It's funny to see the sharing economy promoted as a goal in itself, when 30 years ago one of the criticisms of the Soviet Union was that people there are so poor that they are forced to share kitchens and cars with strangers.
Nobody wants to share things, it's all done for economic reasons. People buy on AirBNB and Uber because it's cheaper than an equivalent hotel or taxi. People sell on AirBNB and Uber because they need the extra income.
For a short while, VC investments paid out as bonuses to the participants, and just the novelty of the thing might keep both sides happy. But eventually there has to be a balance found between "I want to pay less" and "I want to earn as much as before" and "government wants as much taxes as before".
> People buy on AirBNB and Uber because it's cheaper than an equivalent hotel or taxi. People sell on AirBNB and Uber because they need the extra income.
So everyone's a winner, what's the problem? Everyone is getting a better deal than they would with an alternative, excellent I say.
One of the AirBnBs I crashed at when I was between permanent residences was a 2 bed apartment operated by a lovely Polish couple. They rented out both the bedrooms and had converted the living room into a permanent bedsit for themselves in order to make ends meet living in a reasonable part of London.
I'm not sure whether the ability to do this truly empowered them, whether the life with it is better than the alternative. Clearly they judge it to be.
On the other hand was a chap renting out his spare room who loved being a host, chatting to the people he met etc etc. He was definitely happier with it.
You're probably overlooking the change in the quality of the good. Demand in London is highly elastic. If a lot of new sleeping units come on to the market, they will be filled easily because lots of people want to live there.
Now suppose we divide old units of accommodation priced £ in two (halve the slope of the supply curve). The price of a new unit will be close to £. But an old unit then costs nearly 2£. So you have a choice between slum housing and coughing up double the rent.
> But banning AirBnB seems unlikely to improve your salary
I have nothing against AirBnb itself, I was generally talking about the bigger and bigger disconnect that has formed between the middle classes (who have seen their real wages stagnating for the last 10-15 years in the Western world) and the holders of capital, presumably because the latter have accumulated more and more wealth also because of those stagnating wages for the middle classes.
We both know that without VC money (which in the end comes from holders of big capital) companies like AirBnb and Uber wouldn't be where they are right now.
I had been backpacking for 11 months when I was running low on resources and decided to go back to the tech industry.
I had look at places that needed roommates, but the good ones filled up by the time I called back and the others were not places I wanted to live. I ended up paying a premium for having my own place.
Looking back, I didn't want to share after spending much of that time in hostels and shared spaces. But months later, I realize the benefits I've lost. I have too much stuff once again and am desperately trying to cut down. I'm in a city that's filled with cold an unfriendly people, and thanks to having my own place, allows me to be more of a hermit.
I plan on buying a car again at some point and downsizing to less than a car full of stuff. Big salaries are a kind of death trap. It can get people addicted and justify jobs that many of us hate. I'd rather have the small salary and only have enough stuff that I only take up one room; where I could easily pack up and leave.
I kinda like hotel and taxi regulations. I feel they keep things safe, clean and above-board. Despite what Republicans would have you believe, regulations don't come about because some lawmakers got bored, they come about in answer to a problem. Don't tear down that fence before you understand why it was constructed...
I disagree. I think safety and ethics standards are important and I don't think it's reasonable to expect every citizen to be able to completely evaluate every single product or service they consume.
I think that is what the parent was suggesting. Those who want the government's evaluation can utilize the services offered by licensed providers, and those who want to do the evaluation themselves can choose whoever they want.
Except why do those licensed providers have to adhere to those laws, maybe they don't want to also?
As well, maybe it takes a while before the true societal risks are understood, AitBNB regulations may be too weak for some reason, but until we discover that, perhaps we've "unfairly" put some marginal hotels out of business that would have survived under the impending new legislation. (Hope that makes sense?)
They adhere to the laws to maintain their licensing to attract the consumers that demand that. As with now, customers pay a premium to have a certain standard certified for them, which benefits the service provider through higher incomes.
As I touched on a above, the thing about restricted markets is that price is able to rise artificially due to the unnaturally constrained supply. This ends up being a government subsidy; one that is disproportionally paid for by the poorest people. If you are already comfortable with subsidizing licensed businesses, why not continue to subsidize the marginal ones? Perhaps even in a way that is less impactful to the poorest people?
What people are discovering is that tech + crowdsourced feedback loop is better than gov regulation. Feedback loop is faster, more thorough, and more reliable.
Nothing, as long as the participants aren't violating the law. Much in the same way that you don't get any input on how long my grass is, unless it happens to be a fire hazard.
Actually, to the contrary, through things like town ordinances and homeowner's associations it is very likely that you do get to have input on how long your neighbor's grass is
My city has an ordinance for a fire hazard. It's established as a specific length. My neighbor does not get input on that, it either is, or is not, a violation of the city ordinance.
> What people are discovering is that tech + crowdsourced feedback loop is better than gov regulation. Feedback loop is faster, more thorough, and more reliable.
You have very little evidence that this is true.
And anecdotal data suggests that explicit "social ranking" introduces a whole host of other problems. See: the kerfuffle about AirBnB and renting to minorities.
What people still fail to discover though, is that "crowdsourced feedback loop" is very vulnerable to companies with lots of money to spend on the so-called "growth hacking".
> You're welcome to use hotels and taxis that you like. The issue is with stopping other people from using hotels and taxis that you don't like.
My issue would be buying a house or condo with the neighbors across the hall or across the street changing daily. It's not an issue of the quality of the hotel. It's an issue of respecting zoning laws.
you want to be in highly regulated environment, and pay according price for it? great, you have hotels, hostels and so on.
somebody would like to spend less, be in more welcoming/cozy/more spacious environment, have a kitchen at hand and so on? well there is now an option for those too.
I don't see where the problem lies. just don't take perks from the other 'side' as granted.
Sure, but then we have streets filled with taxis, out-of-towners renting space in areas not built to accommodate them, an increase in sickness due to poor sanitation, people getting scammed or worse by shady drivers or landlords, and so on. These things affect me, too, even if I'm not participating in the service.
>people getting scammed or worse by shady drivers or landlords
People get scammed by shady taxi drivers and landlords all the time. Regulations don't work. Haven't you heard about all the taxi drivers who don't take credit cards because "the card reader is broken"? I've had this happen many times, and I don't even use taxis very much.
I'm okay with hotel and taxi regulations...as long as they deal strictly with quality and not quantity. Unfortunately, in too many locations there is a hard cap on the number of taxis, which leads to rent-seeking, low quality of service, and high prices.
>I kinda like hotel and taxi regulations. I feel they keep things safe, clean and above-board.
Your feelings don't match reality. The licensed taxis I've ridden in were nasty, far worse than the unlicensed Uber cars I've ridden in. Taxi: 20-year-old P-O-S Crown Victoria. Uber: 2-year-old Mercedes
There's also plenty of rat-trap motels out there that are properly licensed. I live a couple of miles from one; people have even put videos on YouTube about how awful it is there. There's plenty of really nice hotels too, but that's because people are willing to pay double the price of the rat-trap, and those hotel chains are nation-wide and want to maintain their reputations, not because of any regulations. The only thing regulations are good for is making sure places don't burn down. And even that's iffy; generally places just burn down anyway and then someone gets punished afterwards.
Your argument is anecdotal and based on empirical and not scientific data. I've ridden in many fine taxis. It depends on the city, cultures, cab companies, regulations and a host of other factors.
There are terrible motels and good motels; same with hostels. I've stayed in many hostels that were far Superior and better value than hotels. I've been in some that had mold infestations everywhere.
