bills. It’s truly a catch-22 situation.

However, as someone who admires tech, I find that Uber’s biggest problem is not in the way it treats her contractual drivers (that’s a symptom of a larger cultural problem) But in the way Uber handles technology.

The teams that handle the driver and the rider apps are totally separate. Each of the apps have slightly different nomenclature within the apps and extremely different interfaces. This makes it difficult from the get go to pick up passengers and to safely get them where they are going.

If Uber focused more on creating a great user experience and did the right things to ensure that both riders and drivers were on the same page they would begin to increase in market share.

“ A good name is to be chosen rather than great riches, and favor is better than silver or gold. “ -Hebrew Proverb

Uber has failed publicly to protect itself with bizarre scandals and shortermist business practices. They’ve failed to distinguish themselves from Lyft.

In 5 years I don’t think Uber will be in the rideshare business.

Was this written by GPT-3?

“My mind is living on cloud nine and this .9 is never on vacation.” -Kendrick Lamar.

Nah, my mind is just pretty wild. Sorry if it was kinda hard to read, bro. GPT-3 is for suckers.

Exploit exploit exploit, when the wind turns, use your market position you have gainend and become Paulus.

As the top comment says, corporations like Uber should be pushing for quality free healthcare and strong social benefits. It would help everyone and make gig working much more palatable.

Off-topic, but shouldn't HN be looking at their commenting style and implementing some sort of sub-comment/ replies collapsing style a la reddit?

I collapsed the first parent comment and there's no other to read as the entire discussion now is based on that parent comment.

I think collapsing comments after a limit of replies or votes is reached will help with the contribution of new perspective to the discourse instead of everyone else following the train of thought of a single parent comment.

https://imgur.com/M4qMWog

There's a second page with more comments (and a tiny "More" link on the original HN): https://news.ycombinator.com/item?id=24107497&p=2

I want to know how many billable hours from how many public relations professionals, image consultants and Uber's own marketing department went into the draft of this before the final copy was published.

Isn't much of the 'gig economy' trouble because the US has no single payer health insurance?

It doesn't help - but it's not all. There's been some struggle in Norway too regarding foodora food delivery, partly around compensation for riders using their own bikes:

https://www.svenssonstiftelsen.com/post/victory-for-foodora-...

>"It’s time to move beyond this false choice. As a start, all gig economy companies need to pay for benefits, should be more honest about the reality of the work and must strengthen the rights and voice of workers.

So why doesn't CEO Dara Khosrowshahi lead by example and start paying benefits for Uber drivers immediately instead of writing an Op-Ed about it? Why not actually implement the benefits program and then write an Op Ed about why you did it?

>"I’m proposing that gig economy companies be required to establish benefits funds which give workers cash that they can use for the benefits they want, like health insurance or paid time off. Independent workers in any state that passes this law could take money out for every hour of work they put in. All gig companies would be required to participate, so that workers can build up benefits even if they switch between apps."

Again you're the CEO Dara Khosrowshahi. Why not be a leader and lead by example? Start the fund for your Uber drivers and use that as your inflection point and build consensus based on some action you actually took.

>"Had this been the law in all 50 states, Uber would have contributed $655 million to benefits funds last year alone."

This is patently absurd. Rephrased - "had we been forced to do the thing that I believe is the right thing this would have been the outcome"

Gig companies should be required to fund paid time off and healthcare programs for gig workers...? How are we so desperate to avoid public healthcare and social safety programs in the US that the CEO of a multi-billion dollar company thinks this is a reasonable article to write?

This is the definition of an over-engineered solution. Just cut the damn link between employment and basic benefits like healthcare and this manufactured “problem” goes away.

We have finally scaled all the barriers thrown up by local ordinances and regulations, protecting entrenched industries in a sphere of cronyism and exclusion, using regulatory capture to block anyone else from joining their club. Rather than competing on price or quality, they had devolved to just trying to exclude everyone else from their business model, and they were ripe for disruption.

What a glorious day!

Ok, now to start pulling up the ladder behind us.

>Rides would be more expensive, which would significantly reduce the number of rides people could take and, in turn, the number of drivers needed to provide those trips.

At what point exactly can we state the problem as "Uber is not able to build a sustainable model".

I am all for disrupting taxis and have little love for medallions but if the alternative needs a salary level you can not live on, maybe it is just not a good model.

I and friends have long been saying the gig companies should self-interestedly push for a better universal safety net, so gig works get benefits but the bill is amortized.

