Uber Drivers “Strike” and Switch to Lyft Over Fares and Conditions
buzzfeed.com
buzzfeed.com
The value of Uber isn't really in the tech or the app - it's in the networks of riders and drivers in each city. If each of those can be aggregated into some other kind of service, where Uber, Lyft, etc. are just providers of payment processing, and possibly some operations expertise, that middleman network will capture all of the value.
One could read Uber's insistence on canning drivers who turn down too many rides as an attempt to reduce this leverage, since the only way drivers can exercise it is to turn down Uber rides in order to drive for somebody else. Requiring them to accept a certain volume of Uber rides effectively ties them to Uber.
We're gonna need an Uber for Ubers. But of course a middleman is necessary - who's going to match customers and available drivers? But if drivers have the leverage, it could resemble more of an agent relationship.
Why haven't Uber/Lyft demanded exclusivity with drivers?
> Why haven't Uber/Lyft demanded exclusivity with drivers?
That was my point above, it sounds like that is what Uber, at least, is trying to do. They want their drivers to be Uber drivers first and foremost, so they punish drivers who turn down too many Uber-proposed rides.
Of course, if that's the relationship they want to have with their drivers, it sort of calls into question how "independent" those independent-contractor drivers really are. If Uber wants drivers to only drive for Uber, they could always just hire them as full-time employees. That would cost them money, though, so instead they prefer to keep their drivers as contractors and just force them to behave like employees instead.
It still might not be legal for a part time contractor, but it wouldn't be because of non-compete law.
There are two sides to the story: If customers are so enamored with Uber that they wouldn't consider Lyft or the other services, Uber will still be in control.
EDIT TO CLARIFY: Did not mean to suggest that customers are indeed enamored with Uber. Only wanted to point out that driver promiscuity does not necessarily threaten Uber so long as customers flock to them.
Customers like you describe certainly exist, and may be the majority, but mercenary customers who switch services are a large subset of the total. For example, we don't surge, and a substantial number of our customers report that they only use us when Uber and Lyft are surging.
There's also a time-frame issue here. The number of users who check different services with every ride is low. The number of users who check different services when their primary service is surging is higher. The number of users who are open to occasionally checking out other services if they hear good things is higher yet.
Cost-insensitive users who have Uber brand loyalty may be a large rump population for Uber -- they were the original adopters of the service. But their growth has been in cost-conscious people, and they've been in deep competition for those people, in a price war. Those passengers are a large enough share of their user base that they can't do without them.
Hailo operates in Boston. They use real taxis and are well-established in other cities, probably worth a try if you are looking to replace taxi dispatch.
Thanks for the kind words, and I hope we get to Boston soon and you can give us a try.
Basically while there are network effects in the sense that any provider (Uber, Lyft etc.) will need to have some critical mass before there are enough drivers and enough riders, both can subscribe to multiple providers and there is no long-term stickiness at the moment.
In other words, this is not a winner take all market with FB/LinkedIn/Twitter type network stickiness and the overall market is still fair game. The driver's rating is the only sticky data, and it is unclear in this context as to how valuable that is as riders are not going to wait an extra 30mins to get a 5-star driver vs. a 4-star driver.
This should not come as a surprise to anyone since right now most metros have multiple competing taxi service providers, so it makes sense that that may be replaced by a similar multiple mobile-app taxi providers.
Also, it is difficult to re-paint your taxi when you move from one traditional provider to another, in the Uber/Lyft/etc. world, that is no longer required, so provider switching or aligning with multiple providers is trivial which will imply that in future the providers' margins will be squeezed out and riders and drivers will keep the most benefit.
EDIT: I'm willing to me a Long Bet [1] with anyone regarding fully autonomous self driving vehicles in regular use in 6 years.
I agree someone is going to need to clean them out though.
You could outsource the car cleaning with an agreement at any full service car wash.
One doesn't even need a physical presence anywhere to make the business work.
While high-capacity electric vehicles like a Tesla wouldn't be able to wirelessly charge, it should be trivial to build a physical dock they can connect to with no human intervention (similar to how SpaceX designed the DragonEye mating connector for autonomous mating to the ISS).
There will be significant power losses (10-20%) and alignment issues.
