The uberization of the American workforce

A few weeks ago, as a part of Ann Arbor’s annual, multi-day A2Tech360 event, there was a session called “2029: What the Future Holds,” during which a number of folks from both the University of Michigan and industry speculated as to how technology may evolve and change our lives over the coming decade. Of the presentations, which were shared over the course of an afternoon at the U-M Law School, my favorite was given by U-M Business School professor Jerry Davis, author of the book The Vanishing American Corporation: Navigating the Hazards of a New Economy. Following are four of the photos I took during his presentation, along with my abbreviated notes. I hope that you find the content of his slides as thought-provoking as I did.

Like it or not, we seem to be evolving toward a “gig” economy, in which people, instead of working for single business entities, float between opportunities, doing discrete tasks in exchange for compensation. We’ve known for some time that, unlike our parents and grandparents, we likely won’t be working for the same company for our entire lives. In recent years, however, the change has accelerated, with so-called “benefits” becoming more hard to come by, and the idea of pensions disappearing from the corporate landscape completely. The paternal corporate entities of post-war America are long gone, and we seem to be transitioning into in world where “uberization” is fast becoming the norm.

Today’s largest employers don’t actually “make” anything. The manufacturing sector has essentially been replaced by the service sector in America, were, for the most part, corporations market and sell things that they don’t actually create themselves. Davis gave a number of examples, one of which, involved the largest high-end display company in the United States, a company with tens of millions of dollars in annual sales. A generation ago, you might expect the largest television manufacturer in the country to have tens of thousands of employees, but this company, according to Davis, only employs a few dozen people, who just source units abroad, rebrand them for the American market, and manage their various sales channels. Davis then went on to say that tech companies, contrary to what we might like to think, won’t be our salvation. Even the most successful tech companies, he says, don’t create jobs in anywhere near the numbers that American corporations once did. Companies, in short, are growing smaller and producing less in the way of real goods.

Davis also shared the story of Instant Pot, a company which, again, actually produces nothing, and employs very few people. For the most part, Davis says, our North American companies are now essentially marketing firms that private-label goods produced elsewhere. [The “multicookers” sold by Instant Pot are manufactured by the Chinese company Midea Group.] Long gone are the days when huge vertical corporations like Ford existed, making products from the ground up, starting with the raw iron ore. [Ford operated its own coke ovens and iron foundry.] And this isn’t just true of technology companies, Davis says. All of the tomato sauce sold in the U.S. he says, comes from a single factory.

Davis ends with a nightmare scenario in which Walmart adopts an Uber-like corporate structure, where they no longer have lower-level employees, but just make use of an army of independent contract workers who “bid” on shifts much like those who drive for ride-sharing companies. Under this arrangement, Davis says, those wishing to work for Walmart (or Amazon, or, for that matter, a fast food restaurant) would first have to complete a training course, which they would, of course, pay for themselves. [Just like Uber drivers today need to arrange for their own vehicles and licensing.] And, having completed their training, and perhaps purchased or leased their uniform, they would then “bid” on jobs, being compensated in accordance with a dynamic pricing model, under which they might earn more for shifts worked during peak times. And, of course, each of these independent contractors would be rated on some type of scale, by both customers and management, with preferential treatment being given to those with better ratings… So, to sum up, it would pretty much be like an episode of Black Mirror.

There was a lot more, but those, as far as I was concerned, were the highlights. The main takeaway for me was the thought that other service sector jobs might be susceptible to uberization. It seems obvious now, but it hadn’t ever occurred to me before seeing this presentation that we could be heading in a direction like this. I knew that the trend toward the use of independent contract employees would continue to accelerate, but I hadn’t thought about how cash register operators, warehouse workers, and those stocking shelves might start to be organized in a similar way, allowing corporations to avoid paying benefits, further force down wages, etc. And, now that it’s been mentioned to me, it just seems so obvious… Of course this is the way we’re headed.

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78 Comments

  1. iRobert
    Posted June 25, 2019 at 12:11 am | Permalink

    Automation and self-service are eliminating most of those “jobs” also. These dramatic shifts will collapse the economy.

