9 ms·

Uber proposes policy that would pay drivers a minimum wage of $21 per hour

312 points by docker_up 7y ago

ceejayoz 7y ago
I presume they'll talk up the $21/hour price point in PR while pretending gas, insurance, maintenance, etc. don't cost anything.
- nabla9 7y ago
  If I understand it correctly Uber drivers must buy and maintain their cars as individuals. That has to be more expensive than maintaining sizeable taxi service fleet. No matter how you make it Uber is taking 30-40% markup and letting drivers to eat the extra cost from this business model.
- devoply 7y ago
  Nor their cars and the depreciation on them.
- timdorr 7y ago
  I'm not defending Uber here and it is very likely they are spinning this in their favor, but they claim that rate does include expenses: > Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses https://p2a.co/H9gttWA https://p2a.co/H9gttWA
  - ceejayoz 7y ago
    "While on a trip" is very slippery here.
    - dymk 7y ago
      It's actually very well defined, so I have no idea how it's a "slippery slope"
      - ceejayoz 7y ago
        So there are 730 hours in a month. You're insured for all of them, but you might be driving for only 200 of them, and a portion of that won't be "on a trip". What percentage of the monthly commercial drivers insurance cost are they counting as expenses? Same thing with maintenance. Yeah, that oil change may have cost $40... but none of it was incurred while on a trip.
      - michaelt 7y ago
        ceejayoz didn't say slippery slope - they mean slippery as a synonym for "tricky" or "furtive" For example, "$21 per hour while on a trip" could mean that, if a driver takes a fare 30 minutes out of town then returns empty, they are only paid $10.50 for the hour's work because returning empty was not "on a trip"
        lonelappde 7y ago
        It's not "could" it's clearly the meaning. Out of town drives have surplus charge for this reason.
  - RHSeeger 7y ago
    That's ambiguous. Uber could say "we pay them $21 per hour, and they are expected to pay for their gas/expenses out of that" and it what they said is still true.
  - phonon 7y ago
    They seem to be saying the $21/h is what the drivers would GROSS, not what they would NET after expenses...otherwise they would write "after" and not "including". Compare to their blog here[1] where they are much clearer. "[T]he median driver in Seattle makes between $19 and $21 per hour before expenses. A typical expense range is between $2.94 and $6.46 per hour" [1] https://www.uber.com/blog/seattle/a-look-at-driver-earnings-in-seattle/ https://www.uber.com/blog/seattle/a-look-at-driver-earnings-...
  - tass 7y ago
    This wording is a little unclear. I’d have liked something a little more specific: “in addition to the incurred average costs...”. As is, it sounds like expenses may be part of the hourly rate.
- safog 7y ago
  You can put a price on those things. Insurance: 2400 / yr (guesstimate, maybe lower) Miles driven per year: 50k [1] Cost per mile (Incl depreciation) = 0.26$ [2] Cost per year to drive = 0.26 * 52k = 13520 Total = ~$16k per year in post tax earnings. (Assuming numbers above still work ) Min 21$ / hr = 43,680 Minus taxes = 40,175 Minus driving costs = 24175 post-tax income per month ~= $2k Assuming a single driver lives outside the immediate SF area, "commutes" to work, and shares an apartment, it's enough to survive. There's plenty of other jobs that pay less, so it seems unfair to target Uber on this number. You can expect to get by temporarily or make a bit of extra cash with Uber, but it's not a long term career for a driver - but I expect most drivers know that already. [1] https://ride.guru/lounge/p/how-many-miles-do-uber-and-lyft-drivers-put-on-their-cars https://ride.guru/lounge/p/how-many-miles-do-uber-and-lyft-d... [2] https://bizfluent.com/how-5914430-compute-depreciation-based-mileage.html https://bizfluent.com/how-5914430-compute-depreciation-based...
  - pkaye 7y ago
    Did you account for that the drivers can deduct some of the costs as a business expense?
    - ceejayoz 7y ago
      In the other direction, commercial vehicle insurance costs substantially more.
  - calcifer 7y ago
    > it seems unfair to target Uber on this number No it's not. That there are worse jobs elsewhere in no way implies these people are asking for anything unfair. Uber got where it is by greedily violating every regulation on the books and now that they are facing these "unfair" unionizers they demand regulation? Please.
  - davinic 7y ago
    I question "Bizfluent" as a good source. The IRS states $0.58 per mile. [Edit]: I'll add in another source in line with the IRS rate. See AAA: https://newsroom.aaa.com/tag/driving-cost-per-mile/ https://newsroom.aaa.com/tag/driving-cost-per-mile/
deleted 7y ago
[deleted]
devoply 7y ago
Let's not leave the rest of it, threatened with its drivers unionizing Uber tries to play the individualism card to dissuade collective action. "California drivers deserve access to flexible work." https://www.independentdriver.org/ https://www.independentdriver.org/ I wish rent was flexible. How about food prices, they should be flexible. Car repair costs. Flexible. Gas prices should be flexible. In general life should be flexible. Everyone should negotiate. Things should not be that predictable. It's better for everyone.
- xapata 7y ago
  Prices are indeed flexible.
  - SomeOldThrow 7y ago
    Prices are mostly driven by market forces. That leaves little room for flexibility.
    - jerf 7y ago
      The flexibility is in what you buy. Rent is flexible in the sense that you can choose what to rent, and whether you have people paying with you (roommates). And so on with other expenses; a new Tesla or a 8-year-old used sedan? etc. SV's problem is that even the minimum rent is pretty high, but that's a local problem, not a universal.
      - SomeOldThrow 7y ago
        Ahh, so I have the flexibility to choose to be homeless to save on rent. Great. > SV's problem is that even the minimum rent is pretty high, but that's a local problem, not a universal. In my experience almost all of people's problems are local. To be clear, I have an excellent job. I'm just trying my hand at putting the 'ol empathy hat on.
        jerf 7y ago
brexiteer 7y ago
This makes sense, Uber should be a premium service, back in my day having a private driver on call was expensive as it should be, the wear and tear om the vehicle is ridiculous, the vehicles are nice. You want a cheap ride, get a cab that someone may have shit in OR innovate in your life and buy your own vehicle.
- Milner08 7y ago
  This is absolutely the WRONG message. Everyone should not have their own vehicle. That is insane. Especially in big cities.
  - noir_lord 7y ago
    Given the username I'd suspect a troll.
- bdcravens 7y ago
  False equivalence: A private driver typically wasn't driving a car that had their kid's car seat in it, blaring the music they prefer, in a 2006 Toyota Corolla, and (rightfully so) treating me like a potential threat (many drivers, especially female, have cameras for their protection).
- plink 7y ago
  You’re being downvoted for what, suggesting people buy their own vehicles? The downvoters conveniently skipped that you mentioned the primary option would be to pay the real costs of a private ride . Rideshare is a swindle against gullible, math-challenged contractors while painting the whole affair as a progressive, environmentally conscientious techno-inevitability.
- dang 7y ago
  Trollish usernames aren't allowed on HN because they basically troll every thread they post to. https://hn.algolia.com/?sort=byDate&dateRange=all&type=comment&storyText=false&prefix=true&page=0&query=by:dang%20trollish%20username https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme... I've banned this account for now, but if you want to email hn@ycombinator.com with a better username, we can rename it for you and unban it.
smt88 7y ago
tl;dr Uber/Lyft/gig workers are organizing to get themselves recognized as employees (rather than contractors). > "These petitions are clearly Hail Marys by Lyft and Uber to try to prevent the passage of AB-5, which seeks to codify the ruling established in Dynamex Operations West, Inc. v Superior Court of Los Angeles. In that case, the court applied the ABC test and decided Dynamex wrongfully classified its workers as independent contractors based on the presumption that 'a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits…'" Uber's proposed policy is somewhere between what those drivers get now (no guaranteed wages, no benefits, no protection from unfair labor practices) and what they'd get as employees under California law. Their response: > "'$21 isn’t a living wage for any category of worker in the San Francisco metro area except a single adult or two adults living together,' Gig Workers Rising tweeted. 'What they’re offering is the floor, while hoping to kneecap any efforts to raise wages down the line & create a real union.'"
- lonelappde 7y ago
  Is there a reason you can't commute from Oakland to a SF job? Maybe SF should ban single-passenger cars and solve this Uber problem once and for all.
- chasd00 7y ago
  if they're employees can they be fired? will the have a driving hours quota to meet? Seems like they'll need to make a lot more for uber than $21/hr to cover the overhead of an employee.
SubiculumCode 7y ago
And they arent employees?
- bdcravens 7y ago
  You can guarantee a contractor an hourly wage.
  - stri8ed 7y ago
    How does that account for time waiting between rides? With increased wages, we can expect increased supply of drivers, leading to more drivers waiting. That is unless they apply a cap to the amount of active drivers, which would cause its own issues.
jdsully 7y ago
Is this after accounting for gas and insurance? Or are they just hoping everyone confuses them with employees?
- dpiers 7y ago
  From the proposal: “drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses.”
  - chimeracoder 7y ago
    > “drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses.” "while on a trip", aka "not really $21/hour", because even in extremely dense areas, drivers have downtime between trips, during which they typically have to either drive around aimlessly, find a place to idle/park, or drive to their next pickup.
