I feel like the take home pay example is a bit disingenuous using 4 hours of surge pricing vs a standard 4 hour shift. Yes, that is an example of what could happen in a specific example, but you could also create a similar example without surge pricing and get the opposite result.
It certainly is the lie the whole article hinges on.
If you're just looking to make a bit of money, then sure -- working once a month during a surge pricing event is ideal. If you're looking to earn a living driving for uber, being an employee appears to be better.
In SF, minimum wage will be $15 by 2018, and indexed to cpi thereafter, further eroding the argument.
Also, as minimum wage increases, then those employee jobs become more appealing, so theoretically the market rate for contractors would also increase in order to keep it a viable option. Though don't forget other benefits; many drivers value the flexibility more than anything.
uber also claims full-time drivers in nyc earn a median wage of $90k [1]. Which is utter bullshit [2]. So I assume everything they say is deceptive on some way. For instance, do they wish to work fulltime but can't break even doing so?
In most cities, there is more than enough demand for drivers to work full time (~40 hours/wk), but they value the flexibility over maximizing pay.
There are plenty of folks out there that are unable to work 8 contiguous hours. Perhaps they have children, school, or even a part-time job.
If a college student has free time, they can earn cash as a Uber driver, but when they have a final exam, they don't have to work a second. Traditional part-time jobs, like being a barista aren't that flexible, so the alternative may be having no income during college.
Agreed that everything in any media source (not just from Uber) should be taken with a grain of salt :)
Technically, Uber is not "lying" here. They're just talking gross wages, before driving expenses. Cab salaries are lower because the cab companies assume some of the costs of driving and build them into the daily/weekly cab lease fee (keep in mind almost all taxi drivers are independent contractors in the US).
And agreed on your last point. The questions/issues are much larger than Uber, which we bring up at the end of the post. Why are these jobs appealing to people? Maybe they're indicative of more systemic problems, and we should focus our efforts on things like improving the US education system so that more individuals have access to higher paying jobs.
Very valid point. My point was just to dispel the myth that "employees automatically make more".
I could get into things like (a) how most Uber drivers get to write off $0.575/mi as an expense when they actually only incur actual costs of $0.20/mi, (b) how contractors get to write off other things employees don't (like health insurance premiums), etc, but explaining those clearly in a single blog post is difficult.
Also, keep in mind this post completely ignores opportunity cost, which is arguably the most important aspect and one that is incredibly unique to each individual.
It's not clear to me why becoming an employee would necessarily eliminate flexibility. Why couldn't Uber continue to rely on surge pricing to incentivize drivers during busy times?
It's also worth pointing out that workers often value flexibility when they have a second, predictable income source that covers basic necessities—like a spouse's income. For workers who need the money to make rent, it's far less credible to say that they can "choose" whether they want to work or not.
Uber drivers may prefer to be contractors, but their opinion isn't the only one that matters. Allowing them to be contractors may expand the legal definition of contract work, which affects millions of other workers who have nothing to do with Uber or the sharing economy.
Why would Uber want to incentivize drivers during high demand periods, versus just taking that additional money themselves? The driver has little bargaining power as an employee, so would be forced to work Uber-defined shifts anyway. Uber has enough data now to get pretty close to market equilibrium if they schedule drivers.
Agreed on flexibility being more important when it's not the primary source of income. 'Different drivers have different needs and desires' is really the takeaway here.
And agreed. It's unfortunate that the sharing / on-demand economy are just now bringing light to the nearly 40% of the workforce that is contract/contingent labor. Honestly, I don't think most people appreciate the significant implications the Uber/Lyft lawsuits might have on the labor markets.
> Why would Uber want to incentivize drivers during high demand periods, versus just taking that additional money themselves?
Consumers would revolt, because they hate surge pricing. It is only acceptable because Uber argued that it was necessary to get drivers on the streets. If Uber starts setting shifts, then it looks to the consumer like pure greed. A probable outcome is regulation to cap fares. The main reason to set shifts is to maximize asset utilization, but Uber doesn't own the assets (vehicles), so this isn't an issue.
13 comments
[ 2.3 ms ] story [ 47.1 ms ] threadIf you're just looking to make a bit of money, then sure -- working once a month during a surge pricing event is ideal. If you're looking to earn a living driving for uber, being an employee appears to be better.
In SF, minimum wage will be $15 by 2018, and indexed to cpi thereafter, further eroding the argument.
Also, as minimum wage increases, then those employee jobs become more appealing, so theoretically the market rate for contractors would also increase in order to keep it a viable option. Though don't forget other benefits; many drivers value the flexibility more than anything.
[1] http://www.washingtonpost.com/blogs/innovations/wp/2014/05/2...
[2] http://www.inquisitr.com/2077969/how-much-do-uber-drivers-re...
There are plenty of folks out there that are unable to work 8 contiguous hours. Perhaps they have children, school, or even a part-time job.
If a college student has free time, they can earn cash as a Uber driver, but when they have a final exam, they don't have to work a second. Traditional part-time jobs, like being a barista aren't that flexible, so the alternative may be having no income during college.
Technically, Uber is not "lying" here. They're just talking gross wages, before driving expenses. Cab salaries are lower because the cab companies assume some of the costs of driving and build them into the daily/weekly cab lease fee (keep in mind almost all taxi drivers are independent contractors in the US).
And agreed on your last point. The questions/issues are much larger than Uber, which we bring up at the end of the post. Why are these jobs appealing to people? Maybe they're indicative of more systemic problems, and we should focus our efforts on things like improving the US education system so that more individuals have access to higher paying jobs.
I could get into things like (a) how most Uber drivers get to write off $0.575/mi as an expense when they actually only incur actual costs of $0.20/mi, (b) how contractors get to write off other things employees don't (like health insurance premiums), etc, but explaining those clearly in a single blog post is difficult.
Also, keep in mind this post completely ignores opportunity cost, which is arguably the most important aspect and one that is incredibly unique to each individual.
Not a ton know about smaller tricks, like writing off health insurance premiums (hence why people pay accountants).
We're trying to help with both at Zen99, e.g. with all of our free resources at www.tryzen99.com/learn
It's also worth pointing out that workers often value flexibility when they have a second, predictable income source that covers basic necessities—like a spouse's income. For workers who need the money to make rent, it's far less credible to say that they can "choose" whether they want to work or not.
Uber drivers may prefer to be contractors, but their opinion isn't the only one that matters. Allowing them to be contractors may expand the legal definition of contract work, which affects millions of other workers who have nothing to do with Uber or the sharing economy.
Agreed on flexibility being more important when it's not the primary source of income. 'Different drivers have different needs and desires' is really the takeaway here.
And agreed. It's unfortunate that the sharing / on-demand economy are just now bringing light to the nearly 40% of the workforce that is contract/contingent labor. Honestly, I don't think most people appreciate the significant implications the Uber/Lyft lawsuits might have on the labor markets.
Consumers would revolt, because they hate surge pricing. It is only acceptable because Uber argued that it was necessary to get drivers on the streets. If Uber starts setting shifts, then it looks to the consumer like pure greed. A probable outcome is regulation to cap fares. The main reason to set shifts is to maximize asset utilization, but Uber doesn't own the assets (vehicles), so this isn't an issue.