  2. Demetrius
    Posted June 25, 2019 at 6:46 am | Permalink

    No stability, no loyalty, no community, no responsibility … each person is supposed to willingly become just another atomized “unit of production”/profit center at the beck and call of global capital.

    I’m sure the plutocrats are licking their chops at the prospect of moving from mere billionaires to becoming trillionaires.

    In the short run, the “gig” model has traction, and in some quarters, even a certain cache.

    In the longer run, however, I think environmental degradation, resource depletion, overpopulation, and political instability will conspire to upend this model. “The future is local” … with trade and commerce (and work) returning to local artisans, local networks, local relationships, and mutual responsibilities.

  3. Anonymous
    Posted June 25, 2019 at 7:05 am | Permalink

    I fail to understand how services would degrade the environment faster than loads of polluting factories, producing inefficient gas powered vehicles.

    Or how working gigs for multiple people leads to less human contact than working on the same assembly line for decades.

    I can’t think of anything worse than a repetitive factory job and those jobs haven’t been stable for a very long time. It also has to be pointed out that those in the skilled trades (carpenters, electricians, etc) have been working in a gig economy for decades already.

    It obviously depends on what type of jobs your are talking about but I don’t think the problem is the nature of employment. The problem is that we don’t have an affordable national health care or pension system. Like the presenter notes, there is a mismatch.

  4. stupid hick
    Posted June 25, 2019 at 8:25 am | Permalink

    IMO, this would actually be just fine, desirable even, if only there were universal health care and universal minimum income, which unfortunately people in this country won’t accept because they don’t understand what money is.

  5. Demetrius
    Posted June 25, 2019 at 8:27 am | Permalink

    Another condition related to the “gig” economy is that many lower-wage employers (such as fast-food restaurants, coffee shops, some retail outlets) now use “predictive scheduling” software to assign work in blocks – based on predicted, or even actual business volume.

    As a result, many of these workers spend much of their “free” time essentially on-cal – subject to being called in in short notice, often to work relatively short periods of time, before being sent home again once customer volume dips.

    The “on-demand” nature of this labor seems like a great deal for many employers, (After all, why pay workers for a minute more than necessary?) but leaves many of their workers essentially trapped in a cycle where they have no fixed schedules, so never know when (or how many hours) they’re going to work, etc. – leaving them unable to hold a second job, go to school, fulfill childcare or other family obligations, etc.

    However, lately there has been some push-back, as some cities and states have begun passing “predictive scheduling” laws that mandate that employers provide least some consistency in shift planning, and minimum mandatory break periods between shifts.

    Marketplace: Unpredictable schedules are part of the retail gig but new policies could change that

    https://www.marketplace.org/2019/06/13/predictable-schedules-retail-workers-new-policies/

    Meanwhile – with the rise of “artificial intelligence” and sophisticated computer algorithms, even many workers in white-collar, middle-class occupations are finding that they are no longer being treated as complex, thinking human beings – bur rather serving as “units of production” for global capital.

    NYT: A Machine May Not Take Your Job, but One Could Become Your Boss

    https://www.nytimes.com/2019/06/23/technology/artificial-intelligence-ai-workplace.html

    With two big Democratic presidential debates coming up, I’d love to see some of the candidates address these issues, but I’m not hopeful.

  6. Dogmatic Dolt
    Posted June 25, 2019 at 8:30 am | Permalink

    Aloha Anonymous, This is nothing but a return to 19th century practices. Coal mines used to operated the way the “future Walmart” could operate (the UMWA changed that). Auto plants in Brazil have been adopting these practices. ” It also has to be pointed out that those in the skilled trades (carpenters, electricians, etc) have been working in a gig economy for decades already.” Of course these skilled trades have been organized into Unions for over 150 years. Those folks who work these skilled trades for there entire lives count on the Unions protection and solidarity to ensure some kinds of justice in the work place. Student debt is the new company store. Start your work life off as an indentured worker and we’ll beat some submission into you.
    The choices have always been clear to those who are not brain numb. Socialism or Barbarism those are the choices. The future “gig” (slave) economy and endless wars, that seems to be all that Capitalism can offer.