    - pkaye 7y ago
      Is that different from how normal taxi drivers get paid?
      - chimeracoder 7y ago
        > Is that different from how normal taxi drivers get paid? Yes, but it's not the point - it's misleading to talk about a minimum wage that excludes some time on the job from the denominator.
- deleted 7y ago
  [deleted]
- Avshalom 7y ago
  It's probably calculated to be ~15 an hour net, 15 being the current magic number.
mkagenius 7y ago
Not entirely clear what _policy_ exactly means, does it mean Uber will pay the minimum wage or it wants the government to pay that? (I am not from U.S. so its unclear how it works) I guess, its the government, since people drive for both lyft and uber.
- mrosett 7y ago
  In context it must be a governmental policy
  - jld 7y ago
    Generally the government does not pay/augment wages for companies in the US.
    - koube 7y ago
      I think the person you're replying to is implying that one company cannot just pay their workers a super high wage without losing to its competitors. Competition will keep the wages as low as possible so this change must be done at the systemic level so that Uber and all of its competitors have to make this change at the same time. The only forseeable way to do this is government policy.
- azinman2 7y ago
  Minimum wage applies to what the companies pay an individual, not the government paying people.
- kingbirdy 7y ago
  It's a proposal for a law that requires all ride-sharing companies to pay that wage to their drivers.
  - skyyler 7y ago
    Now I understand why Uber would want this, thanks.
- 7y ago
duxup 7y ago
>Uber is circulating a petition urging people to “protect ridesharing in California.” In the petition, Uber advocates for a policy that would offer drivers a minimum of $21 per hour, paid time off, sick leave and compensation if they are injured while driving, as well as a collective voice and “the ability to influence decisions about their work.” Uber circulating a petition to ... urge Uber to do a thing? Why don't they just do that thing?
- ekc 7y ago
  The goal is to force every other company to do it as well, protecting the long-term prospects of Uber. A smart thing, and possibly a good one in the short term.
  - dsfyu404ed 7y ago
    That would basically be suicide bombing the "ride share" industry though. Everyone is losing money hand over fist. Increasing that amount will kill everyone just as dead but do it faster decreasing the amount of time that Uber, or anybody, would be able to figure out how to be profitable. I can see how faced with a binary choice between $21/hr and classifying as employees $21/hr is better but it's not a binary choice. They can pay off politicians (indirectly and with plausible deniability of course) or do other dirty things (this is Uber we're talking about here) to get the law changed.
    - ghaff 7y ago
      Who says they'll bear the cost? I'm not sure forcing all of these services to jack up their prices is bad for Uber if they can increase their overall margin while doing so. They just can't do it today if the competition won't follow suit. Yes, they lose some volume but Uber/Lyft is probably a pretty strongly engrained habit for many at this point.
      - sachdevap 7y ago
        > but Uber/Lyft is probably a pretty strongly engrained habit for many at this point. Might be true in the valley, but I see no reason to believe that this is true in many other markets.
SomeOldThrow 7y ago
Anything short of employment with the health insurance and no personal investment in the car it seems like it's going to be bad for drivers in the long term.
- standardUser 7y ago
  "no personal investment in the car" That seems excessive. Plenty of professions require significant investment in equipment. Many truckers own their own trucks. Mechanics buy their own tools. It's just part of the equation.
danans 7y ago
> our community relies on to supplement their income, support their families While their marketing promotes driving as a fun side gig, their PR defending their labor practices includes supporting families. It's not surprising coming from corporate PR, but the selective choice of arguments is pretty obvious. But then again, in a society where the general populace's basic welfare is largely left to market forces, maybe it's not a stretch for corporations to make the claim that supporting families is among their side-effects (but not objectives).
- grecy 7y ago
  Just like how McDonald's actually recommends it's employees get another job. Companies in the US are utterly out of control with regards to paying a living wage.
  - kuzimoto 7y ago
    You can't really expect to be paid a living wage at a job that can be done by 14 year olds, can you? There is also a greater supply of low skilled labor available, lowering price of labor. I think you should work 1 to 2 crappy jobs building skills until you can find a single good job. McDonald's also has programs that offer college tuition assistance.
    - grecy 7y ago
      > You can't really expect to be paid a living wage at a job that can be done by 14 year olds, can you? I expect everyone to be paid a living wage at every full-time job. That's the very definition.
      - kuzimoto 7y ago
        Do you have a source to back that claim? I can't find anything that states "full time" equals "living wage". Only referring to the minimum number of hours an employee has to work from receive benefits "part time" employees typically don't get, like paid time off or health insurance. Additionally the Fair Labor Standards Act (for US anyway) does not give any formal definition of "full time" work, and is up to the employer. Only that covered nonexempt workers working more than 40 hours are entitled to overtime. It's fine to disagree, but at least provide some sort of substance to your argument...
Brushfire 7y ago
Minimum wage policies in this sector are such a boon to self driving car companies. It will accelerate the end of uber and lyft using human drivers dramatically. I hope these unions realize what they're doing.
- ProAm 7y ago
  Unions or not that change is coming.
mrnobody_67 7y ago
What do driver expenses look like on a per-hour of driving basis? Gas, oil change, tire wear, etc. on a modest Honda/Toyota type car?
- criddell 7y ago
  $0.58 / mile according to the IRS.
  - Railsify 7y ago
    Is that based on total cost of ownership? AAA claims to have some info on that: https://newsroom.aaa.com/tag/driving-cost-per-mile/ https://newsroom.aaa.com/tag/driving-cost-per-mile/
    - bdcravens 7y ago
      Then the IRS is being generous, as most of the vehicles in that linked page cost less than $0.58/mile.
      - dsfyu404ed 7y ago
        They're including depreciation which makes sense for small businesses that turn over their fleet every X years. If you're not swapping cars ever few years depreciation per mile is basically irrelevant because age and what you use the vehicle for will dominate depreciation.
        lonelappde 7y ago
        You can't drive Uber in an old car, can you? Edit: apparently you can, and drivers leasing new cars to drive are getting creamed.
        bdcravens 7y ago
        In many markets, the car can be up to 15 years old. https://www.uber.com/drive/houston/vehicle-requirements/ https://www.uber.com/drive/houston/vehicle-requirements/
JustSomeNobody 7y ago
> Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses. This simultaneously reduces the race to the bottom of pricing for ride sharing while capping what Uber will pay at $21/hour[0]. [0] "While on a trip". Gotta love that.
WheelsAtLarge 7y ago
What is the right payment for Uber drivers? Will 21/hr cover costs plus give a living wage? That's the starting point before decing if it's good or bad.
- calcifer 7y ago
  > What is the right payment for Uber drivers? Whatever the future union (that the drivers are asking for) can negotiate. > Will 21/hr cover costs plus give a living wage? No it won't, see the article.
WheelsAtLarge 7y ago
What is the right payment for Uber drivers? Will 21/hr really cover costs plus give a living wage? Seems to me that's the starting point before decing whether it's a good wage or not.
- rpmisms 7y ago
  That's more than double (almost 3x) the national minimum wage, and at least in my area, is more than enough to live quite well. Of course, it's barely enough to sustain a weed habit in Silicon Valley, but outside of that bubble, this is quite livable.
  - mikeash 7y ago
    Most minimum wage workers don’t have to pay a bunch of money operating their own equipment as part of their job.
- jumbopapa 7y ago
  The right amount is the amount set by the market. I don't understand these people protesting... no one is forcing you to work for Uber.
  - smallgovt 7y ago
    My understanding is that people believe the free market is failing to provide a living wage to a certain class of society. One of the root causes of this failure is technology and automation, so they think it’s just to implement a minimum wage for Uber drivers. One could imagine a world where automation replaces half of the labor force and the free market would essentially allow corporations to rake in enormous profits while the unemployed class gets paid pennies and lives in poverty.
    - jumbopapa 7y ago
      > one could imagine Sure, we can imagine it, but it would be asinine to take legislative action now when that isn't even a problem.
supernova87a 7y ago
Maybe I'm dense but if drivers aren't finding the expected wage acceptable then why don't they simply choose not to offer their services to Uber? I'm not saying that in the "cruel capitalist" way, I'm observing -- they still choose to work, so there must be demand for it at a low wage level. Seems to me we have an oversupply of labor of people willing (or needing) to work for pennies. Having a minimum wage isn't going to improve that. It's going to lead to fewer people taking rides, and fewer people being able to become Uber drivers, but slightly better for the ones that can remain drivers. Classic minimum wage problems. Why don't we make it $30 per hour? or $50? That would be even better.
- kennywinker 7y ago
