"the real harm here will not be to Uber," Uber said. "It is the drivers who cannot work..."
The city's researchers found that drivers made an average of about $9.73 per hour.
For reference, Seattle minimum wage is $16.39/hr. This appeal to employment is disconcerting, as ride sharing apps are doing their workers no favors by paying them so poorly (including the lack of benefits).
When talking about jobs, especially in the US where so many benefits are tied to employment, a job with pay so low and no benefits should not be considered a good thing.
> This appeal to employment is disconcerting, as ride sharing apps are doing their workers no favors by paying them so poorly (including the lack of benefits).
Except that they do, because they provide a level of flexibility not available at most other jobs.
If you're a college student and you have two hours and fifteen minutes between classes, you can drive for two hours and fifteen minutes. If you're a school bus driver who drives kids to school in the morning and drives them back in the afternoon but has nothing to do in the meantime, you can get in your own car and drive passengers at that time and make some extra money. If you have a part time job working three days a week with an inconsistent schedule set by your employer, you can drive another two days a week, even if it's a different two days every week.
There is value in that, or why is anybody doing it rather than working at Walmart or Starbucks where that isn't available?
But if you make the drivers employees then the company has no reason not to schedule their hours inflexibly, because the flexibility was only needed to attract workers at the lower level of compensation.
In practice what you're doing is disallowing employers from offering employees terms of employment that provide the employee with working conditions of greater non-monetary value than ordinary jobs in exchange for less money. There is no reason to think that this is never advantageous for the employee, and the workers who don't find those terms advantageous remain free to work for any other employer.
> When talking about jobs, especially in the US where so many benefits are tied to employment, a job with pay so low and no benefits should not be considered a good thing.
Then do something about all the benefits tied to employment. All of that exists only as a direct result of government policy.
> In practice what you're doing is disallowing employers from offering employees terms of employment that provide the employee with working conditions of greater non-monetary value than ordinary jobs in exchange for less money. There is no reason to think that this is never advantageous for the employee, and the workers who don't find those terms advantageous remain free to work for any other employer.
That is true, but it's an ecosystem thing. Sure, it might be of benefit of some... but to others it's the only game in town. When people describe fast food jobs as for students saving for their first car so they don't have to provide a living wage... that doesn't help single parents who are using it as their sole income. It's better to inconvenience the students seeking a car, to help the single parents. Those at the bottom have nothing but the flex jobs available to them.
80%+ of Uber and Lyft drivers have other jobs and drive in their free time to make extra money. In those cases it seems like flexibility is much more important than a floor on earnings (which will prevent them from being able to drive during times when earnings are less than that). Currently those drivers are showing up because it's the best possible opportunity for them to make extra money.
The 20% of drivers who are full time will benefit, but the 80% of drivers who are part time will be worse off. I'm not convinced that the government should be telling those 80% of people that flexibility is no longer viable. Being able to make some money in their free time (and they're indicating they're willing to do that) seems better than not being able to.
Although it may be true that 80% of drivers are working part time, it is still reasonable to assume that a disproportionate number of miles driven, and therefore wages paid, are being done by the full time drivers.
As an extension, there is a utilitarian argument that says a full time driver will benefit substantially more from the minimum wage than a part time driver will suffer.
Regardless, I think appealing to the proportion of drivers is misplaced. It would be unsurprising to me if more than 80% of trips were completed by full time drivers.
I disagree. If the intent is to help the 20% of drivers who don't have another job (unclear if they're all full time or not but they seem to be the group that you're most concerned with), then it would be better to see regulation that targets them specifically.
Making it unviable for 80% or more of the drivers to benefit the 20% is a tradeoff that one doesn't have to make. There's nothing in the rulebook for creating regulation that says you have to be so heavy handed. All it shows us is that these are lazy regulators who didn't bother to write decent regulations.
Then you'd be encouraging migration from every other industry into Uber/Lyft because, as you say, no other job offers the same flexibility. So why would I work anywhere else if my minimum is the same? Mostly benefits & inertia of life inhibiting trying new things will prevent some of it but there will still be meaningful migration. The de facto wage would probably raise a bit as competition for workers ripples & Uber/Lyft would start implementing caps on how many drivers there can be (because a lot more will still value the flexibility highly) to better control their prices since the demand pricing has a legal floor above the market rate.
This is all obviously assuming there's about a stable mix of minimum wage jobs available in the market to people who need them. Remember that this job needs a new car every few years so there's a bit of capital investment required to maintain this job. There are financing options available but now suddenly this minimum wage work is further costing you even more to pay the financing. Then you're left trying to address that.
Every legal change to the market can have unintended consequences and infinite imagined ones in advance. Some times it's better to just stick to simple tweaks/changes that have a pretty well trodden path of study by economists. It is also important for cities to explore different things too though so that we can collect the data but which city really wants to do that with its citizens, especially how hard it is to pass helpful reforms for which the market response is well-studied and the law easy to explain to people.
Maybe this depends on the locale, but in Houston 90% of the uber drivers that have driven me worked for Uber because of the flexibility.
It was a guy who just started an insurance company with his wife and they were taking turns ubering when they could to help pay the bills until their company got off the ground.
It was a wife who was saving up for a kitchen remodel she wanted.
Several people who were retired.
Several people with waxing/waning medical issues.
In my experience there weren't a lot of people who were using uber/lyft for their long-term income, which make sense because the pay isn't very high, there aren't any promotions, and many of the individuals who would be interested in a that type of job don't have a nice enough car or have other issues that prevent them from driving for Uber.
IMO the first 8 hours of someone's time is worth a living wage, and any time beyond that is worth even more. Because time is the only non renewable resource; it's literally a person's life. So to hire someone at less than a living wage to do any task is equivalent to saying their life is worth less than the job you're hiring them to do. Which is dehumanizing at best, and approaches slavery at worst.
It's better for someone who needs money to get $0 than to get what they're willing to work for? They don't get a choice in what they find dehumanizing or what they're willing to do?
80% of the drivers have jobs elsewhere. So presumably this is to make extra money for things like a vacation, a new TV, or being able to go out for dinner a few more times. Those all seem to be good and worthwhile for people who want a flexible earning opportunity. I guess I don't understand why a government would tell those people they can't do what they're currently doing because they don't think the current process meets an arbitrary cutoff.
If someone is willing to work extra hours, I contend that fact won't change regardless of whether they're allowed to work for less than they're worth. If they can't find any work to do, then they'll make some. That's how we got to where we are today. But from a government/society's POV, there's no difference between a citizen not making enough money to survive (aka a "living wage") and making $0. Both are roads to failure.
A free market without consideration for the value of a citizen is a race to the bottom. It's a responsibility of a society to ensure its fellow citizens aren't killing themselves.
Also, the "doesn't the person get a say in what's dehumanizing" argument is just so fucked up. I guarantee you it was used 200 years ago by plantations lobbying against emancipation. It conveniently benefits the person already in power while slowly exploiting and destroying their victim.
The minimum wage is an example of "consideration for the value of a citizen". If you remove the minimum wage, what do you expect will happen? Nothing? Wages will go up? Then why do we have it?
Pure unchecked free market capitalism is nothing if not efficient. Where a company can't win by innovation (most companies), they'll gladly win by extracting and selling the wellbeing of their workers. Eventually the worker dies, and they get another. And the whole time they say "don't tell these people what's dehumanizing, let them make that decision for themselves!"
> If you remove the minimum wage, what do you expect will happen?
Some people who were previously unemployed will make $7 instead of $0. Some people who were previously making $7.25 may make $7 too. But then everyone will pay lower prices for things. On net that turns into an overall gain.
I don't see anything in that link that actually says that. And if all you're saying is that some people who used to make $0 start making $7 which then brings down the average, how is that actually bad? $7 is more than $0, it's just an artifact of not including in the unemployed/underemployed in the average.
Meanwhile eliminating price controls can increase wages by increasing competition for labor. Right now Alice makes $8/hour but loses the equivalent of $2/hour to commuting expenses. You let an employer across the street from Alice pay her $6/hour and she takes that job instead, ends up with the same amount of spending money because she doesn't have to pay to commute anymore, doesn't have to waste an hour a day sitting in traffic, and her former employer has to pay $8.50/hour to get someone to replace her (or to convince Alice to stay given that she now has another alternative).