This is just the....dumb version of that same argument.

But maybe this is intentional, because arguing for yet another insurance pool is "non partisan", while arguing for universal heal care will make it harder to lobby both parties.

That's an entertaining soundbite when your business is based on literally extract value from those poor peasants you say deserve better.

Value that wouldn't exist without Uber connecting these otherwise non-taxi drivers with customers.

Literally every business is about extracting value. The question is whether or not that value existed before the business did.

And doctors extract value from sick people. Nonetheless, a doctor might have good reasons to state that his patients deserver better. Assuming malice is not an effective counter-argument.

Uber invented a failed business model that to ensure its success it had to employ lobbyists all over the world to subvert local democracies and manipulate public opinion to remove worker right laws. Using any tatics necessary and fermenting social unrest.

All this colossal damage, for a VC subsidize enterprise that never proved it can actually turn a profit.

This is my favorite Uber messaging revision:

https://twitter.com/neilanalien/status/627873374505562112?la...

Maybe some business models aren't economically viable. Maybe Uber is one of those businesses.

An increasing percentage of wealth in the U.S. is created by systems and automation; individual people are no longer as competitive and this is reflected in lowered wages. The trend will continue.

People who can create systems and automation still have value but the economic machinery will optimize us out of the picture eventually. We're literally training our replacements with ML.

There's no rich CEOs or politicians to blame; we're part of an optimization process designed and evolved to find and exploit efficiencies and loopholes in the existing protective framework of government and cultural/social values.

The solution is to work together as humans to correct and augment the incentives of the current economic system. Economic growth and activity is only a shadowy proxy of human happiness and satisfaction.

I think that this is the tip of the iceberg. Its not just about Uber. Its not just about the gig economy in general. Its about the entire economy.

There are multiple forces at work. One aspect is the actual long-term debt cycle which people don't realize puts pressure on everything. The other thing is the effective de-regulation and loosening of employee protections.

Another part is tech monopolization.

We actually need an entirely new high tech global economic paradigm. We need to re-invent money and government with advanced distributed protocols. That will allow us to holistically and locally track and regulate resources with a universal basic income (or hopefully even a bit more than basic) while we scale-up deployment of automation.

Looking at the comments, Uber is still hated despite the leadership change. Some people hear "Uber" and immediately assume and project the worst.

I think the article was well written. And I wonder what the comments would look like if this article was by the CEO of Lyft.

There's no difference. If it were the CEO of Lyft, I'd suspect that he advocates for it to price Uber out of the market and avoid new competitors. Same as Uber, just with the name tags flipped around.

Step 1: sabotage any worker rights established by pushing workers into freelance/self-employed work.

Step 2: keep the money for labour costs in your pocket and become a unicorn because people with cash want to bet on the removal of worker rights.

Step 3: profit

Step 4: do some lame PR, still keep the cash. Change nothing. Because others have to do that. Just not you. All you needed was the money.

Companies following that model should not have a high valuation because they exist on borrowed time. Extorting money from a system does not make your business profitable at all, it just prolongs death.

Also... is it just me or does Uber seem highly ineffective in operations considering the amount of engineers needed for running the business?

Uber is not a successful for-profit business in the long run as they make no profits; given free money to be able to subsidize what costs there are (and operating on the backs of people who make little themselves) can exist for a long time before failing. In the meantime richly paid executives and well paid employees can milk it for a long time.

And it's not like they become poor or suffer any real consequences when their company fails after never having produced profit ever.

Exactly what I was referring to. The whole business is broken, it is merely a bet on removing worker rights in the long run and that is what it is valued for.

I think the idea is to dominate the market and become the primary player, if not the player, in the driverless economy. The problem is, many players are angling for this - Google, Apple, Amazon, Tesla. If you are not efficient and frugal enough, you won't even make it. Also, those other companies have actual viable sources of income, while Uber is at the mercy of VCs.

Uber wants you to believe that the cost of paying drivers as employees is that you won’t be able to get a car in most places.

This can’t be true.

Uber replaced a poorly run system that actually covered most places and employed it’s labor force.

If Uber and other car services were forced to recognize their workforce as employees, there would be market incentives to support doing so.

Uber mentions the subsidized cost of their health plan. This is very creatively failing to mention that the American taxpayers pay this difference. Your ride may seem cheap, but you pay for it in your tax bill.

