'consider leaving a decent tip'
the way for profit businesses underpay their workers and society is expected to make up for that through tipping bothers me so much. The underpaying business owner is richer than 95% of customers who pay extra so the rich guy's worker makes a decent salary.
The tipping culture is abused so much in USA. There are restaurants in Brooklyn that automatically add 18% gratuity charged and still leave space for tipping and the waiter gives you looks if you leave that space blank.
All these gig economy companies are valued in billions and have made millions for their executives and investors but still won't pay a decent salary to their workers and I am supposed pick up that bill?
No thanks
Tipping is also used to help the worker avoid paying taxes, since many service workers don't report 100% of their tip income as required.
And although companies would be able to deduct salary expense to reduce their own tax bill, they still benefit from the tipping scheme. If the worker receives, say, $10 in tips, the company would have to pay them $15-$20 to give them the same after-tax income, since a large portion of the wages would go towards income tax and social security. So, if the worker makes the same take-home pay through tipping rather than wages, the company and the customer both pay less! The real cost is borne by the taxpayer, who has to pay higher taxes elsewhere to make up for the loss.
> The real cost is borne by the taxpayer, who has to pay higher taxes elsewhere to make up for the loss.
Even using your logic, your basically admitting its the business owner screwing the general population by creating an incentive structure that encourages tax evasion.
The externality this creates (taxpayers pay more, tax enforcement costs more) which means you are crewing the government out of enough money the customers stop benefiting from the "lower price" since they all have to pay it back in higher taxes to make up the shortfall + increased enforcement costs.
Your first sentence describes the intuition where if customers tip waiters more, companies will pay waiters less.
I've actually heard that in many places, the customers actually tip enough that it goes beyond the ability of companies to pay less directly. So the waiters' pay actually does get pushed a lot higher. So high in fact that there's an disparity issue between front staff (waiters) and back staff (chefs), who actually get much worse because they're exposed to pure company pay.
If you order through a service like Postmates, be generous with your workers. We scraped together only about $9.00 per hr for our eight hours of work, even before accounting for the cost of gas and the time we saved by working as a group. If you’re make a request, your worker might be operating well under minimum wage — be patient, and consider leaving a decent tip if you can.
Oooor you could get your legal system to make the company the minimum wage (after expenses).
Yeah, why is this not happening or maybe it will happen and it is too new to say yet. Or maybe for the contract workers the convenience of working to their own schedule out-weighs other considerations.
It doesn't happen because America is pro-capitalism to the point of absurdities like this. Its a political problem that only gets struck down when people are willing to admit to themselves they are getting screwed.
Or you could be clear with average earnings so folks signing up for work know what to expect. $9/hr may be OK (e.g., for a teen who decides to work for a few days for pocket money instead of playing on his phone), but those jobs are very seldom those that would fully sustain an adult, let alone a family.
This in my book is no reason to outlaw them, but more information (which the article does provide) is important. My 2c.
Why does america fight so hard against providing workers with fair wages? Don't you think your neighbours are worth even the minimum that is required to have a dignified life? Serious question…
America is not a subject with goals and will to execute. It is a collection of people of very different opinions. Where folks of similar opinions congregate, state laws often reflect their preferences.
But to your point, many folks (myself included) think that laws should not stifle the jobs that cannot provide for a comfortable lifestyle alone. Such jobs can still provide value for society (occasional work for young / low skilled) and avoid driving the costs through the roof were it to be highly regulated. It is better to inform (so folks accepting jobs know what to expect) and educate / train (so that most folks have a short enough path to where they have more options than just minimum wage).
For a more meaningful discussion, what do you define as a fair wage? Serious question as well...
It's hard to run a profitable business. For some of these services the choice may be between exploiting workers or not brokering work. American culture seems to worship convenience at this time. With the current environment of low unemployment and rising wages, I would expect there to be pressure on these services to increse pay, but how much will the market bear and how much do we want these services?