One thing I really like about the whole inductive road concept is that it totally removes the need for a battery, one of the most expensive parts of an electric car.
You'd basically have a full-size slot car (if you remember those) track (but without sliding contacts).
http://www.greencarreports.com/news/1094329_self-driving-car...
(Google's current effort relies on extremely detailed mapping of all the roads involved, but given the continued existence of the StreetView program that approach probably scales tolerably well.)
As it is, I'd even settle for voice control on my phone that could reliably understand me.
They added a slight "aggression" back in 2011, if other cars aren't letting it out it starts pushing forwards a bit:
> Sometimes, however, the car has to be more "aggressive." When going through a four-way intersection, for example, it yields to other vehicles based on road rules; but if other cars don't reciprocate, it advances a bit to show to the other drivers its intention. Without programming that kind of behavior, Urmson said, it would be impossible for the robot car to drive in the real world.
http://spectrum.ieee.org/automaton/robotics/artificial-intel...
I really don't understand why people think small behavioural differences like that require decades of work. Things that humans find difficult and stressful are likely to be the things that are significantly easier when you have a reaction time measured in milliseconds and full 360 degree vision.
Note that drone could mean a car in this case. UAV being an unmanned aerial vehicule.
- As a 'driver' I get a car that let's me free up large chunks of my time - As a company like Uber the driver 'input' to my model is now far more consistent, predictable, and inexpensive - As an insurance company I can start undercutting my competition by charging less to insure this substantially safer means of transportation while still pocketing a nice margin - As a car manufacturer I now have an extremely compelling reason to sell cars to people that would otherwise wait between 4-6 years in between car purchases - As a government I can (if I'm smart) try and pass laws that will result in drastic reductions in accidents, deaths, etc... I'll also likely be bringing in a lot of business and money by being on the leading edge of this (less traffic and congestion, new opportunities for businesses that leverage these cars, etc...). Whatever revenue I lose in traffic tickets I can make up for in other ways (like a reduced need for traffic enforcement).
As soon as any of the above are able to make/save money this is going to snowball.
The lobbying power and influence of the teamsters and taxi unions is probably the single largest hurdle but if self driving cars are as safe and cheap as it appears they will be this will be a speed bump, not a roadblock.
As a driver, you probably lose your job. Not with the 3-5 year out model, but the one that comes 10 years after that. Even with the 3-5 year model, suddenly the competition for your job becomes extremely tight and starts to focus on things like people skills and entertaining, since the automated car will be doing most of the "heavy lifting" most of the time in a way that is automated into a commodity.
As Uber, you save a lot of money but you also lose a lot of moat, it becomes much easier/cheaper for other companies to suddenly field a fleet of cars.
As a car insurance company things look really iffy for you, again not so much in the 3-5 year timeframe but a bit further out when the human is completely unnecessary since at that point the insurance will be more about insuring the companies making the cars and car software and less about personal insurance, which means there is still significant money to be made, but probably far less than now (if the safety of automated cars turns out to be as great as it should) and by far fewer players.
As a car manufacturer, you'll do well at the beginning but the eventual model of a networked driverless transportation system should require far fewer people to own fewer cars and still live as if they do own cars, which is a long term problem for you when you've built a business optimized to sell cars to broad market consumers on a 5-ish year cycle.
As a government you should, in an ideal world, be in pretty good shape for the reasons you outlined, but good luck dealing with the lobbyists from industries this may "disrupt".
I do think driverless cars are quite a bit closer than most people think, for a lot of reasons, I just think they are going to upset a lot of applecarts on the way in, which isn't necessarily a bad thing unless you're an applecart vendor.
It took one year before the race was finished.
And what does "regular use" mean? That seems like the critical component of a bet like this.
If anyone can buy a self-driving vehicle, Uber and Lyft are aberrations, as anyone (even FedEx and UPS) could provide self-driving vehicle livery services. Its no longer a marketplace business; its a fleet management business (and both UPS and FedEx are extremely capable at managing capital expenditures, fleet operations, and system capacity).
Another interesting consideration is who is building and selling these automated vehicles. Hypothetically a future Google building vehicles could acquire Uber and now they own the entire value chain.
