>As soon as the competition is dead they'll be talking about how non-viable $21/hr is.

Won't even have to do that, wait for inflation to take hold (I believe inflation is very likely to explode in the next few years) and just ride it out.

hyperinflation has always "been around the corner" by every financial crank with a blog. It's not coming.

I'm not talking about weimar republic style hyperinflation my feeling is more on the order of 5 - 12% (maybe not even by CPI standards). Essentially 1970's style stagflation again. CA wages are already high a few years of that and Uber will be back at baseline.

What are you talking about? It’s already here. A home in Bay Area is close to 2 mil now lol.

Why is a home in an unbelievably popular place to live, which is also full of massive amounts of new money, your measure of inflation?

A home near me is about 100k for 2000 sq ft main floor. Does that mean inflation doesn't exist?

What a weird argument.

How much is a meal at mcdonalds?

that's localized inflation due to housing scarcity in the Bay, it's not hitting the economy as a whole.

A $21/hour wage in SoCal wouldn't have any noticeable effect on inflation compared to the effect of Silicon Valley and all the tech companies in San Francisco, and the north half of the state has few enough Uber-ers that it wouldn't do anything there either.

The OP is predicting inflation from other causes, not from what uber does. Even the largest company cannot drive inflation by itself.

> I believe inflation is very likely to explode in the next few years

Why?

A number of factors:

1. Money is essentially free at current interest rates and I don't see a sign of that reversing course.

2. Large firms are hording cash and have more than they know what to do with. They are at the point where they are buying their own stock because that is the most productive thing they can do with that money.

3. The democratic party is running on minimum wage increases. While it is debatable if that will have a huge impact it certainly isn't a deflationary measure.

4. Democrats are also running on the green new deal, universal income and medicare for all that I predict will not actually result in higher taxes for the wealthy in any meaningful way but instead the printing of money in order to fund those programs as that is what seems to happen every time. Even if taxes were implemented as discussed, moving money from investment vehicles (where the wealthy have it) to consumers will still probably cause inflation in terms of housing and consumer goods.

5. China is sitting on about 3 trillion dollars that is currently effectively out of the money supply and they will likely deploy that as a weapon in the trade war.

1. Interest rates have been low for a decade now, causing no real inflationary crisis. The localized housing issues are due mostly to income disparities, lack of space for development, foreign investment, and zoning regulations.

2&3. Democrats "running on" some policy does not at all mean it will happen. In the current political climate, it's quite likely their holding a position means it won't happen.

4. Large firms have already been using record low interest rates to finance stock buybacks. This has been going on for years. The last three or four years of stock price growth has been fueled by financed buybacks, with every year breaking the previous year's record. At some point will need to stop.

As an aside, these buybacks are likely going to be the cause of our next stock market calamity.

5. This is sort of legit fear, but 3 trillion dollar is not really enough to make a market-wide impact and selling their bonds would just push interest rates lower, serving to help the US achieve their current monetary policy. They could use this money to selectively certain industries though.

Its more than housing inflating massively in costs, its education and healthcare too. It may be the only reason that consumer good prices arent inflating is because money is being drained away by the aforementioned 3 major factors faster and faster.

And its not just housing in downtown San Francisco, even housing in middle america podunk nowhere has soared

All of the things that cannot be outsourced, real estate, healthcare, and education.

Why single out the Democrats? The people _currently_ running the government are acting as if money grows on trees; just look at the federal deficit over the past couple years.

While that is true it is printing money for distributive purposes that I'm more worried about. Spending a few billion on bombs to blow up houses on other continents, or to prop up the stock of oil companies for example won't really move the inflation needle in regards to consumer goods as much as printing it to throw it out of a helicopter would in my estimation.

Right now the vast majority of money printing is being given to banks and then placed right back into the Fed and earning interest for those same banks.

Just look at the M2 monetary velocity[1]. It fell off a cliff in 1997 and never really recovered. It's now at an all-time low. For all intents and purposes we're operating on a light version of MMT.

[1] https://fred.stlouisfed.org/series/M2V

All the smart money disagrees with you and thinks the 10 yr inflation rate will be 1.54%

https://fred.stlouisfed.org/series/T10YIE

If you click on Max, the chart indicates that the smart money expected the 10 yr inflation rate in late 2008 to be < .5%, which wasn't the case.

So downward movement in that chart can be triggered by two things. The price of TIPS falling or the price of t-bonds rising. That was caused by the price of t-bonds jumping up due to a flight to safe money, much of that flight contractually obligated.

So I don't think it was due to people honestly thinking the average inflation would be .5% but just an idiosyncrasy of how we estimate market expectations of inflation.

They disagreed with me about housing prices as well a decade or so ago as well.

And I presume you made an utter killing by putting your money where your belief were? Because if you didn't I don't believe you in the slightest.

"The market can remain irrational longer than you can remain solvent."

That someone failed to make money on the market doesn't necessarily mean they were wrong, it may just mean nobody gave them a pile of money they could afford to risk.