  7. Anonymous
    Posted June 25, 2019 at 8:34 am | Permalink

    I just don’t see factory work and employer sponsored benefits programs as viable. A national program of health insurance and pension benefits like that of Sweden, for example, would be far more in line with current working conditions.

    Factory work and employer sponsored benefits programs make workers dependent on corporations, restrict their freedom of movement and self determination and ultimately work against them when they are laid off or the company closes/changes hands.

    I think that is something we would agree on. But I guess not.

  8. Anonymous
    Posted June 25, 2019 at 8:57 am | Permalink

    I agree with the other anonymous (anonymi, anonymice?). Delinking health care and other related benefits from employer or employment status would go a long way toward alleviating workforce stress. As for grandparents and parents being able to have long term employment with a single employer, I think while that definitely happened, it was only for a minority of working age adults. Remember that at least half the adult workforce back in the day was not employable in such a job as nostalgically described in the post (women, minorities).

  9. Anonymous
    Posted June 25, 2019 at 9:04 am | Permalink

    I agree with both Anonymous’

    Only a privileged few were able to work those cushy union based factory jobs. If you lived Southeast Michigan you had some hope, but if you were in the south? Forget it. Your best hope was to move to Michigan as people obviously did, but not everyone could do that.
    The rest of us were left to blow in the wind with no benefits or hope for the future. Old union guys are quick to gloss over that history. And it is particularly condescending to women, given that the rise of those union factory jobs made the assumption that women were to stay at home, raise kids, and forgo any type of financial independence.

  10. Dogmatic Dolt
    Posted June 25, 2019 at 9:08 am | Permalink

    Aloha, Of course he left out some important characteristics of the future Walmart, like the need to rent the check-out lane and cash register if you got the cashier position, or the need to rent the pallet jack if you are doing inventory and receiving work.
    “A national program of health insurance and pension benefits like that of Sweden, for example, would be far more in line with current working conditions.” Ah yes, a bit of socialism to alleviate the worst aspect of a “gig” economy. Of course Sweden has a unionization level of above 70% (cause and effect–unionization brings more social benefits to all) while the US is probably lower than 10% now, and those unions that exist are under constant pressure to become mere appendages to the employer. Of course in the “gig” economy you are you own “boss” so what do you need a union for?

  11. Lynne
    Posted June 25, 2019 at 9:11 am | Permalink

    I agree with stupid hick! This could be a good thing if we also had a universal basic income and national single payer universal health coverage. It could give workers flexibility. In their schedules. In their incomes. In where they work. Whenever you have a business with only one customer, that customer wields a lot of power. That is how it is with labor relations now. I might be selling my labor but being limited to just one customer gives that customer lots of power. But if I were selling my labor to say 5 different employers, if one made unreasonable demands, it would be easy to refuse, especially if there were a guaranteed income to fall back on.

  12. Anonymous
    Posted June 25, 2019 at 9:23 am | Permalink

    In a general sense, I support unions, but I don’t think they are a cure all or do I think that unions are appropriate for all jobs. It’s weird that you believe so much in corporate and employer provided benefits. While, yes, unions can help negotiate these packages, in practice not everyone has access (since unions are reserved for only a select few) and because corporations have a stronger hand in negotiation, as they historically always have.

    I don’t think that corporations should be involved in the negotiation process at all. Health care is a human right, we should be equitably and fairly providing health benefits for all, not just for those who are lucky enough to be in a corporate based union job. Not everyone can or wants to work a 9 to 5 repetitively doing the same thing in the same place for their entire lives, simply because they have no other health insurance options.

    It is strange that you are so cynical to the idea of a national (or nationally managed) health insurance plan in favor of letting GM manage your plan. Why is that?

  13. Dogmatic Dolt
    Posted June 25, 2019 at 9:23 am | Permalink

    Aloha, “Old union guys are quick to gloss over that history.” Young people who don’t know anything about the struggle to organize our class “gloss over that history.” There are historical reasons why Sweden has 70% plus unionization (and a social democracy that cares about the population) and the US with its anemic 10% unionization and its fetishization of “markets” and privatization.
    The UAW (probably) is the largest multi-ethnic, multi-racial, multi-age, multi-sex , multi-gender organization in the country. Its primary objective, benefit all. A big difference over “maximizing profit”.
    But you go ahead and dream about how much better you are then your fellow workers.

