Uber Drivers and Other Gig Economy Workers Are Earning Half What They Did Five Years Ago (recode.net) 153
According to a new study by the JPMorgan Chase Instittue, drivers who transport people via apps (e.g. Uber, Lyft, Uber Eats, Postmates) made 53 percent less in 2017 than they did in 2013. Recode reports: The average monthly payments to those who worked for a transportation app in a given month declined to $783 from $1,469. Meanwhile, people working for leasing apps -- Airbnb, Turo, Parklee and other apps that let you rent assets like your home, car or parking space -- saw their incomes from those platforms rise 69 percent to $1,736 on average.
This is happening as online gig work has become more popular, thanks in large part to the growth in the number of transportation jobs. The share of the working population that has participated in the online gig economy at any point in a year rose from less than 2 percent in 2013 to nearly 5 percent in 2018. There are a number of potential reasons why the average pay for gig economy drivers has gone down. It could be any or all of the below, according to JPMorgan: drivers on average are working fewer hours; demand hasn't increased to meet the increased number of drivers; trip prices have fallen; or platforms are paying drivers lower rates.
This is happening as online gig work has become more popular, thanks in large part to the growth in the number of transportation jobs. The share of the working population that has participated in the online gig economy at any point in a year rose from less than 2 percent in 2013 to nearly 5 percent in 2018. There are a number of potential reasons why the average pay for gig economy drivers has gone down. It could be any or all of the below, according to JPMorgan: drivers on average are working fewer hours; demand hasn't increased to meet the increased number of drivers; trip prices have fallen; or platforms are paying drivers lower rates.
Re:Well, Duh! (Score:5, Insightful)
The headline is VERY misleading. They are talking about MONTHLY income and NOT hourly income. So what is happening is that new Uber drivers are far more likely to be part timers, putting in a few hours of driving at the end of the day to earn some extra income.
About 80% of Uber drivers drive for less than 35 hours per week. Over 60% have another job that is their main income.
That's not necessarily true either (Score:5, Interesting)
Re:That's not necessarily true either (Score:5, Insightful)
nobody knows since the data is _only_ monthly.
No it isn't. One article written by one lazy journalist is not the only data available.
Uber has said that the reason for the decline is drivers working fewer hours [medium.com]. According to Uber, more than 50% of their drivers now work less than 10 hours per week.
The job market today is stronger than it was 4 years ago, and it makes no sense for workers to accept half the pay they did then for the same job. People are not that stupid, and that is NOT happening.
Re:That's not necessarily true either (Score:4, Informative)
The study mentions that:
These declines in monthly earnings among drivers may reflect the fact that the growth in the number of drivers could have put downward pressure on hourly wages; they may also reflect a potential decline in the number of hours drivers are driving. In our data, we do not observe wages and hours separately; we see only their product, earnings.
However, other research provides some clues. Some calculations of hourly wages
on a very large transportation platform—Uber—indicate that trip prices fell between 2014 and 2016, but the number of trips per hour increased, resulting in stable hourly wages (Hall et al, 2017; Hall, 2018).
To our knowledge, there is no published time series information on average hours worked among drivers on any single platform or across all platforms. However, research into tax reporting indicates that self-reported costs by new drivers fell 41 percent between 2013
and 2015, whereas self-reported earnings fell 46 percent (Abraham et al, 2018). Since a significant fraction of these costs is likely to comprise variable costs (vehicle maintenance and fuel), the decline could reflect a reduction in hours, as well as the decline in fuel prices that occurred during this period. The fact that earnings declined more than costs, however, suggests that effective wages also fell.
If trip prices fall (Score:2)
You'd expect the price of rides to go up (Score:3)
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nobody knows since the data is _only_ monthly.
No it isn't. One article written by one lazy journalist is not the only data available.
Uber has said that the reason for the decline is drivers working fewer hours
Well then it's settled, Uber is the very model of honesty.
But yes, working less hours is completely reasonable as a cause. But the next question would be, Have all Uber drivers decided en masse that they want to work fewer hours?
