This is why I don't understand why people take gig jobs. Think of the opportunity costs. First off, Uber drivers don't make that much. Then you have vehicle depreciation and maintenance costs. You need to carry an insurance rider that covers rideshare driving. You also need to pay for your own health care. When you add up all these expenses, plus the desire for a living wage, there is no way drivers can be making enough with current rates. When people say you're essentially borrowing against the cost of the vehicle, I don't think they're being gratuitous. There may be low friction to entering the rideshare space by being a driver, but there are plenty of hidden costs.
> This is why I don't understand why people take gig jobs.
Sometimes Compared to what? is the most important question.
I've been driving for a few years. Before this I was making minimum wage with no benefits. Before that I had a difficult stretch of unemployment. One of my least favorite questions passengers ask me is What did you do before this? because I don't really like to talk about it. It is a rough job - you take a lot of risk, have a lot of bad days, and you get little reward in return. But at least it's work.
Of course the bottom rungs of the ladder look terrible to people near the top, but for who have fallen off of it the bottom is the most important part. All of these "worker protections" define the bottom of the ladder as exploitation. Let me decide that, my labor is my own to sell for whatever price I can get somebody to pay for it.
So, you'd rather drive without a guaranteed minimum wage, possibility for unemployment benefits, or health care benefits? I fail to see how that leaves the driver in a better position.
A min-wage guarantee implies Uber and Lyft will tell you when and where to drive because it would demolish the fundamental mechanism we drivers use to allocate ourselves. Otherwise we would all clump up in a parking lot somewhere trying to insulate ourselves from the costs of driving people around while collecting $10/hr.
> possibility for unemployment benefits
I haven't had this option in a decade or more. If you increase the cost of firing somebody, which is exactly what this is, you increase the cost of hiring as well. See above: this is a bottom rung job, the most important thing is to be on the ladder. If you make the bottom four rungs of the ladder illegal it doesn't mean people can magically start jumping to the fifth rung, they just get left out.
> health care benefits
Life's rough. Hopefully I solve this problem with a better job in the near future.
Don't get me wrong, I really dislike the Uber/Lyft model, I cringe every time somebody says "Oh but Lyft treats drivers so much better than Uber, right?" and I would love to see a better competitor prove the flaws of the Uber/Lyft model in the marketplace. I just don't think that minimum wage, employee status, and benefits packages are going to be that great for drivers or passengers. It's probably a mixed bag for both, but not a very good mixed bag.
As an aside, there's part of me that wants to figure out what a slide-deck is, make one, and be that competitor. So don't think I've been drinking the company Kool-Aid or anything, because I would love to put both of them out of business largely because I don't like how they treat drivers. But I'm still extremely thankful that I've had this job and I don't want to see it taken away from others who may value it in the way I have.
Ok, here's the rant I really try not to give to my passengers. I apologize for the length.
TL;DR - Do you want to date an emotionally unavailable a-hole, or an emotionally manipulative a-hole? Pick your poison.
Lyft's president once said regarding Uber, "We're not the nice guys. We're a better boyfriend." This statement describes Lyft so much better than I ever could. They don't care about doing the right thing, they probably don't even know what the right thing is anymore, their internal sense of morality is pegged to whether or not they can keep people away from Uber.
As a driver, they have the same business model so the fundamentals of the job are exactly the same. Most of the differences are either window dressing, support quality, or bonus-related.
Uber's just kind of cold. Dealing with support is something you try not to do. It feels like they're cutting costs in their support department and they're not interested in convincing you otherwise. It's kind of like they sent you a picture of a middle finger on your third day of work and from that point on you've known the deal.
Lyft is very touchy-feely, they have events so you can eat donuts and they send a lot of emails talking about how you're a member of a community, etc. They also shame you for doing things detrimental to the community, like if you don't accept a ride. Long-term you start to realize it's all very manipulative, to the extent I've started thinking of their logo as a pink snake.
