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Comment by ivarv | Hacker News Reader

So this is basically an admission that the ridesharing business model is not viable without worker exploitation?

Because the previous medallion system was so much better.

Either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that plans to use it as his retirement savings.

Pre-Uber, the more I spoke to cab drivers the more it seemed their industry was a pyramid schemed aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime.

>"Either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!)"

There are plenty of commercial banks that have underwritten loans for taxi medallions and built up a significant portfolio Just in NY for example - North Fork Bank, Capital One, Provident and Signature Bank, See:

https://www.autofinancenews.net/allposts/finance/loss-mitiga...

https://nyrej.com/print/18823

https://www.businesswire.com/news/home/20200117005338/en/Sig...

Of course there are, but as with any not so liquid and extremely volatile asset, the interest rates are going to be horrible. It's not like a car or a house.

People freely working is not exploitation. Full time driving jobs already exist if you wanted that instead of freelance rideshare driving.

They exist, but those opportunities exist not in as numerous quantities because they are undercut by Lyft/Uber, which are only able to do so because they are operating unsustainably. The latter just need to either increase their prices to make the rideshare job more profitable and acceptable or, if that’s truly impossible as they suggest, I guess we’ll have to go back to cab rides.

Uber/Lyft are both profitable in many markets. The system is perfectly sustainable.

It's the service, not the price, that made the biggest difference for users. And this service requires having thousands of drivers able to start at a moment's notice, which is not viable under an employee-shift driven model.

If it’s so profitable, they should be able to pass on those profits to the drivers. If they were already doing that, we wouldn’t be where we are.

People freely worked under abusive conditions in factories in the Industrial Revolution before the labour rights movement. No one wants to go back to that.

This is a tired argument. Please name the abusive conditions that actually apply here.

AB5 affects more than just ridesharing too. Many writers, artists and other creative professionals are suffering as well. What abuse are they affected by?

you dont get vacation days. you re not paid for national holidays off days. you dont get sick days.

you may say it’s what contract is. but without me being able to see where to drive, whom to drive and set price as I wish, without affecting my rating - it’s just talk.

That's not abuse. You work whenever you want, whether it's a holiday or not. That's the whole point of being freelance and applies to any other industry.

And you can set the price. You can't see the destination but you do know the approximate time and direction.

>Tough to call anything done as voluntary with a gun held up to the head.

If you don't have total control and transparency of the contract you pick up then it isn't contracting

The point is that Industrial Revolution capitalists used the same argument that you're using. Those people were "freely" working, except that it was the only real work that could be had. Are people working for Uber/Lyft for whom it's the only way to feed their families, or to supplement their income enough to pay the mortgage or make the rent still "freely" working? If everyone had secure salaries with healthcare and vacation days, how many of those people would "freely" choose to continue working for Uber and Lyft?

> People freely working is not exploitation.

Just because someone freely accepts work, doesn't mean its automatically free of exploitation. Exploitation just means one party is taking advantage of another parties weakness.

Rideshare specifically - I don't think this exploitation is unilateral, but it does exist.

Example - UAE commercial builders freely attracting Pakistan/India laborers and then holding their passports hostage when they realize it's not worth it. https://www.rt.com/news/353432-uae-migrant-workers-slavery/

EDIT: I should clarify - there are degrees of exploitation, the UAE example is an extreme (but used as an example because its so clear cut). My overall point has more to do with people "freely choosing to work" as an idea that people can't be exploited as a result.

You're comparing this to poor laborers held hostage?

Drivers are not forced into anything. They apply and can quit anytime. Earnings and fares are completely transparent. Their schedule is determined by them. Where's the exploitation?

Have you ever driven for Uber? I find it odd that so many people claim to know better for others without any experience of the situation.

Laborers in India/Pakistan were not forced to fly to UAE to take the job, but they did anyway.

> Have you ever driven for Uber? I find it odd that so many people claim to know better for others without any experience of the situation.

I have not, but calculating the economics is pretty damn simple, and their earnings are shit (most drivers dont take into account taxes, car costs, gas, car depreciation, etc.).

I think the problem is that you have to bifurcate those who want a full-time-like salary with those who drive to earn a few bucks, otherwise the discussion breaks down.

Again, having your wages and passport stolen is not "freely" working and completely incomparable to ridesharing.

Earnings vary wildy by person. Some people do great, others don't. There's no universal calculation. Ridesharing has always been about flexibility, not full-time employment, even though some people work full-time hours.

There are numerous other driving jobs if you wanted employment instead of being independent. Perhaps suggesting that instead of changing the law for everyone else would be the better option.

> Again, having your wages and passport stolen is not "freely" working and completely incomparable to ridesharing.

See my edit - I clarified this.

> Ridesharing has always been about flexibility, not full-time employment, even though some people work full-time hours.

Have you ever driven for Uber? This is not correct. Why would drivers sue Uber/Lyft if that wasn't the case?

> Earnings vary wildy by person. Some people do great, others don't. There's no universal calculation.

And some earnings don't even give people enough money to live. Do you understand why most modern societies have minimum wage?

GP isn't comparing anything. They're pointing out how laughable a maxim like "People freely working is not exploitation." is.

It's laughable to think that having your passport taken is considered "freely" working.

You should explain exactly how these drivers are not free before arguing to take their freedom of work away.

Your central error is in assuming that people work because they want to ("freely"), rather than because they have to.

