This is obviously not true as a general statement. A business which has to pay the mortgage on its factory can't just shut down and make nothing or the bank will foreclose.
Meanwhile if Uber doesn't pay as much as you're willing to accept, you can go work somewhere else, or take a loan and go to college. It's extremely rare for one company to be anyone's only alternative to starvation.
I believe here we might have the case of that old maxim "If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.
> Meanwhile if Uber doesn't pay as much as you're willing to accept, you can go work somewhere else, or take a loan and go to college. It's extremely rare for one company to be anyone's only alternative to starvation.
The discussion revolves precisely around the fact companies collude, bringing the wages down to absolute minimal levels, i.e. it's not about Uber or any other single company - the problem is systemic.
A car isn’t just gas - it’s maintenance, depreciation, etc. For normal use, operating a car costs about $0.60/mile. Livery use like an Uber is a little higher due to maintenance needs.
When you work out what a driver actually gets paid, in many scenarios the driver is making very little, and in some they are losing money. Driving Uber is really monetizing automotive depreciation, while working for free. It’s a big accounting grift designed to run until the local competitors are out of business.
This is when amortizing the full cost of the car. Depreciation due to age, insurance and the whole lot. But these are sunk costs for someone who already needs a car for unrelated reasons. Any of those people are rational to consider only the incremental cost from the additional miles and fuel.
And that number is also assuming the typical car owned by people in general, not the typical car used for ride sharing. The most common "car" in the US is a Ford F-150. The most common Uber is a Toyota Prius. Because people aren't as dumb as they're made out to be.
Depreciation is the biggest component, and that is driven by mileage. My recollection is that the GAO/IRS rates are based on midsize sedans.
Three years ago, the average Uber driver made about $0.80/mile according to survey data. You can argue that the costs vary from $0.50/mile and $0.70/mile, but either way the driver is pretty fucked and is selling their asset’s value as well as time. Rental car companies price dynamically based on fleet depreciation in near real-time… there’s a reason why Uber didn’t buy 10,000 Priuses.
The car is a sunk cost, but the mileage and wear and tear erodes the value of the asset.
They can be saddled with debt on a depreciating vehicle, meaning that although their overall income may be negative when accounting for the debt, the alternative is even worse.
Maybe folks need to volunteer in shelters more often. Understand how much closer they are to poverty than they are to Bezos.
It’s also, obviously easy to divide and conquer employees. Uber demonstrated that you can pay workers less then they are spending!