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Comment by Skunkleton | Hacker News Reader

> ...Uber drivers reported earning $13.47 per hour, which means that on average, drivers report that their car is costing them over $6 per hour to operate.

If you were to drive full time, that would get you about 27k/year, which is about the average income that a taxi driver makes. Rideshare companies are asking you to take more personal financial risk than you might as a taxi driver, but giving you more flexibility.

Still 27k/year is not much money really anywhere in the country. I think this is a symptom of some major underlying problems with our economy rather than an indictment of the rideshare industry. If we can't afford to pay drivers a living wage to do their work, then the people who are using these services aren't as well off as they think they are.

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And what does welfare pay? Serious question as I'm not in the USA and have no idea.

If Welfare pays less, isn't Uber/Lyft a positive thing?

And that is just the direct monetary benefit of $27K vs welfare. There are many intangible benefits to work vs welfare beyond money.

Being unemployed has mental health and life satisfaction costs (summary: https://marginalrevolution.com/marginalrevolution/2019/04/is...). This is research that has existed for > 30 years.

There is significant evidence that long term unemployment REALLY hurts someone's hiring chances when applying for a job (see https://marginalrevolution.com/marginalrevolution/2013/04/co... from 2013 with linked papers). As a stepping stone to a living wage, driving rideshare likely helps people looking for better paid work, especially given you can clock off for two hours to take an interview, then clock back on. Try that working any other job.

The rideshare side of the ledger has better mental health & life satisfaction, more money and better job prospects, vs the welfare side with more free time.

I'd prefer to frame the "living wage" question as of all the people who drive Uber/Lyft, not Uber/Lyft drivers which puts their job above their humanity and implies it is a permanent state of affairs, anyway of all the people who drive Uber/Lyft at some point in their lives, will they be better off with the option of driving Uber/Lyft, or better off in a world where Uber/Lyft is not an option?

>There is significant evidence that long term unemployment REALLY hurts someone's hiring chances when applying for a job (see https://marginalrevolution.com/marginalrevolution/2013/04/co.... from 2013 with linked papers).

But in the study linked, they're really testing whether a resume gap hurts your chances of getting hired. I'm skeptical that it would translate the same to gig economy job, given you can't ask them for a reference, nor is there any indication of how much you worked (did you work 40 hour weeks? a few hours a week?), or how reliable/timely you were.

This is a good point. Gig work is unfalsifiable and worth as much as a blank period to an employer trying to see if you are a good fit.

Hell, you could lie and say that you were an Uber driver and there is literally no way for this to be verified.

People exist who are uncomfortable blatantly lying even if they can easily get away with it, and they tend to be good employees compared to the alternative, depending on the job specifics. Real gig work as a resume filling removes their disadvantage.

Our economy has become so overwhelmingly top heavy that the majority of the population is losing the ability to take part in it. The middle class used to be the mean income, but these days the mean has drifted so far from the mode that the distinction between middle class and lower class has all but vanished. Just taking a brief look at the 2014 census numbers, the mode income was centered around $22,000 a year while the mean was $75,000. Let that sink in. The largest percentage of the US population makes less than $25,000 a year.

This information is only useful if it is contrasted against the number of people who want/need/are able to work. People like the retired, teenagers, stay-at-home parents, college students, etc. all may make some small amount of income each year but generally speaking don't work full time. This isn't evidence of people struggling. It is evidence of people exercising their personal rights which include not being a worker.

You're suggesting that the retired, teenagers, stay-at-home parents, and college students make up the majority of the US working population? Yeah, not buying that one at all. The US economy is fucked right now, we've been madly spinning the plate to try to keep it going, but it's starting to wobble badly. Unless something major is done soon it's only a question of when not if things start to implode.

> You're suggesting that the retired, teenagers, stay-at-home parents, and college students make up the majority of the US working population? Yeah, not buying that one at all.

No where did I say this. What are you talking about?

My point was that the mode income, that is the income reported by the largest number of people was incredibly low. You claim that's because there are a bunch of people that don't really need/want to work, so they don't make much. That implies that that group represents the majority of the working population (in order to be the mode income). You're point might have been correct if we were talking about the mean income being very low, but in this case it's exactly the opposite.

The mode is meaningless with such a huge continuous range. A huge chunk of people are right at that income level because of minimum wage. 50% of the people still make more than 50k.

Look at a distribution graph to help visualize it: https://www.census.gov/library/visualizations/2015/demo/dist...