I suppose that is slightly possible, but given that humans tend to like more money rather than less, the concept of more drivers going after a similar number of demands for rides seems more plausible than your massive willful self limitation on hours driven.
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That's why medallion systems were created in the first place, e.g. to make sure the streets weren't flooded with drivers
That may be the official reason, but the real reason was corruption. You grease a politician and you get to buy a medallion worth $500K for a hundred bucks.
It's been in the news lately because apparently notorious POTUS-fixer Michael Cohen has a bunch of them.
Re:That's not necessarily true either (Score:4, Insightful)
Corruption aside, the fact that the medallion is 'worth' $500K in the first place attests to its scarcity - which is, mostly, the point. Medallions were created to keep the city streets from being overcrowded with taxis. I suppose the reduced hours of Uber drivers could be attributed at least in part to the fact that the streets are again overcrowded - due to Uber's skirting of the medallion system. Not much profit in driving an empty car around the city - or charging a flat rate for a trip that ends up taking too long due to excessive traffic.
So, medallions are a form of market manipulation that has the effect of 1) increasing the value of a taxi, 2) reducing overall city traffic and yes, 3) opening up a new channel for payola. But 3 is certainly not the primary purpose - and could be shut down by effective law enforcement. And if you think 1) and 2) are important, but 3) is inevitable - and assuming your not some hardcore anarchist, how do you distinguish between enforceable and unenforceable laws before you decide to give up on them.
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In theory, taxi owner/drivers are small business people. That may not take any special skills, but what special skills does it take to own any small business?
And in theory, traffic optimization and the price of a medallion would balance each other out. Yes, unrestricted Uber traffic upsets that equation - but isn't that the point. Uber should face restrictions to avoid clogging the streets. As it stands, the only market force constraining them is competition for riders pushing drivers to restrict their
Re: That's not necessarily true either (Score:2)
It's just as likely that there are so many Uber drivers now that they're crowding each other out and nobody can make a living.
This is in fact exactly what's happened: an oversupply of drivers has greatly reduced the profitability and drivers thus aren't as motivated to put in as many hours.
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It's also measuring revenue, not profit.
The driver still needs to pay the costs of running the vehicle, which will not have reduced in 5 years, so the impact on real incomes is far more than a halving.
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The driver still needs to pay the costs of running the vehicle, which will not have reduced in 5 years
Actually, running costs have reduced. The biggest cost is gas, which was $3.65 per gallon 5 years ago, and is $2.90 today.
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Compared to gross revenues halving, that is quite a small drop.
If the revenue drop is entirely due to drivers driving a shorter distance during the month, then they will be better off, but there have been multiple stories of driver rates dropping.
It's impossible to know exactly what has happened.
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One thing is that apparently when Uber/Lyft open in a new market they offer supplementary profits to new drivers--but these disappear after a while--and there were a lot more new markets 5 years ago than now.
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The headline is VERY misleading. They are talking about MONTHLY income and NOT hourly income. So what is happening is that new Uber drivers are far more likely to be part timers, putting in a few hours of driving at the end of the day to earn some extra income.
About 80% of Uber drivers drive for less than 35 hours per week. Over 60% have another job that is their main income.
Score:2??? Mod parent up, please. The summary leaves out this very important context.
Also relevant but omitted: Five years ago, Uber and Lyft simply didn't exist in a usable state in many places. As ubiquitous as they have become, It was impossible to get a ride much of the time in my area just 3-4 years ago. Trust me, they let me down a few times when I tipped a few glasses and didn't plan on inconveniencing friends for rides. At first, we had a few otherwise unemployed early adopters here driving full t
Re:Well, Duh! (Score:5, Insightful)
About 80% of Uber drivers drive for less than 35 hours per week.
I'm an Uber/Lyft driver. And another misleading statistic is the number of hours they tell us we've worked.
And that's because both companies do not count the waiting time we take to wait for rides to accept, nor the time we use to get back to a location without getting a ride request. So if the app tells me I've worked 35 hours or 45 hours this week and done my 130 rides for the week, it usually means I've actually worked roughly 50+ to 60+ hours a week. It's all very misleading.
