Uber Rush
blog.uber.com
blog.uber.com
There's no minimum wage or other worker protections if you sign contracts for services.
The social contract is never signed, & it's getting abandoned more & more.
For Uber to be worth its high hype & valuation, it's going to essentially expand these types non-employee situations. That's why I'm "mixed" feeling about this, as I like great UX, smooth marketplaces, & know many people who want part-time work, not full time.
But, I also know many folks who had "decent jobs" (nothing special, but they can raise a family) driving UPS trucks or other things like that.
An truly Uber-like equivalent for parcels might be problematic. Imagine a couple of company shills, posing as a putative messengers, near your competitors’ headquarters.
Keep on challenging the old taxi industries around the world.
The consensus on social norms is not a consensus if it's enforced by some group on another - that's just bullying, not agreement. If our ideas of how society should function differ, we can either reach some compromise to mutual satisfaction (==consensus) or start fighting and guy with 51% of power will win. But that wouldn't be a "contract", "consensus" or "morality" in it. It'll be just an outcome of a brutal conflict.
Here, I'm applying that there is social give & take & expectations/norms throughout our society. Yes, any social norm/contract/expectation is, by definition, constraining/conservative & thus counter to any progress/disruption.
These are not absolutes, as any difficult moral argument is usually balancing competing, legitimate concerns.
We do have an American social "contract" that is eroding: Things like "If you're born poor, and good in school, study hard, work hard your whole life, stay clean, then you have a great chance of getting out of poverty".
If a new technology is involved, the latter is more likely. Technology can reduce transaction costs and replace firms with markets made up of smaller firms.
A really interesting and accessible (but usually misinterpreted via soundbite) famous work in economics is ' The Nature of the Firm' by Ronald Coase. I think this is the best framework for understanding the key dynamic here. Whether employees or independent "contractors" make economic sense is most influenced by transaction costs.
For example if the cost of hiring, negotiating and communicating with a graphic designer every time was low enough, there would be no reason for a company to hire a graphic designer. But realistically if you add up all the things an in house designer does (including making the decisions about what needs to be done) in a month and try to get those done by freelancers, I would estimate the cost at 3-4X higher. As things stand now, I think that a company contracting over 10-20 hrs per week of design work is probably better off with a full time employee. The main reason is transaction costs.
Technology can cause big changes in transaction costs. What was previously done by companies can be done by markets.
A lot of times you can get things done with a freelancer for cheaper. The cost comes A) when you want to change things and have to start over, potentially with someone who has never worked on your project before and B) you don't have someone thinking about your project design/code/product full time, so you are unable to push improvements or respond to issues continuously.
To grow past a certain point, you need someone who has a financial incentive to put your project at the front of their mind - something employment is great at.
For the Uber v. employee model - employees would give Uber better control over supply, independent contractors get more control over when they can work (hence the number of people I know who drive Uber/Lyft/Sidecar a few weekends a month just to pay their SF parking costs).
I really do suggest you look at Coase' paper. To me, its a great example of what economics can do. It's very accessible. The logic goes:
We know competitive markets are better than centralized ones at a national level. So, why are individual firms so large, centralized and horizontal? Wouldn't Microsoft or Walmart benefit from being many small independent units freely transacting with each other? Why do we even have firms? Why don't individuals just sell their service to each other?
The answer is usually "economies of scale" which is a semi-tautological answer. Why does "scale" need to be achieved by a a firm. A market can have scale too. Horizontal scale (eg a company with its own IT department) actually prevents the usual examples of economies of scale from occurring.
The paper argues (in my opinion very convincingly) that "transaction costs" are the main reason that firms exist. Transaction costs are responsible for horizontal companies. The enormous level of inefficiency caused by the centralization of firms (think East vs West Germany) needs to be offset by even more enormous transaction coss.
One difference that happens when you internalize this point is that you can imagine a lot of slack existing ins systems like this. Hours worked is one example (but not the only one). It's possible that the deliver guy will earn more in fewer hours, Uber will earn more than the parcel deliver companies and parcel delivery will become cheaper and better all drawing from this pool of wasted potential. It's a very big pool.
Really, it should basically be the choice between being a freelancer or an employee, and the choice between hiring an engineer/designer or just one off freelancers.
A "real" contractor negotiates rates regularly and with different pricing models, takes work from multiple contractors, pay for their own tools etc. In some cases you genuinely have a "firm" with one client but that's rare.
The question is are these uber contractors contractors in this sense? I think they are.
With cats, I suppose couriers might refuse them -- walking down the street with a cat carrier would be kind of unpleasant, and it would be worse on a bike.