That chart is s great example of exactly what I'm talking about. Look at that 95th percentile line. It's LEFT of the center. 95% of the population is making less than HALF of the top earners.

Do you even know what point you’re trying to make? Because I don’t think this chart is saying what you’re trying to imply. All this chart shows is that there is a long tail of possible incomes to the right.

It doesn’t tell you how much that 5 percent is making in aggregate compared to the 95 percent. Put another way, you could stuff everyone on the right into a single >250k column and it wouldn’t be as tall as that 90th percentile column.

This chart doesn’t really say anything about wealth inequality (which is what “point” I think you were trying to make) and neither does the mode of the incomes.

Mode is a preposterous and arbitrary measurement to use. Median is what you’re looking for, but it doesn’t support your narrative as well.

Median is just the arbitrary mid point between the two extremes, that doesn't actually mean anything useful to the average person. If you picked someone at random from the subset of the US population that reports an income (presumably the working population) and asked them what their income is, the most likely answer is the mode value, or in 2014 about $22,000. That's reality. That's why that is important.

The median income ($53,000) is literally pointless except as yet another indicator of how unbalanced the economy is. If the economy was perfectly balanced the median and mean would be the same, but they're nowhere near that. The median was $53,000, while the mean was $75,000. An incredibly large chunk of the US is making significantly less than a handful of massive earners. And that's not even factoring in all the dirty tricks that the richest use to hide their wealth like offshoring bank accounts and shifting most of their assets into capital gains.

Median is significant because half make more and half make less. That over half of America makes over 50k is very meaningful.

Mode is just the exact number that appears most often in the distribution. Salaries are a continuous range, except for the various minimum wages. That is why the mode is so low. It doesn’t tell you anything.

>and asked them what their income is, the most likely answer is the mode value, or in 2014 about $22,000. That's reality. That's why that is important.

FFS no. That’s not what the mode means. Mode does not imply that’s the majority probability, it’s just the single highest probability out of the possible outcomes.

Statistically speaking, if you asked random people what their income was, the majority would not have an income of $22k. Let that sink in. Your whole mental model of this is deeply flawed. “Mode” != “majority”.

Consider this distribution:

1,2,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16

What is the mode? Do you see why the mode is meaningless shit when discussing what the distribution looks like?

> Rideshare companies are asking you to take more personal financial risk than you might as a taxi driver

At least in New York, the drivers carry all the risk. They pay for insurance and gas and damages and time (so they take risk of not getting fares).

Tangent:

$6/hr sounds a bit low; actual costs are probably higher.

The IRS standard mileage rate (the amount you can deduct from your taxes for each mile driven) is $0.58/mi (https://www.irs.gov/tax-professionals/standard-mileage-rates)

$6/hr operating costs means the driver is driving a max of ~10mi/hour, if costs to operate are in line with IRS guidelines.

I wouldn't be surprised if drivers are underestimating their costs. The true cost of vehicle ownership is rather murky and I doubt many of these drivers are self-taught accountants.

That's why the driver attrition rate is so high and Lyft/Uber have to constantly run driver recruitment efforts in mature service areas. After the driver ruins their original car in less than a year, they quickly realize the true operating costs.

Say what you will about the taxi business but at least taxi drivers knew that the gate fee on a leased vehicle was $100/day.

The IRS deprecation is very far above the costs in actual practice. It's a very conservative number.

I think the IRS number might be spot on.

Quick math:

   ($25,000 cost to buy car new - 
    $4,000 residual value at end-of-life
   ) / 100,000 miles usable lifetime = 

   $0.21/mi depreciation of value

   $3.22 / gallon * (1 / (17 mi / gal fuel efficiency)) = 
   $0.19/mi for fuel

   Maintenance:
     $40 per oil change / 8,000 miles = $0.01 / mi
     $600 tire change / 60,000 miles = $0.01 / mi
     $1,186 average yearly repair / 16,000 average miles driven = $0.07 mile

That all adds up to $0.49 / mi and does NOT include insurance and DMV registration fees.

But in most cases, you aren't buying a car just to drive for Uber (more than half drive between 1 and 15 hours a week [0]), you're doing it on the side. Your per mile costs for driving for Uber are the marginal costs (costs of additional insurance, fuel, marginal wear and tear, etc).

Also, if you're driving for Uber in a new car that gets 17 mi / gal fuel efficiency, you're not making wise moves. There's a reason a lot of Uber drivers are using 5 year old Prius's - this cuts the fuel cost in half, and the depreciation down quite a bit.