  > why don't they simply choose not to offer their services to Uber? You assume there are other options without barriers to entry. You’ve learned how to drive uber, you’ve got a vehicle and payments to make - now take a risk on some other gig with a million unknowns? Now it’s possible that uber cannot shoulder this cost by lowering their margins, and it will pass directly to the consumer as you suggest - but it’s not guaranteed. The fact that uber is behind this suggests that they can shoulder the cost.
  - stri8ed 7y ago
    > You’ve learned how to drive uber That's a bit of stretch. Also worth noting, many of the jobs did not even exist before Uber created a market for it. > why don't they simply choose not to offer their services to Uber? Collective bargaining, aka unionizing, does essentially just that, only with more leverage.
    - kennywinker 7y ago
      ok...? I'm sure driving for uber is not difficult, but making money driving for uber is 100% a skill. When to go out, where to be, how long your shift should be, what rides to skip, etc. That's all invested learning. > Also worth noting, many of the jobs did not even exist before Uber created a market for it. Their trophey is in the mail. Just because you create a new job, does not mean it's a good job. > Collective bargaining, aka unionizing, does essentially just that, only with more leverage. yes! it seems clear to me that uber drivers would benefit from unionizing.
Endy 7y ago
And what will this do to fares? If they stop being the cheapest fast option between two points, I don't feel like I'd be alone in going another way.
- jchallis 7y ago
  Raise them to the point to create an entitled taxi monopoly ripe for disruption by an aggressive industry defining competitor.
- lonelappde 7y ago
  They will still be cheapest fast way by a long shot, but it changes the money vs time calculus. Uber was never about being cheap (except cheaper than cabs in a few places where cabs existed), it was about being affordable and far faster than transit/walking/biking.
phjesusthatguy3 7y ago
Does anyone have a link to the actual policy Uber is advocating? It doesn't appear to be linked from the TC article or the independentdriver site linked from there.
- floppydiskette 7y ago
  https://p2a.co/H9gttWA https://p2a.co/H9gttWA
  - phjesusthatguy3 7y ago
    Yes, that's the link from the TC article. What it says is: "Instead, Uber is advocating for a brand-new policy that would strengthen protections for rideshare drivers by: Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses. Providing drivers access to robust new benefits, such as paid time off, sick leave, and compensation if they are injured while driving with Uber. Empowering drivers to have a collective voice with rideshare companies, and the ability to influence decisions about their work." What are they actually proposing? I see what they want their proposal to do.
alkonaut 7y ago
I assume at $21/h the driver has to pay car expenses? How much does that cost per hour assuming a driver does full time driving? Shouldn’t Uber instead be guaranteeing how much drivers are paid net? If $21 really is before expenses then it’s not even $15 for most drivers after, maybe not even $10? Also: I was assuming the pay was while working, not while driving passengers. Otherwise isn’t it even worse? What if Uber instead just guaranteed drivers a living wage plus benefits net?
- fromthestart 7y ago
  I don't think it costs anywhere near $10/hour to operate a passenger vehicle, even after insurance and maintenance.
  - mikeash 7y ago
    Depreciation is a large cost as well. The IRS sets a standard rate of 58 cents/mile for deduction of vehicle-related expenses. There’s obviously a wide range of actual costs, but that’s in the ballpark for an all-inclusive amount. If you average 20MPH then you’ll exceed $10/hr.
    - acchow 7y ago
      The IRS numbers are very generous.
      - mikeash 7y ago
        They almost perfectly match the TCO numbers from AAA. They show an average of $8,849/year at 15,000 miles/year, which is 59 cents/mile. The cheapest vehicle type they list is small sedans, which are $6,777/year or 45 cents/mile. https://newsroom.aaa.com/auto/your-driving-costs/ https://newsroom.aaa.com/auto/your-driving-costs/ It seems large because we aren’t used to looking at TCO per mile, and only think about the cost of fuel.
        acchow 7y ago
samstave 7y ago
Thats $42,000 a year. Are they doing this in only certain areas?
- dpedu 7y ago
  Not necessarily, they're not proposing to put their drivers on salary.
- davinic 7y ago
  $21/hour only includes time when you're on a fare, not time when you're logged in and available. And it doesn't include the gas, maintenance and depreciation on your personal vehicle driven 30-50k miles per year to reach that amount. The IRS estimates those costs to be $0.58/mile, which would reduce the income by between $17,400 and $29,000.
- synaesthesisx 7y ago
  That's not exactly a living wage in a lot of places like California.
s3r3nity 7y ago
I hate to be _that_ person, but $21 / hr minimum is more than EMTs, and even most surgical Residents make (at least in the US). I don't know how to interpret this in that context: is this proposal absurd, or is the medical / labor system in the US absurd? (or both??)
- docker_up 7y ago
  Yeah I don't know how much more people expect to be paid. It's a completely unskilled job that almost anyone can do. Complaining that $21/hr isn't enough would be insane at this point.
  - behringer 7y ago
    Well the CEO of walmart pulls in 22 million a year. I can tell you right now that 21/hr is doable for every unskilled laborer in the US today.
    - pequalsnp 7y ago
      The problem that arises is that if you artificially inflate someone's wages to an arbitrary number like 21/hr, they might not provide enough value to economically justify the wage level they're set at. It's not, and shouldn't be, an emotional argument. It's an economical one.
      - behringer 7y ago
        The CEO of walmart most certainly isn't worth 22 million/year. If you can't bring in 21/hour as a cab driver you probably shouldn't be driving cab, especially considering you should be pulling in, what, well over 100/hr gross?
        pequalsnp 7y ago
        What evidence do you have that the CEO doesn't bring that much in value to Walmart?
chasd00 7y ago
is there an interview process to be an Uber driver? Or do you just download the app and turn it on? If it's just the app then why wouldn't everyone just download the app and start making $21/hr
- Ancalagon 7y ago
  I have the same question. I'm guessing its $21/hr of driving time?
kemiller2002 7y ago
Call me a cynic, but I don't see how this doesn't hurt drivers. It sounds good, but it's too good to be true. I'm wondering if they are factoring in only the amount of time actually driving. So if you have a 5 minute drive in 60 minutes, at 21.00 per hour you only make 1.75. I'm guessing their hourly wage doesn't include reimbursement for car mileage, gas etc. too. That seems like a raw deal to me. Am I missing something?
- davinic 7y ago
  The IRS vehicle mileage rate for 2018 is 54.5 cents per mile. If a driver averages 20 miles per hour, then their effective hourly rate is cut in half from depreciation/fuel/maintenance/etc.
  - kemiller2002 7y ago
    That is true, and the company doesn't have to reimburse you for that. They can leave that to you to factor in your yearly taxes, effectively putting the burden on you to track and submit all of that.
    - davinic 7y ago
      yes, but it's on your taxes because it's an actual unreimbursed expense you've undertaken. It factors into your net income, not just a tax savings.
- Fogest 7y ago
  I don't think people are reading it correctly. They are going to be paying $21/hr minimum while a driver is ON A TRIP. During non-peak times you could wait almost an hour with no ride. You'd still get nothing for that time. The only thing they are promising is that when you're actively on a trip the wage they are giving you is at least $21/hr. This is not a good deal.
danenania 7y ago
Ok, now how about a sincere focus on safety and driver accountability? I started using Uber and Lyft several years ago in NYC because the taxis were horrible. More than half the rides would feature a driver on the phone, severe road rage, and reckless driving. Now it seems to have come full circle. Ridesharing is almost as bad as taxis used to be. Some drivers are great, but many are rude and seem to use the roads as an outlet for pent up aggression. In SF, around 1 in 10 are obviously stoned. More are overtired and easily distracted. So I'm back to driving or public transit. I love ridesharing and would use it all the time if it was safe, but I'm not putting my life or a family member's life in the hands of companies that can't guarantee a competent driver.
- my_username_is_ 7y ago
  At least with ridehailing apps you have a feedback mechanism to flag these drivers. If enough people have negative experiences, they won't be able to drive for that platform.
  - astura 7y ago
    I don't use that feature unless the infraction is very major (like the guy who swerved into incoming traffic while texting). The reason being is I don't want to look like I'm complaining for the sake of complaining or trying to get free rides/Uber credit.
    - phil248 7y ago
      It's important to rate poor drivers with low scores because a) you won't be matched with them again and b) you're potentially helping remove them as a driver to the benefit of other riders. If they want to give you credits as well, so be it.
- astura 7y ago
  Yeah, I agree with this. Ridesharing drivers have gotten SO BAD, its rare I get one that doesn't have at least a few traffic infractions during a 10-15 minute ride.
jankassens 7y ago
This appears to be a joint effort with Lyft. A joint letter by Uber and Lyft CEOs: https://www.sfchronicle.com/opinion/openforum/article/Open-Forum-Uber-Lyft-ready-to-do-our-part-for-13969843.php https://www.sfchronicle.com/opinion/openforum/article/Open-F... Lyft email campaign advocating minimum earnings: https://p2a.co/xcA3Bg3 https://p2a.co/xcA3Bg3
not2b 7y ago
Presumably the $21 per hour is before driver expenses (gas, depreciation etc: drivers often ignore that their shiny new Prius loses about $0.10 in value per mile driven).
kerkeslager 7y ago
