Unfortunately corporations have figured out how to use their money & lawyers to game the system in their favor. And some of their money goes to politicians to ensure new laws favor them.
Well of course, in order to make profit you can never pay anyone more than what their work is worth. A company that does, will simply lose to the “cheaper” competitor and go bankrupt. The more you exploit the more profitable is your business.
I think delivery workers deserve a fair, livable wage, but I am not sure that this is the way to do this.
If this goes through, I could see this playing out in a couple ways:
I would guess that fees go up to cover increased mandated wages. However, since the apps will not want headline costs to rise much more (already have a reputation for large markups, large percentage of fees, and consumer is getting more and more stressed), they could remove the ability to tip, and advertise that slightly higher fee is now “all-in” pricing, to keep headline costs similar on average. This is potentially detrimental to delivery workers depending on earnings/tip mix and shares that the apps skim from each.
Adding an additional fee per order (on average $5 per order as quoted in a NYT article) on something that has relatively elastic demand, will likely be detrimental to all involved, as volumes could drop more than the increase in price. In this scenario, everyone loses: the consumer, the delivery worker, the third party, local restaurant.
Adding an additional fee per order, and the apps experience little to no change in demand (relatively inelastic). This would only hurt the consumer, and would benefit delivery work and tech co’s. However, I have a hard time believing that demand for delivery is super inelastic given food inflation, state of the consumer, and generally perception on food delivery price already.
Not trying to be a corporate shill, but the economist in me is always hesitant when the solution is market interference. In reality, its probably somewhere between the extremes of 2 and 3, and determining where on that spectrum it ends up is quite nuanced.
We need additional regulation about profit margins and executive compensation, or something along those lines, to prevent cost increases from being passed on to the consumer when it could just as easily come out of the profit margin or executive compensation.
It’s a good joke, right?
The only alternative is to use the tools we have: let the free market work, but not at the expense of the employees. This means, yes, wage increase will be passed into the customer, who will reduce how much they use the service (decrease demand), which will either drive down supply to justify higher prices or drive down prices to increase demand again. Either option creates opportunities for competitors to enter the market which also drives down prices.
All that said, let me be clear: I prefer option A over option B, but I’m not getting my hopes up.
Local officials have said that delivery workers receive approximately $11 hourly after tips, given their out-of-pocket expenses – which is $4 less than New York City’s minimum wage of $15
That wage is insulting, both to the workers and the city. Kick the business’ out of town - someone other will fill the vacuum and do it better.
Noob question: Let’s say you’re an Uber driver. If you keep the app open while waiting for rides would you still receive the $17.96 even if you don’t get any rides? And… In case you receive a ride for $50 how does Uber splits the money? Thanks for clarifying
You only get paid for completing rides. Having the app open does nothing. How much you receive per ride varies greatly depending on location and time of day. Typically there is a base fee for the ride plus a per mile or per minute rate and some other potential fees. Uber then adds a 25% commission that they keep.
Minimum wage would come into play if a driver complete x hours of driving but the average hourly rate over those hours falls below the state’s minimum wage. In those situations it would be Uber’s responsibility to make up that difference. This is similar to to how restaurant servers in the US are paid. Most of the time their tips far exceed the minimum wage when averaged over their whole shift. In the occasional cases where tips are terrible or business is slow the restaurant is responsible for making up that difference to meet minimum wage requirements. These “tech” companies are stating they shouldn’t be responsible for that because they don’t have employees, just contractors who use their app.
In the occasional cases where tips are terrible or business is slow, the restaurant is responsible for making up that difference
This is commonly misunderstood. The restaurant is allowed to average it across your entire pay period, not just the one bad shift. So if you have a bad shift in a two week pay period, your other shifts (above minimum wage) during that period will likely balance out to above minimum wage, and the restaurant won’t be required to make up any differences. You still made below minimum wage for that shift, but the restaurant is able to average it against all of the other hours you worked for that pay period.
Let’s say you have 10 shifts in a two week pay period. For nine of those shifts, you make $12/hr. Then for one shift, you make $0/hr. Even though you literally made no money for one shift, you still averaged above $10/hr for the pay period. And with minimum wage being $7.25/hr, the restaurant wouldn’t be required to adjust your pay for that one bad shift.
I’m aware. I assumed it was understood that this all gets averaged at the pay period (ie payday). I chose to frame it that way because I wasn’t aware of Uber’s payout schedule or pay period. I looked it up and they are calculated on a weekly basis. So if you average below minimum wage across the week Uber would/should be responsible for the difference.
It’s a common talking point for people who don’t believe in tipping. Lots of “it doesn’t matter if I don’t tip, they’ll still get minimum wage from the restaurant” justifications. It completely (and likely intentionally) misses the fact that the employee isn’t getting minimum wage adjustments on a per hour or per shift basis.
At least for delivery I think what gig companies have done in places that require an hourly rate is keeping your acceptance rate over a certain percentage per hour and/or have to take a minimum number of orders.
The primary thing that delivery drivers from accepting an order is if the payment (mostly the tip) is too low, if you’re paid by the hour that’s not much of an issue anymore. Other factors that would still be relevant are things like, is it too many miles (gas, wear and tear), is the pickup or delivery in somewhere that isn’t safe or that doesn’t have (free) parking, is it a restaurant that treats drivers rudely, is it taking you too far from where you need to be at a certain time, etc.
I just found out yesterday that I’m a Tech Company, so you’re not wrong! But in all seriousness, I love the fact capitalism is supposed to be sink or swim, but apparently a lot of our service industry is only a float due to low wages, and in some industries, pushing cost off to the customer in the form of tipping.
If you can’t afford to pay a decent wage, then you shouldn’t be in business.
It’s because they claim that they don’t actually do any deliveries, they just maintain the tech platform that connects independent contractors to delivery jobs. They do this for legal reasons, because if you think about it all jobs technically just connect people to tasks that they complete.
The reality is Uber, grubhub, doordash, etc. are owners of a platform that connects customers to contract delivery services. They don’t directly employ delivery persons. Their product is this platform. This is why they are considered tech companies.
Presumably because they don’t have a single delivery employee. They just provide “tech” that lets drivers and customers find each others.
Of course if those companies were to become responsible for providing a living wage to their “gig workers”, then it becomes harder to still call them mere “tech” companies (and some might argue that an article using that label to describe them is in fact implicitly picking a side in that lawsuit.)
I mean… the law itself is written in such a way that is intentionally ambiguous, and refers to delivery drivers as “workers” (rather than “employees” or “independent contractors”) and refers to the platforms as “third parties”.
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