[0] https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hou...

Well, no, because if you are an Uber driver the vast majority of the depreciation in the value of your car comes from driving Uber. Cars depreciate in large part due to mileage.

Finally, "marginal wear and tear" is a completely absurd concept. The cost of wear and tear on maintenance of a car has a positive derivative and thus has no margin, the more wear and tear the more expensive wear and tear gets. In other words, the limit of the cost of wear and tear as wear goes to infinity is divergent towards positive infinity. Thus, there is no marginal cost.

In the real world, you can't spend an infinite amount of money on a car. There is a limit. The margin will come up at some point unless the driver is completely irrational.

Sure, but in the real world that cost is having to buy a new car, which easily increases the cost per mile by 50% and invalidates the point that "you were already driving a car".

It's an exceptionally poor strategy to drop $25k on a new car that only gets 17mpg when your intention is to be a rideshare driver. A purely internal-combustion Civic or Corolla gets twice that. A Prius more than 3x. So do the ones that are 3-4 years old already. And the Prius will probably last closer to 200k miles.

I would guess that the ridesharing companies will buy fleets before they'll pay Chevy Tahoe rates for compact sedans.

Huh; I had no idea that the newer Prius models can get 50 mi/gallon or more in city driving. That does change the equation quite a bit, I think.

Your cost per mile for gas is way off. MPG is way higher for typical Lyft/Uber.

Usable lifetime is also pretty low. A modern car can pretty easily get to 150k miles even driving Uber/Lyft based on the mileage I’ve seen in the cars I’ve ridden in.

Those are your two biggest factors in your calculations and you can cut them both by a good 30%.

I was talking to a taxi dispatcher at some function here in Canada, and it came up that each vehicle on the road would drive about 500km/day. That's about $200-$250/day in what the per distance rate many employers give out(40¢-50¢/km) for fuel and wear on vehicle. But assuming an 22hrs of driving a day(on a taxi with multiple drivers), that's about 22km each hour or $11/hr for fuel and wear on the vehicle according to what many employers would pay in addition to time driving. This is in Canadian dollars, so $11/hr is about $8/hr in USD and works out to an average of $16USD/hr of driving(assuming (22km|13miles)/hr average)

TCO for a Prius is about 6k a year for non-rideshare applications. The link has this cost around ~13k per year, which isn't outlandish. I think you are right in general though. Uber will let you drive an F-350, but there is no way you will make money with it.

I am almost certain 6$/hr doesn't count depreciation and only part of maintenance. Just fuel costs mean that if you were to drive an average of 20mph, you would pay on average 3$ in gas (in California).

It's also important to note that the 13.47$ an hour is heavily biased towards expensive cities, where it really isn't much, and is actually often under the minimum salary.

Its probably also worth noting that it is $13/hour while working. Your income will fluctuate heavily with demand, which further increases your risk. This of course is also true of taxi drivers.

Who says driving for Uber/Lyft should be a full-time job, or statutorily viable as a full-time job? If you consider it only as a second or third job, then it makes a lot more sense that your second or third job is not going to pay as well or have the same benefits as your first job. Those aspects would be expected and reasonable. The low-risk, high-reward jobs fill your primary job slot, then you seek other options as needed. (After all, if it was any different, you might quit your first job and drive for rideshare instead)

What happens in practice is that people try to make ends meet with two or three crappy part-time jobs, because that's all they can find.

(Insert plug for UBI here.)

Passing laws to eliminate crappy jobs doesn't magically make non-crappy jobs come into existence.

Unsure where UBI comes into the picture either since UBI also does not make non-crappy jobs magically come into existence.

It doesn't solve anything, but having an income stream that's not connected with your job should help make crappy jobs livable, and also increase bargaining power for workers, due to having better alternatives.

Also, increased spending does tend to result in more jobs, at least in normal times.

Can you provide a specific fairly objective definition of what a "crappy" job is?

Is it just a job you don't like doing?

How does adding UBI address bargaining power beyond a temporary fix? Eventually prices will adjust to take into account the buying power of UBI. UBI will become the new baseline and people on UBI will lose the benefits of that buying power. Not denying that UBI won't provide a temporary fix, but there is nothing about UBI prevents the market from adjusting to take into account UBI.

if only the people who were driving as an addition to their primary job, uber would be severely hampered. the ease of access and response is predicated on full time uber drivers

That you don’t bat an eyelid at people needing a second or third job to make ends meet is in itself an indictment of the general state of the US.