And to some of you wondering how this is possible. Why aren't drivers quitting? Well, I'd say 99% of drivers did quit three or four years ago. Me, I am part of the new batch of replacement drivers. I've seen my income slowly get reduced overtime, but definitely not as much as the drivers did four years ago when they went through a massive price cut.
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And to some of you wondering how this is possible. Why aren't drivers quitting? Well, I'd say 99% of drivers did quit three or four years ago. Me, I am part of the new batch of replacement drivers. I've seen my income slowly get reduced overtime, but definitely not as much as the drivers did four years ago when they went through a massive price cut.
So you are part of the current lot of suckers who replaced the last lot of suckers who finally wizened up that they weren't making money and doing stupid amounts of unpaid hours... SPOILER ALERT... eventually you'll come to the same conclusion that its actually costing you more than you earn and look for a job at McDonalds. Then the next bunch of starry eyed suckers will move right in and start the process all over again. Despite P. T. Barnum's alleged assertion being true, there is still a finite number of
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They used to take this for granted a couple decades ago, but somewhere people lost the ability to see that for some reason....
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Well, duh, indeed - don't like the fact that you are living hand-to-mouth? Then *get a real job*. There are a remarkable number of openings and a severe labor shortage, stop screwing around with this hippie crap.
Re: Well, Duh! (Score:2)
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Strat, you're usually spot-on but in this case, we're looking at the result of Uber and Lyft's massive 'recruiting war' that they've been engaged in the past few years. The numbers have likely plateaued but there are now far too many drivers. Of course, the companies - and the customers - aren't likely to mind this one bit.
Thanks, I appreciate your kind words. Likewise, I usually find your posts interesting, insightful, and informative.
I was not referring to only Uber and Lyft. I acknowledge your point on that angle.
"Gig" jobs are not limited to Uber and Lyft or even ride-sharing. Even TFS/TFA states this. The live band or DJ at your local bar/club is a part of the "gig economy" as well.
Government keeps throwing in more obstacles, costs, etc on both the gig-workers and those who employ them which drives down what they make.
Go
It was clear from the start they were burning cash (Score:1, Insightful)
Uber keeps shoveling VC money into the furnace hoping to one day make itself profitable. In the meantime, with dwindling cash reserves, they can't afford to pay drivers as much as they used to.
Re:It was clear from the start they were burning c (Score:4, Insightful)
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Re:It was clear from the start they were burning c (Score:4, Interesting)
You're assuming the business model was not flawed from the outset and because of that, you're interpreting their motive to be more brilliant than it appears to be. Please review the venture capital, and stock market dumpster fire (fueled by investor hundreds of $millions) called MoviePass.
There are a lot of business people who think by sheer force of money, they can disrupt an industry and eventually own the kingdom. In the case of Uber, their investors were racing in a land rush to become such an immense 900lb gorilla that no other competitors could challenge them... they expected to own the consumers and the service providers. As you point out, the free market has stepped in and eliminated the opportunity for Uber.
Comment removed (Score:5, Interesting)
Re: It was clear from the start they were burning (Score:2)
Yet another case of venture capital ruining everything it touches.
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The sad part is if they kept the original model and simply expanded to other cities with high costs of living and a glut of movie theaters? They could have had a modestly successful little franchise, but that model simply wouldn't work in places where theaters have no issue getting customers.
I think it could work almost anyplace where you have deals with the theatre. People who are going to the movies for free are much more likely to buy the high priced snacks. Moviepass seems like a workable solution if they can get the theatres to give them free/discounted tickets and/or a cut of the snack revenue. The biggest problem I see is that it is way too easy for the local theatre to roll their own plan and cut moviepass out. For that reason, the most sustainable business model for Moviepass is li
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That is why the MP model worked so well in San Fran, they went out and made deals with pretty much all the theaters and then the customer didn't have to give a shit if the movie they wanted to see was playing at theater X or only at theater Y, they just went to the most convenient location that was showing what they wanted and that was that.