But I honestly doubt anyone ever trusted us with drugs, the most memorable things I delivered were A) a pee cup (luckily empty) and B) an industrial size sink from Wall St. to 42nd.
I can already imagine lawyers having a field-day on the words ‘possible illegality’.
This is just Kozmo.com 2.0
It is easier to imagine if you consider that it is likely safer for a dealer to simply travel to their customers. One attracts too much attention if they have random people showing up at their residence, or takes on more risk if they have to meet under the public eye. Customers share in this decreased risk.
It also provides low level dealers a competitive advantage in markets they don't have locked down. It might be more of a necessity than optional service these days.
FTFY
Bridge fail; increased load on bart.
Traffic jam == less aware driver which cause me to be more cautious on my route to work == slower... I bike 2 miles from home to Bart, then bike 1 mile from Bart to office... used to be greater distance...
So minimum 6 miles a day: ~260 work days a year = ~1560 Miles biked... *3+ years at a scaling factor of say, 80% is ~3700 miles commuted... my speed has always been based on external factors; traffic, Bart death, cal-train fullness/death, weather, etc...
It is a significant impact on timing... so to say that Rush is not subject to any of this is ignoring reality.
HOWEVER: I will admit that in dense urban environ, with bikes, bike always win..
So: I'd conclude based on own experience that traffic reduction, sans massive catastrophe to the biker, is ~10-20% BELOW WHAT AN UNFETTERED BIKER CAN DO (i.e. n cars at all)
A biker, assuming reasonable distance, should be significantly faster than a car, in dense urban.
So, I may have invalidated my GP post...
I'm pretty sure people downvoting me have no clue about NYC and never you walked through Korea town during rush hour.
I didn't knew bike couriers existed before I saw this movie on TV. Is this common in NY, or is Uber introducing the idea? Is it common elsewhere?
Bicycle couriers have been in New York City and other large cities in the United States (including mine, Minneapolis) for a long time. They are especially suited for traveling from one building in a dense "downtown" area to another.
Awesome expansion by Uber. I suppose the same drivers that drive people around will now be driving stuff around too? Probably doesn't even cost too much in terms of new infrastructure. I wonder where they'll go next.
Edit: They actually did mention that the messenger arrives via bike or foot, so they won't have the same drivers delivering packages.
We’re proud to announce our partnership with the
Bike Messenger Emergency Fund (BMEF). The BMEF
is a non profit public charity organization that provides
emergency compensation to bicycle messengers who
are hurt on the job. With the launch of UberRUSH, we
will donate $1 from each delivery to the BMEF.A comparable example is Google Play or the Apple store. They take a cut of your pay by connecting you to customers but they don't call you an employee. Where is the uproar there?
In Uber's case, and AFAIK, the drivers don't have any of that. They just have to take a course, and then they can just take any job they want, when they want, without fixed hours or even fixed days per week.
To me, they sound more like freelancers than employees.
http://en.wikipedia.org/wiki/Permatemp#Vizcaino_v._Microsoft
This happens all of the time. Large US companies sometimes only hire contractors that have employee status with some other firm to protect themselves.
In the standard test to determine whether an person is an employee, they look at things like who supplies the equipment, who sets the hours, whether it possible for the contractor to have a loss -- most critically in the Uber case, you are more likely to be classified an employee if you do the work that is the purpose of the company.
What that means is that if I clean the offices, I can be a contractor because the purpose of the company might be to make and sell widgets. If I am on the factory floor making the widgets, then the labor dept. frowns on a contractor classification.
These are all just guidelines -- the labor dept or a judge will make the call, but US tax laws incent them to prefer employee status.
(IANAL, but I have served on an employment board, overseeing a US Labor dept regional office)
when did social responsibility go out the window? to me, this isn't a profitable business if they have to claim responsibility for the people they are putting in risk to make a buck. yet, they do it anyone and pass the cost on to the tax payer and no on seems to mind.
On the whole I'm a bit surprised -- the messenger industry has been shrinking a lot as people need fewer actual signatures on documents. I suspect they're doing it more to understand the delivery market and pilot a delivery service than for the traditional document carrying market.
If I have a RUSH order in progress, can I still order a traditional Uber ride?
RUSH is a business use case, which makes me think they'll soon support multiple concurrent rides since that's also a common business use case. When I was a lowly analyst, I often had to coordinate multiple cars for large groups. Really common situation in the NY finance scene (thank god I haven't worked there in a long, long time...).
There is alot of business in this space and they will get the app into high level employees phones
It would be the akin to a corporate 'amex' ... bill the company 'uber'