As an example: In Stockholm where there are no Taxi mediallions (anyone can be a taxi or car hire service in any way they want as long as they regiser and comply with insurance, standardized meters, and other regulations) and the competition alreay has new cars, app-based booking etc - there is precious little margin for Uber to cut from, compared to a city with medallions, cab shortages, ancient taxi companies that don't offer app hauling/prepayment etc.
So how can Uber make a killing in Stockholm? Answer: they find another regulation to work around. Tax regulation. Taxis are required to enter all fares into the meter and that's reported to tax authorities. Uber drivers are supposed to enter the rides themselves into the meter after completing. The kicker is: there is a huge incentive for the individual driver to under-report the fares, and that incentive also helps Uber. This being revealed will obviously now mean that Uber will be forced to pay an estimated and much higher tax, and the drivers won't be trusted to do this themselves in the fuuture. And this will only mean one thing: Uber will pack up and leave. There is no way they can be competitive (to the extent their investors will want) without breaking either Tax law or Labor laws.
Uber's statement was that the individual drivers are responsible for that sort of thing. Wink, wink.
What's worse 75% of them were receiving various types of government money for unemployed people (which are supposed to be decreased if are able to find a job).
Uber is planning to return to the Danish market -- the Danish spokesperson says they will return "with integrity".
AirBnb however has agreed to automated reporting of who receives rental income in Denmark. If you agree to automatic reporting as a landlord, you get a certain tax discount.
Cash tips paid to the server are essentially invisible to the employer. This is an accepted trade-off in a system where restaurants can pay below minimum wage.
An Uber customer cannot pay cash. They pay Uber first (fare + optional tip) and Uber in turn pays the drivers. So they know with 100% certainty how much money is changing hands. For a company that is worth literally billions, having a basic financial reporting system that calculates the government's cut is not some kind of overbearing regulatory hassle.
The "market" rate is partially set based on those assumptions because employees wouldn't be able to live on what they are paid thus the labor force and thus the company would collapse without an increase in wages.
In both cases its a transfer of wealth from the middle class to relatively rich owners.
The extra cash helps for when business is slow and the server has to report they made the minimum wage to the employer anyway because the employer is responsible for ensuring that the server makes state minimum if the wage plus tips doesn't equal such. Basically the employer will just fire people who make the employer actually do this.
It also helps cover the foregone wages when the employee is working through breaks and lunches even though the half hour lunch is deducted from the employees pay.
In short employers sometimes pay as little as $2 an hour x 24 hours per week.
Since nobody on earth can live on $200 a month some combination of tips from you, government benefits paid for by you, and second or third jobs makes survival possible.
Most of us are not terribly concerned if the server is paying taxes properly and are concerned that the business is basically welfare for inefficient businesses who should probably go under.
The new checks were based on information Denmark had received from the Dutch authorities, where Uber’s European headquarter is based.
Danish tax authorities said in a statement they had checked 1,195 Uber drivers’ tax reports and of those 1,192 have had their tax changed now.
I think Airbnb could do a better job of working with cities to ensure that negative externalities don’t poison the well. But I don’t hold them responsible for the tsunami of demand on both sides of this market. It seems pretty clear that people really, really want this, and I don’t think the right answer is “too bad, stay in an overpriced chain hotel”
As far as I know it's a completely different setup with Taxi companies and their hired drivers that work on comission, compared to Uber that works with private contractors.
Do you need a company to start earning money as a cab driver?
Simplest and cheapest with least risk (and least profit) would be working for an established company using a car owned by someone else.
Note that in Stockholm Uber is a regular licensed taxi company. Any taxi company can operate like Uber and vice versa.
So there are hundreds of taxi companies and Uber is just one and like all the others. Uber cars are registered with the vehicle authority as taxis and have regular meters.
Meaning that you can either:
1. Get taxi driver license and driver for a fleet for a certain % to take home. This basically means that Uber is just one of the systems you use to get customers.
2. Get a taxi driver license, a sole trader company (1 person company) and a taxi operating license. This means you are a contractor for Uber, and pay the 25% comission. --> You do not need a meter --> You do need a specific insurance for taxi business.