The premise of the question is wrong. American politicians across the political spectrum are obsessed with stimulating demand for labor and equipping workers for higher-productivity tasks, which is approximately the extent to which government can "provide" more dignified private-sector wages. For all their blunders, our median incomes are among the highest in the world, higher than in countries like France and Germany with more emphasis on minimum standards.
The least dignified thing you can be in America is unemployed. So yes, we will let people have marginal jobs rather than having them subsist entirely on welfare.
The second least dignified thing you can be in America is a renter. A dignified family owns a detached house with a generous backyard. Land is a zero-sum resource, and America's productive cities have reached their horizontal scaling limits. More labor productivity / higher wages only serve to further inflate real estate markets; the number of households enjoying dignified lifestyles cannot grow.
As a personal anecdote, I had to sit down a friend who was driving Uber for a few months - to break down his costs and the money he made - turns out that in his case, after all expenses (car, personal - like child care etc) -- on most days, he was losing money, and he made a max of 3-4 dollars on a few days.
He was aghast, and now does not drive. Many people who do not have jobs get suckered in to the promise of 'working' but end up in a worse situation.
I believe that we in the tech community need to self-police ourselves about these predatory practices that we have engendered on the society and call out those who suck the very last blood drops from the general population, that does not have the skills to analyze their situation.
This is no different from the various regulations around pay-day loans, etc.
What was the biggest gap in his understanding of his own accounts?
Suppose I work a regular office job. If I make $X, but pay out $Y in child care and other expenses (commute/car), then it won’t take me long to notice if $X =~ $Y.
Was the biggest gap unaccounted expenses for his car?
in his case, he never put together all of the numbers. For instance, it did not even strike him that if he stayed at home, he would not have to incur the childcare expense.
That was the biggest change.
Also, he factored in the petrol, but not the vehicle depreciation cost.
Also, there was lost opportunity in studying and improving his skills, and we just did not put a price to it.
He had this nagging doubts, but the pressure of a male sitting at home and not earning - lead to family esteem issues, and so he went along.
Interesting, thanks for replying with the details.
What would happen if people fully quantified other activities. For example, the full cost of drinking, while watching your favorite sport, with friends.
You initially think, “so what, it’s just 3 hours, plus $25 in beer and food.”
Most don’t account for the missed opportunity cost.
I used to do postmates on my bike in San Francisco. Just on the weekends as a way to get paid to work out, I never needed the money.
This was in 2015 but I was making $16-20 per hour. Doing it on my bike I had no expenses at all. I'd do maybe two deliveries per hour or three if I got easy ones (like the guy who had me deliver a Roam burger to a house 100ft away).
The reason I quit was because they removed more and more information from the view you'd get before accepting the job. On a bike that's not ok. There are many things I can't carry and many hills I'd prefer not to bike.
It honestly can be pretty stressful. The app rings really loud (can't disable) and then all of a sudden the clock is ticking. You could be asked to get anything from anywhere and bring it to anywhere and it has to be done in one hour or less.
Good on them! I wish more Stanford undergrads would experience the other side of the modern economy first-hand, even if only for a few hours. In any case, they should have been able to figure out that someone using their own car to deliver a $7 burrito from Chipotle is probably making next to nothing.
> In any case, they should have been able to figure out that someone using their own car to deliver a $7 burrito from Chipotle is probably making next to nothing.
I expect that they did, but if they committed from the start to spend a day (or however much time) on the project, then they had to complete it, for the sake of the story.
This seems to be common across the globe with this "business" model. Drivers get paid minimum wage and have to pay gas/repairs/etc themselves. Recent documentary [1] on Foodora in Berlin where a driver even had to go to court because they didn't pay his salary for the previous months.
I expect some people may take issue with "In the current US marketplace", including me, but I don't have enough info at hand to comment, so I won't!
But, I will note, according to https://www.dir.ca.gov/dlse/faq_minimumwage.htm, the current minimum wage in California is either $10.50 or $11.00 per hour, and so yes, that's pretty terrible.
Note to mention…
>We scraped together only about $9.00 per hr for our eight hours of work, even before accounting for the cost of gas and the time we saved by working as a group.