Who said they needed the extra gig to make ends meet? Some people might just enjoy it, or want to earn a little extra during their free time, or have a seat open on their commute.

To view temp/gig work with a full-time lens is disingenuous, imo.

Why is it necessarily better for someone to have a single job verses multiple gigs? Not everyone wants to be a shift worker or office drone. Its just an implementation detail of the economy not some sort of indicator of a problem.

If you have multiple gigs then at least one of those gigs should provide basic benefits such as insurance. What gig is better at doing it than the gig powered by a megacorp?

I was amazed at the series Breaking Bad, that a teacher would take a summer job to make ends meet. At a carwash no less.

I have brought this up here before and got all kinds of justifications : he has a big house, he has a special needs kid.

I don't think there is any teacher in NL taking summer jobs to make ends meet.

> I was amazed at the series Breaking Bad, that a teacher would take a summer job to make ends meet. At a carwash no less.

Breaking Bad isn’t supposed to be a documentary. Teachers don’t have summer jobs at car washes. Tutoring is both easier and pays better, as does summer school. Working at a car wash is an example of shitty choices, as is his entire relationship with his wife. It’s like his decision to go into drugs in the first place. He’s a public sector employee. He does not need to make drugs to get excellent health care. He does it because he wants to. Working at the car wash is not something he needs to do, it’s a way of expressing his martyr complex.

This is just repeating TNC company propaganda. Nobody is saying this has to be a full-time job. Many, many people work part-time jobs and they are all employees of their workplace. Many of these people also have second part-time jobs, where they are also legally employees of the second company.

You can't really compare yearly salaries unless you pick something to standardize on. You will notice that I didn't pick on benefits at all. I would guess that the reality is most people depending on rideshare for a living are doing multiple jobs.

This is a common logical fallacy promoted by low-wage employers. To turn it around, why should anyone be happy to make LESS per hour for the extra hours in a day they are working?

Fast food restaurants like to argue that they keep their wages low because their workers are young students who just want some pocket money for a car or concert tickets. If you’ve walked into a McDonalds lately, you may have noticed that more of their employees are middle aged folks or even seniors who are trying to supplement their retirement savings.

I often ask my rideshare driver about why they drive, how long they’ve been driving, etc. Very few of them are driving as a hobby or to pick up some side cash. For most of them, it’s their main source of income.

"personal risk"

This is kind of the state of the country really. Ridesharing is an OK gig until you get into an accident, you're fine without health insurance until you get injured, you don't really need a union until you start getting treated unfairly, you can pay for college as long as you consistently have a good salary... we're being statistically gaslit with the idea that most people can scrape by without higher wages and better general protections.

I think you're gas lighting us by ignoring the fact that this personal risk is taken at personal choice. If someone wanted the arrangement that comes with an employee/employer relationship there are jobs that offer that. But not everyone wants that, some people prefer, for their own reasons that are really none of your business to be an independent contractor. This is about choice plain and simple.

Not everyone has that choice, which is why so many people depend on gig economy jobs as their livelihood.

If you do not have in-demand skills for the market, have a family to feed, and the cost of training exceeds your expenses, Uber/Lyft might be one of your only job options.

We make choices within contexts other people create.

And your solution is to take away more choices from people?

The solution is to ensure the worker's employment status is within the legal definition as it's defined. Gig economy could usher in a new era of worker flexibility, but it could also usher in a new era of worker exploitation.

The gig economy keeps pushing risks and cost down the chain, while also showing signs that it may not be a sustainable model as a whole without venture capital to burn through or an end game of predatory monopolist behavior within the market region.

The choice to not have important types of insurance hurts the chooser and it hurts everyone else.

There are many situations where it's best if the societal bargain restricts the options available.

who gets to decide what's best?

Is that a real question? The government, of course. Hopefully an elected one, but no laws of physics force fair representation to happen.

Yes, we've removed lots of choices.

Like for example, it's illegal to sell yourself into slavery or indentured servitude. That's a choice you are not legally allowed to make.

Do you think people are really walking around thinking "I don't want health insurance because I prefer being destitute in the event of an injury"?

No, but there are people who would rather keep more of their paycheck than spend it on premiums or taxes for socialized medicine and take on that risk. Those folks are usually younger people who are more likely to work at these entry level jobs. On the flipside there are people who will risk life and limb doing something unnecessary (skiing, rock climbing, parachuting, etc.) and maybe some of them even feel safer because they know they are insured. Why should we outlaw one form of risk and not another?