A company such as Google could earn a substantial piece of the rider's revenue from advertising which would make it hard for competitors much like Yahoo & Bing under earned Google on search inventory. At that point it becomes very hard for competitors. Does ad based earnings sound unreasonable? Consider that companies, such as Delta, already are bidding their organic listings down on Google. They rank #1 for their name yet still buy the inventory. You could jump in the car and say KFC -- and KFC pays Google for the ride. Or you say "fried chicken" and Google gets even more money to take you to the nearest KFC (or may be Popeyes in that case.)
Secondly, consider additional activities in the vehicle. A car build to drive itself is going to be configured differently than a manned vehicle. May be a Facebook car arrives and you strap on the complimentary Oculus headset.
I don't know what it is, but don't discount the ability of a self driving car service to substantially differentiate itself beyond competitors in the future.
Any of these options will make it extremely difficult for public transit to compete. Certainly cabs are done without gifted monopolies. (Also worth considering if a self-driving cab company can retain any political power without having a fleet of human drivers)
Whether or not Uber is overvalued, they are taking the money. Probably the better choice. The US stock market keeps hitting highs, at some point there will be a drop, or may be a crises with junk debt (very low yields just like 07) and it is going to be a lot more difficult to raise money over night.
Hence, I see the self-driving car to be more of a competition to short-term rentals like Zipcar. In situations where you don't want to drive (have to work/talk on phone; after a you've had a few drinks etc), you'd still need a driver.
You may as well pose it as "what if we invented teleportation?" Many of the end results are going to be similar.
Then they get revenues.
Then use that to grow out and manage it for other cities a well.
My city provides roads, fire, police, and other services in a pretty efficient manner. If yours doesn't, I suggest you campaign for more transparency.
Mine doesn't. I saw a ladder truck, a fire engine, and multiple other vehicles show up when one guy passed out and need medical care.
Don't take my word for it though, the Mayor of Provo answered the question much better:
http://provomayor.com/2011/03/04/why-do-we-send-a-fire-truck...
"I’m often asked why we send a fire truck on every medical call. Does it really require an ambulance and a fire truck for many of the minor injuries? It seems a waste to drive a very fuel-inefficient fire engine to something where the additional personnel are not needed.
While there are some calls for emergency medical assistance that can easily be handled with just the two personnel on the ambulance, there are many that require additional help. Nearly every EMS system sends a unit to “back” the ambulance for a number of reasons. First, nearly every life threatening emergency incident is best handled with at least two paramedics in addition to the driver. Second, there is not always enough reliable information on the patient condition to determine if additional help is needed. Valuable time may be lost if additional personnel are not dispatched until the ambulance arrives and makes an assessment. Finally, even so called “routine” medical calls often require the patient to be lifted into the back of the ambulance. Even if the patient is not obese, it is safer for the patient and for the backs of the medics to have additional help to lift.
When the fire truck is not needed on an incident, it is released to go back into service as soon as possible. The cost of the fuel to have the extra help immediately available when it is needed is a small cost when compared to the loss of precious minutes when a life is on the line."
> Diesel and miles on the truck are cheap, and peoples' time is a sunk cost.
Is a fair point. That ladder truck exists just in case an earthquake breaks the water lines and sprinklers stop working. I still do not see my city (or many others) as shining examples of efficiency. This does not mean I want to privatize things like fire departments and police as that would has its own issues, but neither do I think cities are so efficient that we should have them handle more things.
My city (or well my old city) Chicago takes 12 years to resurface a road. That's not efficient.
Paradoxically for the disruptors, the way out of this trap is for Uber and Lyft to lobby for greater regulation, stringent requirements for insurance and liability, background checks, safety inspections and government licenses. They need higher barriers to entry.
They need to carve out a space safe from competition, or it will rapidly devolve into a lowest-common-denominator market.
Not that there's anything wrong with that.
Taxi drivers have lobbied for years to build up the kind of economic protections they have from disappearing margins in a competitive marketplace, and consequently being a taxi driver meant you could make a middle class living without tortuous hours.
Uber comes along and operates without the limitations of those protections and drivers earn less. Ultimately without intervention it puts a whole industry of people on a trajectory towards poverty, and this is before we even get to self driving cars.