They kind of move and shift things so it's hard to tell what's going on. Especially with their bonuses, look at this[0], where do these numbers come from? 165 rides a week? That's probably 7 12 hour days. But nobody's hitting that, the middle tier might be doable, but not while driving for Uber, too, so you turn off your Uber app for the week and do 7 10's for Lyft. Next week you'll get different numbers, different goals. It's always shifting, always making you think "well, I might make an extra $50 if I don't drive for Uber this week..." Then after a few months you realize you're driving 30% more and making 20% less. And it just kind of happened while you weren't looking, while you were trying to hit these bonuses.
It also used to be that everybody got the same bonuses, but now they personalize them just for you. Because they care. I have no idea what bonuses other drivers are getting at this point, but for many or most drivers the job doesn't work without them (rental program is $1,000/month) so it ends up being an effective lever for controlling drivers.
Or the treatment of XL drivers, Uber lets the driver turn off regular rides but Lyft says that's just not possible and instead tries to "keep [the driver] busy[1]." The notion of keeping independent contractors busy is a strange one. This seems so clearly anti-competitive I don't know how it's even legal. They don't come out and say they'd rather you didn't drive for UberXL, they just want to keep you busy and if that keeps you off Uber then it's a coincidence that never crossed their mind. Why Uber isn't filing a lawsuit over this is beyond me.
Eventually you get sick of Lyft's games and decide to just drive for Uber full-time and within a day you're shaking your head wondering if Uber is even trying at all. Like, at all. So you drive for both. Then you realize if you just turn off Uber for the rest of the week you can hit this bonus on Lyft....
> The notion of keeping independent contractors busy is a strange one. This seems so clearly anti-competitive I don't know how it's even legal.
If my company is paying contractors, they generally want them to be busy; I'm not sure what you mean by that
WRT the anti-competitive statement, are you suggesting that lyft is intentionally making it harder to drive XL for both uber and lyft? TBH, I'm not sure that'd hit on any competition laws but I'm willing to be convinced
Thank you for your post, it lets me see a lot of things I would have never put together. It's impressive how much thought lyft put into their platform to monetize guilt, and ensure "stickiness" of their platform / drivers
I think keeping contractors busy is only productive and worth it if you are getting their money's worth. You are paying them per hour worked, so if we don't have work and they aren't doing anything, we don't have to pay them. Keeping these people "busy" seems to me (and possibly OP) like a way to keep them from driving for Uber since getting paid for specifically XL (I assume) is much better than getting paid for a regular ride. The whole thing is weird because it forces people to choose between possibly getting Uber XL rides (more $$) OR staying busy with normal rides through Lyft where at least they are getting paid!
That is just what I got from the original post, I do not work for either company so it really is hard for me to relate to the pressure OP is feeling.
This isn't related at all. OP just wants a better job, they never stated they wanted to be rolling in it as some CEO somewhere. This is about just living, not striking it rich.
The gig jobs are already not profitable without those things in place. With those in place the gig jobs will be destroyed. People already complain about high prices and those prices don't even cover the costs of trips unless you live in a dense city.
This is the conclusion people come to naturally when one assumes all the other variables don't change in response to the wage. but they all change
The number of rides change as the price of the ride goes up, which happens when you raise the underlying cost to the rider. (aka supply and demand)
The number of drivers change with the overhead cost-per-driver. If each driver has a fixed healthcare overhead, it makes sense to hire only full time drivers as you can pay the overhead once and get the most hours driven from that sunk cost.
The number of drivers that get hired if you bump the salary also declines for all the reasons above.
It doesn't have to imply a decline in service availability. For example, the spread between Uber Pool and X could grow (since wanting your own vehicle, without sharing it, places more stress on the overall system). So, the popularity of pool could grow.
I think the parent's point is that it's better to have a job, even if it's low-paying and has few protections, than to have no job at all.
Obviously it'd be better if all jobs were reasonably-paying and had protections, and you could directly replace all the bad ones with better ones, but that's not the world we live in.
What if the choice isn't between "driving with a guaranteed minimum wage + benefits" and "driving with no protections" but between "driving with no protections" and "doing nothing"? That's the fear here.
