I don't understand what is wrong with Uber Eats charging whatever price they want to charge. If $4.4 is too low just don't work for them. There are probably people for which this is a good price. If not, it's Uber Eats problem, not yours.
It's not black and white. What looks to you like the free choice of people choosing to work for $4.4 may look to others like a forced situation. What I think you're missing is that your assumption that everyone can freely choose and has alternatives is clearly mistaken.
> may look to others like a forced situation. What I think you're missing is that your assumption that everyone can freely choose and has alternatives is clearly mistaken.
Could you please elaborate? I don't exactly follow. Nobody is forcing them to work for Uber. If what you mean is they have bills to pay, etc, it's not like Uber can just magically decide to pay $9/hr, they will likely need to cut most of the jobs at that point anyway.
Simplistically: people can either work or not work. Nearly everyone will chose "work" because it's nice to feel useful, even if that work doesn't pay a living wage.
If people are not earning a living wage, societies can either let them die in the street or subsidize them. Most societies will choose the later, because they're made of humans and not monsters.
That means that there really is a minimum wage, but it's paid in part or in full by the society. Companies that pay less than a living wage exploit the "humans don't like watching children starve to death" vulnerability and effectively steal from society. Additionally, paying a lower wage lets them offer a lower price to consumers which can drive out companies that were paying their customers an actual wage.
Whether or not the statement "nearly everyone will chose to "work" is true, the problem that must be solves is how to incentivize someone to do the work that no one wants to do.
It's entirely possible that providing a "living" wage to a food delivery person just isn't worth it for consumers so they would rather just go get it themselves.
The conundrum is creating a system where there enough incentive is created to do the work no one wants, but at the same time distribute resources so that everyone is provided some definition of "standard of living". This is difficult when the value of (most) human's work is ever decreasing.
There are some jobs which need to be filled by humans who have very little skills. These jobs need to (or can) exist (because they cannot be automated, yet). Fortunately, cutting the workforce also means there will be less delivers and thus less revenue, so these people would get hired anyways. So paying the people really comes down to how much to charge the customer. I would think that most customers would not mind a $3 delivery fee (whether this is included in the price or a extra markup does not matter). Assuming the delivery person can deliver to 4 people (which should be possible in cities), they make an extra $12.
The $3 markup only becomes apparent when a competitor is cheaper then the other players, in which case the competitor gets more orders and make more revenue. Now if there was a law, called minimum wage, which forces employers to pay enough to make a living, there would be no extreme price cutting. Still, about the same amount of people would be employed (maybe slightly less, but most people will still order the meal whether it is $20 or $23 assuming there is no cheaper alternative which fits there needs).
If we do not have those protections, we end up in a situation similar to the Industrial Revolution in Europe where people (and their children) work for 12+ hours a day and still starve to death. Those jobs would exist anyways because the demand does not decrease significantly if the wages rise (this is of course not true for every industry) but by having two competitors cutting down each other at the expense of the employee is bad for everybody if you consider the long term consequences.
So would you describe Sweden as a place with poor quality social safety nets?
According to the article people who want to deliver have at least two choices and one pays significantly more than the other because Uber doesn't have enough volume right now and the volume they do have tends to go to people who have been delivering for some time.
The article says that with Foodora you can make more money starting out, but they schedule when you work. With Uber you just work whenever you want. People trying to decide which service they want to work for are going to use those factors to make a decision. I think it is hard to claim it is exploitative when people clearly have a choice where they work. Keep in mind Sweden doesn't have particularly high unemployment either, so there are a lot of other options out there in addition to these two.
> So would you describe Sweden as a place with poor quality social safety nets?
No, but a proposition like that doesn't address the details.
Reading through this thread its clear that Sweden doesn't have minimum wage; they have strong unions instead (FWIW, I don't see how those are mutually exclusive). Problem is that unions are circumvented partly or completely by freelance constructions like the one we're discussing (another example would be MLM constructions). That needs to be addressed, by law enforcement or lawmakers (politicians). In order to achieve that, publicity like this may aid that goal.
But is that the fault of Uber (or Walmart)? Isn't them having a crap job better than no job? Yea it's not awesome that the pay is low, but at least they are employing some people. If the pay was higher they probably couldn't create the same service at a sustainable price point?
The 'at least they get paid' argument is the one also being used by those who order takeaway food, and those who buy blood diamonds, blood gold, and entire clothes industry alike.
Nevermind the fact these people work in terrible conditions. Nevermind the fact these people work with chemicals which are unhealthy. Nevermind the fact these people ignore traffic regulations because they need to arrive on time. Nevermind the fact these people are children who go down in dangerous mines with gas which can also implode at any time.
It is a fallacy. The real solution to the issue is far more simple: let those who desire takeaway food (or who desire diamonds, gold, or clothes) pay a fair price, so that the workers get paid a fair price.
Easy to say. I can move anywhere, work at almost any company, get a great wage, etc. We are the exceptions. 1.5 million American families, including 3m children, live on less than $2/person/day. That's not by choice.