What are we going to do with everyone who gets forced out of their middle class jobs?
Because you have networks of contractors, you can lever social ties to get a job... This is especially important for immigrant communities.
They can ride the transition period then at least before any serious challenger can take the market.
In theory .. I don't see them lasting long enough to meet the new tech before they implode.
Disregarding the fact that the "driver in a car" model is never going to be the most efficient means of transporting things (as opposed to people), we're ignoring the fact that the "Uber for X" formula already has many players.
Instacart, Seamless, GrubHub, Google Shopping Express, Postmates, every product category already has an "Uber". In fact every product category already has several "Ubers".
Uber won't have a first-mover advantage in any of them, and a lot of them thrive on having logistics options that aren't "dude in a sedan/SUV", and have built substantial hard-to-clone infrastructure on that front.
Uber has a lot of momentum, and a lot of hard-to-clone systems built around freelancer drivers, but IMO others are ahead in applying logistics to other things. This is like saying "Toyota can leverage their engineering expertise and totally own aerospace!" ... without acknowledging the existence of Boeing and Airbus.
Uber seems to be collecting much more interesting data accross greater distances than those you mention which I why I think about them as a logistics company.
But again I think they are grossly overvalued and I think they will find themselves having to change to something else as competition will heat up and pushes prices down.
Carry one phone for Uber and one phone for Lyft, and swap out the branding when representing one or the other.
But in a future where a large percent of rides are shared by 3 passengers on average, or maybe even more via SUV(for cost savings of course), being the dominant provider is tied directly achieving optimal routes and average share ratios.
In such a future , the network effects over riders is much stronger , and it's probably a "winner takes most" market.
I kind of doubt that there will ever be a day when rides have an average of 3 passengers. Figure that if your base fare is $20, the first person you share with saves you $10 (or maybe $9 or something if you have to shore up the profits of the hailing app). Second person you share with saves you... $3. Third person saves you $2.
The returns to the passengers for additional passengers falls off fast, and the costs to the passengers (in terms of time, of discomfort, etc.) are linear or even more than linear. So probably not three passengers.
But two passengers is possible and would make for a real network effect... if ultimately there's enough demand for shared rides at all. There might be! Hard to say.
But the end goal is to replace a large part of private transportation. And with car occupancy of 3 passenger and a drivers ,maybe cars start to get special road rights(as a tool to decrease traffic - it's part of some future roads in israel).
At that point, with UBER running a large part of the traffic and being able to create optimal routes, together with special road right , the difference in delay might not be that big versus driving , and you don't need to drive.
Yes, there are many if's here, as in all visions. but it might come to pass.
I'm afraid of a world in which Lyft is forced to quite (as you only so long sustain on VC money), and Uber then abusing it's monopoly power.
The difference to the existing cab market is the extraordinary scale and growth Uber posses. They can simply afford to undercut everyone's prices for the short term with their billion of dollars in VC money.
Something that would cause problems is if a driver was simultaneously accepting requests on one service while performing trips on another. I've had this happen as a user, and you just see the driver going the opposite direction for ten minutes while claiming to be 'on the way'.
Another problem might be cancellation rates; if a driver were online in multiple apps and got simultaneous requests, they would have to accept one and cancel the other. Acceptance rates are part of a driver's performance records on Lyft/Uber/etc. and declining lots of rides could get a driver's account deactivated.
One thing to keep in mind, is that a "spontaneous pick-up of a new rider" workflow is very similar to a "switch rider to a new network" workflow. If the apps are designed to be rapidly downloaded over cellular/LTE then this could often be accomplished in the space of a single ride, facilitated by coinciding GPS information.
Edit: Also, the strike is going forward - not all of their demands were met. Maybe this is just so Uber can say "hey, we tried to do what they asked?"
The existence of Lyft demonstrates that Uber's first-mover advantage isn't insurmountable, so who's to say the third-mover shouldn't be a free utility that provides matchmaking at cost?
And are you going to vet drivers at all? Check that they have a license and insurance?
Who says you have to run credit cards? Users could pay the drivers cash, or the drivers could have their own Stripe readers or similar.
