

For Uber Drivers, Maybe Becoming Employees Is Worse - tzier
https://tryzen99.com/blog_posts/uber-drivers-becoming-employees-is-worse

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mrxd
It's not clear to me why becoming an employee would necessarily eliminate
flexibility. Why couldn't Uber continue to rely on surge pricing to
incentivize drivers during busy times?

It's also worth pointing out that workers often value flexibility when they
have a second, predictable income source that covers basic necessities—like a
spouse's income. For workers who need the money to make rent, it's far less
credible to say that they can "choose" whether they want to work or not.

Uber drivers may prefer to be contractors, but their opinion isn't the only
one that matters. Allowing them to be contractors may expand the legal
definition of contract work, which affects millions of other workers who have
nothing to do with Uber or the sharing economy.

~~~
tzier
Why would Uber want to incentivize drivers during high demand periods, versus
just taking that additional money themselves? The driver has little bargaining
power as an employee, so would be forced to work Uber-defined shifts anyway.
Uber has enough data now to get pretty close to market equilibrium if they
schedule drivers.

Agreed on flexibility being more important when it's not the primary source of
income. 'Different drivers have different needs and desires' is really the
takeaway here.

And agreed. It's unfortunate that the sharing / on-demand economy are just now
bringing light to the nearly 40% of the workforce that is contract/contingent
labor. Honestly, I don't think most people appreciate the significant
implications the Uber/Lyft lawsuits might have on the labor markets.

~~~
mrxd
> Why would Uber want to incentivize drivers during high demand periods,
> versus just taking that additional money themselves?

Consumers would revolt, because they hate surge pricing. It is only acceptable
because Uber argued that it was necessary to get drivers on the streets. If
Uber starts setting shifts, then it looks to the consumer like pure greed. A
probable outcome is regulation to cap fares. The main reason to set shifts is
to maximize asset utilization, but Uber doesn't own the assets (vehicles), so
this isn't an issue.

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Noted
I feel like the take home pay example is a bit disingenuous using 4 hours of
surge pricing vs a standard 4 hour shift. Yes, that is an example of what
could happen in a specific example, but you could also create a similar
example without surge pricing and get the opposite result.

~~~
tzier
Very valid point. My point was just to dispel the myth that "employees
automatically make more".

I could get into things like (a) how most Uber drivers get to write off
$0.575/mi as an expense when they actually only incur actual costs of
$0.20/mi, (b) how contractors get to write off other things employees don't
(like health insurance premiums), etc, but explaining those clearly in a
single blog post is difficult.

Also, keep in mind this post completely ignores opportunity cost, which is
arguably the most important aspect and one that is incredibly unique to each
individual.

~~~
cbhl
Do most Uber drivers know that they should be doing these things / have an
accountant that knows these things?

~~~
tzier
It's a mix. Most know they have tax obligations and want to pay them, but are
overwhelmed with figuring out how much and how to pay.

Not a ton know about smaller tricks, like writing off health insurance
premiums (hence why people pay accountants).

We're trying to help with both at Zen99, e.g. with all of our free resources
at www.tryzen99.com/learn