Half the planet lives on less than $2 a day. That's $2 in our buying power. What would you buy with $30/month where you live? Not rent. Not gas. Flour? Bag of rice? Hope you can find a cheap source of (probably not clean) water.
Right but that's $4.40 in Sweden, you need to scale that down to the equivalent for other countries. It would be significantly less in places where it's common to live on $2 a day.
There is always less unskilled jobs than people willing to get them therefore the salary will go down to some minimal value if not regulated.
For example there are people who don't have to pay for an apartment and they can agree to work for $500/month and people who have to rent won't be able to compete with them.
The problem is people will prefer Uber Eats over competitors because they are able to deliver food for such a low price. The employees of Uber Eats are the ones paying for this not Uber.
If that is the case then you would expect that the article would talk about how busy Uber Eats was. Instead it says the opposite. He didn't make money because not many people were using the service.
He lays out two ways people can work in delivery. One pays significantly less for starting out, but doesn't require you to work specific shifts. The other lets you work whenever you want, but you are very much subject to what demand comes in. You have a lot more consistency when you don't have control over your schedule.
The market will work to price everyone to free. We see this with creative work, where most people have an effective negative minimum wage. You're better off working at a mcdonalds than write, draw, or create, and many places essentially pay nothing for creative work like reviewing.
For many creatives, they literally had to abandon capitalism and go back to the feudal patronage model with Patreon and kickstarter. The market priced even skilled labor down to effectively zero, since there was just so much produced.
We draw lines where society deems them to be drawn. Its okay for Iran to sell organs. Is it okay for women to be property as is the case in some countries? Child brides? Of course morality is subjective.
I don't want to live in a country where slavery is required for people to barely survive. I'd like to be on the right side of history. And if part of the tech industry has to be gutted or burned down, so be it.
You didn't actually explain why. You just mentioned unrelated issues.
'moralising' is actually a pretty good answer. When it comes to certain actions like organ donations, we're utterly terrified of the idea that someone will feel like they 'have' to do it. Getting a million dollars, even though it would have an amazing impact on your life, is bad because you'd feel pressure toward doing it. Getting a small payment would also be bad because you're being taken advantage of. But you can do it for free if you so desire!
This kind of reminds me of the Econtalk episode on "why the law is so perverse". There's a sense that people can't make rational decisions under conditions of extreme stress.
"I think part of the reason is we worry that there could be at lack of judgment there, perhaps. Someone under that unattractive choice. It's related to Mike Munger's concept of euvoluntary. It's a person who is clearly under duress no matter what: even if they enter into it freely, it's such an unattractive option, to call it a free choice seems somehow perverse in itself."
Thanks a lot for that reference. I listened to that episode, it's got a really interesting idea related to a "marketplace for organs" that I hadn't heard about before.
They describe setting up a consensual "kidney club". The idea being that if you're in the club and need a kidney, one member of the club is chosen at random and compelled to give you a kidney, but likewise if you have kidney failure and would otherwise die you get a kidney from a random member.
This sidesteps the usual concerns about implementing a marketplace for organs. I.e. even if you're a billionaire the only way to insure yourself against kidney failure is to enter the pool of potentially mandatory donors, and you can of course stay outside the "kidney club" and not have to donate to anyone, but then you also die if you have kidney failure.
Katz points out that the reason this doesn't work is that current law can't compel you to donate your organs, even if you've previously signed a contract to that effect, but that this creates a market failure & tragedy of the commons.
Implementing a system like this seems like a no-brainer and a benefit for everyone involved, but it's blocked by current contract law & the inability to force people to undergo medical procedures they consented to in the past.
You are not taking into account differences such as cost of life in the country. Almost every single country that has minimum wage, when brought back to US levels, has it higher than $4.4/h.
Minimum wage isn't a matter of having a certain amount of money. It's being able to live with dignity.
The reverse is people in countries with a low cost of living such as Indra or the Philippines come to work in Canada or the US. A $11 hour minimum wage here is probably equivalent to $50 hour back in the worker's home country.
Compare what rent or a house costs and food basics you'll see that to a worker quality of life depends on the minimum wage but mostly on the cost of living.
You can probably make that argument for slavery too. Both would be wrong. Back at my first university where we went over macro economy and countries, they told us every county must at some point step in and set some basic rules. Not setting these basic rules means going backward in civilization benefits (Not to mention other countries stepping in because they simply advanced more).
So, we evolved out (in economic and civilization sense) of slavery, as we evolved out of unreasonable minimum wages, with the help of governments (enough people saying: no). In a complex system such as a modern western economy, one can has these cracks (work for an hour to buy a loaf of bread and milk), which is very close to slaving, and because these economies are modern in other aspects, they can buffer than. But, the road is still downhill.
The government that doesn't care about it's people, will self destruct eventually. No matter the form. It's a historical fact.
In this very narrow case of Uber, Uber will self destruct eventually, as they subsidize prices to ensure growth. Once they stop doing that, then they are just another Taxi company with an app. And most of the Taxi companies already have apps. So it will be down to the drivers (who in the case of Uber will be paid even less).
The above hypothesis will be tested fairly soon, as Uber is having their IPO this year in fact.