Regulations play a part, and the are an important part of equality. Do people game the system, bend the rules and lobby to pass their own laws that benefit them over the customers and employees. Of course.
But it's all a very complicated system. You need to do a lot of surveys, research and have a good set of controls to say "regulations might correlate with x, y and z," and you'd need people to replicate your work before you can even start addressing causality.
No, you don't need to do any of that stuff to disprove an invalid claim.
A claim was made that "I feel that regulation makes things clean and safe". I pointed out that that claim is utterly false using actual examples. I don't have to prove that regulation doesn't work anywhere, I only have to prove that it doesn't work somewhere. And in the places I've used taxis (NJ, AZ), they're awful. I have used them in NYC too, and those are OK (though to be fair, I'm not black, which I've read is a big problem there). You're right: it depends on the city, etc. Regulations and regulators are different in different places. But to make the broad claim that "regulation is wonderful!!" is blatantly false, and easily disproven by showing only one example of a place where it doesn't work right. Now, if you want to make the claim that "regulation works really well in location X", that's a defensible claim, and only disproven by showing that things are actually bad in location X (and not other locations).
This seems to be the problem with this whole regulation vs. anti-regulation argument WRT taxis and hotels: the pro-regulation people cherry-pick a few places where things seem to be OK. The anti-regulation point out that their experiences in other places are entirely different. The pro-regulation people them stick their fingers in their ears and refuse to believe that there's places where regulations don't work well. Maybe regulation really does work well in those cherry-picked places, but that doesn't help the places where the regulation is bad and the regulators are corrupt.
Regulations aren't mathematical proofs. Laws not working somewhere doesn't justify tearing them down everywhere. You don't see people arguing "Hey, seen that robbery on the news? Those regulations obviously don't work; fuck it, let's make theft legal."
To reiterate coldpie's point, "regulations don't come about because some lawmakers got bored, they come about in answer to a problem". Before going full anti-regulatory based on personal experience, one would be good to consider the relative impact on all places.
I never said they should be torn down or that they can never work.
I merely have the position that regulation is not the panacea that the pro-regulation people seem to think it is. If it works, great. If it doesn't work, then instead of harassing the people who work around broken regulations which just support rent-seeking by cronies, maybe we should look at fixing the political system and eliminating the corruption and bad regulation and bad regulators instead. But that's never proposed as a solution, probably because 1) it's too hard, and 2) the pro-regulation people don't like to admit to the existence of corruption.
It's mostly done for economic reasons, but there is a social aspect to sharing too. More so on couchsurfing than airbnb, and i generally prefer to chat to a part time uber driver than to a full time taxi driver.
For what it's worth, I genuinely like using AirBNB over most hotels due to the service and insights I get from the host. It also tends to feel cozier. Similarly, I used to prefer hostels to hotels for the human interaction, though I've gotten pretty old for that.
Well, that means that AirBNB should be charging more that an equivalent hotel room, doesn't it? At least to the market segment that values the same things that you do.
I am wondering how many segments there are in the "accomodations" industry. We have the homely/warm/cozy opinioned root kind of segment CalRobert has exemplified; then we have the dirt-cheap hobo-shelter-minus-stabbing that people on a tight budget seem to value, etc.
I would not be surprised if AirBNB has applied their data engineers to the task of identifying these segments; it sounds like a classic unguided ML problem.
To be fair, if more hotels were cozy and made it easier to meet local people I'd be more inclined to go with hotels. They're not _bad_, per se, just kind of sterile.
There are exceptions, of course. I've stayed in small, usually family-run, bnb's in rural Ireland, and Germany's romantic road. These tend to be more charming.
I understand and agree with you w.r.t. hostels vs. hotels, and also feeling too old for that scene. I regularly get the impression that people become less outgoing over time (unless they're already tipsy when you meet them). I feel like when I meet people around my age (late 30s/early 40s) they're already all friended up and will donate no more than polite small talk or mindless automatic chit-chat. The halcyon days of being moulded by new experiences and sharing in a stranger's adventures belong to my son now :)
I can sympathize there. I still like meeting new people, but I have a partner now, which makes it harder. Also, I suppose the conversation has to shift a bit; you can only talk about which countries you've gone to before it seems like you're just having the same chat over and over again.
Also, when you're older and have already spent a decade or more accumulating good friends (one hopes!) the exploration/exploitation equation starts to favour spending more time with old friends than making new ones.
It's about shared negative emotional experiences, of which their are more when one is young e.g. school, leaving home. It follows that if you wish to befriend adults you need to share a rock climbing accident, get stuck together in an airport for 72 hours, or similar.
> Nobody wants to share things.
I don't think that is always true. Some people want to see resources being used efficiently, which is why they like to share.
I personally hate buying things. I prefer pre-furnished bedrooms and roommates who share whiteware and dishes. It's nice to be able to live somewhere for a year and still pack everything up in the same two bags after a year and take off again.
While I don't disagree with the overall content of your post, but the world is not so black and white as you paint it with "Nobody wants to share things". Look at long running projects like Couchsurfing for example. Also, from a personal perspective, I always liked to share my possessions with other people. Interestingly I'm much worse at sharing my time.
But do you think those people you mention would "love to share" if they were forced to it in order to secure a safe place to sleep and a plate of food?
Well they usually are forced to. They accept sharing with others as just the way of the world, not something they get to have a personal opinion about.
>> Look at long running projects like Couchsurfing for example
The big difference is that, unlike those "sharing" economy companies, Couchsurfing was not a business, and once it turned its focus to making money an exodus of "users" ensued.
Couchsurfing was not targeted at Airbnb's "get a cheap place to sleep at city X" demographic, and people that couldn't demonstrate they were looking for anything other than a low cost hotel would see their requests turned down. Couchsurfing users were willing to share their house, not for a small amount of money, but for the value of making international acquaintances (and friends for life, sometimes), which is something they also received through the service when going abroad.
> People sell on AirBNB and Uber because they need the extra income.
That's true for some people. But for others, it's more "want" than "need".
Like one driver I rode with last week: she started driving for Lyft part-time, in addition to her day job, because she wanted to make a little extra money in order to afford the down payment on a house. She didn't need to do that; she could have continued living in her existing place indefinitely, and her day job lets her afford her current living expenses just fine. But she wanted something more, so she took up Lyft. And I got the impression that she'll give up Lyft as soon as the down payment is made.
Or other drivers I've talked to who could work a full-time job in another field and make a decent living doing so, but choose to drive for Uber or Lyft because they like the idea of being their own boss. This actually reminds me of how insurance companies work... I've been approached by a few of them while unemployed in the past, and they came off as pyramid schemes to me, but there are a few people who have the mindset to make it work for them, and they enjoy it.
(I should probably qualify that I'm specifically talking about life insurance here. Other kinds of insurance may be different.)
You have to pay to become an agent, you work solely on commission, and you have to pay for all of your own work expenses (drive around to meet with clients? You pay for the gas!). The agent who recruited you into the biz gets a cut.
It's probably best to browse sites like ripoff report for descriptions of how being a life insurance agent works. A lot of people are unhappy with the system, but if you look through the reports, you'll also see positive reviews by agents who are happy with how the system works who are.
Here's how one review compares it to a pyramid scheme:
> So let me get this straight. You are hired informally through a conference type atmosphere where they sell you their business opportunity. They tell you that it is your business and you get what you put in. Claiming that you can make over 100k each each year working solely on commission. After reaching a sales cap they place you ahead of 5 low level sales persons. When those people reach their sales cap they give you five more or 'promote' you again to have 5 managers below you and 5 agents below each of them?