Why do you think that every job has to be suitable for single parent breadwinners? Couldn't our society function better if there were different kinds of jobs available, including for low skilled teenagers?
Because there is nothing that a low-skill teenager can't do that a low-skill breadwinner can. That's the point. We need to lift the floor so that even low-skill people can support themselves and their families. Otherwise people with supports having their living subsidized will outcompete people without those supports. Just look at the controversy about having to be well-born to be able to afford zero-income internships that are the gateway into some industries.
> Otherwise people with supports having their living subsidized will outcompete people without those supports.
And this sounds like some form of UBI.
If everyone had some income floor as a starting point, the government could be far less involved in micromanaging employment relationships, and low income people would be in a better position to turn down jobs offering very low wages.
I don't see how that would work. If a teenager or college student gets the UBI they can still outcompete the breadwinner, unless the UBI is enough to provide... but why wouldn't they just stay home and raise their kids or provide care to their elderly parents etc?
They absolutely could do that, which is the point. UBI gives you the freedom to make the best decision regarding how to use your time. If UBI is enough to cover you, then spending time at home raising kids and taking care of your family may be the best use of your time, which is a win for both your family and society.
Both of those things provide value to society as a whole. Raising children that will grow up and be part of society has value. Taking care of those that have difficulty caring for themselves has value. Both those things have additional value in having people doing it that are emotionally connected, and not strangers doing it for a paycheck to have their basic needs met. Allowing people to be able to do those tasks and still meet their basic needs is good for everyone. It also takes pressure off the job market, where basically every single person needs a job. Companies could more freely automate low paying low skill jobs without having to worry about what happens to those people that would be “put out of work”.
> Because there is nothing that a low-skill teenager can't do that a low-skill breadwinner can.
that's not really true. I remember it being surprisingly difficult to get my first minimum wage job as a teenager. the managers at grocery stores and even gas stations would ask if I had any prior work experience and never call me back. most employers would prefer an older and more experienced person if they could get them for the same price. I ended up getting a job at a restaurant, but that was only because the owner was a creepy manchild who wanted paid teenage friends to relive his highschool glory days with.
Pretty much all lucrative career paths have pretty well paid internships. Anecdotally, I've never met someone who's taken an unpaid internship. Of course this sample sized is bias as I work in finance and most of the people I know do as well (some tech as well).
Or they're real lottery jobs that may effectively require volunteer/low-wage dues paying.
But, in any case, internships that don't pay or pay minimally tend to indicate a field that you probably won't earn a lot in anyway.
There are probably exceptions with some summer jobs where the pay may not be a lot but it looks good on a resume in a field that does pay good salaries.
Kids going into medical school will often volunteer in research labs or shadow doctors for free during undergrad. Schools won't consider kids who haven't done this.
There are also paid ways to do this as well like being a medical scribe.
Also if you're poor there much bigger barriers to being a doctor than an volunteering. Like the decade of unpaid schooling. Or remove the need for an undergrad degree for doctor's like the rest of the world.
It is very different from continent to continent and country to country, but the not paid internships I know are for positions that prepare you for tough to get jobs or where the training the intern receives is far more valuable than the work the intern does. Some internships are closer to free schooling in a company with the option to get hired after 3 months. There are bad companies that use internship as cheap or unpaid labor, but that's the abuse of the system, it does not means it is always bad.
I believe film and media. I guess those are only well-paid for a few. A search for "unpaid internships" brought up PR. I'm guessing it would appear more often in industries where networking is much more important and job mobility is lower than in STEM.
It's important to talk about what we're talking about. Uber/Lyft do a bit of sleight of hand by talking about the "median driver's median hourly wage" when they ought to be talking about the "median hourly wage." If there are jobs available for low-skilled teenagers that's fine, but that's a misrepresentation.
In fact, in most cases, low-skilled teenagers, even if they are a majority of workers in a role, still make up a minority of hours worked. Similarly, people putting in 0-20 hours make up 2/3rds of the drivers but something like 25% of the actual hours worked. So they're not really what we should be looking at when looking at what Uber/Lyft's business actually looks like.
80% of Uber/Lyft drivers have other jobs. The vast majority of drivers will be worse off with a floor on earnings that makes many earning periods no longer viable. Those are people who have decided to trade their free time for money and if there were better alternatives they wouldn't be driving for Lyft/Uber. Ignoring them because they drive less hours per week doesn't give us a reason why we should ignore their economic interests. If the goal of the law is to make sure that the 20% of full time drivers are better off, they're probably better off by making regulations around that specifically rather than sacrificing 80% of the drivers who have other jobs (that clearly aren't making ends meet on their own - because they're driving extra hours for ride share companies on top of their existing jobs).
The goal is simply that all hours worked are for minimum wage. Under Seattle law, paying someone less than minimum wage is theft. Nobody is ignoring anyone's economic interests. They are simply attempting to stop wage theft.
I'm not sure I've seen a formal definition of wage theft. Certainly I can start a poorly performing business in Seattle and lose money or could make less than minimum wage. It doesn't feel like anyone is stealing money from me there.
Some work produces less than minimum wage value. Minimum wage was initially created to price minorities out of the market. Cutting off earning opportunities that people would do (and they're currently doing it) but that fall below that arbitrary earning floor only restricts total earning opportunities. That so many people seem to be willing to drive for ride share companies tells us it's currently better than any other alternatives and that they're willing to accept their current payments.
Wouldn't my business make more money for my shareholders if most of the labor was framed as meant for low skilled teenagers working random short shifts?
You still need to convince someone to take the job. Why is someone who doesn't need that level of flexibility and wants an ordinary full time job going to choose that over Walmart?
And if there is an actual reason, why take that option away from someone who is choosing it on purpose?
> Why is someone who doesn't need that level of flexibility and wants an ordinary full time job going to choose that over Walmart?
Why are you assuming there are always other jobs available? In the case when there is, I can see your point. But when there are not it's no longer a choice. Sometimes it's better to just things off of the table to make the whole system better. And yeah it does suck for people in unique circumstances. It's really a balancing act that requires nuance and compromise.
> Why are you assuming there are always other jobs available? In the case when there is, I can see your point. But when there are not it's no longer a choice. Sometimes it's better to just things off of the table to make the whole system better. And yeah it does suck for people in unique circumstances. It's really a balancing act that requires nuance and compromise.
If there aren't other jobs available, you haven't made the whole system better.
I'm not convinced that a higher level of "no job at all" is a better overall fit for society than "some people drive Uber" given that Uber isn't a particularly exploitive thing in terms of destroying the body or inflexible hours or other problems of the past.
It seems like we're trading off a useful form of semi-employment for a greater need for direct redistribution, and I'd rather my redistribution be partially-Uber-shaped and provide at least some features.
A world where Uber exists needs a less-high absolute redistributed benefits floor, and results in some more work getting done to people's benefit.
The problem is, we just are really bad at providing that base benefits floor, and we're trying to make Uber magically fix that for us.
> If you're not being paid enough to live on 40 hours a week, you're underpaid.
This is perhaps a core disagreement, which is wroth digging into. I'm willing to engage with this idea but the disagreement area is critical here.
First, what it means to "live on 40 hours a week" is highly variable from person to person, is it not? If you agree, shouldn't we then avoid making broad judgments based on that concept? I suggest that we leave such judgments to the employee and leave it on him to make decisions on those details.
Second, supposing that an individual decides he doesn't earn enough: isn't is better to rely on him to investigate what he can do to address the situation? There are many things that can be done to address the situation from working more hours, to changing jobs, to taking on training for a new job for example. Isn't this preferable?
> supposing that an individual decides he doesn't earn enough
All forms of safety nets require the consideration of a reasonable floor. I mean if someone feels public transport is beneath them, well tough, but have a warm safe place to sleep with a locked door and fridge seems reasonable. Of course, in time the floor will rise.