People take risks. Life is all about risk and choices. I will never believe it is moral to take those choices from anyone.

Y'jumped to a lot of conclusions, there. I suggest you try asking some genuine questions, instead.

Personal risk isn't an isolated thing. Thousands of people taking personal risk have systemic effects, and these companies aren't paying into it, even though everyone around these "risk-takers" suffer the consequences.

> Thousands of people taking personal risk have systemic effects

How do you know the personal situation of each of Uber's/Lyft's drivers? How do we measure risk for each person in an objective way? Some people might be at no risk, some higher. We can't know! What right is there in taking away options that benefit some people because it might possibly not work well for someone who voluntarily signed a contract? This is not liberal policy. This is paternalistic, state-controlled economic oppression.

> Some people might be at no risk, some higher.

All rideshare drivers are (by definition) participating in the most dangerous activity (western) humans do on a daily basis. Every non-utilized minute they spend on the road adds risk to them as well as to other members of society.

The fact that in most places in the world there's legislation that defines requirements and responsibilities for professional drivers, from qualifications, to insurance, alcohol intake, maximum working hours, minimum rest hours, etc., Implies that it totally does exist.

I think you're gas lighting us by ignoring the fact that these types of choices aren't fully unconstrained. People aren't assuming this risk because they prefer to, but rather they have limited choices available to them given their resources and background.

> but rather they have limited choices available to them given their resources and background.

So let's take one more choice away!? Not every person looking to make some money is looking for something with as much commitment as employment. Not every business needs people to work according to their schedule at a specific place. While you think you're giving full-time employment and benefits to all of these people what you're really doing is taking certain kinds of opportunities away.

Yes! If the free market results in employers offering shitty choices that take advantage of workers with limited options, the government should step in and attempt to correct the power-imbalance that puts the workers at life- and liberty-threatening disadvantages.

Extrapolating from your logic, indentured servitude would still be allowed to exist.

Banning a form of work where workers owns the means of production doesn't seem to be in the workers interest. I'd rather they regulate it in a better way, for example rewrite union laws to make it possible for gig workers to unionize.

Where did I mention the banning of a form of work?

Uber drivers do not own the means of production, as ruled by the recent California courts, because they do not own the capital of their employers, which is the IP of Uber. This is why socialists are developing and operating open-source and decentralized alternatives to Uber in many countries, so that they will indeed own the means of production.

That said, I agree that employment laws need a rewrite for these situations, but we won't get the needed reform to get the gig-worker system to work under either Biden or Trump, so not for at least 6 years.

>While you think you're giving full-time employment and benefits to all of these people what you're really doing is taking certain kinds of opportunities away.

This is some of the most phenomenal bullshit I've ever read.

There's nothing stopping Uber and Lyft from allowing people to work their own hours and also giving them benefits if they meet hourly qualifications.

You're talking about people making <$30k a year while shouldering most of the risk and using their own cars as if they're shopping around for the best FAANG salary.

> There's nothing stopping Uber and Lyft from allowing people to work their own hours and also giving them benefits if they meet hourly qualifications.

There is, if the driver drives in bad hours making their income not come up to minimum wage uber would be forced to pay the driver anyway. In order to avoid this uber would be forced to limit when and where people can drive.

Being an employee means that the company has to ensure that the employees time is well spent so that it is worth the minimum wage and benefits at least. Being a contractor means that the contractor himself is responsible for what he is doing is profitable enough for him to live on. So changing them to employees means that now uber has to ensure every driver only drives when it is profitable for uber.

So everyone who wants to handle this responsibility themselves don't want to be an employee.

>if the driver drives in bad hours making their income not come up to minimum wage uber would be forced to pay the driver anyway

is this a California specific law? There are lots of variable hour workers out there that may skirt by below the hour threshold for a short amount of time, but generally the employer can set reasonable adjustment periods where they'd lose their benefits for continuing to do so.

Uber can simply adjust their algorithm and refuse to give shifts to drivers if there is enough drivers to cover the "bad" time period, which would be the exact equivalent of Uber drivers right now not getting rides (and not getting paid) when there is no demand.

When's the last time you've worked a minimum wage contract job? At that level of employment you're not exactly shopping around for better offers.

Uber and Lyft can offer benefits to contract workers. Do you think they don't because they want to give people the right to choose?

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