15 votes

"It’s an old joke that ride-share companies are slowly inventing the bus, but it’s more accurate to say that they have reinvented the servant."

6 comments

  1. [5]
    Yugioh_Mishima Link
    tl;dr the success of gig economy companies like Uber, Instacart, and DoorDash come from finding ways to squeeze labor to its breaking point, slapping a fancy app over top, and calling it increased...

    tl;dr the success of gig economy companies like Uber, Instacart, and DoorDash come from finding ways to squeeze labor to its breaking point, slapping a fancy app over top, and calling it increased efficiency rather than any true technological advancement. They saw a world where working classes were being paid $2 to perform tasks the upper class is willing to pay $5 to not do themselves, and their bright idea was, "What if instead we were able to pay them $1 and pocket the other $4?"

    Few Americans have ever been prosperous enough to afford the full-time, one-on-one attention of servants, but most can afford at least some small amount of personal service on occasion, if only the rare cab ride. The goal was to bring these personal services to middle- and upper-middle-income consumers at the expense of those who are forced to do the work. In a perfectly efficient world, people would be served by others to the exact degree that the market values their time more—and in the 21st century, the market doesn’t value most people’s time that highly. If middlemen-app companies can lower the barriers to service in such a world and charge a small fee in the process, they should, in essence, have a license to print money.

    7 votes
    1. [4]
      nonesuchluck Link Parent
      Yeah, I've always been baffled how much money Uber/Lyft skims off the top from their drivers, and somehow they're still losing money? I don't understand. It can't possibly be that expensive to run...

      Yeah, I've always been baffled how much money Uber/Lyft skims off the top from their drivers, and somehow they're still losing money? I don't understand. It can't possibly be that expensive to run a glorified geolocation app with 3rd party map data.

      If Wikipedia can run the 5th biggest site on the internet with donations and no ads, this should be doable. Subtract 5% or whatever credit card fees to add credit to your account, pay 100% to driver, take tips like Humble bundle: user chooses split between company and driver. Stick Jimmy Wales face on top if you must, that's a proven money-getter.

      3 votes
      1. Yugioh_Mishima Link Parent
        They're currently unprofitable because they can deliberately throw all of their revenue back into operating expenses as long as someone else is footing the bill. It goes something like this:...
        • Exemplary

        They're currently unprofitable because they can deliberately throw all of their revenue back into operating expenses as long as someone else is footing the bill. It goes something like this:

        1. Fiscal recovery efforts since 2008 have left banks with huge cash reserves to lend at extremely favorable rates.
        2. Banks lend that cash to venture capitalists. (Also to fund the mergers and acquisitions we see a million of each week, but I digress.)
        3. VCs unload wheelbarrows of money onto startups.
        4. Startups burn it all on R&D and building market share.
        5. As long as interest rates are +/- 0% everyone is content to repeat steps 2-4 without turning a profit.

        As mundane_and_naive pointed out, getting self-driving fleets operational ASAP is vital to Uber/Lyft's long-term survival. Once the Fed raises interest rates, the days of easy venture capital are over and they'll have to demonstrate stronger fundamentals to investors. And once regulators catch up to them with regard to labor practices (as they've started to in NYC), those fundamentals are going to look very bad if they haven't gotten out from under the cost of human drivers yet.

        7 votes
      2. mundane_and_naive Link Parent
        My guess is they need the money to invest in self-driving tech, which is probably the only way for these companies to remain relevant in the future. R&D is always a giant money sink with slow return.

        My guess is they need the money to invest in self-driving tech, which is probably the only way for these companies to remain relevant in the future. R&D is always a giant money sink with slow return.

        5 votes
      3. MimicSquid Link Parent
        Reading up on Lyft's IPO, I saw that if they ceased additional marketing and R&D, they'd already be profitable. At this point, increased revenues is less desirable than increased market share with...

        Reading up on Lyft's IPO, I saw that if they ceased additional marketing and R&D, they'd already be profitable. At this point, increased revenues is less desirable than increased market share with the ability to turn the screws and ramp up prices later.

        4 votes
  2. 45930 Link
    This is an interesting topic because the "gig economy" is the definition of the free market. You have people that are sort of well-off driving for uber. I just found out a coworker of mine was...

    This is an interesting topic because the "gig economy" is the definition of the free market. You have people that are sort of well-off driving for uber. I just found out a coworker of mine was doing grocery shopping for insta cart as a college student before starting where we work now. You also have people attempting to make a full time living out of these new opportunities, who are in a completely different economic class than the first group. The idea of the "side hustle" is, in my opinion, a very innovative and liberating one that these new apps offer. I know the against side says that "needing a second job" is bad. But I don't think everyone who gigs needs the job. But beside the "side hustle" is this different class of laborers that are just doing the gigs full time.

    Now, as I said earlier, it's a great example of the free market. In my opinion, many people who are, say, driving for uber full time, are making a poor choice, and in a vacuum we could just write it off as people being stupid. But in reality, these people can make $100 today by driving, or they could polish their resume, or they could go on interviews, or they could go to school. Only one of those options nets them $100. If you do that day by day, you end up being a full time driver. I'm sure that if you don't drive for a couple days uber will ping you and offer you some bonus to start driving again too.

    At the end of the day, I think it's the government's job to protect people, not Uber's. And I don't think the government should protect people via asking companies to protect them. However you regulate Uber, they will find a way to do something similar anyways. Personally, I'm a believer in abolishing minimum wage and replacing it with basic income and universal healthcare. I think that would be a nice solution to this problem, in that if everyone's basic needs are sorted, then driving would be a "side hustle" for everyone doing it. The options to apply for a better job, or go to school to work toward a better job become more realistic. I'm sure there are other solutions as well. I think that this discussion will definitely continue in the progressive canon in the next few years. I'd be interested to hear a conservative opinion on the issue, as well, other than some Darwinian "this is fine" answer.

    6 votes