> isn't is better to rely on him to investigate what he can do to address the situation? There are many things that can be done to address the situation from working more hours,
People shouldn't have to spend all their time working, even if they have no worthwhile skills. Just because someone has no economic value doesn't mean they don't have human value. They should still have a life.
> to changing jobs, to taking on training for a new job for example.
Those require money and time, not easily obtained. Also, the people who need it most are those with the least amount of access to it.
> Isn't this preferable?
This is personal question, but I say no. Even if you don't agree, then maybe you'll agree with this "The best reason to feed the barbarians at the gate is to keep them out of your gate". Law & order is a democracy, and when enough people decide that the current order doesn't benefit them, it ends.
> but have a warm safe place to sleep with a locked door and fridge seems reasonable.
Yeah, that seems reasonable to me but we also know that there's a great deal of variation on all of the details there (warm, safe, locked door, refrigerator). I see it as necessary to allow/require individuals to make the decisions on all those details. I see it as a necessary condition for people to be free.
> People shouldn't have to spend all their time working, even if they have no worthwhile skills. Just because someone has no economic value doesn't mean they don't have human value. They should still have a life.
I'm sympathetic to this outlook. It's the details of it where I get tripped up with people. One area in particular is the state where someone has no worthwhile skills. I think that while a human being has no less dignity when he has no worthwhile skills, that is an unsustainable state that needs work. Similarly, I question the implicit assumption that there is a connection between someone's economic value and intrinsic worth as a human being. Perhaps what we disagree on what is it looks like for a society to place minimum acceptable value on such life.
> Those require money and time, not easily obtained. Also, the people who need it most are those with the least amount of access to it.
I don't dispute that money and time are required, and that it may not be easy. However I still maintain the responsibility lies in those individuals/workers.
> This is personal question, but I say no. Even if you don't agree, then maybe you'll agree with this "The best reason to feed the barbarians at the gate is to keep them out of your gate". Law & order is a democracy, and when enough people decide that the current order doesn't benefit them, it ends.
There is a version of the statement I could agree with, but in your specific statement of barbarians at the gate, it's also a possibility to not feed them. It really depends and since it's a hypothetical I don't want to engage with it too much. But I do agree that you can't expect to build up a huge class of miserable people and expect stability forever. The question to me is, how can we best serve them? I adamantly prefer to teach and raise them up, difficult as that may be, then to place demands/restrictions on employers.
Then again a few taxi drivers I have talked to in the US admitted starting to drive for ride sharing companies after finishing their maximum allowed shift of 12 hours...
Also I've heard multiple reports that in most of the gig economy markets casual workers are de-prioritized, so that only those who put in at least 40 hours a week stay in the game...
Seattle has the authority to change the conditions of employment - how much less Uber pays in exchange for the flexibility. Uber/Lyft has a right to stop operating there if they don't like it.
Why would Uber/Lyft fight so hard to stay with unfavorable conditions?
Some amount of ride sharing works under arbitrarily unreasonable conditions. Making $1 is better than making $0. But it's not as good, for multiple parties, as the alternative where they make a million dollars, more drivers have work, more passengers can afford rides and the existing passengers (many of which are also lower income people) pay less for them.
Exactly. The only question here is can Uber/Lyft operate in an npv positive manner under these new regulations? If so, then they will and the regs hurt their margins in order to serve workers and that’s fine. If not, they’ll leave, and these people won’t have driving as a source of income.
They could continue to operate but with less drivers, fewer hours worked, and fewer total dollars being paid out to their employees. Thus hurting the employees, anyone who relies on ubers, and the companies while benefiting a subset of drivers who will make more money per hour.
> "In practice what you're doing is disallowing employers from offering employees terms of employment that provide the employee with working conditions of greater non-monetary value than ordinary jobs in exchange for less money."
the other side of that problem is that the wages are dictated by one party (with basically no external price signals impinging on them) rather than being free to respond to demand. it has the same anti-competitive issues that any price-fixing scheme has. plus, there are other sociopolitical forces depressing wages in a decidedly tilted labor market. fix those imbalances and then we'd have much more support for a freely self-adjusting labor market for driving.
> But if you make the drivers employees then the company has no reason not to schedule their hours inflexibly, because the flexibility was only needed to attract workers at the lower level of compensation.
What if there were another purpose to the flexibility, to apply that 'two hours and fifteen minutes' of time the college student had to capturing the market value of shuttling people around campus and nearby, rather than stationing some 40-hour/week employee near campus, hoping to have them utilized all 40 hours?
That makes a lot of sense: allow the market to do its thing and efficiently allocate scarce resources.
But it raises the question: why doesn't Uber operate like a normal marketplace where buyers/sellers submit bids/offers at prices of their own choosing?
By preventing buyers/sellers from participating in price discovery, Uber makes itself look a lot more like a classic employer/vendor than an online marketplace.
Because it adds friction to what both drivers and riders want to be an easy, smooth transaction. Sidecar tried this approach and had their lunch eaten by Uber and Lyft.
What if you can have actual employees and offer flexible times? That can be done.
That college student can sign up for short shifts, after all. You can allow folks to self-schedule. I*m pretty sure Uber already rates folks, in part, by their availability to drive.
> What if you can have actual employees and offer flexible times?
Sort of. If you have actual employees you need to pay for benefits. Someone who only works a few hours a day may not bring in enough revenue to cover the cost of their benefits, so the employer may need to require longer, less flexible hours in order to make it worth hiring someone in the first place.
So, that's an optimization problem around cost of benefits versus amount of revenue, right? The company can view it from the aggregate perspective; they might lose money on some low-hour employees, but still capture the revenue, enhance their market share and convenience, and make it up on revenue versus cost aggregated over all employees.
>There is no reason to think that this is never advantageous for the employee, and the workers who don't find those terms advantageous remain free to work for any other employer.
Your use of "never" is a red-herring. You have to quantify what it means. If 100% of uber drivers prefer higher pay over flexibility, what would be your argument? In other words, your argument completely hinges on a significant chunk of employees feeling like they are not being exploited. Without data, it won't stand on its own.
>There is value in that, or why is anybody doing it rather than working at Walmart or Starbucks where that isn't available?
Because those jobs are soul crushing, if you've ever worked at one of those. Just because Uber is offering "better" working conditions doesn't mean the drivers are happy about the pay. Also, if your standard of ethics is "whatever the employee voluntarily accepts" then why have a minimum wage at all?
One of the strongest appeals to me of a sustenance level of UBI is that we could then abolish the destructive minimum wage laws that shut some people out of the workforce, preventing them from the pride that is inherent in a solid effort at a job and bettering their lives on their own.
Right now, if you can only create $7/hr of economic value, no employer can legally employ you for a regular job in a way that's profitable for them.
>Right now, if you can only create $7/hr of economic value, no employer can legally employ you for a regular job in a way that's profitable for them.
Sure, but its just a shifting of costs. Either the employer pays them the extra $ or the government taxes everyone and makes up the difference. It comes out of the economy in either case.
I think UBI is a great idea, but so is minimum wage, and so is welfare, etc, etc. They're are all great ideas intended to help people in tough conditions.
I find it useful to point out the faulty core of a person's argument when they're making a bad point that will hurt people, so that others who come across it don't give it undue deference.
> The city's researchers found that drivers made an average of about $9.73 per hour.
Why cut the quote off in the middle of the sentence?
> The city's researchers found that drivers made an average of about $9.73 per hour, while the ride-hailing companies' researcher put the number at $23.25.
I assume that the city's researchers looked at take-home divided by time available to drive and the companies probably only counted the time the drivers were actively engaged. It's why they only want to have to pay a wage when a driver is engaged: they can make them clock out in between rides.
They both said they did what you note. But they have different data sets.
The companies included tips and not any delta associated with insurance.
Oddly the companies would not share their data set with the city but did share it with Cornell. Just on that count alone I tend to look more favorable to the city’s numbers.
Morally you might be right, but that’s not the legal definition.
Your tips are counted as part of your wages. In some cases companies can pay wages below minimum wage as long as the sum of wages and tips adds up to minimum wage.