Lyft was actually the first mover on the the UberX product category, Uber was only doing premium service when Lyft started growing.
Ultimately this market is a race to the smallest commissions possible. There are costs involved like credit card processing, insurance, operations, etc. I could see commissions going down to 5%.
If someone were to build a Stellar-like decentralized market that matched drivers with riders who pay with the market's internal currency, the incentive to build and improve upon the service would be the appreciation of the currency. People who thought it could succeed would buy some of the currency cheaply, build applications that make the market easy to use, and profit from the gains their improvements cause.
It could happen.
And anyway, I bet there is a surprising level of sophistication to eg: Uber's software
Do you need any of those things? How much does Craigslist spend on marketing and sales?
Operate as a non-profit, compete only on price, and let drivers spread the word themselves. Imagine if at the end of the ride, your Uber driver told you, "Hey, next time call me with the CheapRides app and it'll cost you 20% less, and I'll make more."
The problem is simply that a couple weeks ago Uber started sending UberX fares to Uber black car drivers. Which was a dumb move, because they are unprofitable and undercut the value of the premium car service. They've now reversed that dumb move.
The article surprisingly doesn't really spin this into generalized pontificating and really talks about this specific grievance at length. HN commenters however are responding as if this was a general piece on Uber's failings as a whole... Strange.
When articles are posted about Uber drivers earning $90k/yr, I'm sure many folks quit their $40k office job and hit the road. The thing is, driving taxi is pretty low skilled so the growing supply of drivers will really push down their income. There's an efficiency problem when an Uber driver "can earn" more than 75% of Americans, and existing drivers have been reaping the benefits of those inefficiencies.
The take-home from $90K driving taxis is very different than the take-home from $90K sitting at a desk.
It is a no brainer.
* Unless you have enough money to change regulations in your favor, skirt regulations, and so on, in which case it's survival of the financially-backed.
[1] http://www.theverge.com/2014/8/26/6067663/this-is-ubers-play...
It would be such an Uber-move.
I wonder how much good the office protest will do versus just emailing Uber saying "Adios Uber! I'm headed to Lyft because of..."
The on site picketing made sense for blue collar industrial and government workers because the switching cost of quitting your job and (hoping) to get hired at another plant would have been very high. For hire drivers working for Uber and Lyft essentially have close to zero switching costs. A demonstration of that would seem more effective than picketing.
Local papers in Dallas have been doing quite a bit of coverage as Uber and Lyft taken on the politically connected taxi industry here. I don't know if intra-service fighting would get as much attention.
Maybe some HNers in the Long Island area will chime in.
Long Island City is right across the river from Manhattan. It's technically on the Island, but for most people Long Island = Suffolk and Nassau, not Brooklyn and Queens.
The main difficulty in getting a network like this to succeed is the fact that there is no incentive for new drivers to join.
Until then, they are just a taxi company with lax employment protocol.
If you lock in a driver, you start to look like an employer with employees. This creates enormous payroll tax responsibility, workers comp insurance and other headaches for Uber/Lyft.
I would bet that Uber/Lyft have burned a metric crapton of lawyer and accountant brains in an effort to be on the "safe" side of the independent contractor vs employee fight. They're not going to screw that up.
If the drivers create the value/provide the service and Uber is facilitating that by taking a share, it has to make sense for the value-creator/service provider to continue the relationship. If Uber erodes that margin, the drivers will leave.
Eventually Uber has to change to benefit their service providers and act a little more ethically. The drivers know of their underhanded ways with dealing with Lyft and eventually the public will.
I am an immigrant, I drove a black car in NYC(many years ago), my cousin drives one now. He is none too happy with the UberX situation right now.
Uber should consider the plight of the drivers and not their 100X VC overlords. Nobody ever got rich driving a cab, why victimize the drivers?
"Because we can?"
"We are making the market more efficient"
"Frictionless"
It is just at the expense of the drivers. That's your friction point.
Hard working people just want a fair shot, not to be exploited.
Instead of a billion-dollar pay day, why not just a little human decency.
I'll keep using UberX in cars that don't need $80/day in gas.
Been in those kind of jobs myself and the only way out is to upskill until your value as a worker is high enough that ruthless managers that couldn't care less about the impact of their decisions on individuals won't get away with it.