Don't most people always go to the closest theatre? There are only 2 theatres in my town and they are about 15 minutes apart. They are competitors but they always show pretty much the exact same movies at the exact same time. A moviepass at either one would be fine. It would make zero difference to me if it was one or the other. The driving distance and amenities are similar enough that something like a moviepass at one and not the other could easily draw in customers slightly further away.
but then the big theaters started there own plans (Score:2)
but then the big theaters started there own plans that really hurt them.
More about MoviePass (Score:2)
it costs the theater the same to show the movie to 10 people or 100
If this were the case, StubHub would be all over movie theater ticket sales. Empty seats? Discount the tickets until they're all full. Theaters would be tickled at more patrons buying concessions.
This is the big confusion suffered by anyone who invested in MoviePass (post-expansion). There are no margins availab
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There are a lot of business people who think by sheer force of money, they can disrupt an industry and eventually own the kingdom.
Stupid as that sounds, it can still make a lot of money for the VC's. As long as they sell their stake (or enough of it to pocket a big profit) before the whole house of cards tumbles down, the worthless kingdom they end up owning ended up costing them nothing (or even netting them a big windfall). The problem is that the media and, in turn, the public buy into the hype on the way up, facilitating this whole 'succeed by failing' sham.
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But that was true of Amazon for years - maybe decades. Who says investors won't put more cash in. Especially if they've already pulled out their initial cash investments by selling their inflated shares.
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They're trying to undercut taxis and public transportation, then jack prices sky-high after they kill the competition.
Their competition is not taxis or public transit. Their competition is Lyft, and Lyft is not going away. When both Uber and Lyft pulled out of Austin, other "ride-share" companies were up and running in less than a week.
Uber is growing at 3 times the rate that taxis are declining, so only a third of their riders would have otherwise used a taxi.
Uber's rates are already "sky-high" compared to public transit. They win against public transit by being way faster and more convenient.
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I don't use Uber or Lyft a lot because I can eas
End result: looking good (Score:1)
They're trying to undercut taxis and public transportation, then jack prices sky-high after they kill the competition.
Great, then they should still cost about half what taxis cost...
And with actual customer service instead of glowers. Have YOU ever tried to report a taxi driver for anything?
Re:End result: looking good (Score:5, Insightful)
At least I can pay good, old-fashioned, cash for a taxi and not have my CC info, email, name, and other ID info in a database for eternity. Uber/Lyft/the rest of the "rideshare" techbro firms = no privacy.
Yeah, yeah, taxis have cameras, but facial recognition is still a lot harder than ID from an account "verified" with CC info. F Uber, Lyft, Via, and the rest of them.
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Cool story, bro. You go on paying at least double, waiting in inordinate amount of time, carrying cash and wasting your time.
You and Fluffernutter, our favorite angry cabbie roommates or something?
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Get a Target prepaid card (it's a bit trickier to grab one outside of the US, but still doable). Same goes for SIM card. It is possible to use most modern phone-tied services (semi) anonymously. The idea is that it is a bit inconvenient to set up so most people don't bother. Still beats the amish "option" you're suggesting though.
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Got news for you: most businesses still accept cash. In the NYC boroughs, many of the same drivers that drive for the "rideshare" firms also operate under regular taxi ("black car") brands and can be used for a lower cash payment than when you pay through Goober or Lyft.
Amish is not an insult -- sometimes the older option is the best option. Fuck progress for the sake of progress when it gives no measurable benefit.
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But couldn't you always take a Town Car -- illegally -- for cash in NYC?
I don't count myself an expert on NYC, but early on when I started flying out there to support our small office, they told me if I had trouble finding a cab there was often a bunch of Town Cars that would do cash fares.
I didn't do it often, but 2-3 times coming out of a better restaurant there would be a few Town Cars waiting and they would take you for cash fares that didn't seem out of line for what I'd pay for a taxi.