It's wise to look a gift horse in the mouth when it comes from an amoral corporation, but I suspect this is fairly honest, not because Uber is doing it out of the kindness of their own hearts, but because Uber wants to avoid regulation. People who claim that regulation only makes things worse should take note of this: even the threat of regulation can be enough to get corporations to at least try to appear to do the right thing. That said, I think there are two problems with this: 1. Long-term results of this will just be Uber trying to avoid regulation for as long as possible, while figuring out more and more clever ways to maximize profit at the expense of both drivers and passengers. 2. Any payment agreement which doesn't include health insurance in the US needs to be considered as significantly reduced. Back of napkin math ahead: Health insurance can run as high as $700/month and after taxes someone getting paid $21/hour takes home closer to $10.50, meaning some drivers will have to work ~65 hours/month just to pay for health insurance. Assuming Uber drivers drive 160 hours/month (which is conservative), paying for their own health insurance is a ~40% reduction in pay. This means that, pre-tax, that $21/hour looks a lot more like $12.60/hour would in a country with a reasonable healthcare system. Of course, there are some worst-case scenario numbers included here (most people's health insurance isn't that expensive) but at least some Uber drivers, particularly with expensive-to-treat preexisting conditions, are going to be receiving a much lower wage if health insurance isn't included. I suspect this singlehandedly is why Uber is even making the $21/hour offer: as a way to avoid regulation that would require them to pay for health insurance.
- smallbigfish 7y ago
  What's so amoral about it?
  - kerkeslager 7y ago
    Are you asking what's amoral about Uber? Saying "amoral corporation" is almost redundant and isn't specific to Uber--almost all corporations are fairly amoral.
- deleted 7y ago
  [deleted]
- 7y ago
gandalfian 7y ago
Is this really a wage or do you have to deduct your petrol and motoring costs from it? Are you working when waiting for a customer Or only when actually driving?
SN76477 7y ago
$21 is not enough once you add in operating costs that the drivers must swallow.
c9c9c9c9 7y ago
It's not clear from the article, is it a flat fee of $21/hr? Or is it only $21/hr of passenger time?
deleted 7y ago
[deleted]
Proven 7y ago
I am against it because it will increase the cost of their services
munherty 7y ago
This from the same company that hasnt turned a profit..
jrochkind1 7y ago
The article is written confusingly. It seems to really be, Uber responds to proposed legislation in CA, by asking for it to be changed to allow uber drivers to remain 'independent contrators' -- but they're willing to take legislation, apparently, that would guarantee a $21/hour guarantee, along with paid sick leave and vacation? Or maybe they're saying if they don't pass any legislation at all, they're willing to do those things voluntarily... presumably just in CA? I'm a bit confused, the article is poorly written. This is a lot more than many Uber drivers currently get. There are people quoted in the article saying $21/hour still isn't a living wage in the bay area. But if Uber is suggesting that $21/guarantee with paid leave is only fair, presumably they'd be willing to commit to that nationwide, not just in CA where they are threatened by legislation? (Just kidding, I obviously don't presume that). I know many people who do or have driven for Uber in other parts of the country who would find it quite an improvement to get a guarantee of $21/hour and paid leave.
tyingq 7y ago
"wage" is a confusing term to use in this context if they aren't very specific about what things the driver has to pay out of that $21/hr. Self employment tax, employers share of FICA, vehicle wear/tear/depreciation, fuel, health insurance, commercial vehicle insurance, benefits, etc. They seem to want you to make a straight comparison to a W-2 hourly rate which isn't honest.
WKH 7y ago
Kicking away the ladder.
haggenballs 7y ago
Correct me if I’m wrong, but it seems that Uber and Lyft are only proposing such a policy because they are scared that drivers will be considered employees, and not independent contractors. It’s probably much cheaper to pay drivers a minimum wage of $21/hour when they are driving a customer (not accounting the idle time, or time to get to the fare), than it is to provide benefits for every single driver. To me, I don’t see this as an ethical move, but a somewhat disingenuous effort in an attempt to save money in the long-run.
pythonwutang 7y ago
This is an attempt to push Lyft out of CA by raising the cost side of the equation but that cost will eventually have to be passed to riders, which will dramatically drop demand. If the minimum wage law passes and they subsidize rides long enough to edge out Lyft then they finally get the monopoly they’ve been promising investors for the last decade but they also lose a huge amount of their TAM. The laws of supply and demand will eventually come into play. And of course once they get their monopoly they will raise prices further to get profits and at that point I’d guess they would only be slightly less expensive then Taxis were before all this gig economy craziness.
- cdmcmahon 7y ago
  I also think it's an attempt to ward off a nascent unionization push. Regarding a different, recent "olive branch" type proposal: "The one thing they don’t want to give you is the thing that you need to get. This offer from Uber and Lyft is like a kidnapper offering you a softer blanket, as long as you agree not to ever escape. No thanks. These companies know very well that once their workers become actual employees, they will get a host of benefits automatically, and they can formally unionize to win themselves many more benefits and increased pay. These companies, which have never made a dollar even while exploiting their workers, fear this. So they offer some concessions." [1] [1] https://splinternews.com/if-uber-wants-it-its-bad-1835514222 https://splinternews.com/if-uber-wants-it-its-bad-1835514222
- deleted 7y ago
  [deleted]
- Jommi 7y ago
  https://www.sfchronicle.com/opinion/openforum/article/Open-Forum-Uber-Lyft-ready-to-do-our-part-for-13969843.php https://www.sfchronicle.com/opinion/openforum/article/Open-F...
phjesusthatguy3 7y ago
What is it that Uber is proposing? I understand that they're "advocating for a brand-new policy that would strengthen protections for drivers" but what is that policy? What policy are they suggesting be put in place to make sure protections for drivers are strengthened?
habosa 7y ago
"$21 per hour while on a trip" As many have pointed out, this is the key. Not possible to have 100% utilization, so most drivers would probably earn 50-75% of this number.
us0r 7y ago
>"minimum of $21 per hour while on a trip" Am I the only who notice the last 4 words? This will effect very few drivers as most are already making > that "while on a trip (and not stuck in complete grid lock)".
Animats 7y ago
"while on a trip" - Uber PR. Not per hour worked. Not when going to a pickup. Not when waiting for a ride. Only "while on a trip". That alone probably means about 1/3 off. Which puts them below SF's $15/hour minimum wage. Then, Uber counts the entire amount paid to the driver as "wage", not including their renting the driver's car. That takes off a substantial amount.[1] And if drivers were employees, Uber would have to buy the bottled water. [1] https://www.ridester.com/uber-lyft-driver-costs-and-expenses/ https://www.ridester.com/uber-lyft-driver-costs-and-expenses...
- asperous 7y ago
  How else could they do it though? They'd have to telling drivers they can't work or scheduling them, otherwise there'd be a flood of people chilling in their cars waiting on rides and being paid by uber. The "gig" economy seems to work by offering people a fairly open choice of pay and work. Though Uber could be more transparent about expected earnings.
  - ilaksh 7y ago
    They could be paid while they have 'accept rides' turned on and then Uber could stop accepting an infinite number of drivers.
  - lysp 7y ago
    Similar to cloud based server prices. Paid for time that you're actually online. If you're only logged on for 20 mins (a third) of the hour - you get $7 min wage ($21 / 3).
    - Jommi 7y ago
      Are you seriously comparing a saas service to a service based on real humans? You do realize how different turning a server on from being off vs. getting a driver to pick you up from whatever that person was doing before?
- rollingdeep 7y ago
  You’ve identified what everyone else can’t understand. Kudos. This is especially damaging to drivers that desire to drive their own vehicles and choose how much they want to drive. The proposed wages are way below what you should be taking home in an area like SF, and you are depreciating your own expensive asset and paying your own fuel and maintenance, auto insurance, health insurance and so on. The real gem however is this would force drivers to use the rental car program which doesn’t make much sense unless you are driving all week long. It is a way for Uber to control drivers making them unable to reject poor work and working conditions without actually making those drivers employees. As an independent contractor you should be able to turn off your Uber driver app when the pay starts sucking, and go work for someone else at your own discretion. There’s no freedom to do that rolling around in an Uber rental.
lewaldman 7y ago
In Brazil the drivers would get better salaries than our doctors... ¯\_(ツ)_/¯
cookie_monsta 7y ago
The article was updated and the headline changed to "Uber proposes policy that would pay drivers a minimum wage of $21 per hour while on a trip" to clarify the misconception that drivers would actually receive $21/hr. I think the headline should be changed here to avoid similar misunderstandings
Bud 7y ago
Key words in this story: "while on a trip". This isn't actually $21/hr. It could very easily end up being under $10/hr. Just depends how lucky the driver is.
torgian 7y ago
So... it sounds more and more like Uber is going to need to provide drivers insurance, etc... which means they will probably need higher requirements from their drivers at some point. Maybe even licensing and... wait, is Uber slowly becoming a taxi service?
deleted 7y ago
[deleted]