Note the "we" and the "even before accounting for the cost of gas". I think they meant $9 per hour for the group, which means that's less than $9 per hour per person. Also, that doesn't include the cost of fuel or wear and tear on the car.
they probably had more than one person in the car, which is probably against tos anyway. The first day they made $63 in 5 hours, about 12.50. but the second day was $12 in 3 hours.
basically postmates should have told them to logout the second day. and $16 for 2.5 hours for the laptop is really bad.
the first 2.5 hours they were making $19/hour. it seems like all of these platforms you can make an OK wage if you learn how to game bonuses/surge pay/demand, but its counter to the work whenever you want.
It was a qualification, of sorts, meant to suggest “regardless of principle or viewpoint”. I.e., the tasks mentioned generally required less skill than most minimum wage jobs ostensibly require.
Admittedly, I was working from anecdotal evidence off the top of my head (e.g., banners on fast food chains proclaiming “starting at $XX/hr”) and not hard data.
Personally I believe paying less than livable wages is criminal in most instances.
I was talking with a guy a while back that did one of these delivery services but with bicycles (Ubereats maybe?) -- he would cheat and get his wife to drive him around so they could spend "quality" time together though.
IIRC we claimed he made $60-$100 hours a day (also IIRC he mostly only worked the weekends or maybe his wife only drove him around on the weekends) sticking to the busy areas, Downtown Phoenix and Oldtown Scottsdale.
Depends on what you make of it I suppose, he seemed happy to get out of the house.
'consider leaving a decent tip' the way for profit businesses underpay their workers and society is expected to make up for that through tipping bothers me so much. The underpaying business owner is richer than 95% of customers who pay extra so the rich guy's worker makes a decent salary. The tipping culture is abused so much in USA. There are restaurants in Brooklyn that automatically add 18% gratuity charged and still leave space for tipping and the waiter gives you looks if you leave that space blank. All these gig economy companies are valued in billions and have made millions for their executives and investors but still won't pay a decent salary to their workers and I am supposed pick up that bill? No thanks
Tipping is also used to help the worker avoid paying taxes, since many service workers don't report 100% of their tip income as required.
And although companies would be able to deduct salary expense to reduce their own tax bill, they still benefit from the tipping scheme. If the worker receives, say, $10 in tips, the company would have to pay them $15-$20 to give them the same after-tax income, since a large portion of the wages would go towards income tax and social security. So, if the worker makes the same take-home pay through tipping rather than wages, the company and the customer both pay less! The real cost is borne by the taxpayer, who has to pay higher taxes elsewhere to make up for the loss.
> The real cost is borne by the taxpayer, who has to pay higher taxes elsewhere to make up for the loss.
Even using your logic, your basically admitting its the business owner screwing the general population by creating an incentive structure that encourages tax evasion.
The externality this creates (taxpayers pay more, tax enforcement costs more) which means you are crewing the government out of enough money the customers stop benefiting from the "lower price" since they all have to pay it back in higher taxes to make up the shortfall + increased enforcement costs.
Your first sentence describes the intuition where if customers tip waiters more, companies will pay waiters less.
I've actually heard that in many places, the customers actually tip enough that it goes beyond the ability of companies to pay less directly. So the waiters' pay actually does get pushed a lot higher. So high in fact that there's an disparity issue between front staff (waiters) and back staff (chefs), who actually get much worse because they're exposed to pure company pay.
If you order through a service like Postmates, be generous with your workers. We scraped together only about $9.00 per hr for our eight hours of work, even before accounting for the cost of gas and the time we saved by working as a group. If you’re make a request, your worker might be operating well under minimum wage — be patient, and consider leaving a decent tip if you can.
Oooor you could get your legal system to make the company the minimum wage (after expenses).
You could also work toward a world where Postmates can’t find anyone willing to work for $9/hr! :)
Yeah, why is this not happening or maybe it will happen and it is too new to say yet. Or maybe for the contract workers the convenience of working to their own schedule out-weighs other considerations.