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As for Uber (or Didi, or whatever top dog is in the area) specifically, those are best when they're dumping VC money (I don't think t
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Crime is the price we have to pay for living in a free society. If cash enables crime, so be it. Better less safety than total control and surveillance.
Want to really fix crime? (a) stop criminalizing victimless crimes like personal drug use and sex between consenting adults. (b) don't create an economic environment with lack of opportunity that doesn't allow people other options.
As usual, Uber haters wrong (Score:2)
At least I can pay good, old-fashioned, cash for a taxi and not have my CC info, email, name, and other ID info in a database for eternity.
From Uber's FAQ [uber.com]:
Apple Pay can be added to your Uber account as a payment method. With an Apple Pay account, you can also request and pay for trips without having an Uber account. Apple Pay is a subscription-based service currently only available in the United States. ... Select PAYMENT in your app menu and tap Apple Pay.
Apple Pay is like a one time CC, they don't have a
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No shit (Score:4, Informative)
It's a race to the bottom. The more "gig economy workers" there are, the lower the rates will be.
Instead of the traditional impact being company profit margins, it's peoples wages that are shrinking.
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The more "gig economy workers" there are, the lower the rates will be.
Not necessarily. You are only looking at one side. As the "gig economy" grows, there will be more "sellers" (workers) but also more buyers of their services.
The number of Uber drivers has gone up, but so has the number of riders.
Re:No shit (Score:4, Insightful)
I somehow doubt an industry fueled by the likes of Uber who supported it for the sole reason of skirting minimum wage laws is going to generate higher wages.
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"Piece workers"
There is a reason they died out in the Industrial Revolution. There is also no reason to believe their modern equivalent is going to work better. The burden of proof is on you for that.
So what? (Score:4, Insightful)
As I've said elsewhere, I'm happy to burn VC money for cheap rides, but I'd use Uber or Lyft even if they weren't cheaper than official taxis. I know what I'm getting and who drives it, I never have to worry about bullshit claims that the credit card machine doesn't work, I don't have to carry cash at all. All of those are very valuable qualities. Do they screw drivers over? Probably so, but traditional cab companies are little if any better under ideal conditions.
Re: So what? (Score:2)
Traditional cab companies where you live, at best. Sad to hear you have a broken municipal democracy.
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Uber may be a horrible company, but the taxi system here was borderline unusable unless you were at the airport or had an hour to burn waiting for one at your house.
The convenience of Uber/Lyft is astonishing. You can actually get a ride nearly anywhere in very short order. It's hard not to believe their success isn't a function of breaking all the rules but because they actually provide a really good service compared to taxis.
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Labor vs Capital (Score:1)
Wait, you're saying that, in a capitalist society, that by definition favors capital-owners over laborers, new ways to rent-seek with your capital (like AirBnB) are paying more than new ways to sell your labor (like Uber)? No way!
Re: Labor vs Capital (Score:2)
Our masters artificially restrict the housing supply in major cities, driving up the price of existing units. Likewise our masters import as much cheap labor as possible, in order to drive down wages.
Re: Labor vs Capital (Score:4, Insightful)
This artificial scarcity of housing thing gets brought up here, mostly blaming owners of single family homes for engaging in zoning restrictions so they can get rich on housing price increases.
I watch the sale prices for houses in my neighborhood and if I extrapolate those prices out 10 years when my mortgage is paid off and I sell, the price I will get for my house isn't even a profit compared to what I paid in principal, interest, taxes and insurance and maintenance costs.
It's feels like a windfall because it's a giant lump sum run up by inflation, but it's more or less break even at best. I literally would have been much better off had I rented cheap suburban apartments and put the difference in some stock index fund.
I think the complaints about artificial scarcity are kind of accident-of-history. Up until not that long ago, most people didn't *want* to live in the city. Old housing stock, bad schools, crime, high taxes. The US spent decades migrating to the suburbs. In the last 20-some years, many cities have seen a renaissance, including suburban boomers retiring and moving back into core cities.
Since so much development focus at a macroeconomic level was focused on the suburbs, the cities were underdeveloped. Now that everybody wants to live there -- young people, retirees, etc, the housing growth is lagging the demand, and the demand is driving prices way up.