312 points by docker_up 7y ago

I presume they'll talk up the $21/hour price point in PR while pretending gas, insurance, maintenance, etc. don't cost anything.

nabla9 7y ago
If I understand it correctly Uber drivers must buy and maintain their cars as individuals. That has to be more expensive than maintaining sizeable taxi service fleet. No matter how you make it Uber is taking 30-40% markup and letting drivers to eat the extra cost from this business model.
devoply 7y ago
Nor their cars and the depreciation on them.
timdorr 7y ago
I'm not defending Uber here and it is very likely they are spinning this in their favor, but they claim that rate does include expenses: > Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses https://p2a.co/H9gttWA https://p2a.co/H9gttWA
- ceejayoz 7y ago
  "While on a trip" is very slippery here.
  - dymk 7y ago
    It's actually very well defined, so I have no idea how it's a "slippery slope"
    - ceejayoz 7y ago
      So there are 730 hours in a month. You're insured for all of them, but you might be driving for only 200 of them, and a portion of that won't be "on a trip". What percentage of the monthly commercial drivers insurance cost are they counting as expenses? Same thing with maintenance. Yeah, that oil change may have cost $40... but none of it was incurred while on a trip.
    - michaelt 7y ago
      ceejayoz didn't say slippery slope - they mean slippery as a synonym for "tricky" or "furtive" For example, "$21 per hour while on a trip" could mean that, if a driver takes a fare 30 minutes out of town then returns empty, they are only paid $10.50 for the hour's work because returning empty was not "on a trip"
      - lonelappde 7y ago
        It's not "could" it's clearly the meaning. Out of town drives have surplus charge for this reason.
- RHSeeger 7y ago
  That's ambiguous. Uber could say "we pay them $21 per hour, and they are expected to pay for their gas/expenses out of that" and it what they said is still true.
- phonon 7y ago
  They seem to be saying the $21/h is what the drivers would GROSS, not what they would NET after expenses...otherwise they would write "after" and not "including". Compare to their blog here[1] where they are much clearer. "[T]he median driver in Seattle makes between $19 and $21 per hour before expenses. A typical expense range is between $2.94 and $6.46 per hour" [1] https://www.uber.com/blog/seattle/a-look-at-driver-earnings-in-seattle/ https://www.uber.com/blog/seattle/a-look-at-driver-earnings-...
- tass 7y ago
  This wording is a little unclear. I’d have liked something a little more specific: “in addition to the incurred average costs...”. As is, it sounds like expenses may be part of the hourly rate.
safog 7y ago
You can put a price on those things. Insurance: 2400 / yr (guesstimate, maybe lower) Miles driven per year: 50k [1] Cost per mile (Incl depreciation) = 0.26$ [2] Cost per year to drive = 0.26 * 52k = 13520 Total = ~$16k per year in post tax earnings. (Assuming numbers above still work ) Min 21$ / hr = 43,680 Minus taxes = 40,175 Minus driving costs = 24175 post-tax income per month ~= $2k Assuming a single driver lives outside the immediate SF area, "commutes" to work, and shares an apartment, it's enough to survive. There's plenty of other jobs that pay less, so it seems unfair to target Uber on this number. You can expect to get by temporarily or make a bit of extra cash with Uber, but it's not a long term career for a driver - but I expect most drivers know that already. [1] https://ride.guru/lounge/p/how-many-miles-do-uber-and-lyft-drivers-put-on-their-cars https://ride.guru/lounge/p/how-many-miles-do-uber-and-lyft-d... [2] https://bizfluent.com/how-5914430-compute-depreciation-based-mileage.html https://bizfluent.com/how-5914430-compute-depreciation-based...
- pkaye 7y ago
  Did you account for that the drivers can deduct some of the costs as a business expense?
  - ceejayoz 7y ago
    In the other direction, commercial vehicle insurance costs substantially more.
- calcifer 7y ago
  > it seems unfair to target Uber on this number No it's not. That there are worse jobs elsewhere in no way implies these people are asking for anything unfair. Uber got where it is by greedily violating every regulation on the books and now that they are facing these "unfair" unionizers they demand regulation? Please.
- davinic 7y ago
  I question "Bizfluent" as a good source. The IRS states $0.58 per mile. [Edit]: I'll add in another source in line with the IRS rate. See AAA: https://newsroom.aaa.com/tag/driving-cost-per-mile/ https://newsroom.aaa.com/tag/driving-cost-per-mile/

deleted 7y ago

[deleted]

devoply 7y ago

Let's not leave the rest of it, threatened with its drivers unionizing Uber tries to play the individualism card to dissuade collective action. "California drivers deserve access to flexible work." https://www.independentdriver.org/ https://www.independentdriver.org/ I wish rent was flexible. How about food prices, they should be flexible. Car repair costs. Flexible. Gas prices should be flexible. In general life should be flexible. Everyone should negotiate. Things should not be that predictable. It's better for everyone.

xapata 7y ago
Prices are indeed flexible.
- SomeOldThrow 7y ago
  Prices are mostly driven by market forces. That leaves little room for flexibility.
  - jerf 7y ago
    The flexibility is in what you buy. Rent is flexible in the sense that you can choose what to rent, and whether you have people paying with you (roommates). And so on with other expenses; a new Tesla or a 8-year-old used sedan? etc. SV's problem is that even the minimum rent is pretty high, but that's a local problem, not a universal.
    - SomeOldThrow 7y ago
      Ahh, so I have the flexibility to choose to be homeless to save on rent. Great. > SV's problem is that even the minimum rent is pretty high, but that's a local problem, not a universal. In my experience almost all of people's problems are local. To be clear, I have an excellent job. I'm just trying my hand at putting the 'ol empathy hat on.
      - jerf 7y ago

brexiteer 7y ago

This makes sense, Uber should be a premium service, back in my day having a private driver on call was expensive as it should be, the wear and tear om the vehicle is ridiculous, the vehicles are nice. You want a cheap ride, get a cab that someone may have shit in OR innovate in your life and buy your own vehicle.

Milner08 7y ago
This is absolutely the WRONG message. Everyone should not have their own vehicle. That is insane. Especially in big cities.
- noir_lord 7y ago
  Given the username I'd suspect a troll.
bdcravens 7y ago
False equivalence: A private driver typically wasn't driving a car that had their kid's car seat in it, blaring the music they prefer, in a 2006 Toyota Corolla, and (rightfully so) treating me like a potential threat (many drivers, especially female, have cameras for their protection).
plink 7y ago
You’re being downvoted for what, suggesting people buy their own vehicles? The downvoters conveniently skipped that you mentioned the primary option would be to pay the real costs of a private ride . Rideshare is a swindle against gullible, math-challenged contractors while painting the whole affair as a progressive, environmentally conscientious techno-inevitability.
dang 7y ago
Trollish usernames aren't allowed on HN because they basically troll every thread they post to. https://hn.algolia.com/?sort=byDate&dateRange=all&type=comment&storyText=false&prefix=true&page=0&query=by:dang%20trollish%20username https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme... I've banned this account for now, but if you want to email hn@ycombinator.com with a better username, we can rename it for you and unban it.

smt88 7y ago

tl;dr Uber/Lyft/gig workers are organizing to get themselves recognized as employees (rather than contractors). > "These petitions are clearly Hail Marys by Lyft and Uber to try to prevent the passage of AB-5, which seeks to codify the ruling established in Dynamex Operations West, Inc. v Superior Court of Los Angeles. In that case, the court applied the ABC test and decided Dynamex wrongfully classified its workers as independent contractors based on the presumption that 'a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits…'" Uber's proposed policy is somewhere between what those drivers get now (no guaranteed wages, no benefits, no protection from unfair labor practices) and what they'd get as employees under California law. Their response: > "'$21 isn’t a living wage for any category of worker in the San Francisco metro area except a single adult or two adults living together,' Gig Workers Rising tweeted. 'What they’re offering is the floor, while hoping to kneecap any efforts to raise wages down the line & create a real union.'"

lonelappde 7y ago
Is there a reason you can't commute from Oakland to a SF job? Maybe SF should ban single-passenger cars and solve this Uber problem once and for all.
chasd00 7y ago
if they're employees can they be fired? will the have a driving hours quota to meet? Seems like they'll need to make a lot more for uber than $21/hr to cover the overhead of an employee.