> In some cases companies can pay wages below minimum wage as long as the sum of wages and tips adds up to minimum wage
Both federally and in many states wage and hour laws, there is a lower tipped minimum wage that can be paid so long as the sum of tips and actual wages is at least the the level that would be the minimum wage for a nontipped position, but the fact that there is still a minimum for the actual wage and that the wage is summed with tips to compare against a separate target makes very clear that “wages” and “tips” are separate buckets, the former does not include the latter.
Now, there are other things (like income taxes) that operate on the sum not one of the individual buckets, but that's a different issue.
> but arbitrarily excluding wages from someone’s earnings
No one's excluding wages from earnings, or tips from earnings; what is excluded is tips from wages, just as is done when setting a separate tipped minimum wage (that only is a minimum for wages, not wages plus tips), like the federal $2.13 and many state wage and hour laws for tipped employees, or when setting a minimum wage and not counting tips against it (as is the case in a number of US states and territories, including Washington, California, and others.)
Actually IIRC last time I looked it was more like city researchers usually subtract depreciation on the vehicle from the earnings, which can be quite substantial (IRS rates are roughly a quarter per mile). Uber doesn't subtract that, so the rate per hour varies wildly.
If the goal was a desperate work force then we succeeded decades ago.
By measuring sufficiency of pay against the population of drivers you're not measuring anything useful. Intellectually indolent comments like this are overtly harmful to the people desperate enough to work for nearly half their cities minimum wage.
Is it fair to assume that anyone working for less than a cities livable wage is desperate until proven otherwise?*
I'd prefer to interview everyone and get hard data about what people need and want. What they're sacrificing, what they have too much of, how their talents are being wasted etc. That's impossible though, so I took a shortcut*.
A sizable percentage of Americans live 1-2 paychecks away from being homeless. AS in, I've seen numbers of up to 59%.
I have no clue where to find that information about drivers in particular - if you do, you could look it up. But if you assume that they represent at least the general population, you could count on a sizable portion of drivers needing it.
It might not even be housing: If you can't pay your water bill, the water company will shut you off and threaten to report you to social services if it isn't on very quickly (and then take longer than that to turn it on). Kids can get taken for electricity or a number of things.
Yeah i'm not understanding why thousands and thousands of people in these cities are doing it for $9.73 when they could get a job at starbucks and instantly make much more.
But they are doing it. So things like flexibility must be important. If it was a small number of people we could expect that they might be making some kind of irrational decision. If it's thousands and thousands of people then it's likely an indication that it's the best possible option for people in that situation.
Because their manager at starbucks cuts their hours to 38 a week to keep from paying full time benefits. Plus who has been hiring in the past 3 months?
This is where government policy meets business reality. The reality is, ridesharing is a low margin business. Have you seen Uber's earnings reports? It's questionable whether the business model can ever be sustainable.
So with higher wages, you're just accelerating Uber's drive into insolvency. Their only option is to cut workers and increase ride prices.
But you can only do the latter so much before you lose users to the point where Uber just becomes a private taxi service for the wealthy in which case you might as well not use a rideshare model and just hire professional chauffeurs.
If a business model requires the exploitation of its workers to remain profitable, is that a business worth having? If forcing businesses to pay their laborers a wage sufficient to have a bare minimum standard of living before paying shareholders for their speculative investment, is that a bad thing?
Therein lies the harsh business reality. Every product and service you use, somewhere along its production (including basic materials), distribution or marketing has workers earning poverty level wages. And many can only function as a business with low wage workers or automation.
Are these business worth having? If we hope to maintain our quality of life, I believe yes.
And because the choice for these workers is low wages or no wages, then answer is probably yes for them as well.
The only other option for higher wages would be for these businesses to be state-sponsored, which is at least worth consideration.
> many can only function as a business with low wage workers or automation.
If this were true, they would not have extra money to give to shareholders. The idea that a corporation is allowed to pay poverty wages while still claiming profit for speculative investors is the problem. That isn't a harsh reality, that is legally sanctioned exploitation. Does every business do this? Of course not, but looking at corporate profits over the last 20 years, it is clear this is the norm.
> The only other option for higher wages would be for these businesses to be state-sponsored, which is at least worth consideration.
Completely untrue. The money is already there. It is just being given to speculators, not workers. Weird how average wages have gone down in the last 40 years but CEO pay has gone up almost a 1,000%.
If it were true that people doing job= no exploitation, then we wouldn’t need labor laws. Paying people below poverty wages, and people doing the job because they need the money is exploitation. It is taking advantage of the asymmetry of the power in a relationship between a rich company and a poor employee to set terms that that are exploitative of the employee.
But in this case, it's claimed that any fast food joint job pays better than Uber. I don't see how the platform could keep a steady number of drivers if that was true.
And, to he honest, I really don't like the condescending attitude some politicians have toward Uber drivers. They seem to assume they can't do the math to figure out if they are profitable or not.
Uber is still not making profits. So where is this money coming from?
You can't raise prices and expect the same level of demand from consumers. So once demand goes down, the # of drivers needed will go down.
So you raise prices by restricting supply of drivers. It's not that complicated. Uber is not keeping prices low as part of some scheme to rip off drivers and hoard profits in some bank vault like a cartoon villain - they're what the supply / demand of the market dictate.
If you disagree, I'm happy to look at concrete data to change my mind.
Perhaps if you cannot pay your employees minimum wage - regardless of the sort of work they are doing, perhaps you shouldn't be in business. I don't care if Uber is making money or not.
If there is need for more adequate public transportation and taxis, perhaps we should work on that issue. If the system is robust enough, merely having a personal driver (uber/lyft/taxi/limo) should be a luxury and a choice.
This has nothing to do with data, but principle.
And it isn't like Uber has been a good player in all of this: I truly don't agree with their attitude towards laws, and do truly believe they are in business because they exploit people and eschew their responsibility as employers both by offering gig-only employment and refusing to classify drivers as employees: Their business obviously relies on the drivers.
That sounds nice on principle but I'm not sure I liked the world where Taxis were a monopoly and did things like "not pick you up if you weren't in the city" and "not pick you up if you were nonwhite."
So, I'm hoping there is a universe where drivers get paid more (maybe even set their own prices, that makes them more like business owners and the apps more like payment providers) and rideshare can exist.
Posted it in an other thread [0] but do we really want to go back to the medallion system?
Pre-Uber, 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 planned to use it as his retirement savings (an extremely volatile asset and not very liquid).
The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme 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, and they know exactly how much they are going to get for the car they have should they sell it.
Also, the argument on Uber/Lyft drivers not being contractors since they can't set their own rates and decide which ride they take strikes me as weird since medallion drivers were contractors, had to charge the price set by the city and could only pick-up customers in the (arbitrary) zones covered by their medallions.
And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).
> Perhaps if you cannot pay your employees minimum wage - regardless of the sort of work they are doing, perhaps you shouldn't be in business. I don't care if Uber is making money or not.
So instead of hiring 1000’s of workers who _voluntarily_ chose to work there for those wages, (not just drivers)...principles say they should ALL be out of work?
> When talking about jobs, especially in the US where so many benefits are tied to employment, a job with pay so low and no benefits should not be considered a good thing.
The alternative is no job at all, for many drivers.
People adapt, consumers too. If Uber or Lyft were to vanish from the face of the earth tomorrow due to regulations, some other business would probably pick up where they left, serving the demand - because after all, there is demand for ride-hailing services.
Question is, how much are consumers willing to pay?
Why do you think you know better than the workers involved who is doing them favors or no favors? Those workers choose to drive for Uber or Lyft because it was better than any other alternative available to them. Seattle is doing harm with this legislation.
This is a dead end line of thinking. It ignores that these people might not be able to choose any alternative. If you are faced with starvation and homelessness, you might 'choose' to take an incredibly poorly paid job because it enables you to barely scratch by.
That's hardly a 'choice', it's the companies realizing they have a worker pool they can exploit that will take pennies on the dollar.
Seattle is saying, "No, if you are providing work in this city, you will abide by minimum wage standards like any other employer."
I agree with your point: Some are choosing to drive for Uber/Lift because they don't have any better alternative. Where I disagree is the solution.