Maybe Uber thinks PR pieces like this one will convince us not to regulate them. I hope we’re not that slow.

Is there any reason to believe the CEO really believes this or is this just the next step in their business model: start raising the barriers to entry by making it more expensive for the competition?

The real problem IMO is that government in the US isn't able to keep up with how quickly the world is evolving.

The solutions thus far are obviously not optimal. The solutions being proposed also probably have issues yet to be discovered.

What really needs to happen is a fire needs to be lit under legislators' butts TBH. I think the end result is going to be a problem either way if we end up with something that (regardless of outcomes) won't be changed again for another decade.

What PR company is recommending this recipe? So much symmetry, but yes basic PR management: always control the conversation first.

"Google’s Sundar Pichai: Privacy Should Not Be a Luxury Good" [1]

"I Am the C.E.O. of Uber. Gig Workers Deserve Better."

[1] https://www.nytimes.com/2019/05/07/opinion/google-sundar-pic...

I am CEO of UBER, i have been azzramming gig workers for years, now i hacked the system, don’t pay payroll tax or provide healthcare, and now i cannot afford it either because shareholders do not want to pay for it, so i need to create noise and find a bailout, and i think tax payers should do it since clearly we as a company are not willing/able.

Cherio suckers

> Gig workers want both flexibility and benefits — we support laws that could make that possible.

Whenever a company says "we support regulation" there's always an unstated suffix phrase: "that makes it easy for us to do what we want to do and hard for our competitors to do what we want to do."

This is the same old Uber, desperately twisting and turning to get out of the responsibilities of an employer. Like a minimum wage. Uber is operating illegally in California, refusing to treat employees as employees after the legislature passed a law clearly making them employees.

Uber actually attempted to comply with AB5, by allowing California drivers to set their prices and giving them more freedom about which rides to accept.

Critics may argue Uber is still non-compliant even with the changes, but that's probably for a court to decide.

From AB5:

...shall be considered an employee unless the hiring entity demonstrates that all of the following conditions are satisfied:

(1) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(2) The person performs work that is outside the usual course of the hiring entity’s business.

(3) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Uber tries to argue that they're not in the business of selling rides, they're just a matching service. That's to escape (2). Neither customers nor drivers nor courts believe this.

I hope everyone sees what he's doing. If he wanted to give people a better life he could as a individual without legislation. What he's doing is putting regulation around the industry that only uber can afford to adhere to, so that no one can afford to compete with them.

https://www.theverge.com/2020/8/10/21362460/uber-lyft-driver...

I am the CEO of Uber. I am attempting to get ahead of a unionization movement by substituting their potential demands with ones my corporation can at least control somewhat. My hand was forced to get to this position and it can be forced further.

In general it shouldn't be the case that working part time disqualifies someone from earning unemployment or disability checks. It's pointlessly punitive and reduces health, happiness and productivity for the entire labor force.

Now that we’ve grown to dominate the space by fragrantly ignoring and intentionally breaking laws, we support creating new laws that will prevent others who lack our scale and resources from entering our monopoly.

Of course. This is gate-keeping with a sprinkle of regulatory capture.

My favorite quote:

>Many of our critics, ..., believe that Uber and our gig economy peers have failed drivers by treating them as contractors, and that we will do anything to avoid the cost of employee benefits like health insurance. Given our company’s history, I can understand why they think that.

Pray tell, what is this company history you're talking about? Come on, be specific. And did those policies get you the market-share you have now?

"Government, I beseech thee, make my industry more complex and regulated than even telecom!"

But definitely don't make us owe back pay!

I think you meant “flagrantly” but in the case of Uber “fragrantly” fits quite well too.

It is the government's job to legislate and provide universal healthcare/an adequate safety net. If you expect Uber to provide healthcare to its workers, many of whom don't want to be employees because that would reduce the flexibility of their work arrangement, then Uber will "hire" fewer people, raise prices, and increase average time-to-service. How is that a good thing?