SubiculumCode 7y ago

And they arent employees?

bdcravens 7y ago
You can guarantee a contractor an hourly wage.
- stri8ed 7y ago
  How does that account for time waiting between rides? With increased wages, we can expect increased supply of drivers, leading to more drivers waiting. That is unless they apply a cap to the amount of active drivers, which would cause its own issues.

jdsully 7y ago

Is this after accounting for gas and insurance? Or are they just hoping everyone confuses them with employees?

dpiers 7y ago
From the proposal: “drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses.”
- chimeracoder 7y ago
  > “drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses.” "while on a trip", aka "not really $21/hour", because even in extremely dense areas, drivers have downtime between trips, during which they typically have to either drive around aimlessly, find a place to idle/park, or drive to their next pickup.
  - pkaye 7y ago
    Is that different from how normal taxi drivers get paid?
    - chimeracoder 7y ago
      > Is that different from how normal taxi drivers get paid? Yes, but it's not the point - it's misleading to talk about a minimum wage that excludes some time on the job from the denominator.
deleted 7y ago
[deleted]
Avshalom 7y ago
It's probably calculated to be ~15 an hour net, 15 being the current magic number.

mkagenius 7y ago

Not entirely clear what _policy_ exactly means, does it mean Uber will pay the minimum wage or it wants the government to pay that? (I am not from U.S. so its unclear how it works) I guess, its the government, since people drive for both lyft and uber.

mrosett 7y ago
In context it must be a governmental policy
- jld 7y ago
  Generally the government does not pay/augment wages for companies in the US.
  - koube 7y ago
    I think the person you're replying to is implying that one company cannot just pay their workers a super high wage without losing to its competitors. Competition will keep the wages as low as possible so this change must be done at the systemic level so that Uber and all of its competitors have to make this change at the same time. The only forseeable way to do this is government policy.
azinman2 7y ago
Minimum wage applies to what the companies pay an individual, not the government paying people.
kingbirdy 7y ago
It's a proposal for a law that requires all ride-sharing companies to pay that wage to their drivers.
- skyyler 7y ago
  Now I understand why Uber would want this, thanks.
7y ago

duxup 7y ago

>Uber is circulating a petition urging people to “protect ridesharing in California.” In the petition, Uber advocates for a policy that would offer drivers a minimum of $21 per hour, paid time off, sick leave and compensation if they are injured while driving, as well as a collective voice and “the ability to influence decisions about their work.” Uber circulating a petition to ... urge Uber to do a thing? Why don't they just do that thing?

ekc 7y ago
The goal is to force every other company to do it as well, protecting the long-term prospects of Uber. A smart thing, and possibly a good one in the short term.
- dsfyu404ed 7y ago
  That would basically be suicide bombing the "ride share" industry though. Everyone is losing money hand over fist. Increasing that amount will kill everyone just as dead but do it faster decreasing the amount of time that Uber, or anybody, would be able to figure out how to be profitable. I can see how faced with a binary choice between $21/hr and classifying as employees $21/hr is better but it's not a binary choice. They can pay off politicians (indirectly and with plausible deniability of course) or do other dirty things (this is Uber we're talking about here) to get the law changed.
  - ghaff 7y ago
    Who says they'll bear the cost? I'm not sure forcing all of these services to jack up their prices is bad for Uber if they can increase their overall margin while doing so. They just can't do it today if the competition won't follow suit. Yes, they lose some volume but Uber/Lyft is probably a pretty strongly engrained habit for many at this point.
    - sachdevap 7y ago
      > but Uber/Lyft is probably a pretty strongly engrained habit for many at this point. Might be true in the valley, but I see no reason to believe that this is true in many other markets.

SomeOldThrow 7y ago

Anything short of employment with the health insurance and no personal investment in the car it seems like it's going to be bad for drivers in the long term.

standardUser 7y ago
"no personal investment in the car" That seems excessive. Plenty of professions require significant investment in equipment. Many truckers own their own trucks. Mechanics buy their own tools. It's just part of the equation.

danans 7y ago

> our community relies on to supplement their income, support their families While their marketing promotes driving as a fun side gig, their PR defending their labor practices includes supporting families. It's not surprising coming from corporate PR, but the selective choice of arguments is pretty obvious. But then again, in a society where the general populace's basic welfare is largely left to market forces, maybe it's not a stretch for corporations to make the claim that supporting families is among their side-effects (but not objectives).

grecy 7y ago
Just like how McDonald's actually recommends it's employees get another job. Companies in the US are utterly out of control with regards to paying a living wage.
- kuzimoto 7y ago
  You can't really expect to be paid a living wage at a job that can be done by 14 year olds, can you? There is also a greater supply of low skilled labor available, lowering price of labor. I think you should work 1 to 2 crappy jobs building skills until you can find a single good job. McDonald's also has programs that offer college tuition assistance.
  - grecy 7y ago
    > You can't really expect to be paid a living wage at a job that can be done by 14 year olds, can you? I expect everyone to be paid a living wage at every full-time job. That's the very definition.
    - kuzimoto 7y ago
      Do you have a source to back that claim? I can't find anything that states "full time" equals "living wage". Only referring to the minimum number of hours an employee has to work from receive benefits "part time" employees typically don't get, like paid time off or health insurance. Additionally the Fair Labor Standards Act (for US anyway) does not give any formal definition of "full time" work, and is up to the employer. Only that covered nonexempt workers working more than 40 hours are entitled to overtime. It's fine to disagree, but at least provide some sort of substance to your argument...

Brushfire 7y ago

Minimum wage policies in this sector are such a boon to self driving car companies. It will accelerate the end of uber and lyft using human drivers dramatically. I hope these unions realize what they're doing.

ProAm 7y ago
Unions or not that change is coming.

mrnobody_67 7y ago

What do driver expenses look like on a per-hour of driving basis? Gas, oil change, tire wear, etc. on a modest Honda/Toyota type car?

criddell 7y ago
$0.58 / mile according to the IRS.
- Railsify 7y ago
  Is that based on total cost of ownership? AAA claims to have some info on that: https://newsroom.aaa.com/tag/driving-cost-per-mile/ https://newsroom.aaa.com/tag/driving-cost-per-mile/
  - bdcravens 7y ago
    Then the IRS is being generous, as most of the vehicles in that linked page cost less than $0.58/mile.
    - dsfyu404ed 7y ago
      They're including depreciation which makes sense for small businesses that turn over their fleet every X years. If you're not swapping cars ever few years depreciation per mile is basically irrelevant because age and what you use the vehicle for will dominate depreciation.
      - lonelappde 7y ago
        You can't drive Uber in an old car, can you? Edit: apparently you can, and drivers leasing new cars to drive are getting creamed.
        bdcravens 7y ago
        In many markets, the car can be up to 15 years old. https://www.uber.com/drive/houston/vehicle-requirements/ https://www.uber.com/drive/houston/vehicle-requirements/

JustSomeNobody 7y ago

> Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses. This simultaneously reduces the race to the bottom of pricing for ride sharing while capping what Uber will pay at $21/hour[0]. [0] "While on a trip". Gotta love that.

WheelsAtLarge 7y ago

What is the right payment for Uber drivers? Will 21/hr cover costs plus give a living wage? That's the starting point before decing if it's good or bad.

calcifer 7y ago
> What is the right payment for Uber drivers? Whatever the future union (that the drivers are asking for) can negotiate. > Will 21/hr cover costs plus give a living wage? No it won't, see the article.

WheelsAtLarge 7y ago

What is the right payment for Uber drivers? Will 21/hr really cover costs plus give a living wage? Seems to me that's the starting point before decing whether it's a good wage or not.

rpmisms 7y ago
That's more than double (almost 3x) the national minimum wage, and at least in my area, is more than enough to live quite well. Of course, it's barely enough to sustain a weed habit in Silicon Valley, but outside of that bubble, this is quite livable.
- mikeash 7y ago
  Most minimum wage workers don’t have to pay a bunch of money operating their own equipment as part of their job.
jumbopapa 7y ago
The right amount is the amount set by the market. I don't understand these people protesting... no one is forcing you to work for Uber.
- smallgovt 7y ago
  My understanding is that people believe the free market is failing to provide a living wage to a certain class of society. One of the root causes of this failure is technology and automation, so they think it’s just to implement a minimum wage for Uber drivers. One could imagine a world where automation replaces half of the labor force and the free market would essentially allow corporations to rake in enormous profits while the unemployed class gets paid pennies and lives in poverty.
  - jumbopapa 7y ago
    > one could imagine Sure, we can imagine it, but it would be asinine to take legislative action now when that isn't even a problem.

supernova87a 7y ago

Maybe I'm dense but if drivers aren't finding the expected wage acceptable then why don't they simply choose not to offer their services to Uber? I'm not saying that in the "cruel capitalist" way, I'm observing -- they still choose to work, so there must be demand for it at a low wage level. Seems to me we have an oversupply of labor of people willing (or needing) to work for pennies. Having a minimum wage isn't going to improve that. It's going to lead to fewer people taking rides, and fewer people being able to become Uber drivers, but slightly better for the ones that can remain drivers. Classic minimum wage problems. Why don't we make it $30 per hour? or $50? That would be even better.

kennywinker 7y ago
> why don't they simply choose not to offer their services to Uber? You assume there are other options without barriers to entry. You’ve learned how to drive uber, you’ve got a vehicle and payments to make - now take a risk on some other gig with a million unknowns? Now it’s possible that uber cannot shoulder this cost by lowering their margins, and it will pass directly to the consumer as you suggest - but it’s not guaranteed. The fact that uber is behind this suggests that they can shoulder the cost.
- stri8ed 7y ago
  > You’ve learned how to drive uber That's a bit of stretch. Also worth noting, many of the jobs did not even exist before Uber created a market for it. > why don't they simply choose not to offer their services to Uber? Collective bargaining, aka unionizing, does essentially just that, only with more leverage.
  - kennywinker 7y ago
    ok...? I'm sure driving for uber is not difficult, but making money driving for uber is 100% a skill. When to go out, where to be, how long your shift should be, what rides to skip, etc. That's all invested learning. > Also worth noting, many of the jobs did not even exist before Uber created a market for it. Their trophey is in the mail. Just because you create a new job, does not mean it's a good job. > Collective bargaining, aka unionizing, does essentially just that, only with more leverage. yes! it seems clear to me that uber drivers would benefit from unionizing.