> If this in anyway sounds like the operation that liberty National adheres to then it is a Pyramid Scheme.
Another says:
> This is not a job for anyone without deep pockets. It is an expensive company to go to work for. I have probably spent more money to work for this company than for all other companies I have worked for combined!
And another:
> Also, count on spending several hundreds of dollars (or thousands) to work for this company. You will have to have a (relatively) new laptop computer and a GPS plus appropriate attire and suitable automobile. You'll probably be driving 100 miles a day at your expense. It is unlikely that you'll make enough money in the first few months to off-set these expenses and have anything left over for your family. I've probably spent more than I've made with Liberty National.
But here's one guy who made being an agent work for him and really likes it:
> I have enjoyed the comments from "ex-employees" of the company. I started in August of '06. Prior to this career move, I owned a business for 6 years, worked 16 hours a day consistantly.
> The reason I bring that up is, I believed in what I was doing, these comments have a common thread, LAZY people expecting more than they are willing to put in!
> I have been with Liberty for over a year now, I have worked very hard to get what I have and where I am with the company, with out my "WORK ETHIC" I would not be where I am, with that said, I have not worked a 16 hour day since I sold my business in '06...on average I work 9-11 hours 5 days a week...not bad when you consider my yearly income IS over 6 figures! Oh, and I get to see my family!
> 1. If you work hard, yes you can make over $100k your first year, I did!
"It's funny to see the sharing economy promoted as a goal in itself, when 30 years ago one of the criticisms of the Soviet Union was that people there are so poor that they are forced to share kitchens and cars with strangers."
And how the soviet union would only have one manufacturer and one shitty product.
Now we have walmart.
No matter the ideology, powerful people will want to possess power and wealth and will use whatever systems are in place to get there.
Many of the things made during the Soviet era were made to last. I'd recommend the documentary: "The Lightbulb Conspiracy." It talks about planned obsolesce and the throw away economy.
It's not necessarily because the Soviet state, but more simply due to resource scarcity and needing to make things that last a very long time.
It's more than appalling that our cell phones are only intended to last two ~ four years. Of course that gives miners and Chinese manufactures jobs and growth (and the war industry too as they start a few more wars to collect resources).
I don't see how the latter would help - "long-life" products would break anyway.
OTOH, if we could get minimum warranties from the EU's standard 2 years to something like 20 years for appliances and 10+ years for digital electronics... maybe then companies would start to care.
There is both good and bad in a quick product cycle.
The bad, if done wrong, you get poor recycling of input materials. If done right, you get iteratively better more environmentally friendly products.
We would not want to be using inefficient air conditioners, washers, dryers, refrigerators, water heaters, etc. from yen years ago. They are simply inefficient compared to a new model. The problem is in recycling the displaced products.
>Many of the things made during the Soviet era were made to last.
They were made to last because they were costly and difficult to obtain, but they were of shockingly poor quality. Consumer goods in the soviet union were uniformly terrible. These dreadful products were the natural result of material shortages, obsolete design, inept management, a total indifference to quality and consumers who had no other choice.
Look at soviet cars. Trabants, Yugos and Ladas were shoddily built from the cheapest materials. Soviet citizens kept these cars running because they had no other choice - either you figured out some way to fix up your pile of junk, or you walked. When Ladas and Yugos were exported to the west, they required major upgrades to meet safety and emissions standards and were still the worst cars on the market.
That maps across the entire soviet economy. The very best goods available to soviet citizens were usually worse than the shoddiest goods on the western market.
Walmart doesn't source from a single manufacturer though, and while competing with them may not be a walk in the park, it's still orders of magnitude less tricky than competing with state owned soviet companies ever was.
There's plenty of wrong with the current state of facts, but suggesting it's roughly similar, let alone equivalent, to what the situation was in the USSR is quite ridiculous.
But AirBnB and Uber aren't actually sharing. The uber driver isn't carpooling on their way to work, they're your driver, which is a luxury. Likewise an entire apartment on vacation is much better than a hotel room.
Actual sharing like couch surfing hasn't been nearly as popular.
I remember reading a blog post on "The Bullshit Sharing Economy" while I was backpacking and it made the same general argument.
If it were a real sharing economy, the developers and system engineers on the platform would make the same hourly rates as the drivers. In such a way everyone would contribute to the co-op and everyone would benefit.
It'd be interesting to see a price breakdown internally at Uber or Lyft and see how much people would actually get paid if every driver/contractor and every dev/admin/janitor/board member were to make the same hourly rate.
I generally agree that the "sharing" economy isn't a sharing economy. But I don't think this:
If it were a real sharing economy, the developers and system
engineers on the platform would make the same hourly rates as
the drivers. In such a way everyone would contribute to the
co-op and everyone would benefit.
follows.
Different services are worth different amounts depending on the value they yield and, sometimes, who they're targeted at. If a relatively small team of programmers can enable a massive business, then they may be deserving of apparently outsized compensation for their time and work.
lol I fail to see the logic in where "real sharing" and equal wage became correlated. If I lent my lawnmower to my neighbor what does that have to do with his wage?
Presumably because you shouldn't be even talking wages in a sharing economy, at least not beyond money flow that's necessary to keep the system afloat.
>For a short while, VC investments paid out as bonuses to the participants, and just the novelty of the thing might keep both sides happy. But eventually there has to be a balance found between "I want to pay less" and "I want to earn as much as before" and "government wants as much taxes as before".
Eventually, a "business" has to actually create value and earn a profit somehow. If VCs actually intend to support neat stuff on charity, they can just write checks to the National Science Foundation.
My place is on AirBnB because the income is great and gives me the freedom to hang out anywhere I want in the world while someone else pays to stay in my place.
I use Uber for its pleasant vehicles and drivers, more than its cost. I'd absolutely user then over taxis even if they were 20% more expensive.
I don't use airbnb because my travel needs can't tolerate any random last minute host cancellation. I continue to use hotels. I'm rarely happy with hotel prices but I am willing to pay for reliability of service.
Well, for one thing it's not a "sharing economy" (that's a feel-good misnomer) - it's a "part-time work economy", which is a completely different beast. The fact that Uber, TaskRabbit et. al. have managed to brand it as such is a triumph of marketing.
(I like the term "gig economy" - also used in linked article - because it reflects the reality of the style and conditions of the work.)
It's a sharing economy, as in there is little room for profit - it's all break-even business, the producer surplus shared completely with the consumer.
Ok I made that meaning up - but still, think about it.
Seriously? Do you think Kalanick has no expectation to turn a profit? The only reason Uber operaters below costs right now is because they still have millions upon millions of VC money to burn, AND because those millions can be turned into further market penetration.
They do not share out of the goodness of their hearts, they are merely positioning themselves to extract even biger surpluses in the future.
Here in Rio Uber doesn't have much space to hike prices before local yellow cabs become much cheaper.
Uber seems to arrive at new locations with offering price savings that pretty much amount to dumping, and would be strongly opposed by consumers and antidumping regulators (the usual pushback doesn't come from them) if established cab services weren't such an annoying, low-level-of-service monopoly.
But hey, yellow cabs here have improved a lot (better cars, better service) and prices are approaching parity.
While not the best term is its valid in the sense that you're sharing your existing infrastructure. With uber you're sharing the car you already own. The problem is way too many people ran out, bought $35,000 cars they wanted, and drove them on the weekends and evenings to pay for them and then complain about low wages. You're not supposed to buy infrastructure for these types of gigs. They only make sense as added use on existing infrastructure.