    Aloha Lynn, ” if I were selling my labor to say 5 different employers, if one made unreasonable demands, it would be easy to refuse, especially if there were a guaranteed income to fall back on.” Ever hear of Employer organizations? Have you ever heard of “concentration of capital”? Dream on. A little bit of socialism is good? Why not a lot?

  14. Anonymous
    Posted June 25, 2019 at 9:33 am | Permalink

    I never said I was better than anyone at all. Where are you getting that?

    Sweden’s economy has historically been much less diverse than that of the US, having a larger share of workers in manufacturing jobs (cause, well, it’s Sweden, you can’t grow anything and there aren’t that many people anyway) so I don’t think that the comparison of union share is appropriate.

    We could use any number of other countries as examples where universal coverage occurs. Sweden was just an example, because it does have universal coverage and national pension schemes and both do, in fact, foster entrepreneurship (which it needs to move out of manufacturing because Sweden needs to remain competitive) and improve the general quality of life for all people.

    I am not going to malign the UAW (because they, as you say, have done a lot of good), but it is clear that not everyone can be in the UAW. What happens to those who aren’t lucky enough to be involved in that union or for those who have jobs where a union (or even employer sponsored benefits packages) just doesn’t make sense?

  15. Janette Rook
    Posted June 25, 2019 at 1:04 pm | Permalink

    It’s a scary shift. I was somewhat heartened by the efforts in California to extend some of the long & hard fought for worker protections to Uber/Lyft drivers, but it needs to be a federal solution because these gig jobs are expanding like wildfire

  16. Eli Morrissey
    Posted June 25, 2019 at 1:34 pm | Permalink

    Problem is, when the government finally does step in to regulate the “Uberized” worker, the laws will be written in favor of competing forces. You are seeing this with new Airbnb laws in local communities. It’s really not in our current conception where are workforce will be in 10 or 20 years. As an employer, you are seeing the “gig” mentality spill over into our new workforce. It’s hard to plan around that.

  17. iRobert
    Posted June 25, 2019 at 2:32 pm | Permalink

    None of the gig drivers I’ve spoken with comprehend their actual costs and risk. They seem to be bent on kidding themselves about what they are actually making in income, It’s bizarre.

  18. M
    Posted June 25, 2019 at 3:22 pm | Permalink

    I’ve talked with some folks who drive for Lyft who seem to have found a way to make it work for them. It’s not easy, but there are ways to work within the system to earn an OK living, by taking advantage of company incentives, earning bonuses, choosing your shifts wisely, etc. Still, though, it strikes me as being akin to indentured servitude, as people are encouraged to go into debt to get nicer cars so that they can earn better reviews and thereby qualify for the above-mentioned incentives. [Some drivers get to the point where they’re occasionally guaranteed a certain higher-than-normal income for a shift. It’s a way for the company to ensure that their “best” (highest rated) drives are on road at certain times.] If I’m not mistaken, some ride-sharing companies are even in the business of selling new cars to their drivers, essentially setting up a scenario where they have no choice but to keep driving in order to make their payments. [It’s like working in a “company town.”] But all of this will soon end. When autonomous vehicles take over, there won’t be any need for human drivers.

  19. Anonymous
    Posted June 25, 2019 at 3:48 pm | Permalink

    I drove for Vets a long time ago. At least with Uber, you own the car. Driving taxi for vets or yellow was a scam in itself. You had to work 12 hour shifts to be able to make your taxi rental fee for the day, some days you’d lose money. The dispatchers would give preferential treatment to people they liked, and you had no guarantee your fare would actually pay in the end.

    Licensing taxis was simply a means of controlling congestion, it had nothing at all to do with insuring fair wages or workers. In the end, it helped insure that taxi mafias controlled whole taxi economies.

    So while Uber is problematic, the old system was also problematic.

