Uber is better than taxis for riders, and worse than taxis (in some ways) for drivers.
Also consider that some Uber drivers couldn't realistically become taxi drivers in their spare time, and perhaps some of them would prefer to be underpaid by Uber rather than not working at all.
... and taxpayers. Someone else pays for the upkeep of those roads, without which their business could not exist. In the UK, someone else pays for the healthcare of their drivers, as they dodge Employer's NI. Etc etc.
The entire business model of "disruption" is pocketing what everyone else pays for the dependencies and externalities.
>Someone else pays for the upkeep of those roads, without which their business could not exist.
Everyone pays gas taxes that scale with the amount driven and therefore their use of the roads. Any unusually high driving would be made up by the higher gas consumption and the resultant taxes thereon.
If anything:
1) Taxi routes are concentrated in cities, where they have lower miles per gallon and thus pay more taxes per mile driven than the typical car. (Edit: and city roads probably have lower maintenance costs per ton-mile due to not having to drag people out as far to maintain it and related factors.)
2) Maintenance costs on roads are almost entirely due to cargo trucks, not sedans, since road damage scales with (something like) the fourth power of weight per axle.
Side note: why is it that every time there's an unpopular big player, everyone finds a way to label any publicly provided good as a subsidy to that player? It's not just this but "arresting shoplifters is a subsidy to Walmart", "public roads are a subsidy to Amazon", "public infra is a subsidy to Netflix", "navies are a subsidy to shipping".
> someone else pays for the healthcare of their drivers
No, the government collects income taxes from everyone to provide universal health care through the NHS. Uber's drivers pay the social insurance taxes on their income. The fact that it isn't billed to Uber specifically is irrelevant. Lloyd's isn't billed for the NHS taxes on the couriers that drop them packages, but that doesn't mean Lloyd's "dodges employer's NI".
If your point is that they should be so assessed because they're really employers, not clients, that's economically questionable too -- the burden of a tax is independent of who you assess it to; if one day they forced Uber to pay NI, they could just cut payments to drivers to cover the tax, since all the income streams would be unaffected. Same effect as if they started assessing VAT by charging customers as they leave the store instead of taking it from retailers.
No, the government collects income taxes from everyone to provide universal health care through the NHS. Uber's drivers pay the social insurance taxes on their income.
You've clearly not researched just how much Employer's NI is. It's a lot more than an employee pays.
It's clearly not a subsidy if a company is paying their fair share in taxes. Also here in the UK we have workers on income support (welfare) because their employers underpay them... That is quite literally a case of the public purse subsidising a private enterprise.
>You've clearly not researched just how much Employer's NI is. It's a lot more than an employee pays.
While I'm not familiar with how Employer's NI works else where in the world, given the way it works in the US I'm fine with it being cut. The way it works in the US is great for hiding the true rate of tax from the employee by having it taken out of their paycheck before the employee ever sees it. I think it works better if the employee sees the full amount their employer pays them and exactly how much the government taxes that rate.
> Also here in the UK we have workers on income support (welfare) because their employers underpay them
To qualify for income support a person has to be working less than 16 hours per week.
You also have to be one of these:
> pregnant or a carer or a lone parent with a child under 5 or, in some cases, unable to work because you’re sick or disabled
(There are 3 other requirements too)
The UK benefits system is comprehensive and complex, and there are some people in full time work who get benefits. This is a good thing - we want people to work. We want people to have at least a minimum wage. We don't want to set the minimum wage too high because it reduces jobs.
Some benefits are specifically "in work" benefits - working tax credit and child tax credit.
>You've clearly not researched just how much Employer's NI is. It's a lot more than an employee pays.
If it works anything like the US, there is a portion[1] assessed to the employer and to the employee. If you report income as an independent contractor/self-employment, you pay both sides of it (since otherwise people would artificially class themselves as contractors to pay less). Are you saying Uber drivers in the UK aren't paying that, or that UK law allows that loophole?
>Also here in the UK we have workers on income support (welfare) because their employers underpay them... That is quite literally a case of the public purse subsidising a private enterprise.
So, it's not Uber-specific, just the general argument that all low-wage labor (below some threshold) is inherently subsidized because you qualify for public assistance at that level.
since otherwise people would artificially class themselves as contractors to pay less
That is exactly what they do do. IT, media, even public sector, it is rampant. The Inland Revenue keep trying to crack down on it but contractors are very sly about it and always find a loophole to technically meet the requirement as if they were a genuine small business.
And so they do. Speaking from what I see in Poland, you can divide people going "contracting" into two groups: in industries like IT, it's an easy way to get ~20% bigger salary than you'd otherwise get in a similar position. In low-skilled industry, it may be the only way you'll get a raise (or even a job), so people don't have much choice.
If you report income as an independent contractor/self-employment,
you pay both sides of it (since otherwise people would artificially
class themselves as contractors to pay less).
In general, that's true in the UK, but because of the various allowances, categories, and thresholds, if Uber is a contracting company, and the drivers are individual freelancers/contractors, less tax is paid.
There are complicated rules to ensure this is only allowed in cases of genuine freelancing/self-employment (IR35 is one part of those rules), but Uber has previously lost court cases on parts of those rules, where drivers were ruled to be employees rather than freelancers [1].