Some benefits, like retirement and health care, can be provided by the government. We already pay FICA taxes -- they could be expanded to include Medicare (for all) and perhaps a more generous retirement package.
But that's not what's going on here, is it? Instead the government is stepping in and trying to force the companies involved to take over that responsibility.
I drive Lyft and Uber in the SF Bay Area. I'm a retired computer programmer and I need to supplement my income to have spending money. I'm on MediCal which is a great health insurance program and easy to get on if you are low income. I'm actually making really good money driving. When I am smart about knowing when and where to be I can make a too much money even working part time, by which I mean I will disqualify myself for MediCal. After all expenses including auto depreciation (I paid 6000 for a nice little transport car) I make a profit. Now I doubt Lyft or Uber would hire me because of my age. So it goes.
Hah, that's an interesting trap to be in. It's not dissimilar to pushing wages down in order to qualify for high ACA subsidies. The way the system is set up, there's quite a tax cliff...especially for older people (the difference between $0/month and $1200ish for an individual).
If you have wealth, you can essentially create an income, on paper, to look like whatever you want, to meet ACA subsidy qualifications. Here's an example of a practical application: You could rent, or buy a home with your wealth. If you buy a home outright, you won't have the monthly mortgage or rental payment (you'll have property taxes, but let's assume those are far lower than an ongoing monthly rent check).
Withdrawing from pre-tax retirement accounts counts as income for ACA purposes. You've now lowered your annual expenses (and thus, your income) and can qualify for subsidies, but all you've really done is shift some of your net worth from investment accounts to housing, in order to reduce annual expenses. This example is likely more applicable to a person in retirement, as well.
Another take is to put money in investments with no taxable event (I think that Berkshire Hathaway is one) and live off of savings in the meanwhile. Outright home ownership (as you mention) is another one. Regular and tax deferred savings get treated even more differently than normal.
I don't doubt that for people with some money, it'll be common to countdown using similar strategies for 5-10 years until you hit the magic 65 age. Given the difficulties in staying employed until full retirement age for programmers, it's quite a gift.
In another couple of decades, a lot of people get to do the pay-down fandango where couples split their assets so that one doesn't pauperize the other (via annuities).
All brought to you by the market warping body called government.
What is the additional cost of having an insurance rider to cover when you're rideshare driving? I haven't pulled a quote, but I imagine that could be expensive due to increased liability.
I can only answer for Toronto, Canada but the answer was nothing. Uber has a deal with one of the insurance companies up here so you’re covered at no extra charge. (Intact / Belair Direct).
Uber pays them directly for a big commercial contract to cover you when you’re driving for Uber.
My prior comment may be dated, or regionally-contextual. I assume then you have a personal policy, that covers when you are driving just you, and Uber's takes over when you have rideshare passengers. When I was looking for personal auto policies recently, I recall being asked (in the US) if you plan to do any rideshare driving.
Yes my personal auto policy explicitly covers Uber. I did need to inform them, but my premiums did not change.
"ridesharing drivers operating on the Uber platform in Ontario can now be covered, at no extra cost. All you have to do is call us in order to update your personal auto policy." -- https://www.belairdirect.com/en/partnerships/uber.html
Many of the costs you list are invisible or avoidable if you don't care about consequences: Vehicle depreciation is invisible. Maintenance costs will hit later. If you haven't heard (or don't care) about the insurance thing, you just don't do it, so zero expense (until you're in an accident).
Once you ignore these costs, and only do "income - fuel", Uber pays "really well". And you can do it at any time, as you wish! Little effort! Own boss!
It's not surprising that Uber finds people to drive for them. Not everyone realizes the hidden costs.
Although there are apparently some who seem to understand them, know how to play the optimization game, and (think that they) make enough that it's worth it. I have no way of checking, of course.
Everyone who I've personally known do these jobs only do it temporarily just to make ends meet between real jobs. It doesn't matter how shitty the benefits are if you're going to get kicked out on the street because you missed the rent/mortgage payment. Maybe some people do it "for a living" but I bet most are between real opportunities or making some money for Christmas/vacation/etc
The reason they don't have a choice is because the system is designed to provide the lowest quality of living possible because we haven't done basic things like raised minimum wage with inflation or institute universal health care.