If you raise the price of cigarettes, people buy fewer cigarettes. If you raise the price of gasoline, people buy less gasoline. If you raise the price of labor, people (both companies and individuals) buy less labor. If the price of Uber/Lyft increases, the number of rides will decrease. That means that drivers will be forced to work fewer hours or to find another job. But if (as you say) this is the only alternative they have to homelessness, then they'll become homeless.
So you imagine that Uber and Lyft drivers will spend their extra money on Uber and Lyft rides so the number of rides won't go down and it will be a perpetual motion machine?
This is the same reason companies used Groupon with their terrible economics or people take cash advances on their credit cards: you need the money today even if it is incredibly expensive and sub optimal. Does the GP also think we don't need laws for CC companies because the high levels of consumer debt show people obviously want 20%+ interest rates?
Have you seen the unemployment rate lately? We are in one of the worst recessions in living memory. It's not like those Uber drivers can just quit and go work somewhere else.
Yes, it's terrible, which is why interfering with people and businesses who have come to a voluntary agreement to work together is especially harmful now.
I imagine the same argument was made by coal barons who were forced to stop paying in company scrip.
And the industrialists who were forced to stop employing children in their factories.
And the owners who were forced to grant weekends and 8 hour workdays.
We have a long history of protecting workers from exploitation in this country. The weekend, prohibitions on child labor, OSHA standards, PPE, minimum wages, payment in US dollars, anti-discrimination laws, coverage for accidents on site, leaves for illness, etc. etc. etc.
If you think poor workers should make more money, then the government should give it to them. The last thing we should do is make it harder for them to retain a job, or penalize those that have provided the best job they have on offer. Preventing the low skilled from working stunts their career permanently.
The replies to this comment forget that the demand is there regardless and that if margins are so thin, the cost can be passed on to those who take ubers/lyfts - disproportionately those who make more money.
Unless the typical uber ride is an hour long, the price would not be doubled. And I see no reason that demand would go down in a way that is worth the trade-off of exploitation and forcing people to go on without living wages.
Some questions here about whether this means drivers will get paid for idle time. This Seattle Times article has clearer wording on this:
> The legislation will set new per-mile and per-minute rates for drivers while they’re transporting passengers, meant to be high enough to also account for expenses and downtime.
> To guarantee the minimum wage, the new rules will use a combination of per-minute and per-mile pay rates, divided by what’s known as a “utilization rate.” That figure is based on the share of drivers’ time spent with passengers in the car, rather than waiting for a ride.
Other specifics include $29.90/hr gross hourly pay while driving (to target $16.39/hr total), $5 per-trip minimum.
> the new formula incentivizes companies to keep that utilization time high when the city calculates its pay rates. That can mean the companies look for ways to have fewer drivers on the road.
Personally, I'm all for legislation around minimum per-minute, per-mile, and per-trip payments. Keeps a level playing field and prevents a race to the bottom in a situation where workers can't collectively bargain.
But this "utilization rate" thing definitely sounds like an overreach that's likely to have unintended/regrettable consequences. It should be up to drivers to determine if they're spending too much time waiting around, and choose to do something else with their time when that's the case (my impression is this is one of the best parts of these programs for drivers currently - it's easy to act on your opportunity cost).
What happens with drivers logged-in on multiple apps at the same time? Do they both pay the driver his iddle fee?
Almost every driver I encountered had both apps open and would shut the other one down when accepting a ride.
How does this works for medallions drivers? The poor driver who just paid 150$ for the privilege of renting a medallion car for the day. Is he getting paid when waiting for rides?
The point is that there is no idle fee. The legislation just states the minimum required wage for time and miles spent with a passenger, as well as a $5/trip minimum.
I don't understand why everyone is reading secondary sources to interpret the law when Seattle City Council provides primary sources near instantaneously¹. You're just playing a game of telephone.
While I don't like Nth degree media (you know, the types of articles that link to other articles which link to other articles which link to the primary source), I'm also not a lawyer and find it tedious to read legalese. One of the jobs of journalists is to take information, make it explainable, and put it in context.
Fair enough. Skip to 14.33.050.A and read just that. It's written like a code specification. All the variables have values either defined there or trivially lookup-able.
I'll copy it for you with constant params filled in:
I calculated this for my last Uber ride (which was $18.47) and it was $24.84 instead so with a 25% margin that makes it $33.12. I think I would skip that ride and have done something else. For my last Lyft ride it cost $34.85 - $5.29 for Lyft Pink. I was prepared to do the $34.85. The calculated amount is $34.56 which with the 25% margin is $46.08. I know that ride so I would have brought my bike with me and taken BART that time. This is going to make going to the club a bit more expensive for me now if they do the same in SF. I'll probably suck it up on nights out but I'll probably drive for everything else.
Important note: Unlike the big argument everyone is having in the comments, you can't actually get paid for idle time right now. The way it works is that idle time gets loaded into calculations of those two factors which are currently 0.492 and 0.622.
So if you want to game those figures you need to create more idle time but you'll only be able to take advantage of it next year (when they're updated).
I wonder how long before these companies pull out of Seattle, or Washington entirely.
If it's just Seattle, will they just geofence the city and not allow rides to originate or terminate there? What happens if a driver is transiting the city limits, but isn't within for a full hour - does the minimum wage get prorated, or what?
Everyone predicts doom and gloom when Seattle enacts a progressive policy. Seattle’s economy is still doing well. I view this as essentially fixing a loop hole around their existing minimum wage laws.
These policies don't have an effect in a day - it takes time.
People need to move - if Amazon wanted to move it would take them years just to build a new campus; let a lone try to transfer employees. People are sticky to a location, so the city can extract more and more from them until they eventually decide to leave. It will slow growth as people choose not set up there; it will make the economy less flexible as people have few choices.
These policies will destroy wealth and will hurt those who currently do these jobs. Remember the people doing these jobs are doing them because they're the best option available to them - this include far more than just the wage.
It's going to be harder and harder to find jobs for low skilled workers in Seattle.
To me this is about a group of laws being passed in Seattle that raise wages for labor and tax corporations. Seattle has a very long history of such laws. Corporations keep expanding in Seattle and people keep moving to Seattle because it’s such a great place to do business. These laws are about ensuring that the great amount of wealth being generated in the area is shared among the entire community.
If you don't make solid money, you move out of the city because it is too expensive. The minimum wage law is less than 2 years old, and it's possible for Seattle to continue it's boom momentum despite recently policy. If the policy is bad, it isn't hurting the tech workers, it's hurting the smaller businesses and people who work there. When a burger and beer is $25, people eat out less and businesses have fewer $16 an hour people on staff.
Minimum wage doesn’t increase restaurant prices much. It varies a lot, but ~8 people can handle an average of 50 customers an hour. That’s an extra 90cents per meal assuming their all paid an extra 7.50 an hour. More realistically several of those people where already making more than minimum wage so the impact is even less.
Further, rent is based in large part on how profitable the location is. So, land lords end up picking up a chunk of the difference.
The result isn't really doom. It's just you have shitty taxi services and everyone is sad. Nobody remembers the reason is bad regulation. Uber started in the first place because taxis in San Francisco were and are so bad that they were basically unusable.
It's a bit more complex than this (source: I live in Seattle). Seattle is saved from the impact of a lot of the progressive policies because many of them are shut down by the courts (all the attempts to instate an income tax, for example).
And while the Seattle area is doing well, a lot of the growth and new jobs are now in Bellevue, not Seattle itself, to avoid the various head taxes which are proposed or enacted (which, btw, is another case of Seattle enacting a progressive tax and then immediately dropping it because of business outcry -- so it's not really correct to say that Seattle's economy is doing well "in spite of" the policy).
And as other point out... these things take time. Amazon isn't going to pull up and leave overnight. But it will shift jobs out of downtown over the course of 5 years, and Facebook and Google have easy options to do the same (Google has a large Bellevue presence as well).
It's true, but the SLU campus has been in the works for most of a decade. There's a really long trailing indicator on new construction, and few if any big employers are laying down plans for new downtown offices starting in 2020.