The Big Short is a fantastic read due to watching somebody who you know is right, and knows that he's right, almost get wiped out because the market teetered on the edge of the precipice for over a year.

With something like inflation over a 10 year period this isn't true. In ten years either it was lower than you thought or it wasn't, and you can make lots of money based on the spread of inflation-protected and non-inflation protected assets.

Being right doesn't mean very much. A broken clock is right twice a day. If I say something will go up I have a 50% chance of that being true. That doesn't mean anyone should take my advice on the future.

Sure, I'm just saying the argument above was fallacious. That an argument against X is fallacious does not mean X is true.

I was about 13 years old I didn't have much capitol to invest. I just put together the two pieces of the puzzle that housing prices were rising much faster than wages and that a products price can't continuously rise faster then the consumers ability to pay for that product. I guess the "smart money" missed that.

Now we have a bunch of presidential candidates that tell me they are going to print money all day long and a bunch of people who "know better" telling me that won't cause inflation to spike. ¯\_(ツ)_/¯

Before we saw a huge inflation, we'd see very low unemployment then inflation would uptick to 2%. And in the current interest rate environment we could probably use an inflation rate closer to 4%.

No candidates are talking about printing money, just spending it in different ways.

>Print money Taxing isn't printing.

The democrats can never seem to manage to tax the wealthy (themselves effectively) when push comes to shove. I'm not trying to be partisan, Republicans similarly are unable to cut spending. Perhaps this time will be different but I'm betting against that personally.

Also it is my belief that moving money from investment vehicles to consumers will have a inflationary effect on consumer goods. The slow trickle of subsidized Uber rides for example probably has less of an effect than a direct cash transfer that happens more rapidly. More so much of that money is invested internationally, by increasing taxes on the wealthy we may be in effect increasing the total money supply in the United States.

Taxing the wealthy wouldn't increase the money supply but if redistributed could increase money velocity.

That was different. If you think inflation is about to sky rocket it's easy to make a bet that pays off if that happens.

It was much more difficult for housing. The Big Short tells a story about how even if you knew housing was over valued it was very difficult to short, and the ones who did almost lost everything.

Uber will just "ride it out"

But Uber's opponents seem to be arguing that $21/hr is too low, and it'd give drivers a worse deal than passing the law. If that's true, passing the law will kill Uber's competition even more effectively.

Considering a 40 hour work week, $21 hour comes out to about $3350 before tax monthly, is that really too low for driving around a car?

It's $42k annually and that's before the insurance, maintenance, depreciation and fuel, so down to the mid-to-high 30's. That seems like it would be poverty level in many California cities.

Not to mention most of those hypothetical 40hrs a week (assuming they can get that much work) would be unsociable hours because that’s when demand is at its greatest (eg people leaving the pub).

Family health insurance costs $24K/yr. Rent is atleast $24K/hr. Those 2 alone will kill you...

> Rent is atleast $24K/hr

Heh. I heard it was bad in CA but wow.

That's a fair point I didn't think about the car maintenance too much.

Neither do most of the drivers, unfortunately. They are going to be the ones holding the bag at the end.

..take a different job then?

> is that really too low for driving around a car?

Depends how you look at it. If you're looking purely at supply and demand of drivers, it's fine. If you think people working 40 hours a week should be able to afford decent housing and health insurance it's probably too low.

I'm not familiar with US salaries I guess it greatly depends on the state/city you're in. But in the UK I don't think this amount is uncommon for some doctors or software developers, especially outside of London.

After tax it's probably closer to $2800, and health insurance is around $600/month for a pretty average plan. For a family of three this leaves you $1000 left over, and even the crappiest one bedrooms in California in small towns start around $1300/month.

Comparing different countries’ wages just isn’t a good comparison. Consider the typical health insurance premium and student loan burden for US workers and you’ll already see why a UK comparison would be apples and oranges.

A 30 minute ride already costs me about $18. I assume an hour ride would be around $40 or so. As a rider I would seriously wonder where those other $19 are going... Not to mention I would still feel the standard pressure to tip.

A 30 minute ride in the Bay Area can be close to $40 (with no peak pricing increases).

You're assuming cab drivers only work 40 hours. That's wildly off base.

I don't follow, is this a "perfect is the enemy of the good" situation where they think the minimum wage should be higher and are opposing a half-step toward that?

For political reasons that can make sense, it's hard to push for a minimum wage bump right after a different one, but I am unaware of other cab companies advocating for a higher minimum wage prior to this.

> I wouldn't assume it comes from an ethical origin.

It's always hard to say where an idea in a company "comes from". We probably don't mean literally the human being who said it out loud first. Most ideas have been around for a long time before they become policy, waiting for circumstances to change or politics in the organization to favor them. If the politics in an organization favor an idea for a combination of reasons, both ethical and self-interested, it might not be fair to say which reason "gets the credit" for the idea.