So basically if Uber runs a fleet of contractors, it's massively more important than having taxi companies that operate phone-based (as well as app-based) ordering systems. They have massively more overhead than the tiny operations office that Uber needs to operate in any certain city.
When nonprofits pop up to help gig workers determine if they are actually making any income, the business plans seems pretty obvious.
They don't have to be stupid to be exploitable. They just have to be in a desparate situation.
In England people who claim unemployment benefit (Universal Credit (UC)) will lose that benefit if they refuse to take gig economy jobs. They're forced into these jobs by the state.
And then, because of the way UC works they are forced to work as many hours as possible. The flexible bit doesn't work for them because UC doesn't work well for people doing variable hours part time.
https://publications.parliament.uk/pa/cm201719/cmselect/cmwo...
https://www.theguardian.com/society/2018/mar/25/universal-cr...
https://www.ftadviser.com/protection/2018/03/29/meeting-the-...
https://www.litrg.org.uk/sites/default/files/Gig%20economy%2...
It's not having to drive lyft or die.
It's about being forced to drive for lyft, and still lose your income, and lose your home.
It's not being able to predict your income from one month to the next, which puts you at risk of losing your home because you can't pay rent and the state keeps paying you weird amounts because of the way that benefit works.
We've seen huge rises in street homeless numbers. In 2007 we had about 500 people in the UK sleeping on the street. Today that's over 4,000 people.
In 2017 over 30,000 single parent families (the kind who should benefit most from the flexibility of zero hours and gig economy) were made homeless.
Oh no!
While I'm not saying these gigs are exactly long term careers it's better for the state and for the person than not working.
This is a route back into employment for people who've spent years out of work. The intent is to provide a ramp from "no work, full benefits", though "some work, some benefits", to "full time paid employment, no benefits". (in fact, with tax credits, many people in full time (over 16 hours per week) work are also getting state benefits).
This ramp is broken by the gig economy because zero-hours contracts make it impossible for the state to know how much top-up benefit to pay month to month. This plunges people into debt and poverty.
The gig economy employers benefit because they don't have to pay a lving wage, they don't need to compete for workers by offering sensible wages.
This is an unintented distortion of the free-market. If you believe in free markets you should wish to see the end of this distortion.
Instead of blaming Uber for having work available for people who want to only do a few hours per week (or who can’t do more for whatever reason), why not blame the government for not updating their rules to better fit the actual reality on the ground?
> Four working single mothers have won a High Court challenge over the government's universal credit scheme.
> They argued a "fundamental problem" with the system meant their monthly payments varied "enormously", leaving them out of pocket and struggling financially
Note that these are working mothers.
US companies really need to understand the English concept of "taking the piss".
No-one expects companies to pay all their tax and obey the law all the time. What they do expect is that companies do not take the piss. Uber is taking the piss, and they're going to be regulated if they don't make changes.
> blame the government for not updating their rules
I'm doing that too.
People criticising and blaming companies eager for taking advantage of either naive or uninformed people is how the economic system becomes less vulnerable and how people learn what to be careful off. Openly criticizing these companies is how next workers become informed about traps like this.
Lot of drivers went into debts and sold away their cars. The market has probably more stabilized now.
But inspite of all the talk of tech, we are still looking at these platforms taking 25%-30%.
> indentured lower class that's barely surviving and has very little ability to lift itself up
Thriving poverty industry and a steady stream of immigrants who have to start from the bottom of the visa/stay permission hierarchy ensures that at any time, there exist a solid share of a society qualifying as such. It's trivial also to embitter these two groups (domestic and incoming) onto each other.
That's exactly what the article is saying, though. Informal work arrangements (the gig economy) take off when unemployment is high due to a big recession; but when labor markets are tight (and unemployment is really, really low right now) traditional, formalized work is a lot more attractive.
Not if your other palls in different industries and politics help deprive them of better options...
These companies provided very little as far as tech revolution. They mostly rely on cutting wages and offputting risk/liability/taxes/benefits onto the workers. That’s a business model that’s doomed to fail. The word we’re looking for is “greed”.