If you can't understand why people have to work, I don't think I can help explain that.

That’s so vague as to be meaninglessness. Everyone has to work to provide for themselves.

Your example does not match the Uber/Lyft situation. They are free to stop driving at any time and are not stranded in a foreign land without vital identification.

Yes people can freely work for Lyft/Uber, but they can't work free. As in, the designation "independent contractor" means they should have a lot more freedom in how they conduct their personal business than they do at the moment.

Lyft/Uber keep their drivers on a leash while saying they're independent contractors. And that is exploitation.

I disagree with what you claim is a "leash". Have you ever driven for Uber? They have already made tweaks to give drivers more control over their fares and you always had control over when and where you work, along with which ride you accept.

More importantly these definitions are decades old and need updating for the modern era. The better solution would be to create a new classification between employee and freelance.

IIRC they only made these tweaks are being pressured by the government. They were perfectly happy breaking the law when it allowed them to grow quickly.

At that point it's full blown Stockholm syndrome, they somehow managed to make people believe it's in their own interest to be denied basic worker rights. Make them believe they are "their own boss" and they'll accept everything, even if they're just a tiny cog in the giant money printing machine (money they'll never see the color of)

Basic worker rights? Have you ever worked as an independent contractor? What rights are you specifically talking about?

People who have no idea or experience of others but want to remove their freedom and tell them what's best for them is far more insidious and dangerous.

> People who have no idea or experience of others but want to

That's the basis of society, people who have a better overall views of things decide for you all the time, and it should be like that.

What's the opposite ? Private for profit companies deciding what's better for "you" ? That's what Uber and Amazon are trying to do and that's why they lose dozens of court cases about workers rights all over the world.

I don't even get your point, "it's not as bad as X", ok but what's the goal ? Raise the bar so that everyone has access to safe, sustainable jobs or lower the bar to the lowest acceptable working conditions ?

The issue is that people making these laws do not have a better overall view of things. When you go against the majority because you personally think something without experience or evidence, that's a major problem.

When did I make the point that "it's not as bad as X"? Both full-time driving jobs and freelance ride-sharing exist. Drivers can already choose what works for them, and many choose ride-sharing for the flexibility it offers and because it's what works in addition to their prior commitments.

Why do you want to take away that opportunity or think that people are incapable of making that choice for themselves?

Personally I don’t think Uber drivers are as stupid as you think they are. They legitimately want to be able to drive flexibly. Also they keep about 75% of receipts for their driving (average gross margin for Uber is under 25%).

> Also they keep about 75% of receipts for their driving

That's good because that way they can pay for their car insurance, health insurance, pension, gas, car maintenance, self employment taxes, frequent car cleaning, &c.

I'm not saying the drivers are stupid, I'm saying Uber &co are very smart.

When you're pulling the "Stockholm syndrome" card you're basically implying the drivers are stupid and unable to recognize they're victims.

Not sure how else to read your previous statement.

Well it’s not even ridesharing as such. I think Uber and Lyft would have avoided legal issues, had they been actual ridesharing companies. Driving around picking up people and driving them to destination where you don’t need to go is called being a taxi.

I really wish we could stop calling Uber ridesharing, when the majority of their business is in fact not. It cause problems for actual ridesharing, which do enjoy some legal protection in some countries.

The vast majority of freelancers do not feel like they are being exploited.

Source: I run a company that helps freelance/contract software engineers find work.

I have you ever worked as a freelancer? I have and so do many many people I know. Go to a bar with all your freelancing friends and play this drinking game: take a drink every time your client has shafted you.

You will be drunk very quickly.

https://vimeo.com/22053820

I have worked as a freelancer for many years. I now run a company that finds work and manages clients for freelancers.

No, I think it’s two fold. One it means they believe increasing rates would make their business less viable and second it’s likely a tactic to force the government to reconsider.

The gov will have to weigh the benefit of people having affordable rides on demand plus people who want “side money” vs higher fares plus people who now are either out of a job or out of side money.

Sort of, the rub is the model can't work for both über and lyft. Their competing triggers a race to the bottom price war exacerbated by the lack of platform lock-in.

In other words, I as a rational consumer will use the service that is cheapest when all other factors are identical. Driver's as rational actors will do precisely the opposite - the one paying me the most - as neither platform found a way to differentiate themselves on driver benefits.

This system behaves according to market principles and as such, costs need to be constantly cut to fight off competing rideshare services.

Über needs lyft to die and vice versa. The real battle can be further abstracted to the investment firms supporting each company. Since the investors know that so long as their bet is funded and working towards one of the two endgames for rideshares (full self driving or death of competition) it doesn't matter how much money is lost per ride.

The belief that consenting adults who voluntarily apply and work for a company as they choose are being "exploited" speaks volumes about your beliefs of the average person's intelligence and capabilities. Perhaps it is the class of individuals who internalize beliefs of another class of people being effectively brainless cattle who must be shepherded and protected -- perhaps it is they who are actually exploiting workers for their own social and political ends.

it's not even viable with worker exploitation. Lyft has literally never not lost money.

The State of California doesn't care about workers, they care about the tens to hundreds of millions of dollars they want from payroll and unemployment taxes, in addition to revenue from automatic withholdings for people whom would otherwise be below the reporting limit.

I dislike the moving of the goalposts about what is "worker exploitation". The workers aren't being exploited, they're working. Worker exploitation would be forcing them to work 80 hours a week without the ability to say no.

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