The same way a gig musician is supposed to have his own gear that has already been paid off and not supposed to run out and buy the most expensive stuff at guitar center after a few guitar lessons. Then they're pissed that studio gigs pay only $100 a day which isn't a lot to offset that guitar center credit card balance.
I assume it is because financing is profitable and locks drivers into a work commitment. This doesn't necessarily imply that it makes long term financial sense for the driver.
Yeah, the headline isn't supported by the article.
Another way of looking at these numbers is that the unsustainable explosive growth the "gig economy" saw early on was just that, unsustainable and explosive initial growth. The "mere" ~100% YoY growth for labor platforms is still incredible, and time will tell if that continues to drop.
The article avoids talking about what the "gig economy" would need to sustain itself, but it's entirely possible it doesn't need to grow nearly this fast to still be completely viable.
Decelerating growth while still being unsustainable because it's VC-subsidized raises serious questions of whether there is a self-sustaining business underneath; the main advantage "gig economy" firms have over competing established incumbents is willingness to spend VC money and test the limits of the law, but once the law is either adjusted or settled through disputes and VCs want to see returns rather than pouring in more subsidies in hopes of future growth, both of those advantages go away and they end up in competitive markets without a moat.
Can anybody see a real future in any of these gig service companies? I'd say Uber is the exception because of the way the business works (i.e. ride sharing is something you can't plan for the future, it's a one shot per transaction deal) (this also doesn't account for it's constant boxing matches with various Governments, that's a different discussion)? Like the maid services, once you get linked up with a maid you like, you're directly incentivized to abandon the service to keep the maid you want, and they are incentivized you let you do it because they get more money?
It seems like all of these "match x worker to x task" services are a countdown until the customer finds a worker they particularly like (or just one they can tolerate, I wouldn't be wild about strangers having access to my home) at which point they drop the service, and the servicer's time to handle clients for said service has now been reduced, since they have a direct relationship with a client.
I mean they can put this in the ToS that you "can't do that" but in reality they absolutely can, there's nothing to stop them and no real way to follow up in a meaningful, actionable way for the service.
The service can have a better insurance than the individual worker, etc. Ultimately it's up to the service to add enough value that you want to keep using it.
What if your favorite worker is busy? Either you have to find a replacement yourself (a failure), or the worker knows someone else who's available (and then the worker is basically running their own small time service).
You can certainly put a non-compete of existing customers in the contract with the "independent contractor" and make it clear that if the platform finds out you'll lose all your existing contracts and get sued. You could offer a way to buy themselves out of the contract too.
The tricky part is the platform finding out. The customer isn't going to out them, and the provider is going to do everything possible to not out themselves. Unless our hypothetical service is hiring PI's to follow all their contractors around, it seems unlikely they could catch even a small fraction of the offenders.
PIs are expensive. My dad's a PI, and mostly works for insurance companies on worker's comp fraud cases. Even the insurance companies, for all their money, don't hire a PI until they are 99.9% positive a given claimant is defrauding them, and at that point the PI is more of a formality to gather evidence for court than a tool for finding out if the claimant is a fraud or not.
Right and that's what I'm saying, the expense for finding out who's skimming clients is going to be incredibly high compared to the minimal benefits. Even with VC cash that seems like a tough sell.
Not to mention, it would be a trifle for even a lackluster reporter to paint this up like the company being the creepy big brother bad guy. The PR cost could be very high too, considering the levels of loyalty (read: none) most customers have to these services.
Most of the people would probably use the same service time and same location.
But, even before that offer the customer a free service time with new contractor for canceling. if in a competitive situation offer to match prices just need a quote. if it starts to look kind "fishy" flag the contractor.
Also, try to filter out dishonest contractors. In the cleaning situation do you want someone coming to your place that's willing to steal from the place they work?
Except this offer goes against what I was saying is the "x factor" in the customer deciding to hire the contractor directly instead of using the service; they find a contractor they trust more than the service, or they find this contractor does better work, offers lower rates off the service, etc. The customer has multiple incentives to leave (keep the same worker that they like, pay less) and the contractor has them too (less overhead, makes more because the service isn't taking a cut, maintains own relationship with customer).
The basic result is, while these services are good for helping customers -find- contractors, it's much harder to maintain that value gain once the contractor has been -found-. Most customers aren't going to perceive it as stealing from their employer, because they aren't employees, they are contractors, and because of the low value gain by using the service. The service is in effect getting paid to continuously provide contractors, and if the customer likes the contractor they have, they have no reason to continue using the service.
Everyone quits at the same time. When they realize how much they owe in taxes or incur accidental cost like a car accident or a large maintenance bill to their home they were renting out.
When your contractors lose money working with you they eventually have no choice but to do something else because they run out of money.
Same with deliveroo, I hate seeing their cyclists have accidents, knowing their employer will not help them.
Sadly, the employees have no choice, they cannot get unemployment benefit if they leave an uber/deliveroo job. Or they work a zero hours contract job, again with no security.
The job of the gatekeepers we've been so eager to dismantle was to keep prices, and to some extent wages, up. We should not be surprised to find that in more open markets, prices, and to a more extreme extent wages, are dropping.
Good, hopefully people are realising how exploitative a lot of these platforms are. We need new laws that require gig employees to get sick/accident pay and net pay at minimum wage or above.
In the UK, there have been a few cases (Uber, Hermes, City Sprint) where "gig economy workers" were declared to be employees rather than independent contractors, and therefore entitled to all the usual benefits.
What I don't see discussed here is that we are reaching peak employment in the United States so part time jobs will swap out in favor of more stable employment. I would predict an increase in the number of "gig" jobs as employment regresses back to the mean and/or if we see another spike in unemployment.
Rephrased as a question: "Did these companies succeed primarily because of the job / capital market they grew up in, or was it just a contributor to the scale / growth?"
This is how it's supposed to work isn't it? If the wages fall so low that it's no longer worthwhile for people to do the work, people will stop doing it. If the work still needs to be done, people will have to pay an amount that workers are willing to accept.
When you tip with your credit card when ordering through grubhub, 99% of the time it goes to grubhub and it never reaches the driver. Grubhub guarantees a hourly wage, but to keep your tips that you have to earn more then your hourly rate. This means the driver won't receive any tips until he/she makes themselves free for grubhub. Pretty ingenious IMO, make the driver a contractor so you don't pay payroll tax, and the drivers basically work to make themselves free for you to hire.
It's not that I want the tips, I really do think tipping is a horrendous system and it is "my fault" for signing up to work for them (I was incredibly desperate for money). I just feel it is disingenuous to call it a tip when it should be called a "please pay my driver's hourly wage for me" fund. I know that is basically what a tip is, but when someone tips me very well I have this sick feeling in my stomach because they wanted it to go to me not grubhub. That is why I'm leaving grubhub.
I'll break it down for you guys how it works because I was confused for a long while about how it works (which is probably by design).
You work 8 hours for grubhub. For brevity, lets assume in your area grubhub pays $10 a hour, the mileage they pay you is 25 cents a mile (from restaurant to customer only, you don't get anything driving to restaurant) and the delivery fee is $2. You deliver 10 deliveries during that time, your (payable) mileage is 40 miles:
You worked 8 hours, so your hourly wage is $80. Now lets see how much in tips you need to make before you can start keeping your tips!
Delivery fees - $20 Mileage - $10
You would need to make $50 in tips to start actually getting your tips.