I feel like I am missing something here.
If there was a factual claim here, I have to believe that they'd be sharing their numbers. It would be trivial for them to show a decrease in earnings (they can easily calculate gas and wear-and-tear) in the before-and-after earnings. The fact that that isn't happening makes me believe this is similar to the protests last year in SF. From the reports back then, it ended up being mostly drivers who had been banned from the uber platform who were trying to be reinstated (although that's not what they claimed).
They're trying to convince Uber to stop doing what they don't want (according to them, they do not make more by accepting UberX fares, no matter what the company says) by denying them labour. In the meantime, they're doing work elsewhere, although are hoping not to permanently work there; they're hoping that Uber will cave in.
Denial of labour ("striking") is a tried-and-tested approach to persuading companies to do what the labourers want. They can't operate without labour, so labourers organise to deny them that until they get better working conditions/better pay/etc.
Assuming enough labourers agree to deny labour, this will work unless (a) what the labourers want, the company literally cannot provide without going bust, or (b) there are enough people looking for jobs and willing to put up with the bad terms that the company can hire them to replace the striking labourers.
This is a relatively simple idea, and has been a thing since the Industrial Revolution; I'm not really sure what you're not getting.
Leverage the power of scale. Unions 2.0
Even in a competitive market for autos, the capital dependence of the industry -- and potentially geographical separation between plants -- means that if the workers in Alan's factory are upset with their working conditions, they very likely can't just walk over to Bob's factory en-masse and sign up to work there. The ability to do that with certain services that are 1:1 and where the middleman is just providing matchmaking gives the individual service providers more power to set working conditions with the middleman in a market where there are competing middlemen then would be the case in many industries.
"provided entirely by one worker" : this is like admitting that the problem comes from injecting hierarchy into the system, which in a free market can only happen voluntarily if both parties benefit from it, but in a statist society is imposed or restricted by the economy planners through regulation.
"essentially a matchmaking service where there is very low [switching] friction" : every market is a matchmaking service between the seller and the buyer, and the way to sustain low friction is to have as little regulation as possible (you will see the Uber/Lyft_fuelled prosperity (e.g. happy workers) disappear if the government steps in, and it will decrease wages to the point that it will be equal to the taxi market which is heavily regulated)
"which is not true in many other industries" : how can we know? "many other industries" are mostly regulated, and heavily so.You're saying deregulation doesn't work in other industries because they're already regulated.
The problem of workers and factories, as far as I know, is solved by unions. However, historically governments have regulated unions as well. Cf. Bangladeshi garment workers, their poor working conditions and their torturing of labor organizers.
No, markets are not matchmaking services. Markets are places where people make matches, matchmaking services are a service that is sold in the market. Notably, its the core of the service Uber and Lyft provide, and its low friction to switch, as a user or supplier, between them. This is a special characteristic of the kind of service Uber and Lyft are selling.
> "which is not true in many other industries" : how can we know?
Because we can readily observe that what many other industries are selling is not matchmaking services between single-worker-provided services and purchasers of those services with low switching friction for workers because local competition exists which can readily absorb additional workers because there is little capital dependency for the service being provided that isn't carried with the worker and there is low friction for consumers to switch between service providers.
> You're saying deregulation doesn't work in other industries because they're already regulated.
No, I'm not saying either that deregulation doesn't work in other industries, or that to the extent it doesn't its because they're already regulated. I'm saying the specific features of the market in which Uber and Lyft are operating which provide significant leverage to their drivers to improve their labor conditions by leveraging competition among potential employers does not exist in most other markets, and so is not simply generalizable into "improvement in working conditions come through competition not regulation" (and that, additionally, history provides plenty of examples of improvement in working conditions that came through regulation.)
It certainly illustrates how workers can, in certain market conditions, leverage competition between services through which their labor is marketed to improve labor conditions, and its certainly worth understanding for that value.
The philosophical connection between the hacker culture/ethics and anarchism was much clearer to me and many others maybe a decade ago, but now I see this losing ground.
There's a fear in people when someone calls for decentralization of power. Most other types of decentralization are obviously good in the eyes of programmers, but not this one anymore.
It is not even that so much in this case as the language used.