Maybe it's not 100% of the goal, but I'm very confident that legal jurisdiction hedging (w/ the ability to move staff at less-than-decade notice) is a big part of splitting offices across SLU and Kirkland.
Why would they pull out? Taxis existed before Uber and others. Either a) Uber at scale can't compete with local taxi service which will return pretty quickly, (so Uber would die anyway in a long run) or b) they will be completely fine with a few tweaks around scheduling / number is drivers.
To be fair, taxi service in seattle was quite awful during the pre-uber times. It was usually best to pretend they didn't exist unless you were at a location they congregated frequently (the airport, for example).
Hopefully, the prompt and transparent service that came with Uber is here to stay even if the company itself isn't.
As long as Ubers and taxis are subject to the same rules, I'm fine with it. If this minimum wage requirement does not also apply to taxi drivers, then it's very suspect to me.
The replacements they had in Austin never filled those shoes unfortunately. During SXSW traffic spiked and all the replacements were crashing and people were getting "stranded" with no rides.
Have you tried using Uber or Lyft during any large event? They are just as much of a clusterfuck. Either the app crashes due to so many phones nearby clogging the network, or drivers drop the ball, either cancelling on you or accepting your ride from 30 minutes out, trapping you for fear of getting a bad rider rating for too many cancelled rides. Getting into the wrong rideshare is also surprisingly common and concerning, especially when these large events involve a lot of drinking. I usually resort to walking a mile, maybe more, from the event before I attempt to call up a rideshare.
I use Uber and Lyft all the time during Re:invent which is, by any reasonable measure, a large event. It works great and works even better than Amazon's buses (which themselves are pretty good) if you need to cram a lot of transit into your workday.
Sure, but since then things have kept improving. From a technology point of view it's only going to get easier and easier to run a ride-sharing service.
I suspect the market will solve this problem. There's a pretty neat growth hack that you can do that doesn't scale (http://paulgraham.com/ds.html) and therefore lets you out-compete the incumbents like Uber and Lyft: pay your drivers minimum wage. Once you're established and profitable you can keep doing it.
So here's one thing I've never understood about such measures to treat drivers as employees: how do you handle drivers who drive for multiple companies at once?
It's fairly well known that drivers will sign on to multiple apps and choose which rides they take. Like they don't know the destination but still. What if a does 2 rides for Uber and 1 for Lyft in an hour? Who pays the minimum wage here? Both?
It seems like this would be incredibly hard to police and strengthens the argument that drivers aren't employees.
EDIT: to be clear I'm not talking about, say, alternating days for Uber and Lyft. I'm talking about drivers who are signed into both and take the first that comes up. They'll also accept rides on one app while still doing a ride on another. This is really common.
I think what's confusing is there's two different wages being thrown around here: Are drivers guaranteed $16.39/hr, in addition to $0.56/minute and $1.33/mile driven while transporting?
The questions I think are mostly about the former, not the latter.
Yes, at least partly. Payments for mileage are definitely a separate thing from regular wages, because you own your car and your boss needs to pay you for wear and tear on it. If payment for time spent driving is also mentioned in the law, that's probably on top of their regular wage, though there could be an exception for people who's job is only driving.
Having two jobs versus one job and with a minimum wage would just have your hourly rate increase on both jobs to the minimum rate .
Just because you have two jobs doesn’t mean that the law doesn’t apply .
What just happens is the ride share companies have every hour a driver is working and if it falls below the minimum wage then they would have to increase it to the minimum.
Is that for the time effectively worked (trip time) or it includes time between trips? If a driver is sitting idle waiting for a trip who is paying, both companies or nobody?
They are working both apps at the same time, picking rides from the first that pops up. I don't see how hourly rates would work with that unless they timeslot every hour to one company, which is not how it currently works.
I haven’t seen a driver that has a ride share when one is from Lyft and the other is from Uber.
But that doesn’t matter because you would calculate minimum wage by taking the amount of time worked with the income and then computing the difference between the hourly rate.
I think it's quite common for drivers to have both the Lyft and Uber app open, and to take the first/best available ride that pops up from either app.
The question is whether you'll be paid by Uber while completing a ride from Lyft, and if the answer is "no" how that'll happen technically. Or perhaps you don't get paid for idle time - I'm not quite clear on that point.
I'm also curious about this. I wonder if they'll start requiring drivers to "clock on" and "clock off", and you won't be able to accept rides outside of that dynamic. I know it already kinda works like that, but something more formal since now they're paying you while you're "clocked on".
I also assume this means they'll be more strict about turning down/canceling rides when you're "clocked on", and they'll assume you're available to accept rides when you're "clocked on" and don't currently have a passenger.
Which of course makes them much more analogous to a traditional livery cab.
EDIT: But then also kinda not I guess? Because a livery cab driver can decline a ride before it starts obviously.
I wonder if it'll work more like food service, where Uber covers the "difference" if you make less than the minimum wage (and for better or for worse, much like food service I assume if they have to make up the difference too frequently you'll be booted off the platform).
how do you handle drivers who drive for multiple companies at once?
IF you're classified as an employee, your employer can legally prohibit moonlighting. Enforcing this is not a problem unique to ride sharing apps, so it might be worth looking into how this is handled elsewhere. However, if an employer treats their employees well enough, their workers are less likely to seek outside employment.
How does that work now for part-time work? I would assume that working at Walmart for 10 hours doesn't include a clause that says I can't work at Target for 10 hours as well.
All of this gets messier because most "normal" jobs in this space don't let you pick your hours. It's clear you can't literally be in two places at once, but you can be "on call" with Uber and Lyft at the same time if you want to, and it's somewhat beneficial to all parties for them to do so.
You probably can't have it both ways. If you decide that working for someone means being paid a minimum number of hours, paid when on stand by to work and not actually driving etc., then obviously you can only idle for one network at a time and watching two apps for the best ride isn't possible.
That really doesn't sound like the city's problem. Perhaps with a fairer wage, fewer drivers will feel like they need to work for both companies. ¯\_(ツ)_/¯
There's lots of things the ride share companies could do to make it look less like a job, but they don't, because it would reduce their revenue. What's the problem with applying regulation that makes it more likely to be worthwhile for the drivers?
Or is your argument that this will destroy profitability for drivers by denying them the right to chase fares across services?
> This is not a "multiple part-time job" scenario.
But it literally is, so what's your argument against that? They'd get minimum wage at both their part-time jobs like everyone else, like contracting or temping part-time for two agencies. What warrants anything but the standard interpretation?
Traditionally, when working two part-time jobs, you aren't typically doing both part time jobs simultaneously. Like, you cant be doing counter-duty at Starbucks 10am-1pm while also be pumping gas across town at Exxon 10am-1pm -- instead you'd have to have shifts w/o overlap. Each company is responsible for paying a fair wage for their shift.
With Uber and Lyft, most drivers I've seen are on both apps simultaneously and choosing the best ride that pops up, which makes the standard interpretation obsolete for gig jobs like this which allow for parallelism.
While I support good wages for drivers, it is unclear who pays the good wage -- Uber, Lyft, or both, or half each, or some proportion as you clock-in-clock-out constantly. I'm sure there is a good answer that is fair to the driver, but I haven't heard it yet.
> Traditionally, when working two part-time jobs, you aren't typically doing both part time jobs simultaneously
Nobody is doing two jobs at once. They can only take one ride at a time. They simply alternate ate a higher frequency than other jobs. Why would this frequency have any effect on how they are treated?
> While I support good wages for drivers, it is unclear who pays the good wage -- Uber, Lyft, or both, or half each
They get paid by the company from which they take the ride from. Whoever they're working for at a particular time, for those particular miles, is who pays the rate.
But that's not exactly the same. If I'm working part time at Starbucks, but no one comes into the store, I'm still paid my hourly wage for being there. If I'm logged in to Uber and Lyft and waiting for a ride on both, and no one calls one, do I just not get paid? I'm still providing value to both companies by being online (users of the app see a quicker pickup time since I'm available). Right now, rideshares are only paying you for doing the actual tasks, while most jobs pay you for the task AND time spent being a warm body who will jump to do the next task.
