I think the conundrum is that either Uber pays for downtime (employee model) or it doesn't (contractor model). It's literally impossible to be actively driving passengers for a solid 40 hours a week while maintaining reasonable work hours. For the model that pays for downtime, it needs to make it up somehow since it wouldn't be able to afford people just sitting around doing nothing in the middle of nowhere. Typically, this is accomplished by mandating employees to be "clocked in", unable to refuse rides, and chasing some sort of quota. I'd be curious to hear about different options.
At least how I see it, many of the problems are that the company is not giving the protections that they've historically supposed to have given. I think one option is to extricate those protections from the employers and bring them to a different level. It could be a union, it could be a local/regional/national/(dare I say global) government, it could be some other org that provides those services. Then the employer could still give the flexibility and not have to worry about providing those extra benefits.
What's blocking them from doing metrics based payment, but with employee like protections? Pay people for the time they mark themselves "available" (regardless of if there's any rides), and require that drivers take anything you give them while they are available. I imagine you could put in a cap and a floor if you really wanted to. You could even allow drivers to reject a certain percentage of rides if you felt like it.
The point wouldn't be to control the drivers, but for uber to assume some of the risk.
Ultimately there is no such thing as driver protections. Either they bring in more money than they are paid or they are going to be out of work (either by being fired, or the company going under).
A company isn't going to let people just do whatever if the company is assuming risks. For example, say demand peaks at 7-9am and 4-6pm. The company could simply dictate that that's the only times you can work (because the full time old-timer high earners already took all other time slots). But maybe you're a stay-at-home parent and only have free time during school hours, so for you, that's objectively a worse deal, since you get to take home $0 as opposed to whatever you could make under a work-at-any-time model.
Or maybe the company tells you that you can't work on-and-off around your town like you used to, due to existing driver saturation, and they tell you that you have to drive to the downtown of the nearby metropolitan city for a shift (many full time drivers I've talked to actually do this today to get better on-the-clock volume).
Or maybe you just can't work at all because there's enough drivers on the road today already.
There's a million scenarios like these.
As a thought exercise, you could go out and drive an Uber casually for a couple of hours, and simultaneously pay yourself whatever amount you think is fair, out of your own pocket. The gist is to track your on-the-clock time and mileage (which is fairly easy w/ the app), and then work out the math to figure out how much the rides should've cost to pay the amount you decided. If the exercise comes out to charging $40 for 10 min rides to account for suboptimal downtime, or you're finding that you need to work a 12 hour day to hit a similar income threshold as a full timer elsewhere, you can be sure that you've neglected some important aspect of the unit economics math and you would've failed at being Uber.
> Ultimately there is no such thing as driver protections. Either they bring in more money than they are paid or they are going to be out of work (either by being fired, or the company going under).
If we’re starting off with that as a belief why have any regulations at all?
> A company isn't going to let people just do whatever if the company is assuming risks.
Companies routinely do that. Hell sometimes that is the entire reason for employing a specific person, is to let them do what they want and then reap the economic benefit from owning the outcome.
Regulations or no regulations, that's just a fact. You can't have a company paying out more than it intakes, that's just basic math.
People are so quick to say "oh just raise wages" as if Uber/etc never contemplated the idea (recall we're talking about the company that popularized the idea of surge pricing for rides), but I don't think many of the armchair analysts have put an ounce of thought into what actually happens when you dictate monetary factors (let alone the gradient of effects relative to different degrees of change). Uber/Lyft were fairly clear about potential impact of employment mandates on service reliability when prop 22 was making the rounds, and I find it curious that there's simultaneously a sentiment that pre-uber service availability was crap and a sentiment that one just ought to raise prices and somehow people will get to eat their cake and have it too.
> Companies routinely do that
You're giving an apples-to-oranges example and you know it. Hiring Rob Pike vs letting unskilled drivers sit idly on company dime are completely different scenarios. The latter group doesn't even generate leads (unlike cabs being hailed off the street).
I think there are quite a few options. It took me about a minute to think of the below, so I'm sure with the resources of Uber they can come up with something better:
- Driver 'clocks in' when they are in the app and ready to receive rides.
- They get paid as normal, however there is a guaranteed minimum which means that they will get paid the minimum wage.
- Driver can decline rides, but there is a % threshold at which point they can be performance managed if required (i.e. warnings for declining too many rides and then removed if required).
- Driver clocks out when they are no longer wanting to receive rides. 3 declines in a row or something similar automatically ends shift. Shift can also be ended due to low demand, unless the driver has signed up for a particular shift ahead of time.