Now I'm getting a new pizza delivery job where the hourly rate is a couple bucks an hour lower, so my hourly rate in this example would be $8, so while I would only make $64 dollars from my hourly rate, I get to keep my delivery fees, mileage, and tips on top of that.
The Grubhub I worked for spreads the work around so that people earn the minimum hourly rate. Why wouldn't they? it lowers their labor costs to near zero.
If you have to use grubhub tip in cash, or better yet just don't tip. I don't care I am making the minimum hourly rate 99% of the time. If grubhub can't survive without the credit card tips customers intended to go to the driver it shouldn't be around.
P.S.: I'll say again I understood that I signed a contract so grubhub can do whatever it wants. I understand I got a few dollars more over the minimum wage (as if it was worth giving up all that tip money). This entire post was about informing people the deception involved around the credit card tips. If grubhub stands by their practices, then spreading this information around won't hurt their business.
Not saying I don't believe you...just that it's pretty brazen to hold tips while outwardly encouraging customers to tip, based on some appeal to be nice to drivers.
Edit: Thanks for the update. Sounds like fraud to me, since they are outwardly saying the tips go to the driver. If that is spelled out in the contract you have with them, you might have some easy recourse.
"I'd like to understand this better. This article[1] suggests that if you're being stiffed on tips, it's the restaurant, and not GrubHub doing that."
I read both your links.
1.) The restaurant had nothing to do with the tip at all. The customer pays grubhub the money for the food and (most of the time) my tip. Grubhub paid the restaurant directly, any time I made more then my hourly rate in tips the tips showed up on my check from grubhub.
I am sure grubhub works differently in different cities. I am merely relaying my experience working for them for over a year.
2) They can claim the tips go directly to the driver, the tips indeed go directly towards the driver's hourly rate so grubhub doesn't have to pay them themselves. That is how it is in their minds. This can be open to interpretation, just merely giving people the information they should have had from the get go.
I feel like you're missing my point, but if not just ignore this, you can interpret this your own way. :)
Going with your server example, if it worked like grubhub the waitress would have to earn over $2.35 an hour before s/he could start keeping her/his tips. At that point, s/he is essentially free for the business to hire. Now imagine if that place had maybe a hundred waitresses and spread the tables out between them so none made more then the $2.35 an hour. The business then keeps all the tips in this scenario. That is how grubhub works (where I live at least)
When I got a big tip early in my shift, I would never receive any more orders the rest of my night. Why would they send me more orders? then they'd have to give me some of the credit card tip money. They could have one of the other drivers do all that work until they maxed out their hourly.
Is it right to call it a tip when the business intends to do everything in it's power to not give any of the money written in the tip line to the driver? I guess thats a personal opinion you will have to make on your own.
The new place I start working at in a few weeks "guarantees" only $2 less an hour. that is one delivery an hour at the new place with no tip and I am making the same hourly rate. Then I will keep my tips and mileage and delivery fees.
A company I can be proud to work for hopefully. I won't feel bad seeing a good tip ever again. peace of mind is the best tip I can think of.
Are you positive that you fully understand the compensation structure of the new pizza delivery place? Because it seems incredibly unlikely that they will pay you $8/hour, plus a delivery fee per delivery, plus a per mile rate, and then tips on top of all of that.
For server's wage, the business is required that a server make at least $7.25 an hour. So,
- if nobody comes, the restaurant can't pay you server's wage, they pay you minimum wage ($7.25)
- If a server receives $4 in an hour of tips, the restaurant has to add in $1 to the $2.35
====
And for long term employees with weekly/monthly paychecks, hopefully this all equals out or benefits the server. If the server takes cash tips and doesn't report them, or works under that expectation, then that server has somewhat unlawfully opted out of the system.
It's not that you don't get to keep your tips, it's that your tip goes towards the guaranteed hourly rate. And it's not at all uncommon, and certainly not unique to GrubHub. In many cases jobs that involve tips will guarantee earning $X/hour, and if you don't pull enough in then the store will kick in the extra. I think it's the same with GrubHub. They don't pay you $10/hour, they guarantee that at a minimum you will earn at least $10/hour in tips + delivery fees + mileage.
This sounds completely illegal. The tips should go to the driver, not in lieu of guaranteed income. That sounds like a class-action suit waiting to happen.
> This entire post was about informing people the deception involved around the credit card tips. If grubhub stands by their practices, then spreading this information around won't hurt their business.
This is actually how it works for credit card or cash tips to waiters in restaurants as well. This is not unique to GrubHub.
The "minimum wage" is not a base income with all tips being just gravy on top. "Minimum wage" is a concept introduced by the government that puts a lower floor on how much you make. If the tips by themselves aren't enough to put you over "minimum wage" the restaurant must legally cover the shortfall.
is this surprising news? at least living in SF its pretty clear we're at full saturation. Companies have been throwing all the money at fending off competition and expanding to new markets...
As well, most all of these gigs are means to an end, so equally unsurprising about the employment trends. Go ask folks if they want to be a taxi driver or delivery person and you'll get pretty negative response. Ask, hey do you want to work for Uber or Caviar and it's sure, why not. I imagine the novelty wears off pretty quickly.
A lot of the cut paid out to workers in the gig economy is going to fade to nothing. Uber and Lyft, as prime examples, are two capital spigots that are making binary bets that they can essentially cut their labor costs and become profitable through the use of automation (Travis basically said "self-driving and IPO or bust). It's not going to look pretty when workers who didn't have any protections suddenly face up to shifting capital.
Can this data mean that a significant part of "gig economy happens to be a fad, similar to 3D TVs or Groupon? I.e. that value of relevant companies could and would soon significantly shrink, just like it happened with Groupon and its clones, after they went through the whole body of SMBs (for most the deals were NOT profitable) and the deal-seeking individuals. The main difference being that attractive pricing for the labor-sharing and capital-sharing platforms was funded and subsidized by VC money, while for Groupon and clones money for reduced pricing went out of pockets of SMBs...
1. The article seemed fuzzy on data supporting the claim that people who have dropped out of the gig economy have changed to non-gig employment.
2. What are the types of jobs the former gig-sters moved to?
3. Are more employers trying to move to a gig-based employment model?
4. Aren't there already companies who sort of operate on a gig-based model in how they hire contractors for a limited duration and then drop them when the contract ends? It's just that these don't get counted as the trendy "gig" model?
This reminds me of a study (and subsequently made into a book)that tracked how the poor manage their finances through a series of diaries. [1] The most interesting insight, for me, was the fact that it isn't the absence of income but the unpredictability of it that is most worrisome for poor families.
Similarly, in this case, if I have a job with an assured income every 2-4 weeks, you'll have to convince me with a huge uptick over this income to sacrifice this assurance for a chance to become a contractor. Add to this the other benefits such as retirals and health-insurance and the trade-off looks even less attractive.
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[ 3.5 ms ] story [ 235 ms ] threadNobody wants to share things, it's all done for economic reasons. People buy on AirBNB and Uber because it's cheaper than an equivalent hotel or taxi. People sell on AirBNB and Uber because they need the extra income.
For a short while, VC investments paid out as bonuses to the participants, and just the novelty of the thing might keep both sides happy. But eventually there has to be a balance found between "I want to pay less" and "I want to earn as much as before" and "government wants as much taxes as before".
So everyone's a winner, what's the problem? Everyone is getting a better deal than they would with an alternative, excellent I say.
I'm not sure whether the ability to do this truly empowered them, whether the life with it is better than the alternative. Clearly they judge it to be.
On the other hand was a chap renting out his spare room who loved being a host, chatting to the people he met etc etc. He was definitely happier with it.