Endy 7y ago

And what will this do to fares? If they stop being the cheapest fast option between two points, I don't feel like I'd be alone in going another way.

jchallis 7y ago
Raise them to the point to create an entitled taxi monopoly ripe for disruption by an aggressive industry defining competitor.
lonelappde 7y ago
They will still be cheapest fast way by a long shot, but it changes the money vs time calculus. Uber was never about being cheap (except cheaper than cabs in a few places where cabs existed), it was about being affordable and far faster than transit/walking/biking.

phjesusthatguy3 7y ago

Does anyone have a link to the actual policy Uber is advocating? It doesn't appear to be linked from the TC article or the independentdriver site linked from there.

floppydiskette 7y ago
https://p2a.co/H9gttWA https://p2a.co/H9gttWA
- phjesusthatguy3 7y ago
  Yes, that's the link from the TC article. What it says is: "Instead, Uber is advocating for a brand-new policy that would strengthen protections for rideshare drivers by: Ensuring drivers would earn a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses. Providing drivers access to robust new benefits, such as paid time off, sick leave, and compensation if they are injured while driving with Uber. Empowering drivers to have a collective voice with rideshare companies, and the ability to influence decisions about their work." What are they actually proposing? I see what they want their proposal to do.

alkonaut 7y ago

I assume at $21/h the driver has to pay car expenses? How much does that cost per hour assuming a driver does full time driving? Shouldn’t Uber instead be guaranteeing how much drivers are paid net? If $21 really is before expenses then it’s not even $15 for most drivers after, maybe not even $10? Also: I was assuming the pay was while working, not while driving passengers. Otherwise isn’t it even worse? What if Uber instead just guaranteed drivers a living wage plus benefits net?

fromthestart 7y ago
I don't think it costs anywhere near $10/hour to operate a passenger vehicle, even after insurance and maintenance.
- mikeash 7y ago
  Depreciation is a large cost as well. The IRS sets a standard rate of 58 cents/mile for deduction of vehicle-related expenses. There’s obviously a wide range of actual costs, but that’s in the ballpark for an all-inclusive amount. If you average 20MPH then you’ll exceed $10/hr.
  - acchow 7y ago
    The IRS numbers are very generous.
    - mikeash 7y ago
      They almost perfectly match the TCO numbers from AAA. They show an average of $8,849/year at 15,000 miles/year, which is 59 cents/mile. The cheapest vehicle type they list is small sedans, which are $6,777/year or 45 cents/mile. https://newsroom.aaa.com/auto/your-driving-costs/ https://newsroom.aaa.com/auto/your-driving-costs/ It seems large because we aren’t used to looking at TCO per mile, and only think about the cost of fuel.
      - acchow 7y ago

samstave 7y ago

Thats $42,000 a year. Are they doing this in only certain areas?

dpedu 7y ago
Not necessarily, they're not proposing to put their drivers on salary.
davinic 7y ago
$21/hour only includes time when you're on a fare, not time when you're logged in and available. And it doesn't include the gas, maintenance and depreciation on your personal vehicle driven 30-50k miles per year to reach that amount. The IRS estimates those costs to be $0.58/mile, which would reduce the income by between $17,400 and $29,000.
synaesthesisx 7y ago
That's not exactly a living wage in a lot of places like California.

s3r3nity 7y ago

I hate to be _that_ person, but $21 / hr minimum is more than EMTs, and even most surgical Residents make (at least in the US). I don't know how to interpret this in that context: is this proposal absurd, or is the medical / labor system in the US absurd? (or both??)

docker_up 7y ago
Yeah I don't know how much more people expect to be paid. It's a completely unskilled job that almost anyone can do. Complaining that $21/hr isn't enough would be insane at this point.
- behringer 7y ago
  Well the CEO of walmart pulls in 22 million a year. I can tell you right now that 21/hr is doable for every unskilled laborer in the US today.
  - pequalsnp 7y ago
    The problem that arises is that if you artificially inflate someone's wages to an arbitrary number like 21/hr, they might not provide enough value to economically justify the wage level they're set at. It's not, and shouldn't be, an emotional argument. It's an economical one.
    - behringer 7y ago
      The CEO of walmart most certainly isn't worth 22 million/year. If you can't bring in 21/hour as a cab driver you probably shouldn't be driving cab, especially considering you should be pulling in, what, well over 100/hr gross?
      - pequalsnp 7y ago
        What evidence do you have that the CEO doesn't bring that much in value to Walmart?

chasd00 7y ago

is there an interview process to be an Uber driver? Or do you just download the app and turn it on? If it's just the app then why wouldn't everyone just download the app and start making $21/hr

Ancalagon 7y ago
I have the same question. I'm guessing its $21/hr of driving time?

kemiller2002 7y ago

Call me a cynic, but I don't see how this doesn't hurt drivers. It sounds good, but it's too good to be true. I'm wondering if they are factoring in only the amount of time actually driving. So if you have a 5 minute drive in 60 minutes, at 21.00 per hour you only make 1.75. I'm guessing their hourly wage doesn't include reimbursement for car mileage, gas etc. too. That seems like a raw deal to me. Am I missing something?

davinic 7y ago
The IRS vehicle mileage rate for 2018 is 54.5 cents per mile. If a driver averages 20 miles per hour, then their effective hourly rate is cut in half from depreciation/fuel/maintenance/etc.
- kemiller2002 7y ago
  That is true, and the company doesn't have to reimburse you for that. They can leave that to you to factor in your yearly taxes, effectively putting the burden on you to track and submit all of that.
  - davinic 7y ago
    yes, but it's on your taxes because it's an actual unreimbursed expense you've undertaken. It factors into your net income, not just a tax savings.
Fogest 7y ago
I don't think people are reading it correctly. They are going to be paying $21/hr minimum while a driver is ON A TRIP. During non-peak times you could wait almost an hour with no ride. You'd still get nothing for that time. The only thing they are promising is that when you're actively on a trip the wage they are giving you is at least $21/hr. This is not a good deal.

danenania 7y ago

Ok, now how about a sincere focus on safety and driver accountability? I started using Uber and Lyft several years ago in NYC because the taxis were horrible. More than half the rides would feature a driver on the phone, severe road rage, and reckless driving. Now it seems to have come full circle. Ridesharing is almost as bad as taxis used to be. Some drivers are great, but many are rude and seem to use the roads as an outlet for pent up aggression. In SF, around 1 in 10 are obviously stoned. More are overtired and easily distracted. So I'm back to driving or public transit. I love ridesharing and would use it all the time if it was safe, but I'm not putting my life or a family member's life in the hands of companies that can't guarantee a competent driver.

my_username_is_ 7y ago
At least with ridehailing apps you have a feedback mechanism to flag these drivers. If enough people have negative experiences, they won't be able to drive for that platform.
- astura 7y ago
  I don't use that feature unless the infraction is very major (like the guy who swerved into incoming traffic while texting). The reason being is I don't want to look like I'm complaining for the sake of complaining or trying to get free rides/Uber credit.
  - phil248 7y ago
    It's important to rate poor drivers with low scores because a) you won't be matched with them again and b) you're potentially helping remove them as a driver to the benefit of other riders. If they want to give you credits as well, so be it.
astura 7y ago
Yeah, I agree with this. Ridesharing drivers have gotten SO BAD, its rare I get one that doesn't have at least a few traffic infractions during a 10-15 minute ride.

jankassens 7y ago

This appears to be a joint effort with Lyft. A joint letter by Uber and Lyft CEOs: https://www.sfchronicle.com/opinion/openforum/article/Open-Forum-Uber-Lyft-ready-to-do-our-part-for-13969843.php https://www.sfchronicle.com/opinion/openforum/article/Open-F... Lyft email campaign advocating minimum earnings: https://p2a.co/xcA3Bg3 https://p2a.co/xcA3Bg3

not2b 7y ago

Presumably the $21 per hour is before driver expenses (gas, depreciation etc: drivers often ignore that their shiny new Prius loses about $0.10 in value per mile driven).