Also, doesn't this incentivize drivers to intentionally be "on the clock" in places and at times where they won't get rides? I can't just decide that Starbucks has to pay me to be behind the counter from 2-5 AM every day, but right now, I can decide to be available on Lyft then.
Presumably this will lead to some sort of tighter geofencing, or caps on how many drivers can be active at a given time?
This is before you get into weird things around locality. If I live outside of Seattle, but drive into Seattle to do some Lyft driving, does this apply to me? What if I take a ride that starts outside of Seattle, but ends up in the city? Or if I pick up someone in Portland and drive them to Seattle?
I said this in a sibling comment, but I think the confusion is:
> I think what's confusing is there's two different wages being thrown around here: Are drivers guaranteed at least $16.39/hr, in addition to $0.56/minute and $1.33/mile driven while transporting?
> The questions I think are mostly about the former, not the latter.
This isn't the right answer, but we should at least acknowledge that there are potential problems with the gig economy.
I'm not quite sure how to reconcile this with my views on markets. The platform certainly performs a valid function, and markets are generally good at matching up buyers and sellers. Ostensibly everyone participating is doing so voluntarily. However, I don't find it particularly virtuous to have totally automated auctioning of labor pressing down on working class compensation and benefits. Constantly repricing every transaction to carve another 20c away from a guy driving for 12hrs a day.
> Ostensibly everyone participating is doing so voluntarily
I disagree that it’s voluntary.
Nobody is driving for Uber because it’s their passion.
For the majority, they’re doing it to make enough money to allow them to barely get by. They myth of college kid earning a couple extra bucks for beer money is a great bit of storytelling by Uber and other gig economy companies.
Is there a literal gun to their heads? No. Is there a figurative gun where they’re looking down the barrel of not paying for meals, healthcare, and other necessities? For many, yes.
Let the individual decide what to do. It does not matter how YOU FEEL about it, what matters is what the worker wants to do. If the person doesn't want to work for the low rates then they're free to leave and do something else. Most people working for gig apps are doing it for side money anyways. It isn't a full time job for them and gig apps were never intended to be a full time job.
If you want to help the workers then you can create jobs in the community and increase the demand for labor in general.
The "regular" taxi cab medallion cost averaged $35k in 2017 down from $200k in 2013[1] otherwise you will likely be leasing it and a car from a taxi company. If I recall, the daily buy-in is generally $90-150. So these costs should be included in the calculation.
Uber/Lyft doesn't like this, because they might get into a situation where there is a surge of demand and everyone hit their 20 hours already, and the only way to counter that would be to employ more people that would be wasted outside the surge. It makes sense, but these companies see drivers as resources to throw at demand and not people with livelihoods.
Frankly I don't think that actually matters to the city council. If given the choice, they would rather be seen as people who fight for platitudes than people who actually have an overall positive effect but nobody notices.
City council has recently: Outlawed the use of chemical weapons, slashed the police budget, increased funding to community programs by tens of millions of dollars, created a rent relief program for tenants during Covid, increased minimum wage, increased taxes on high earning large corporations, and more.
All of these have a materially positive effect on the people of Seattle.
I disagree with your assessment of "materially positive".
Police response times have been dismal in my neighborhood in North Seattle, and crime has increased. The maintenance man who worked with my wife downtown was murdered by a tenant recently because there was not enough police resources to accompany the eviction of a tenant who was making violent threats.
The community programs have had no noticeable effect on poverty or homelessness rates, as prosecution and drug court diversion has been discarded. I see needles most times I go for a neighborhood walk, and the children's playground is currently occupied by vagrants who are chopping down trees in our park.
The minimum wage laws pushed my young brother-in-law out of full-time employment in 2019 and led to his moving out of state. Multiple local shops and restaurants have closed over the last few years because they can't keep up with rising artificially imposed costs. The new taxes on businesses and high earners has led to Amazon moving 25,000 jobs out of the city to the east side.
> The community programs have had no noticeable effect on poverty or homelessness rates
I'd be surprised if they did, as they were approved last week.
> Police response times have been dismal in my neighborhood in North Seattle
This sounds like a problem with the police dept independent of funding levels, as the funding was only reduced last week. (I also live in North Seattle, and I haven't seen data on crime increasing or decreasing. In general, I've seen lots of car prowls, but relatively low crime otherwise.
> Multiple local shops and restaurants have closed over the last few years because they can't keep up with rising artificially imposed costs.
This is always the way business works. If those businesses relied on exploiting laborers to make ends meet, then maybe it's better that they are being replaced with other businesses that don't? Also, from what I've seen, rising rents are much more problematic for businesses in North Seattle.
> The new taxes on businesses and high earners has led to Amazon moving 25,000 jobs out of the city to the east side.
I'm not sure they did. Did Amazon reduce their investment in Seattle by 25k? Or did they simply increase it by 25K outside of their core area while they also increased in their core area? The increase in taxes is also relatively recent, so there's no way that Amazon did this in response to a tax increase (as siting 25,000 people takes years of planning.)
Do you have some citations that this is the recent policy of the city?
I agree that a decade or more ago, the city absolutely bungled their housing planning. The current city council has been, from what I've seen, trying to open up development through permitting more Accessory Dwelling Units in residential areas [1], increasing the zoning in many neighborhoods in Seattle [2].
The City Council banned the ownership and use of chemical weapons and undirected crowd control munitions (e.g. blast balls) by the police dept (or their allies). The police were flooding residential areas with CS gas to the point that, at times, you couldn't see down a block.
If legislation like this were adopted widely it might have a positive incentive of driving ride sharing companies towards less driving time by having passengers do more of the work, e.g., by setting up common drop off and pick up locations (similar to existing functionaity that lowers the price by having you walk a bit)
I think this brings up a problem though. By raising the cost of labor, you're more incentivized to try to make sure that labor is used efficiently. This is why, pre-Uber, it was hard to impossible to get taxis in some small towns, suburbs, or less-active parts of the city. If you're paying someone minimum wage whether they're actively driving someone for a fare or not, you can't afford to have someone on the clock out in the middle of nowhere where there's a low chance they will ever get a ride.
One of the benefits of the current system is that being available to start a ride is essentially "free", both for the driver and the passenger. I've had times where I called a Lyft, and had it be someone who literally was living in the same apartment building I was in, and walked down to their car, drove out to the street, and picked me up. Presumably they were just at home, but still active in the app to take rides. This helps to expand coverage for pickups to areas where it wouldn't make sense to have a car just actively circling. Drivers have a reason to be searching for a ride near them, even if there's a low chance of it popping up.
How do you solve this? We see this issue in other industries as well - food deserts are a similar issue. It's expensive to run a full grocery store, so you can only afford to put them in places where they'll see enough traffic to warrant it. But as a general culture, there's value in services that aren't economically viable on their own. Optimally, some of this would be solved with public transit or such, but that can't just be done overnight, or to everywhere it's needed, so what's the in-between?
If I've read it correctly the Seattle policy applies only to drivers while they are driving (presumably including on their way to pick someone up), so this shouldn't limit the amount of Ubers waiting for drivers, though it may limit the number of rides that drivers get because it will reduce the amount of rides demanded as a result of the increased price. I do wonder if this could paradoxically decrease the efficiency of the service if there is less coverage from drivers (if drivers drop off the service from getting fewer rides) and thereby increase the distance needed for a driver to pick up a passenger, on average.
I'm not sure I follow? You usually don't just "not have a minimum wage when it doesn't make sense". This is a regulation on contracts - it's not something that will be decided on a case by case basis every day.
I mention the difficulty getting rides because I've had this issue before in Seattle. I have a friend who lives in the far northern suburbs, but still in the city, and it can be quite hard to get a cab up there of any variety, presumably because there aren't many people in that area who want to hire one with enough regularity to make it profitable.
None of this is to say people shouldn't be paid better. My point is just that there's often a conflict between the fair and just price of a service, and the value that service provides. Obviously, right now that differential is being made up on the backs of workers, which is bad, but swinging things back in the other direction will cause other issues that need to be considered.