It doesn't happen because America is pro-capitalism to the point of absurdities like this. Its a political problem that only gets struck down when people are willing to admit to themselves they are getting screwed.
Or you could be clear with average earnings so folks signing up for work know what to expect. $9/hr may be OK (e.g., for a teen who decides to work for a few days for pocket money instead of playing on his phone), but those jobs are very seldom those that would fully sustain an adult, let alone a family.
This in my book is no reason to outlaw them, but more information (which the article does provide) is important. My 2c.
Postmates was advertising $25/hr last summer on Craigslist when they just came to Long Island NY
Why does america fight so hard against providing workers with fair wages? Don't you think your neighbours are worth even the minimum that is required to have a dignified life? Serious question…
America is not a subject with goals and will to execute. It is a collection of people of very different opinions. Where folks of similar opinions congregate, state laws often reflect their preferences.
But to your point, many folks (myself included) think that laws should not stifle the jobs that cannot provide for a comfortable lifestyle alone. Such jobs can still provide value for society (occasional work for young / low skilled) and avoid driving the costs through the roof were it to be highly regulated. It is better to inform (so folks accepting jobs know what to expect) and educate / train (so that most folks have a short enough path to where they have more options than just minimum wage).
For a more meaningful discussion, what do you define as a fair wage? Serious question as well...
It's hard to run a profitable business. For some of these services the choice may be between exploiting workers or not brokering work. American culture seems to worship convenience at this time. With the current environment of low unemployment and rising wages, I would expect there to be pressure on these services to increse pay, but how much will the market bear and how much do we want these services?
If my business relies on buying wood, cutting it, and selling it, but my customers won't pay a high enough price to cover my costs, what happens?
I go out of business.
There's no reason society should subsidize business models that don't work for unnecessary products.
What is the nature of this subsidy?
Tips
The premise of the question is wrong. American politicians across the political spectrum are obsessed with stimulating demand for labor and equipping workers for higher-productivity tasks, which is approximately the extent to which government can "provide" more dignified private-sector wages. For all their blunders, our median incomes are among the highest in the world, higher than in countries like France and Germany with more emphasis on minimum standards.
The least dignified thing you can be in America is unemployed. So yes, we will let people have marginal jobs rather than having them subsist entirely on welfare.
The second least dignified thing you can be in America is a renter. A dignified family owns a detached house with a generous backyard. Land is a zero-sum resource, and America's productive cities have reached their horizontal scaling limits. More labor productivity / higher wages only serve to further inflate real estate markets; the number of households enjoying dignified lifestyles cannot grow.
As a personal anecdote, I had to sit down a friend who was driving Uber for a few months - to break down his costs and the money he made - turns out that in his case, after all expenses (car, personal - like child care etc) -- on most days, he was losing money, and he made a max of 3-4 dollars on a few days.
He was aghast, and now does not drive. Many people who do not have jobs get suckered in to the promise of 'working' but end up in a worse situation.
I believe that we in the tech community need to self-police ourselves about these predatory practices that we have engendered on the society and call out those who suck the very last blood drops from the general population, that does not have the skills to analyze their situation.
This is no different from the various regulations around pay-day loans, etc.
What was the biggest gap in his understanding of his own accounts?
Suppose I work a regular office job. If I make $X, but pay out $Y in child care and other expenses (commute/car), then it won’t take me long to notice if $X =~ $Y.
Was the biggest gap unaccounted expenses for his car?
in his case, he never put together all of the numbers. For instance, it did not even strike him that if he stayed at home, he would not have to incur the childcare expense. That was the biggest change.
Also, he factored in the petrol, but not the vehicle depreciation cost.
Also, there was lost opportunity in studying and improving his skills, and we just did not put a price to it.
He had this nagging doubts, but the pressure of a male sitting at home and not earning - lead to family esteem issues, and so he went along.
Interesting, thanks for replying with the details.
What would happen if people fully quantified other activities. For example, the full cost of drinking, while watching your favorite sport, with friends.