That's not particularly great, and I'm sure some people will have builds/other suggestions, but Uber is a 76 billion dollar company, I'm sure they can come up with something better and a way of operating within labour laws.
I think part of the problem is the market, for some markets. The new law would not affect NYC or dense urban areas because there is lots of order liquidity there. But what about rural Pennsylvania? (Ask me how I know? Hint: management consulting air dropped to remote client location)
When i'm in rural areas, there are often no taxis and one will show up an hour after you call, maybe. Without order liquidity, it is infeasible to maintain supply. Which company (or person) would stand ready to ride just in case an order came thru once every 4 or 5 hours?
The current market response to this is simply not supporting the market. The alternative is Uber where presumably the person is doing their yard work and jumps and does a ride if one happens to pop up. I cannot imagine Uber will sponsor idle wages in rural regions where you get an order or two a day.
> Without order liquidity, it is infeasible to maintain supply. Which company (or person) would stand ready to ride just in case an order came thru once every 4 or 5 hours?
The only solution here is if the ride is absurdly high, to the point where you break even with drivers in the nearest high-population city, which people also don't want since they'd be paying multiple hundreds of dollars for a ride. At that point, people will just get a car.
The issue with uber is that it's compensating for a lack of public transportation that takes you exactly where you want to end up at (or public transportation at all in most of the U.S.). Maybe the only way car-on-demand is profitable is if (A) we get self-driving cars, or (B) the government creates their own system with lower fares and runs it at a pure loss with no profitability in mind.
I think even absurdly priced rides dont work beyond a certain level of illiquidity. Matching price to order is just too spotty. A perfect example is landing in an airport on a late flight -- i've waited 45min for a taxi at Delta Terminal in NYC. As a business customer, I would have paid $100 or even $200 for a ride that cold night. Most business travelers are cost elastic, esp post-travel. Except there is no way to broadcast that willingness to pay to cab companies, esp at an off-terminal like Delta Terminal. I dont think people realize how truly game-changing Uber and surge pricing was.
> I cannot imagine Uber will sponsor idle wages in rural regions where you get an order or two a day.
If Uber can't operate while paying minimum wage then maybe they shouldn't be operating.
Every other company has to work out how to pay minimum wage. An unprofitable rural convenience store doesn't get to pay its clerks less because the sales aren't high enough, so I fail to see why it should be different for Uber and their drivers.
I mostly agree with you -- but a more apt analogy would be if clerks could work from home and had the option of choosing their shifts in 20-30 minute slots and they could continue watching TV at home (or whatever) if they werent called...so basically a babysitter might be a better example. Should babysitters be paid for 40hr weeks just in case we need one in the middle of the week for 2hrs?
To be fair, an appropriate Uber setup here would also require that drivers know the destination beforehand and get compensated if the ride is cancelled and have the ability to decline rides.
The problem for both babysitters and uber drivers in low-usage areas is that there is NO economic model that allows for 40hr workweeks once population (or usage) declines sufficiently. All these gig models work very well in the city but totally break down as you go to rare use areas. A new model is required -- i'm not saying Uber is it, but Uber is closest.
Anyone who isnt in an urban environment, or who's landed at an airport at 2am knows this is a problem. We just need a way to fairly compensate people to solve it.
I mostly agree with you too - however I think there is a subtle difference between an employee explicitly wanting to work these incredibly short shifts, and an employer mandating it.
I.e in your example, where someone wants to work in 30 minute increments and that is the staff member's choice and the employer is happy, then fine.
However it would be unreasonable for an employer to say to a staff member "I'm only going to pay you in 30 minute increments, and after each 30 minutes you can go watch TV, but if a customer arrives when you are on break I want you to run back to work straight away to staff the till, and I'm not going to pay you for the time watching TV".
It's reasonable to ask the Babysitter to work part-time and have fairly short shifts. An example of being unreasonable would be to say that they have to take calls during the day with customers and they will only be paid the minutes talking to customers. It's worth saying the laws here change if you are an employee vs sole-trader, and most babysitters would not be classed as an employee while Uber drivers are.
If the babysitter is an employee of a babysitting bureau, sure. If they're an independent contractor, negotiating babysitting contracts on their own, no (well, strictly speaking, they are at that point their own boss and can decide if they want to pay themselves for downtime or not).
For any situation in-between, the answer probably ends somewhere on the spectrum between "yes" and "no".