Now suppose we divide old units of accommodation priced £ in two (halve the slope of the supply curve). The price of a new unit will be close to £. But an old unit then costs nearly 2£. So you have a choice between slum housing and coughing up double the rent.
I have nothing against AirBnb itself, I was generally talking about the bigger and bigger disconnect that has formed between the middle classes (who have seen their real wages stagnating for the last 10-15 years in the Western world) and the holders of capital, presumably because the latter have accumulated more and more wealth also because of those stagnating wages for the middle classes.
We both know that without VC money (which in the end comes from holders of big capital) companies like AirBnb and Uber wouldn't be where they are right now.
I had look at places that needed roommates, but the good ones filled up by the time I called back and the others were not places I wanted to live. I ended up paying a premium for having my own place.
http://khanism.org/perspective/minimalism/
Looking back, I didn't want to share after spending much of that time in hostels and shared spaces. But months later, I realize the benefits I've lost. I have too much stuff once again and am desperately trying to cut down. I'm in a city that's filled with cold an unfriendly people, and thanks to having my own place, allows me to be more of a hermit.
I plan on buying a car again at some point and downsizing to less than a car full of stuff. Big salaries are a kind of death trap. It can get people addicted and justify jobs that many of us hate. I'd rather have the small salary and only have enough stuff that I only take up one room; where I could easily pack up and leave.
As well, maybe it takes a while before the true societal risks are understood, AitBNB regulations may be too weak for some reason, but until we discover that, perhaps we've "unfairly" put some marginal hotels out of business that would have survived under the impending new legislation. (Hope that makes sense?)
As I touched on a above, the thing about restricted markets is that price is able to rise artificially due to the unnaturally constrained supply. This ends up being a government subsidy; one that is disproportionally paid for by the poorest people. If you are already comfortable with subsidizing licensed businesses, why not continue to subsidize the marginal ones? Perhaps even in a way that is less impactful to the poorest people?
Congratulations. You just invented "zoning laws".
You have very little evidence that this is true.
And anecdotal data suggests that explicit "social ranking" introduces a whole host of other problems. See: the kerfuffle about AirBnB and renting to minorities.
My issue would be buying a house or condo with the neighbors across the hall or across the street changing daily. It's not an issue of the quality of the hotel. It's an issue of respecting zoning laws.
somebody would like to spend less, be in more welcoming/cozy/more spacious environment, have a kitchen at hand and so on? well there is now an option for those too.
I don't see where the problem lies. just don't take perks from the other 'side' as granted.
People get scammed by shady taxi drivers and landlords all the time. Regulations don't work. Haven't you heard about all the taxi drivers who don't take credit cards because "the card reader is broken"? I've had this happen many times, and I don't even use taxis very much.
Your feelings don't match reality. The licensed taxis I've ridden in were nasty, far worse than the unlicensed Uber cars I've ridden in. Taxi: 20-year-old P-O-S Crown Victoria. Uber: 2-year-old Mercedes
There's also plenty of rat-trap motels out there that are properly licensed. I live a couple of miles from one; people have even put videos on YouTube about how awful it is there. There's plenty of really nice hotels too, but that's because people are willing to pay double the price of the rat-trap, and those hotel chains are nation-wide and want to maintain their reputations, not because of any regulations. The only thing regulations are good for is making sure places don't burn down. And even that's iffy; generally places just burn down anyway and then someone gets punished afterwards.
There are terrible motels and good motels; same with hostels. I've stayed in many hostels that were far Superior and better value than hotels. I've been in some that had mold infestations everywhere.
Regulations play a part, and the are an important part of equality. Do people game the system, bend the rules and lobby to pass their own laws that benefit them over the customers and employees. Of course.
But it's all a very complicated system. You need to do a lot of surveys, research and have a good set of controls to say "regulations might correlate with x, y and z," and you'd need people to replicate your work before you can even start addressing causality.
A claim was made that "I feel that regulation makes things clean and safe". I pointed out that that claim is utterly false using actual examples. I don't have to prove that regulation doesn't work anywhere, I only have to prove that it doesn't work somewhere. And in the places I've used taxis (NJ, AZ), they're awful. I have used them in NYC too, and those are OK (though to be fair, I'm not black, which I've read is a big problem there). You're right: it depends on the city, etc. Regulations and regulators are different in different places. But to make the broad claim that "regulation is wonderful!!" is blatantly false, and easily disproven by showing only one example of a place where it doesn't work right. Now, if you want to make the claim that "regulation works really well in location X", that's a defensible claim, and only disproven by showing that things are actually bad in location X (and not other locations).
This seems to be the problem with this whole regulation vs. anti-regulation argument WRT taxis and hotels: the pro-regulation people cherry-pick a few places where things seem to be OK. The anti-regulation point out that their experiences in other places are entirely different. The pro-regulation people them stick their fingers in their ears and refuse to believe that there's places where regulations don't work well. Maybe regulation really does work well in those cherry-picked places, but that doesn't help the places where the regulation is bad and the regulators are corrupt.
To reiterate coldpie's point, "regulations don't come about because some lawmakers got bored, they come about in answer to a problem". Before going full anti-regulatory based on personal experience, one would be good to consider the relative impact on all places.
I merely have the position that regulation is not the panacea that the pro-regulation people seem to think it is. If it works, great. If it doesn't work, then instead of harassing the people who work around broken regulations which just support rent-seeking by cronies, maybe we should look at fixing the political system and eliminating the corruption and bad regulation and bad regulators instead. But that's never proposed as a solution, probably because 1) it's too hard, and 2) the pro-regulation people don't like to admit to the existence of corruption.
Sure, if you consider the desire of incumbent businesses to lock out competition and artificially inflate their profits to be a "problem".
I am wondering how many segments there are in the "accomodations" industry. We have the homely/warm/cozy opinioned root kind of segment CalRobert has exemplified; then we have the dirt-cheap hobo-shelter-minus-stabbing that people on a tight budget seem to value, etc.
Any thoughts.
To be fair, if more hotels were cozy and made it easier to meet local people I'd be more inclined to go with hotels. They're not _bad_, per se, just kind of sterile.
There are exceptions, of course. I've stayed in small, usually family-run, bnb's in rural Ireland, and Germany's romantic road. These tend to be more charming.
Like local hotel taxes.
Also, when you're older and have already spent a decade or more accumulating good friends (one hopes!) the exploration/exploitation equation starts to favour spending more time with old friends than making new ones.
The big difference is that, unlike those "sharing" economy companies, Couchsurfing was not a business, and once it turned its focus to making money an exodus of "users" ensued.
Couchsurfing was not targeted at Airbnb's "get a cheap place to sleep at city X" demographic, and people that couldn't demonstrate they were looking for anything other than a low cost hotel would see their requests turned down. Couchsurfing users were willing to share their house, not for a small amount of money, but for the value of making international acquaintances (and friends for life, sometimes), which is something they also received through the service when going abroad.
That's true for some people. But for others, it's more "want" than "need".
Like one driver I rode with last week: she started driving for Lyft part-time, in addition to her day job, because she wanted to make a little extra money in order to afford the down payment on a house. She didn't need to do that; she could have continued living in her existing place indefinitely, and her day job lets her afford her current living expenses just fine. But she wanted something more, so she took up Lyft. And I got the impression that she'll give up Lyft as soon as the down payment is made.
Or other drivers I've talked to who could work a full-time job in another field and make a decent living doing so, but choose to drive for Uber or Lyft because they like the idea of being their own boss. This actually reminds me of how insurance companies work... I've been approached by a few of them while unemployed in the past, and they came off as pyramid schemes to me, but there are a few people who have the mindset to make it work for them, and they enjoy it.