Winners from classifying gig workers as employees:

- Full-time taxi drivers who happen to get a job from Uber

- Well-intentioned people who believe that society improves when there is an appearance of fairer labor treatment

Losers from classifying gig workers as employees:

- Full-time taxi drivers who don't get a job from Uber because labor laws force Uber to shrink

- Part-time taxi drivers who cannot work for Uber as full-time employees

- Part-time taxi drivers who can increase their hours but don't get a job from Uber because labor laws force the company to shrink

- Part-time taxi drivers who increase their hours and get a job but despise the new, inflexible work arrangement - and their kids, if they have kids

- Millions of Uber customers who get worse service for a higher price

- Prospective Uber customers who cannot afford the new service and make poorer transportation decisions (slower, less safe)

- Foregone business and consumer opportunities due to people not being where they want to be when they want to be there

- Gig businesses that never get started, gig economy innovation that never happens, and society at large

If the government provides a better safety net, then people will benefit from it no matter the job and no matter the particularities of their work arrangement (self-employed, part-time, full-time, single employer, multiple employers, unemployed...). I chose to study the California Dynamex gig worker case for a business law class and there's really no way around the terrible tradeoffs.

Would Uber be willing to pay a premium initial deposit to the collective fund on the name of all their gig workers they had since the beginning.

That would assuage people skeptical about marketplace dynamics for new startups.

Be the change you want to see in the world, Uber. You don't need laws to tell you to do the right thing. You are free to treat your employees (including contractors) as people and not resources to be mined. So do it.

Or, get off your moral high horse from which you claim that everybody should be obligated to treat people fairly, and until they won't, you won't either. This is morally bankrupt leadership.

Oh, and before someone says they are beholden to their shareholders. I realize that, and it doesn't mean companies need to strip mine the land in the name of profit. Doing the right thing is sustainable, and over a long enough time horizon, the most beneficial action on behalf of shareholders.

I worked for Dara before. Believe it or not, he is a sincere and honest person. Yes, he cares about the bottom line (as any CEO would) but he believes what he's saying here.

Well, I guess Hitler also believed what he was saying.

The Oxford's fair work foundation(1) is aiming to create better conditions for gig workers.

1: https://fair.work

Or, "We are losing billions of dollars, please have more good will for us and also make it more difficult for other companies to enter our space plz."

I just searched the thread for the words 'fox' and 'henhouse' but nothing came up. Did I misunderstand the search interface?

This is being written because they are worried they are losing their legal fight against forced arbitration. Because they are!

I have to say I appreciate the honesty in the title, although I'm surprised that he was willing to admit it.

Tactics, it's like saying i'am the CEO of McDonald and being vegan, but i understand every meat lover out there, now both sides love you :-)

I was reading it more like "I am the CEO of McDonalds. Workers at McDonalds deserve (a) better (CEO than I am)"

https://archive.is/zlOzx

Ah the classic, “now that we have market share, increase cost of entry for everybody else”.

Are trade unions still as frowned upon as I remember them to be in the US?

This is fear of being regulated, I think the gig economy is low hanging fruit to regulate and tear apart to pretend they (whoever is in charge) are changing society, he is trying to frame Uber as part of the 'solution' rather than the problem.

He probably wants regulation. Once you're the dominant player, have Congress build you a moat. It worked great for financial and health industries

True but not too much, he is trying to control the narrative on regulation

The idea that employees can't have flexibility is BS though.

What is the administration cost difference between an employee and contractor? Also, what causes the difference?

I am the CEO of Uber, and I can gas-light you from the opinion section of the New York Times, because money talks. No other person is better positioned to do something about the plight of gig workers more than me, but I'm going to tell you a story about how we could all fix this together to distract you from reality. I'll throw in some blame to build up a strawman we can all tear down together, while gig workers still get the shaft and I still get my fat payday.

Yes!

Even his opening premise is flagrantly false: the problem is not that Uber has "failed drivers by treating them as contractors". The problem is that Uber has arrogated to itself all the benefits of an employee-style relationship without incurring any of the burdens.

They can't have it both ways. But their business depends on it. Switching to food delivery does not give them a way out of the pain machine. Which is why they have to spend so much money working the refs.

Exactly, this is essentially 'thoughts and prayers' said euphemistically.

Luckily we have the average hacker news commenter to come in and fill us in on why billionaires aren't actually so bad after all. I just don't know what I'd do without this website sometimes!

Not a great year from the opinion section of the NYT. Between this and Tom Cotton, I'm convinced the editorial board just looks at the pile of money and the potential virality of these posts, rather than the words written on the page.

TL;DR:

"Hey guys, I'm the CEO of Uber! We have problems, our drivers are miserable. But u know what, lets fix everyone's problem first and then we fix ours, ok?"

can't read due to paywall? what's the angle? uber is almost ruined by the pandemic. so he is looking to score some tax money?

Does anyone else think its silly that a "PSA"-type op-ed thing is behind a paywall?

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