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Comment by kypro | Hacker News Reader

If you think you're mad as a consumer, imagine all the Uber/Lyft drivers who no longer have any income because the government has made it uneconomical for their employer to do business in their city.

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If they can't pay even minimum wage, it was already uneconomical and being subsidized by government welfare.

How is that true? Plenty of people work minimum wage jobs that aren't subsidized by government welfare.

If someone has a roommate or a partner or a parent or a child that supports them?

There are some jobs that are only economically viable at a certain wage, and anything beyond that makes it not economically viable. So those jobs won't exist.

Exactly, if you can't afford to pay a living wage you have a bad business model, which is exactly what the comment you responded to was pointing out.

Incorrect. McDonalds might calculate that for every hour someone sweeps in front of their store, they make $7 in profit. If someone is willing to do that for $6 an hour, they will pay. If minimum wage is $8 an hour, they will leave the dirt and leaves there.

That has nothing to do with having an economically viable business model.

Please do not engage on HN if you are unable to understand basic economics. This is not a place to argue something this trivial.

They offer a service and you can choose to drive for them. This in a lot of cases helps people make extra money or hold them over. But you think it’s better to let the government remove this option?

I just can’t get onboard with this thinking. I understand it for W2 jobs but for freelance and pick your own hours it does not make sense.

Exploiting underpaid workers is not a service. Even if they are in tough situation with few better options.

Cool talking point.

This would make more sense if people didn't need to work to continue living. As it stands, if people get into a dire enough situation they will be forced to take work on whatever terms the company wants to offer. The reason these laws exist is to protect workers from being forced into terrible situations for a company's benefit.

Of course, the service is voluntary, but for many people the options are "work for pennies or live on the street" -- that's hardly an unforced choice. Why should the state subsidize Uber's profits, given that the state will be the one to support people who end up in poverty?

Tax labor correctly then, so that it reflects how much the government wellfare will need to subsidize.

Simplistic feel-good minimum wage laws are creating unemployment. This is a perfect example.

Uber and Lyft can easily afford to pay their workers the minimum wage, it would however hurt their record profits and set a precedence that they would need to pay a living wage across all cities. Amazingly all other businesses in this city are already able to afford the minimum wage. This is a perfect example of a company tossing some of the lowest income members of society literally to the street rather than pay them a living wage. Thank god we have minimum wage laws.

Can you help me out with the money here? I was curious, so I went and looked.

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

It looks like they made approximately 1.4 billion, with a gross bookings of around 37.5 billion. That would _seem_ to mean that drivers would get an increase of approximately 3% of the full booking price if Uber was a nonprofit?

Best I could find is that there are about 5.4 million drivers worldwide. So if Uber's profit was distributed evenly, each would get about $264/quarter? Without knowing hours driven, I'm not sure what all that boils down to. I suspect it doesn't factor in idle time, without rides.

Can you talk a little bit about how you came up with "easily afford to pay their workers minimum wage"?

A lot of people assume that just because a company has a lot of money that they can freely give away that money to their employees. We've seen this before, Starbucks for example, billion dollar company they have plenty of money to give their employees. No one really takes into account all of the expenses, and what that actually would look like.

So maybe stop subsidizing wages with government welfare, and labor will automatically gravitate away and uber/lyft won't find enough drivers and be forced to hike wages to find drivers.

that is the dirty truth. All of those feel-good minimum wage laws are in fact stealing wages from those workers. Those workers were OK to work for those wages before the law. Now they have nothing.

The result is now higher unemployment and use of tax-dollar to subsidize those people.

Yes. More people should take note that there's always unintended consequences with price controls. It usually makes things much worse.

Reminds me of: https://www.lenconnect.com/story/opinion/columns/2013/09/23/...

Or, since the overall demand for transportation hasn't changed, jobs shift over time to ones with less exploitative terms.

this is the traditional belief, but all the empirical research on this shows that it is not true.

https://www.umass.edu/news/article/umass-amherst-economists-... https://www.economist.com/finance-and-economics/2021/01/30/w...

_All_ of it? Damn. That's wild.

Those workers often had no other choice other than to get exploited to scrape by, and now businesses who will refuse to pay a living wage have thrown them to the street. It's clearly economically viable for them to pay the bare minimum, but they will literally cease business than accept slightly lower profit margins.

Yeah, to be clear – I obviously want people to be compensated well for their work, but the path to that isn't as easy as passing a law. And I wish that wasn't the case, but it is, and ultimately this is the consequence of pretending otherwise.

But having laws still works better than to just hope that no greedy businessmen would ever want to exoit workers.

They are okay with it at first because they don't realize they're going to wear out their cars. Then when the car is in the shop for a week, and they can't work, they're not only paying for expensive repairs, but also not making any income at the same time. There is a reason the turnover is high with Uber and Lyft, and it's not because the pay is good.

Or maybe it's a splash of reality for those businesses that have relied on undercompensated labor and VC money to acquire market share.

Not really. They haven’t been doing that for a few years now.

They are just going to leave the market if it becomes unprofitable. I see people complaining all the time about ride prices so the consumer doesn’t want this and im sure the people driving aren’t happy to lose the income as well.

Who is winning here?

It's not unprofitable, it's them posturing that they will refuse to lower their profit margins. Do you honestly think they can't afford to pay their employees the bare minimum that literally every other business in the city is paying? No they can easily afford it but if they do pay their workers fairly it sets a precedent that would slightly lower profits the "growth at the expense of everything" mindset.

Presumably those other businesses are able to generate more revenue per employee. Otherwise, they'd go out of business (which happens all the time), as Uber and Lyft are doing here. What do you believe their profit margins are? Uber's latest investor update says theirs was ~2.9% last year, though that number probably requires a decent amount of familiarity with the business to interpret.

I can't imagine investors would be very happy about them choosing to posture instead of making money with their investment if that's what they were doing.

Obviously investors want better margins. Treasuries are paying 4-5% guaranteed, so why invest in Uber to make 3%?

I think I'm more angry about employers feeling so entitled to labor that they would rather close their doors and fire everyone than pay them even remotely fairly

Do you have a view on child labour laws?

I was working at 14 in Florida. What do you consider to be child labor?

I have lots of views they likely don’t line up with yours because most people don’t see how the low end of the economy actually works.

I’m sure you’d agree - the devil is in the detail. A kid working for some pocket money after school or at the weekend is one thing.

A kid dropping out of school at a young age or being pressured to work is another, and symptomatic of other problems.

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