You have to pay to become an agent, you work solely on commission, and you have to pay for all of your own work expenses (drive around to meet with clients? You pay for the gas!). The agent who recruited you into the biz gets a cut.
It's probably best to browse sites like ripoff report for descriptions of how being a life insurance agent works. A lot of people are unhappy with the system, but if you look through the reports, you'll also see positive reviews by agents who are happy with how the system works who are.
Here's one (this specific company repeatedly contacted me in 2010-2011): http://www.ripoffreport.com/reports/liberty-national-life-in...
Here's how one review compares it to a pyramid scheme:
> So let me get this straight. You are hired informally through a conference type atmosphere where they sell you their business opportunity. They tell you that it is your business and you get what you put in. Claiming that you can make over 100k each each year working solely on commission. After reaching a sales cap they place you ahead of 5 low level sales persons. When those people reach their sales cap they give you five more or 'promote' you again to have 5 managers below you and 5 agents below each of them?
> If this in anyway sounds like the operation that liberty National adheres to then it is a Pyramid Scheme.
Another says:
> This is not a job for anyone without deep pockets. It is an expensive company to go to work for. I have probably spent more money to work for this company than for all other companies I have worked for combined!
And another:
> Also, count on spending several hundreds of dollars (or thousands) to work for this company. You will have to have a (relatively) new laptop computer and a GPS plus appropriate attire and suitable automobile. You'll probably be driving 100 miles a day at your expense. It is unlikely that you'll make enough money in the first few months to off-set these expenses and have anything left over for your family. I've probably spent more than I've made with Liberty National.
But here's one guy who made being an agent work for him and really likes it:
> I have enjoyed the comments from "ex-employees" of the company. I started in August of '06. Prior to this career move, I owned a business for 6 years, worked 16 hours a day consistantly.
> The reason I bring that up is, I believed in what I was doing, these comments have a common thread, LAZY people expecting more than they are willing to put in!
> I have been with Liberty for over a year now, I have worked very hard to get what I have and where I am with the company, with out my "WORK ETHIC" I would not be where I am, with that said, I have not worked a 16 hour day since I sold my business in '06...on average I work 9-11 hours 5 days a week...not bad when you consider my yearly income IS over 6 figures! Oh, and I get to see my family!
> 1. If you work hard, yes you can make over $100k your first year, I did!
This sounds like legitimate MLM not a pyramid scheme. I'd suggest reading the MLM section on https://en.m.wikipedia.org/wiki/Pyramid_scheme
And how the soviet union would only have one manufacturer and one shitty product.
Now we have walmart.
No matter the ideology, powerful people will want to possess power and wealth and will use whatever systems are in place to get there.
Many of the things made during the Soviet era were made to last. I'd recommend the documentary: "The Lightbulb Conspiracy." It talks about planned obsolesce and the throw away economy.
It's not necessarily because the Soviet state, but more simply due to resource scarcity and needing to make things that last a very long time.
It's more than appalling that our cell phones are only intended to last two ~ four years. Of course that gives miners and Chinese manufactures jobs and growth (and the war industry too as they start a few more wars to collect resources).
And no pressure to make shitty things just to ensure you have return customers.
OTOH, if we could get minimum warranties from the EU's standard 2 years to something like 20 years for appliances and 10+ years for digital electronics... maybe then companies would start to care.
The bad, if done wrong, you get poor recycling of input materials. If done right, you get iteratively better more environmentally friendly products.
We would not want to be using inefficient air conditioners, washers, dryers, refrigerators, water heaters, etc. from yen years ago. They are simply inefficient compared to a new model. The problem is in recycling the displaced products.
They were made to last because they were costly and difficult to obtain, but they were of shockingly poor quality. Consumer goods in the soviet union were uniformly terrible. These dreadful products were the natural result of material shortages, obsolete design, inept management, a total indifference to quality and consumers who had no other choice.
Look at soviet cars. Trabants, Yugos and Ladas were shoddily built from the cheapest materials. Soviet citizens kept these cars running because they had no other choice - either you figured out some way to fix up your pile of junk, or you walked. When Ladas and Yugos were exported to the west, they required major upgrades to meet safety and emissions standards and were still the worst cars on the market.
That maps across the entire soviet economy. The very best goods available to soviet citizens were usually worse than the shoddiest goods on the western market.
There's plenty of wrong with the current state of facts, but suggesting it's roughly similar, let alone equivalent, to what the situation was in the USSR is quite ridiculous.
Actual sharing like couch surfing hasn't been nearly as popular.
If it were a real sharing economy, the developers and system engineers on the platform would make the same hourly rates as the drivers. In such a way everyone would contribute to the co-op and everyone would benefit.
It'd be interesting to see a price breakdown internally at Uber or Lyft and see how much people would actually get paid if every driver/contractor and every dev/admin/janitor/board member were to make the same hourly rate.
Different services are worth different amounts depending on the value they yield and, sometimes, who they're targeted at. If a relatively small team of programmers can enable a massive business, then they may be deserving of apparently outsized compensation for their time and work.
Eventually, a "business" has to actually create value and earn a profit somehow. If VCs actually intend to support neat stuff on charity, they can just write checks to the National Science Foundation.
I don't use airbnb because my travel needs can't tolerate any random last minute host cancellation. I continue to use hotels. I'm rarely happy with hotel prices but I am willing to pay for reliability of service.
(I like the term "gig economy" - also used in linked article - because it reflects the reality of the style and conditions of the work.)
Ok I made that meaning up - but still, think about it.
They do not share out of the goodness of their hearts, they are merely positioning themselves to extract even biger surpluses in the future.
Uber seems to arrive at new locations with offering price savings that pretty much amount to dumping, and would be strongly opposed by consumers and antidumping regulators (the usual pushback doesn't come from them) if established cab services weren't such an annoying, low-level-of-service monopoly.
But hey, yellow cabs here have improved a lot (better cars, better service) and prices are approaching parity.
The same way a gig musician is supposed to have his own gear that has already been paid off and not supposed to run out and buy the most expensive stuff at guitar center after a few guitar lessons. Then they're pissed that studio gigs pay only $100 a day which isn't a lot to offset that guitar center credit card balance.
Then why does Uber offer financing?
I'm not through the whole thing, yet, but we're off to a bad start
Another way of looking at these numbers is that the unsustainable explosive growth the "gig economy" saw early on was just that, unsustainable and explosive initial growth. The "mere" ~100% YoY growth for labor platforms is still incredible, and time will tell if that continues to drop.
The article avoids talking about what the "gig economy" would need to sustain itself, but it's entirely possible it doesn't need to grow nearly this fast to still be completely viable.
It seems like all of these "match x worker to x task" services are a countdown until the customer finds a worker they particularly like (or just one they can tolerate, I wouldn't be wild about strangers having access to my home) at which point they drop the service, and the servicer's time to handle clients for said service has now been reduced, since they have a direct relationship with a client.
I mean they can put this in the ToS that you "can't do that" but in reality they absolutely can, there's nothing to stop them and no real way to follow up in a meaningful, actionable way for the service.
What if your favorite worker is busy? Either you have to find a replacement yourself (a failure), or the worker knows someone else who's available (and then the worker is basically running their own small time service).
Not to mention, it would be a trifle for even a lackluster reporter to paint this up like the company being the creepy big brother bad guy. The PR cost could be very high too, considering the levels of loyalty (read: none) most customers have to these services.
