Uber, Lyft, and Gigs in General – How Are They Doing?

A lot has piled up here about working without conventional jobs.  Let’s see what it is.

Oldest is “Biden Proposal Could Lead to Employee Status for Gig Workers” (Noam Scheiber, The New York Times, October 11^th).  That wouldn’t be wide open, but rather “lowers the bar for that employee classification,” by incorporating “how much control workers have over how they do their jobs and how much opportunity they have to increase their earnings by doing things like offering new services.”  The piece, though, is more about how current laws are often disobeyed by companies preferring workers to be contractors.  Consistently correct categorization would do more for those with gigs than changing it.  As for Megan Henney’s October 12^th Fox Business response that “Biden’s proposed gig worker rule could deal a major blow to small businesses,” the end of slavery did that as well.

Also on the 11^th, The New York Times told us to “Meet the App That Helps Gig Workers Know How Much They Really Make” (Erin Griffith).  It’s Para.  Not a cost-accounting product, but one that gets into company databases and reveals how much workers will be paid, often including tip amounts, so they can accept or refuse giving rides or delivering restaurant orders.  The product delighted neither Uber nor DoorDash, who both sent Para “cease-and-desist letters.”  Para provides information important enough for one driver to report that “a no-tip order from Red Lobster could mean less than $3 for 30 minutes of work during a peak time.”  Overall, if companies freely provided this information, there would be no need for anyone to get it any other way.

From the front ridesharing lines came “What Shocked Me Most When I Became a Lyft Driver for a Week” (Timothy B. Lee, Slate.com, December 22^nd).  The reporter found great variation in his portion of what Lyft charged, from “less than 30 percent” to “more than 80 percent,” and over the week collected 52%.  Interesting, since the rate Yellow Cab of Milwaukee paid when I worked there in 1976, for those preferring a percentage of fares, was 55% – with the company providing the taxi.  As Lee put it, “it seems that the smartphone revolution didn’t make taxi dispatching cheaper and more efficient.  It made it way more expensive.”  So, perhaps, could someone create a cheaper rideshare model?

Three articles on the other large de facto cab company appeared in the New York Times over five weeks.  “Uber Drivers Say They Are Struggling: ‘This Is Not Sustainable’” (Winnie Hu and Ana Ley, January 12^th).  That’s no wonder, if they need to pay for their cars out of 52% of fair market fares.  Yet they have learned something – one interviewee said he was leaving to drive a truck.  Also, little shock that “Uber Reports Record Revenue as It Defies the Economic Downturn” (Kellen Browning, February 8^th).  It was $8.6 billion from October to December 2022, of which $595 million was profit.  Yet “Financial Woes Thrust Lyft, Long in Uber’s Shadow, Into the Spotlight” (also Kellen Browning, February 15^th).  On their “record revenue of $1.2 billion in its most recent quarter,” they lost $588 million.  Strange.

Moving almost six months later, we heard that “Minneapolis Uber, Lyft drivers want minimum wage, companies say it could be worse for riders” (Mills Hayes, Fox Business, August 2^nd).  I could not have imagined that as a cabdriver, when, over full-length days, I netted over double the $1.80 per hour I got elsewhere the next year.  And yes, Uber and Lyft opposed that, perhaps because it illuminated how little many earn after expenses.

Last, could it be that emphasis on gigs is causing “The death of hobbies” (Eve Upton-Clark, Insider, July 31^st)?  Not really.  Since my early teens, I have consistently sought out ways of earning money from what I enjoy, and have done that, with different things, most of my life.  That does lead to wanting a true avocation when others become vocations.  Yes, as the author says, going for profit can cut down other activities in that area, as, for example, reselling collectibles cuts compatibility with keeping them for yourself, but people can always adjust what they do.  A great deal of the fun remains – and the advantage of earning money instead of spending it can, over decades, be remarkable.  So, find the right choices for you and go right ahead – you’ll probably like it.