> Whatever the intentions, the effects are still the same. On that the eugenicists were right. The eugenics movement, however evil its motive, understood an economic truth: the minimum wage excludes people from the job market. It takes away from marginal populations their most important power in the job market: the power to work for less. It cartelizes the labor market by allowing higher-wage groups access while excluding lower-wage groups.
The main reasons for the lack of minimum wage laws are because of a high degree of unionization and the widespread use of collective bargaining agreements.
Hopefully Seattle will have strong public housing, basic income, and other safety nets to support a basic quality of life for every resident. Then we won't have to worry about this for every new tech advancement that pushes workers out.
Taxes. Ideally progressive taxes. The tax burden of a wealthy person in Seattle is currently incredibly low. (Speaking as a wealthy person in Seattle who is shocked at how little I have to pay every year to support my local community.)
I'd encourage you to make a voluntary donation to the State of Washington Treasury's General Fund or one of about 750 account appropriations[2]. I'm sure there would be some that would help support your local community.
I give a significant portion of my income to local community organizations to support education, housing, and social equity.
However, I believe philanthropy is not a scalable solution to systemic issues. People tend to pay for causes that make them feel good, which doesn't line up with what actually needs to be solved. I strongly believe that we need to get everyone contributing to societal maintenance, rather than relying on people opting in.
Big question. Fundamentally, having capital allows one to acquire more capital, generationally. The history here is long and complex. Over hundreds of years, we've seen a striation of incomes, wealth, and capital across the country.
The lower ends of that income spectrum are dealing with difficult choices about whether to cut food, heating, housing, medicine, sanitation, childcare, etc. Low level crime is a symptom of people being squeezed too hard.
So, let's dive a layer deeper: what causes inequal access to healthcare, housing, education, sanitation, etc.? Part of it is cultural -- people framing the question as, "Why should I give up some of my income so someone else doesn't have raw sewage pumped into their yard?" rather than, "What's the baseline experience we should all have, no matter what, and how much do I have to give up to ensure that?"
Fundamentally, I think culturally, in the US, we prioritize "mine" too much over "ours", which leads to tight fists on improving conditions and addressing economic inequality, which leads to systemic problems in housing/food/education/etc., which leads to crime, drug abuse, mental health problems, etc.
As for the second question, I think you are asking whether companies are obligated to grow their profits/income and how is that tied to these issues? I want to make sure I understand what you are asking before I try to answer.
Thanks for asking good questions. We might not agree on the root causes here, or what to do about it, but at least this set of questions is a reasonable dive into things.
Ok, my brief reading suggests the thesis is that everyone wants to be at the top, but to grow the number of people at the top you must grow the number of people below that by some larger number.
For example, a manager earns more, people want to be managers. Only way to get more managers is to grow and get more workers. Now you have even more people who want to be managers.
It's an interesting idea, and sort of a novel (to me, at least) framing of the ideas behind a ponzi scheme or keeping up with the Joneses or the American dream (that we could all be millionaires). It also seems to be the natural order for the capitalist economy, if I understand the thesis correctly. ( Capital must beget capital, else no one would invest. As more people invest, we must grow to sustain the growth in capital.)
I need to think about it a bit more, but it seems to me that the theory assumes the actor is a solipsist or predominantly interested in their own self. I'm not sure that's necessarily axiomatic in American culture.
Thanks for sharing the concept, and feel free to offer suggestions or corrections where I misunderstood it.
Do you have data to suggest that will happen? People like to live and work in Seattle, just like they like to live and work in California and New York. Or Europe.
Will some folks get grumpy about taxes and leave? Maybe, but I don't have any data to suggest that it will materially matter.
Let's suppose that in a couple of years, data emerges that demonstrates that this happens. What do you recommend should be done about it, assuming it were to happen?
Generally I don't believe that hypothetical is likely. It's one thing to see a revenue shortfall due to covid, it's another thing to suggest that wealthy people will just leave.
If you can find a case where the wealthy folks have left to avoid taxes and it made a material difference, I'm happy to engage.
Historically, the only thing I can think of is White Flight, but in that case one of the driving forces was the spending of tax money on building housing and infrastructure for the wealthy outside of cities. (And there were many other explicitly segregationist policies in place at the time to prevent the less wealthy from going along with them.)
What do you think it should be done about the chilling effect of those taxes? Talented graduates who select to join a different city instead of Seattle, a city perhaps less hungry for their hard worked money. Enthusiastic founders who never decide to start that startup anymore and rather get a job because why bother when others get to enjoy most of the fruits of your labor?
Business never started, money never made, growth stunted. Is it worth to sacrifice the future so that politicians can add another checklist to their re-election campaign?
> Talented employees who select to move to a different city instead, less hungry for their hard worked money.
That's one framing. Another framing is that the taxes I pay were never "my" money to begin with.
To answer your broader question, I'm not going to argue against a hypothetical. If you've seen places where the local area is a highly desirable place but whose economy is flagging because of high taxes, I'm happy to dive in more. But in general, people want to live in Seattle even if it means chipping in a little more. Founders want to start here because there's talent here.
> places where the local area is a highly desirable place but whose economy is flagging because of high taxes
The whole of Europe, pretty much. Only desirable to refugees and migrants dreaming of that sweet sweet social security, while bleeding talent, entrepreneurs and startups to USA in droves. Europe chose a while ago stagnation over innovation and evolution and today is paying the price.
> taxes I pay were never "my" money
That simply cannot be true, considering that if I move to a different place that money end up in my bank account, mine!
> if I move to a different place that money end up in my bank account, mine!
Reversing this argument -- moving to a place with higher taxes means that money isn't in your bank, not yours!
> The whole of Europe, pretty much.
Germany seems to be doing alright. Most of Europe rates highly on the IHDI. GDPs are growing in places like Sweden and France, despite a high tax rate.
You'd think so but no. Most refugees enter UE through a poorer border country but do everything to migrate to the richer, north-western countries where Social Security level is higher.
That graph is over the past 20 years. Even during post-2008 recovery, labor force participation rates decreased. Of course the pandemic is going to cause a spike, but the general trend is undeniable.[1]
What's your point? We already know that high labour costs (as in a liveable wage even for so called simple jobs) doesn't necessarily cause high unemployment. Northern-European countries have proven it for ~70 years.
I'm sorry, but you're incorrect on two matters of fact.
First: the EU's labor force participation rate is significantly lower than the US's (58.3% in 2019 vs 63.4%). If the US had the EU's LFPR, we'd have 13 million fewer jobs.
Second: Denmark, Austria, Finland, and Sweden all lack minimum wage laws. They have other programs that benefit poor people regardless of whether they have a job or not.
1. I didn't write EU, I wrote Northern-European countries.
2. While true, it isn't a fact supporting your point. The main reasons for the lack of minimum wage laws are because of high degree of unionisation and the widespread use of collective bargaining agreements.
I think it's interesting that there's so much talk about minimum wages for drivers, but restaurant workers have been working for $2-3/hour for decades, including periods of time when they are doing untipped work.
The places with these conversations do not have that. Both California and Washington have the same minimum wage for tipped and untipped workers. So in Washington you are guaranteed $13.50 / hr and then tips go on top. In California you are guaranteed $12 / hr and then tips go on top.
In Seattle, where this law was passed, the minimum wage is over $16 / hr and then tips go on top.
Alabama does do that bit with the $2/hr minimum wage if tips make up the balance but there isn't a significant effort in places like that to backstop wages for drivers.
It's still socially expected in these places, so you might face some censure. But yes, for real. Interestingly, SF which has a $15 min wage has higher socially expected tip percentages than the rest of California.
Americans have such a fetish for tipping. I think it makes them feel like generous benefactors to be in control of someone’s earnings. You could raise the wage for servers to $100k per year and people would still want to tip 25% for a $50 sandwich.
But changing the system so that employers pay employees properly? That would be ludicrous...even though it works for just about everyone else.
The city's researchers found that drivers made an average of about $9.73 per hour.
For reference, Seattle minimum wage is $16.39/hr. This appeal to employment is disconcerting, as ride sharing apps are doing their workers no favors by paying them so poorly (including the lack of benefits).
When talking about jobs, especially in the US where so many benefits are tied to employment, a job with pay so low and no benefits should not be considered a good thing.