But, even before that offer the customer a free service time with new contractor for canceling. if in a competitive situation offer to match prices just need a quote. if it starts to look kind "fishy" flag the contractor.
Also, try to filter out dishonest contractors. In the cleaning situation do you want someone coming to your place that's willing to steal from the place they work?
The basic result is, while these services are good for helping customers -find- contractors, it's much harder to maintain that value gain once the contractor has been -found-. Most customers aren't going to perceive it as stealing from their employer, because they aren't employees, they are contractors, and because of the low value gain by using the service. The service is in effect getting paid to continuously provide contractors, and if the customer likes the contractor they have, they have no reason to continue using the service.
See what I mean?
When your contractors lose money working with you they eventually have no choice but to do something else because they run out of money.
It follows that turnover must be quite huge in the profession.
Sadly, the employees have no choice, they cannot get unemployment benefit if they leave an uber/deliveroo job. Or they work a zero hours contract job, again with no security.
Hopefully that spreads wider.
Rephrased as a question: "Did these companies succeed primarily because of the job / capital market they grew up in, or was it just a contributor to the scale / growth?"
Former GrubHub employee here.
When you tip with your credit card when ordering through grubhub, 99% of the time it goes to grubhub and it never reaches the driver. Grubhub guarantees a hourly wage, but to keep your tips that you have to earn more then your hourly rate. This means the driver won't receive any tips until he/she makes themselves free for grubhub. Pretty ingenious IMO, make the driver a contractor so you don't pay payroll tax, and the drivers basically work to make themselves free for you to hire.
It's not that I want the tips, I really do think tipping is a horrendous system and it is "my fault" for signing up to work for them (I was incredibly desperate for money). I just feel it is disingenuous to call it a tip when it should be called a "please pay my driver's hourly wage for me" fund. I know that is basically what a tip is, but when someone tips me very well I have this sick feeling in my stomach because they wanted it to go to me not grubhub. That is why I'm leaving grubhub.
I'll break it down for you guys how it works because I was confused for a long while about how it works (which is probably by design).
You work 8 hours for grubhub. For brevity, lets assume in your area grubhub pays $10 a hour, the mileage they pay you is 25 cents a mile (from restaurant to customer only, you don't get anything driving to restaurant) and the delivery fee is $2. You deliver 10 deliveries during that time, your (payable) mileage is 40 miles:
You worked 8 hours, so your hourly wage is $80. Now lets see how much in tips you need to make before you can start keeping your tips!
Delivery fees - $20 Mileage - $10
You would need to make $50 in tips to start actually getting your tips.
Now I'm getting a new pizza delivery job where the hourly rate is a couple bucks an hour lower, so my hourly rate in this example would be $8, so while I would only make $64 dollars from my hourly rate, I get to keep my delivery fees, mileage, and tips on top of that.
The Grubhub I worked for spreads the work around so that people earn the minimum hourly rate. Why wouldn't they? it lowers their labor costs to near zero.
If you have to use grubhub tip in cash, or better yet just don't tip. I don't care I am making the minimum hourly rate 99% of the time. If grubhub can't survive without the credit card tips customers intended to go to the driver it shouldn't be around.
P.S.: I'll say again I understood that I signed a contract so grubhub can do whatever it wants. I understand I got a few dollars more over the minimum wage (as if it was worth giving up all that tip money). This entire post was about informing people the deception involved around the credit card tips. If grubhub stands by their practices, then spreading this information around won't hurt their business.
And this post[2], from GrubHub, uses some language that would be concerning if they were doing what you're saying.
[1]http://money.cnn.com/2016/03/15/pf/tips-seamless-grubhub-del...
[2]https://www.grubhub.com/thecrave/essential-guide-to-tipping-...
Not saying I don't believe you...just that it's pretty brazen to hold tips while outwardly encouraging customers to tip, based on some appeal to be nice to drivers.
Edit: Thanks for the update. Sounds like fraud to me, since they are outwardly saying the tips go to the driver. If that is spelled out in the contract you have with them, you might have some easy recourse.
I read both your links.
1.) The restaurant had nothing to do with the tip at all. The customer pays grubhub the money for the food and (most of the time) my tip. Grubhub paid the restaurant directly, any time I made more then my hourly rate in tips the tips showed up on my check from grubhub.
I am sure grubhub works differently in different cities. I am merely relaying my experience working for them for over a year.
2) They can claim the tips go directly to the driver, the tips indeed go directly towards the driver's hourly rate so grubhub doesn't have to pay them themselves. That is how it is in their minds. This can be open to interpretation, just merely giving people the information they should have had from the get go.
Yes, your new pizza gig, is supposed to make up the difference between $2.35 and $7.25 if you make no tips.
Going with your server example, if it worked like grubhub the waitress would have to earn over $2.35 an hour before s/he could start keeping her/his tips. At that point, s/he is essentially free for the business to hire. Now imagine if that place had maybe a hundred waitresses and spread the tables out between them so none made more then the $2.35 an hour. The business then keeps all the tips in this scenario. That is how grubhub works (where I live at least)
When I got a big tip early in my shift, I would never receive any more orders the rest of my night. Why would they send me more orders? then they'd have to give me some of the credit card tip money. They could have one of the other drivers do all that work until they maxed out their hourly.
Is it right to call it a tip when the business intends to do everything in it's power to not give any of the money written in the tip line to the driver? I guess thats a personal opinion you will have to make on your own.
The new place I start working at in a few weeks "guarantees" only $2 less an hour. that is one delivery an hour at the new place with no tip and I am making the same hourly rate. Then I will keep my tips and mileage and delivery fees.
A company I can be proud to work for hopefully. I won't feel bad seeing a good tip ever again. peace of mind is the best tip I can think of.
For server's wage, the business is required that a server make at least $7.25 an hour. So,
- if nobody comes, the restaurant can't pay you server's wage, they pay you minimum wage ($7.25)
- If a server receives $4 in an hour of tips, the restaurant has to add in $1 to the $2.35
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And for long term employees with weekly/monthly paychecks, hopefully this all equals out or benefits the server. If the server takes cash tips and doesn't report them, or works under that expectation, then that server has somewhat unlawfully opted out of the system.
This is actually how it works for credit card or cash tips to waiters in restaurants as well. This is not unique to GrubHub.
The "minimum wage" is not a base income with all tips being just gravy on top. "Minimum wage" is a concept introduced by the government that puts a lower floor on how much you make. If the tips by themselves aren't enough to put you over "minimum wage" the restaurant must legally cover the shortfall.
Actually if the true reason for this trend is that the economy is improving and wages will improve then these investors should be fine.
And the "down and to the right" graph depicting 500% growth falling to 100% is, well... judge for yourself.
2017: Not anymore.
2022: We are in the "minimalist economy".
Are there any sharing economy unicorns currently listed on the stock exchange? They are just asking for people to short it.
1. The article seemed fuzzy on data supporting the claim that people who have dropped out of the gig economy have changed to non-gig employment.
2. What are the types of jobs the former gig-sters moved to?
3. Are more employers trying to move to a gig-based employment model?
4. Aren't there already companies who sort of operate on a gig-based model in how they hire contractors for a limited duration and then drop them when the contract ends? It's just that these don't get counted as the trendy "gig" model?
5. We may have reached peak "peak" articles.
Similarly, in this case, if I have a job with an assured income every 2-4 weeks, you'll have to convince me with a huge uptick over this income to sacrifice this assurance for a chance to become a contractor. Add to this the other benefits such as retirals and health-insurance and the trade-off looks even less attractive.
[1] http://www.portfoliosofthepoor.com/