Instead we've subsidized all these gig corporations so frequently that one of the biggest ones pays 0 in federal taxes. Something I don't even get the choice to do.
It's about time we stop capitulating to desperation.
> This is why I don't understand why people take gig jobs. Think of the opportunity costs. First off, Uber drivers don't make that much.
It must be nice to sit in air conditioned office on $800 chair, sipping kombucha, looking at 2x 28" 4k monitors pontificating "Why would anyone want to be driving for uber?"
Because for an Uber driver this job could be the best available. One needs to eat and put a roof over one's head.
I'm actually sitting on a wooden chair at a wobbly table in a
space with no air conditioning, but that's beside the point. My original comment does have an air of privilege to it, and for that I apologize. It's my own frustration that we can't do better to people who's best option is something requiring the skill set of a job like rideshare driver. Stated in other (hopefully more fruitful) words, if you can work rideshare you can probably work at In N Out. They start at $13/hour and have none of the external costs of contract ridesharing. That could be more profitable to the worker, but I have not done the math.
> They start at $13/hour and have none of the external costs of contract ridesharing. That could be more profitable to the worker, but I have not done the math.
There are not enough In-and-Out burger places to accomodate all the Uber and Lyft drivers.
Uber might have the highest take home pay, but subtract vehicle depreciation, maintenance costs, insurance riders for rideshare driving, and the net is more in line with other employers of low-skill labor.
People have to eat, nothing is free in the US. People generally do whatever their best option is. If the best option is below minimum wage, that's what they do. Why is that the best option? Zero-to-no tariffs and, consumer goods produced overseas by slave labor. No reason to hire domestic workers. Even McDonalds has touch-screen ordering now.
> This is why I don't understand why people take gig jobs.
That's because those are the available jobs. I'm struggling to understand your question - obviously people will take whatever jobs are available to them so that they can support themselves. I doubt it's the CFA's or AI researches that take these jobs for the fun of it it's likely people who need them to survive.
Single data point checking in, ride share imo was a massive boon to people like me in the self employed lower middle class. Many of us already own cars and pay for our own health insurance. For people like me who make too much to qualify for state benefits but too little to 'climb the ladder' these sorts of jobs have been great because they fit easily into our schedules and the pace of the work is enjoyable to many of us.
From my perspective, and I do realize this is relative, people wonder why the middle class is shrinking while failing to realize that a lot of these pro-worker laws are only good for certain types of workers. I'm not saying people poorer than me don't deserve help because I haven't been helped yet, but the issue is precisely that it seems (again, relative to my experience) that no one except the lowest income bracket actually attract political attention right now.
Last Uber drive that I talked to that did this on the side was in the area for some construction job that required him to be on site some days of the week, others didn't. In those days when they didn't call on him he did Uber for some money. The alternative was to not do anything and not get that money. There are definitely costs (hidden or not, really depends on how deep you are going to look for them) but I can also see how given the alternative of not doing anything they can still help. It's not like the Uber driver doesn't have to pay for insurance, registration and other fixed car costs (food, rent) anyway, whether they Uber or not.
I mean those are all costs you should factor in but don't have to pay or are somewhat opaque (eg: depreciation). Drivers can go without health care and gamble on the insurance rider. Then the only paid costs are vehicle maintenance.
By "gamble on the insurance rider" you mean further externalize the cost that Uber already externalized onto the drivers? Because the people that end up paying when you "gamble on the insurance" are the people that you injure in an accident, or systemically through the need to carry "uninsured coverage" to cover yourself against those gamblers.
I can make very good money driving for Uber up to 25 hours per week in my city. This is after maintenance, gas, and depreciation costs. Lots of breweries here and people who like to have a good time and tip well.
Rideshare insurance is an extra $10/month. Basically nothing.
I have to pay for my own healthcare when I have a regular job too. Buying on the exchange is pretty much the same thing with more choice.