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I guess I don't understand. I'm mostly responding to the rhetoric of "enforced housing shortages" that principally blames single family homeowners for backing zoning restrictions that limit the construction of multi-family housing in traditionally single family neighborhoods. The crux of the argument is that people aren't interested in protecting quality of life, etc, they are just protecting their housing value as an investment.
To me the hole in that argument is that a house isn't a very good financial i
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Contract rent is a form of economic rent. There's a reason they have the same word in the name, it's not just some coincidence.
I love my gig (Score:3)
Disclaimer:I'm in Ontario, Canada - minimum wage is $14/hr.
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Barrister? Medical Specialist?
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I get the same feedback for the most part when I take Uber. I ask the drivers how they like it and they all seem pretty positive about it.
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I make double what I was making as a salaried employee. I take uber fairly often and the drivers all have said they make more driving for Uber (duh) than they did at there last job. One even shown me spread sheets of his expenses and his strategies for being available when the fairs are higher. I don't see anyone in the gig economy complaining, so I have no idea where these articles are coming from.
I'm in the USA and I've used Uber quite a few times this year for trips to and from a public transportation station that can take me to the airport. I live in a large metropolitan area and we have a major airport here. In the past I used to beg friends to take me or pick me up as taxi fares are outrageous and my air travel is 100% personal, so I can't expense taxis as it's not for work. I've talked to the various drivers and I'd say about half the ones I've had don't have another job and they told me ba
two-sticker cars (Score:1)
I've been seeing a lot of parked cars with both Lyft and Uber stickers. I worry that after they work their 10 hour shift for oee company they move on and work another 10 hour shift at the other.
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I've been seeing a lot of parked cars with both Lyft and Uber stickers. I worry that after they work their 10 hour shift for oee company they move on and work another 10 hour shift at the other.
No. That is not what they do. They work for both at the same time. They have both apps, and take whichever ride comes first and then remove themselves from the queue in the other app.
Uber Eats? (Score:4, Funny)
“... drivers who transport people via apps (e.g. Uber, Lyft, Uber Eats, Postmates) ...”
I take it Uber Eats is trying to gain a foothold in that important, but underserved, cannibal market?
Gig economy: All the risk, no profits. (Score:2)
That's the deal.
This has impact on the social fabric. I'm noticing this myself, because as a web developer doing agency stuff you basically are smack-center in the gig economy. Sort of decently paid, yes, but gig economy none-the-less. The Germans have a better term for this "the precariously employed" to describe those working in the gig economy.
The thing is, I think this is also a natural consequence of us all moving into a post-scarcity economy, so by and large this is a good thing happening. But until a
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Your socialist UBI utopia is a farce, because once people stop working, or trying to work, scarcity comes back and right quick.
Why would people stop working? UBI is supposed to be just enough to cover living expenses (housing, food, etc), nothing more. People will always want more (better house, more/better food, vacations, cars, etc), or want to create or produce things, so there will always be people willing to work and goods or services to buy. Not everyone will want to spend their life sitting around eating cheetos and watching porn. Isn't there something you would love to do if money wasn't a concern? I can think of severa
What did you expect... (Score:2)
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I'd add, I understand if people are having a hard time finding a better job, but that's an entirely different (and valid) issue. Because you are in-between web developer jobs doesn't mean Uber is obligated to pay you more...they aren't a welfare program.
How is that a separate issue when so many companies these days only provide "gig" jobs (or "gigs" make up a significant percentage of their workforce)? Companies are relying on people desperate, naive, or ignorant enough to ignore/not realize that most costs are being externalized to themselves, and being paid a pittance for it. And what happens when all your web development jobs become "gigs" as well? More people bouncing around from low paying gig to low paying gig means more people unable to save, una
Good luck (Score:2)
Too many drivers (Score:2)
If I had to guess based on my own experience in San Diego, I'd say there are too many drivers competing for the same customers. Every other car har an Uber logo on it.
Jobs of last resort (Score:1)