kerkeslager 7y ago

It's wise to look a gift horse in the mouth when it comes from an amoral corporation, but I suspect this is fairly honest, not because Uber is doing it out of the kindness of their own hearts, but because Uber wants to avoid regulation. People who claim that regulation only makes things worse should take note of this: even the threat of regulation can be enough to get corporations to at least try to appear to do the right thing. That said, I think there are two problems with this: 1. Long-term results of this will just be Uber trying to avoid regulation for as long as possible, while figuring out more and more clever ways to maximize profit at the expense of both drivers and passengers. 2. Any payment agreement which doesn't include health insurance in the US needs to be considered as significantly reduced. Back of napkin math ahead: Health insurance can run as high as $700/month and after taxes someone getting paid $21/hour takes home closer to $10.50, meaning some drivers will have to work ~65 hours/month just to pay for health insurance. Assuming Uber drivers drive 160 hours/month (which is conservative), paying for their own health insurance is a ~40% reduction in pay. This means that, pre-tax, that $21/hour looks a lot more like $12.60/hour would in a country with a reasonable healthcare system. Of course, there are some worst-case scenario numbers included here (most people's health insurance isn't that expensive) but at least some Uber drivers, particularly with expensive-to-treat preexisting conditions, are going to be receiving a much lower wage if health insurance isn't included. I suspect this singlehandedly is why Uber is even making the $21/hour offer: as a way to avoid regulation that would require them to pay for health insurance.

smallbigfish 7y ago
What's so amoral about it?
- kerkeslager 7y ago
  Are you asking what's amoral about Uber? Saying "amoral corporation" is almost redundant and isn't specific to Uber--almost all corporations are fairly amoral.
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gandalfian 7y ago

Is this really a wage or do you have to deduct your petrol and motoring costs from it? Are you working when waiting for a customer Or only when actually driving?

SN76477 7y ago

$21 is not enough once you add in operating costs that the drivers must swallow.

c9c9c9c9 7y ago

It's not clear from the article, is it a flat fee of $21/hr? Or is it only $21/hr of passenger time?

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Proven 7y ago

I am against it because it will increase the cost of their services

munherty 7y ago

This from the same company that hasnt turned a profit..

jrochkind1 7y ago

The article is written confusingly. It seems to really be, Uber responds to proposed legislation in CA, by asking for it to be changed to allow uber drivers to remain 'independent contrators' -- but they're willing to take legislation, apparently, that would guarantee a $21/hour guarantee, along with paid sick leave and vacation? Or maybe they're saying if they don't pass any legislation at all, they're willing to do those things voluntarily... presumably just in CA? I'm a bit confused, the article is poorly written. This is a lot more than many Uber drivers currently get. There are people quoted in the article saying $21/hour still isn't a living wage in the bay area. But if Uber is suggesting that $21/guarantee with paid leave is only fair, presumably they'd be willing to commit to that nationwide, not just in CA where they are threatened by legislation? (Just kidding, I obviously don't presume that). I know many people who do or have driven for Uber in other parts of the country who would find it quite an improvement to get a guarantee of $21/hour and paid leave.

tyingq 7y ago

"wage" is a confusing term to use in this context if they aren't very specific about what things the driver has to pay out of that $21/hr. Self employment tax, employers share of FICA, vehicle wear/tear/depreciation, fuel, health insurance, commercial vehicle insurance, benefits, etc. They seem to want you to make a straight comparison to a W-2 hourly rate which isn't honest.

WKH 7y ago

Kicking away the ladder.

haggenballs 7y ago

Correct me if I’m wrong, but it seems that Uber and Lyft are only proposing such a policy because they are scared that drivers will be considered employees, and not independent contractors. It’s probably much cheaper to pay drivers a minimum wage of $21/hour when they are driving a customer (not accounting the idle time, or time to get to the fare), than it is to provide benefits for every single driver. To me, I don’t see this as an ethical move, but a somewhat disingenuous effort in an attempt to save money in the long-run.

pythonwutang 7y ago

This is an attempt to push Lyft out of CA by raising the cost side of the equation but that cost will eventually have to be passed to riders, which will dramatically drop demand. If the minimum wage law passes and they subsidize rides long enough to edge out Lyft then they finally get the monopoly they’ve been promising investors for the last decade but they also lose a huge amount of their TAM. The laws of supply and demand will eventually come into play. And of course once they get their monopoly they will raise prices further to get profits and at that point I’d guess they would only be slightly less expensive then Taxis were before all this gig economy craziness.

cdmcmahon 7y ago
I also think it's an attempt to ward off a nascent unionization push. Regarding a different, recent "olive branch" type proposal: "The one thing they don’t want to give you is the thing that you need to get. This offer from Uber and Lyft is like a kidnapper offering you a softer blanket, as long as you agree not to ever escape. No thanks. These companies know very well that once their workers become actual employees, they will get a host of benefits automatically, and they can formally unionize to win themselves many more benefits and increased pay. These companies, which have never made a dollar even while exploiting their workers, fear this. So they offer some concessions." [1] [1] https://splinternews.com/if-uber-wants-it-its-bad-1835514222 https://splinternews.com/if-uber-wants-it-its-bad-1835514222
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Jommi 7y ago
https://www.sfchronicle.com/opinion/openforum/article/Open-Forum-Uber-Lyft-ready-to-do-our-part-for-13969843.php https://www.sfchronicle.com/opinion/openforum/article/Open-F...

phjesusthatguy3 7y ago

What is it that Uber is proposing? I understand that they're "advocating for a brand-new policy that would strengthen protections for drivers" but what is that policy? What policy are they suggesting be put in place to make sure protections for drivers are strengthened?

habosa 7y ago

"$21 per hour while on a trip" As many have pointed out, this is the key. Not possible to have 100% utilization, so most drivers would probably earn 50-75% of this number.

us0r 7y ago

>"minimum of $21 per hour while on a trip" Am I the only who notice the last 4 words? This will effect very few drivers as most are already making > that "while on a trip (and not stuck in complete grid lock)".

Animats 7y ago

"while on a trip" - Uber PR. Not per hour worked. Not when going to a pickup. Not when waiting for a ride. Only "while on a trip". That alone probably means about 1/3 off. Which puts them below SF's $15/hour minimum wage. Then, Uber counts the entire amount paid to the driver as "wage", not including their renting the driver's car. That takes off a substantial amount.[1] And if drivers were employees, Uber would have to buy the bottled water. [1] https://www.ridester.com/uber-lyft-driver-costs-and-expenses/ https://www.ridester.com/uber-lyft-driver-costs-and-expenses...

asperous 7y ago
How else could they do it though? They'd have to telling drivers they can't work or scheduling them, otherwise there'd be a flood of people chilling in their cars waiting on rides and being paid by uber. The "gig" economy seems to work by offering people a fairly open choice of pay and work. Though Uber could be more transparent about expected earnings.
- ilaksh 7y ago
  They could be paid while they have 'accept rides' turned on and then Uber could stop accepting an infinite number of drivers.
- lysp 7y ago
  Similar to cloud based server prices. Paid for time that you're actually online. If you're only logged on for 20 mins (a third) of the hour - you get $7 min wage ($21 / 3).
  - Jommi 7y ago
    Are you seriously comparing a saas service to a service based on real humans? You do realize how different turning a server on from being off vs. getting a driver to pick you up from whatever that person was doing before?
rollingdeep 7y ago
You’ve identified what everyone else can’t understand. Kudos. This is especially damaging to drivers that desire to drive their own vehicles and choose how much they want to drive. The proposed wages are way below what you should be taking home in an area like SF, and you are depreciating your own expensive asset and paying your own fuel and maintenance, auto insurance, health insurance and so on. The real gem however is this would force drivers to use the rental car program which doesn’t make much sense unless you are driving all week long. It is a way for Uber to control drivers making them unable to reject poor work and working conditions without actually making those drivers employees. As an independent contractor you should be able to turn off your Uber driver app when the pay starts sucking, and go work for someone else at your own discretion. There’s no freedom to do that rolling around in an Uber rental.

lewaldman 7y ago

In Brazil the drivers would get better salaries than our doctors... ¯\_(ツ)_/¯

cookie_monsta 7y ago

The article was updated and the headline changed to "Uber proposes policy that would pay drivers a minimum wage of $21 per hour while on a trip" to clarify the misconception that drivers would actually receive $21/hr. I think the headline should be changed here to avoid similar misunderstandings

Bud 7y ago

Key words in this story: "while on a trip". This isn't actually $21/hr. It could very easily end up being under $10/hr. Just depends how lucky the driver is.

torgian 7y ago

So... it sounds more and more like Uber is going to need to provide drivers insurance, etc... which means they will probably need higher requirements from their drivers at some point. Maybe even licensing and... wait, is Uber slowly becoming a taxi service?

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