The HN community works hard to encourage polite conversation. Even a commonly agreed upon opinion will be down voted if not stated in a polite and clear fashion.
If you had instead stated "This is an excellent example of free market competition allowing more freedom for workers than are exhibited in a government regulated market" then your comment would likely have been better received. :)
This particular case seems to realize said friction (and consequently, the surplus/benefit for the drivers) precisely because the service itself being offered by Lyft/Uber is market like, and the end-consumer product is in fact offered by the drivers themselves. It is not clear to me (or the others disagreeing with you here evidently) that regulation has any bearing on this conversation -- in a world where both Lyft and Uber's respective operations are regulated by the state, the power is still in the drivers' hands because Lyft and Uber are competing to offer the drivers' services.
This is not exactly the common formula for most employee-employer relationships, although it may become more common as this business model takes off. What dragonwriter seems to be saying IMO is that there are certainly cases that don't fit this mold that are good arguments for state intervention; among them are cases where there is greater friction for the employees themselves due to the nature of the business; lack of information about compensation, working hours, or other metrics to evaluate the given positions; or, as dragonwriter said, physical proximity to the workplace itself.
If you would be so kind, please elucidate how you feel this particular seemingly unique scenario is generalizable to regulation in general.
PS: Apologies if this is wordy and difficult to follow, I have a hard time writing coherently into this tiny box.
I'll try to clarify my point: before Uber/Lyft, we had taxis. Just taxis. Then, the argument went: "Well yes, for taxis we need state intervention because if the government doesn't regulate cabs then anyone can charge fare and conditions will deteriorate and it will be inherently less safe and..."
Then Uber/Lyft comes around and all of a sudden the taxi market is "relatively frictionless" and has other "unique characteristics" that make it so beneficial to employees.
I'm trying to point out that there is nothing special about taxis. It is not a special market. I can't deny that one to one business relationships allow for faster change in the market, as the employee can simply up and leave at any point.
The taxi market was the furthest thing from frictionless until competition started. The power will always be in the employees' hands so long as anyone is free to start competition. We see this with this selfsame example - before Uber, taxi drivers were basically employees to medallion owners (and taxis were supposed to be a regulated system for the free enterprise of starting a one-man cab company, not for the rich to buy all medallions and rent them). This is an example of failed regulation that allowed the current exploitation of taxi drivers. Competition is now allowing better conditions for those same drivers, even though there's no pretense that Lyft drivers own their business. It's an above-board operation and more moral than before, and not surprising that it works better for both parties engaged in this.
So what I'm arguing is that whenever we say "but it doesn't apply to roads/this/that", it's usually because of the blind spots we have from looking at the system the way it is and being unable to imagine how else it could be. The roads example is a classic one.
There were also missteps with insurance that companies like Uber and Airbnb made, which were corrected, but, I suspect, wouldn't have been addressed as quickly without a legal/regulatory framework for liability. They're essentially hidden risks/costs to the consumer and employees.
So aspects of this market need more than a simplistic "Yay competition, boo regulation..." And, I think in general we need to move public & political discussion beyond that point an get a better understanding of where competitive markets work, and where they fail.
I'm sure the system works better with stability so the incentives push towards full-timers.
Regardless, the answer to your question is the first result when you search Google for "Uber liability coverage":
> Uber holds a commercial insurance policy with $1 million of coverage per incident. Drivers’ liability to third parties is covered from the moment a driver accepts a trip to its conclusion. This policy is expressly primary to any personal auto coverage (However it will not take precedence over any commercial auto insurance for the vehicle). We have provided a $1 million liability policy since commencing ridesharing in early 2013.
If a cab driver in New York City rapes and kills a passenger, it wouldn't make people distrust all cabs in NYC, much less cabs in other cities; there's no brand name to be damaged by news coverage, and as a news story it probably wouldn't even be covered by media outside of the NYC area.
But if an Uber driver rapes and kills a passenger, it will be covered by media everywhere, because Uber is a newsworthy company and because Uber has a global presence, and the Uber brand will be damaged worldwide, not just locally. Because Uber is a "new thing" there will be lots of people/media asking questions about the safety of Uber (in many cases stupid questions, but still).