In IT consultancy (and other high-paid jobs), it's generally more tax-efficient for the worker to be an independent contractor (but has to satisfy various rules to do so). For lower-paid jobs like driving for Uber (and the general "gig economy"), it's in the companies' interest to label the worker as "self-employed", which means the worker misses out on all sorts of worker protection regulations whilst the employer saves on costs and taxes. Many companies skirt the limit of the regulations, and end up in court as a result.
Strange. In most discussions, I've found UK law to be much more logical than US, but this discussion has revealed two notable counterexamples:
1) That your tax rate can be lower under self-employment classification (incentivizing spurious misclassifications).
2) That roads are paid for through income tax (rather than petrol or odometer tax), which is only loosely correlated with road usage and which punishes people who economize on it, while subsidizing above average users.
In any case, you can't really pin 2) on Uber, which isn't getting any more of a subsidy than any other business using the "road platform". They were abusing the law for 1) but courts have since put a stop to it.
In the USA, gas taxes cover only a tiny fraction of damage to roadway. In Europe it heavily exceeds it, and most of Canada is about break-even. And that's of course ignoring that gas taxes are meant to not simply be user-fees for the roadway. Also ignoring costs outside of infrastructure - stuff like traffic enforcement and health costs. And it assumes the land the road was built on was free - which it obviously isn't, particularly in the kind of dense environments where road widening is impossible.
Yes, in the aggregate, gas taxes don't cover maintenance; but, as I said in points 1) and 2), the typical urban sedan driver is still overpaying since they cause virtually none of the maintenance costs (by percentage). (AIUI, any cab taxes exist to fund the regulatory costs, not the excess wear they're causing.)
Furthermore, the point under debate was whether Uber, as a cab[-like] service is underpaying for its road usage -- relative to the typical person -- by driving so much more; that point is still wrong because their per mile costs are unchanged with such higher usage.
>Everyone pays gas taxes that scale with the amount driven and therefore their use of the roads.
If talking about the UK, that is not quite correct. Roads in the UK are mainly funded by income tax and council tax. See http://ipayroadtax.com/ for more information.
Gas taxes do not even come close to covering road maintenance. My property taxes were raised last year to pay for some road maintenance. That's also assuming you're buying gas where you're Ubering. If you're a suburbanite it's very unlikely you are.
This circles back to that Governments making rules will always find those who find ways to work around them. How about we try making rules that even if worked around, don't harm others?
At least in San Francisco, there's far more of them. The extra wear and tear on the roads ends up as a road repair bill that taxpayers pick up.
If the TNCs were a 1:1 replacement for traditional taxis, this wouldn't be a legitimate argument, but the evidence out there suggests that TNCs have grown the size of the car hail market at the expense of off-peak transit, so the TNCs really are putting more cars on the streets.
Road wear is exponentially proportional to vehicle weight. Almost all of the wear is caused by large commercial trucks and other heavy vehicles such as buses. Passenger cars cause very little road wear. TNC drivers are mostly using lighter vehicles.
Your link supports the claim that "trucks cause exponentially more road damage than passenger vehicles"; it does not support your claim that "almost all of the wear is caused by large commercial trucks" or "passenger cars cause very little road wear".
In San Francisco, the Treasurer estimated 45,000 TNC vehicles in operation compared to just 1,800 taxis. That's an enormous increase in car hail traffic, and one that I claim has a substantial maintenance impact absent evidence to the contrary.
Right, when we say Uber is better than Taxis, we generally mean "the Uber model is better than Taxis". We can exchange Uber with Lyft or any other company that works with thath model. It's about the general environment that ride sharing brings.
Things like how using an app makes hailing a ride easier, how having a rating system forces drivers and riders to behave better, how mobile payment removes the awkwardness of exchanging money, etc.
There's nothing specific to Uber in there, and when it does come to specifics, Uber is pretty awful as we've seen.
Even further, there's nothing specific to the Uber model in there. Every one of those things could be implemented exactly the same way by an ordinary cab company. In fact, many cab companies worldwide have already implemented both the first and the third one.
The only unique thing about the Uber model as opposed to regular cabs is that it's priced lower through a combination of semi-illegal dirty tricks and setting unsustainably low (or negative) margins in order to maintain growth and capture the market.
The good thing about Uber is that I can get an Uber no matter where in the world I am (assuming that town has Uber). I don't have to know what cab companies are around or what apps I have to download.
That's about the only thing that's actually good about Uber. But even then, Europe has at least two competing taxi aggregator apps now, so this advantage is bound to disappear.
Has it always been that way though? I remember when they first launched in SF, and I remember drivers being pretty excited about how much they were making driving. I remember talking to some folks who also drove taxi, mentioning that Uber paid them substantially more.
Part of this is that Uber was / is building a rider / driver base, and to do so, they accept losses on every ride. They were paying drivers more money than they were collecting in fares. It was an attempt to claim market share and drive competitors out of business (which hasn't quite worked thus far) so they could increase the prices later when they had price control power. Uber's existence is all based around investors dumping money faster than they burn it in operating costs (without ever turning a profit).
Uber is better than taxis for riders, and worse than taxis (in some ways) for drivers.
Also consider that some Uber drivers couldn't realistically become taxi drivers in their spare time, and perhaps some of them would prefer to be underpaid by Uber rather than not working at all.