You initially think, “so what, it’s just 3 hours, plus $25 in beer and food.”
Most don’t account for the missed opportunity cost.
I used to do postmates on my bike in San Francisco. Just on the weekends as a way to get paid to work out, I never needed the money.
This was in 2015 but I was making $16-20 per hour. Doing it on my bike I had no expenses at all. I'd do maybe two deliveries per hour or three if I got easy ones (like the guy who had me deliver a Roam burger to a house 100ft away).
The reason I quit was because they removed more and more information from the view you'd get before accepting the job. On a bike that's not ok. There are many things I can't carry and many hills I'd prefer not to bike.
It honestly can be pretty stressful. The app rings really loud (can't disable) and then all of a sudden the clock is ticking. You could be asked to get anything from anywhere and bring it to anywhere and it has to be done in one hour or less.
Good on them! I wish more Stanford undergrads would experience the other side of the modern economy first-hand, even if only for a few hours. In any case, they should have been able to figure out that someone using their own car to deliver a $7 burrito from Chipotle is probably making next to nothing.
> In any case, they should have been able to figure out that someone using their own car to deliver a $7 burrito from Chipotle is probably making next to nothing.
I expect that they did, but if they committed from the start to spend a day (or however much time) on the project, then they had to complete it, for the sake of the story.
This seems to be common across the globe with this "business" model. Drivers get paid minimum wage and have to pay gas/repairs/etc themselves. Recent documentary [1] on Foodora in Berlin where a driver even had to go to court because they didn't pay his salary for the previous months.
[1] https://www.youtube.com/watch?v=2mnb-p7zVvM
In the current US marketplace, $9/hr for essentially a zero skill delivery driver isn’t terrible, is it?
I expect some people may take issue with "In the current US marketplace", including me, but I don't have enough info at hand to comment, so I won't!
But, I will note, according to https://www.dir.ca.gov/dlse/faq_minimumwage.htm, the current minimum wage in California is either $10.50 or $11.00 per hour, and so yes, that's pretty terrible.
Note to mention…
>We scraped together only about $9.00 per hr for our eight hours of work, even before accounting for the cost of gas and the time we saved by working as a group.
Note the "we" and the "even before accounting for the cost of gas". I think they meant $9 per hour for the group, which means that's less than $9 per hour per person. Also, that doesn't include the cost of fuel or wear and tear on the car.
they probably had more than one person in the car, which is probably against tos anyway. The first day they made $63 in 5 hours, about 12.50. but the second day was $12 in 3 hours.
basically postmates should have told them to logout the second day. and $16 for 2.5 hours for the laptop is really bad.
the first 2.5 hours they were making $19/hour. it seems like all of these platforms you can make an OK wage if you learn how to game bonuses/surge pay/demand, but its counter to the work whenever you want.
It was a qualification, of sorts, meant to suggest “regardless of principle or viewpoint”. I.e., the tasks mentioned generally required less skill than most minimum wage jobs ostensibly require.
Admittedly, I was working from anecdotal evidence off the top of my head (e.g., banners on fast food chains proclaiming “starting at $XX/hr”) and not hard data.
Personally I believe paying less than livable wages is criminal in most instances.
I was talking with a guy a while back that did one of these delivery services but with bicycles (Ubereats maybe?) -- he would cheat and get his wife to drive him around so they could spend "quality" time together though.
IIRC we claimed he made $60-$100 hours a day (also IIRC he mostly only worked the weekends or maybe his wife only drove him around on the weekends) sticking to the busy areas, Downtown Phoenix and Oldtown Scottsdale.
Depends on what you make of it I suppose, he seemed happy to get out of the house.
Is Instacart, Doordash Uber Lyft any different? Or for that matter any of the gig economy jobs?
Why pick on Postmates? Any ulterior motive by authors?
they had to start with one of them...
My guess, as college students, they might not have wanted to start with a service (Uber, Lyft) that would potentially take them far from campus.
And DoorDash might have additional onboarding to do. For example, don’t you need to get a DoorDash shirt and credit card?