  20. iRobert
    Posted June 25, 2019 at 4:17 pm | Permalink

    I’m assuming you’re taking the word of drivers that they “have found a way to make it work for them.” They really haven’t. They just don’t realize their actual costs are equal or grater than their take. So while they are simply, and rapidly, converting the value of the vehicle they’re using back into cash, they only get a portion of that which is short of the dramatically multiplied maintenance cost and purchase cost of the vehicle. Every single driver I’ve talked to clearly does not understand it. They will say they are “making it work,” but you’ll always find out their driving “job” is actually being subsidized by the income of a spouse, a parent, or a pension. I challenge anyone to provide the full actual numbers on any of these drivers that are supposedly making profit.

    The key is ratcheting down pay rates, which can be done at will by Uber and Lyft. That was something the taxi companies could not do without it being obvious to their drivers. That’s no longer the case, and the ability to ratchet down pay continuously at will permits these companies to whittle their “fleet” down to only those which are subsidized by parents, spouses and pensions.

  21. iRobert
    Posted June 25, 2019 at 4:26 pm | Permalink

    If your parents, spouse or pension buys you a $30,000 car, and you drain the value of that car down to $0 in two years by driving it 100k miles, you haven’t made $30,000 in those two years. What’s actually happened is your parent, spouse or pension gave you $30,000, and you wasted the thousands of hours it took you to drive 100k miles, and just to simply convert it to cash.

  22. iRobert
    Posted June 25, 2019 at 4:43 pm | Permalink

    Also, when a person drives their car 10x the rate they would if they weren’t driving on Uber or Lyft, they are depreciating their vehicle approx 10x as fast, and replacing brakes, tires, oil, and spending on maintenance and repairs at 10x the rate. Almost all expenses correlate to mileage, not time. It’s amazing how many people don’t realize that. Only insurance, registration and such are time-correlated expenses.

  23. iRobert
    Posted June 25, 2019 at 4:50 pm | Permalink

    But like I said, the key is that pay rate can be ratcheted down continuously and the sweet spot for Uber and Lyft is to have only subsidized drivers. They have nothing motivating them to try to keep drivers who aren’t and need to be compensated for their full actual expenses. (And you can forget about risk. People are totally clueless on that little detail.)

  24. Frosted Flakes
    Posted June 25, 2019 at 9:53 pm | Permalink

    People often underestimate the cost per mile of owning a car. Wear and tear and maintenance is a lot more expensive than fuel costs per mile. The more luxurious the car the higher the per mile costs.

    Does anyone know what the average uber driver brings in per mile?

  25. iRobert
    Posted June 26, 2019 at 6:31 am | Permalink

    That’s a good question, FF. I wonder if we could get an Uber driver to share their full and precise numbers here for analysis.

  26. Anonymous
    Posted June 26, 2019 at 8:05 am | Permalink

    If only there was some easily accessible hand held computer that had access to a large library of archived information that could be shared with the rest of us. Otherwise we’d have to rely on a pressed for time Uber driver to give us his or her own unique story to make a generalized judgement about a widespread practice. Hmmm, I wonder.

  27. Anonymous
    Posted June 26, 2019 at 8:18 am | Permalink

    I’m going to guess that FF and iRobert are pretty old, because they didn’t think of doing a Google search to answer their questions while already on the internet.

  28. Anonymous
    Posted June 26, 2019 at 8:35 am | Permalink

    I was just typing a response asking them if they had ever heard of a search engine. FF likes to delegate assignments to others, so it might be some kind of ploy to get people to do things for him.

  29. Eel
    Posted June 26, 2019 at 9:35 am | Permalink

    Maybe they could Uberize the IT department at WCC.

  30. Anonymous
    Posted June 26, 2019 at 9:56 am | Permalink

    Pretty common in IT. It is called hiring contractors.

  31. iRobert
    Posted June 26, 2019 at 9:56 am | Permalink

    Please do it then, Anonymous. Is there a reason you haven’t?

  32. iRobert
    Posted June 26, 2019 at 10:00 am | Permalink

    It’s so simple, Anonymous. What’s taking you so long. We’re waiting.

  33. Anonymous
    Posted June 26, 2019 at 10:07 am | Permalink

    I think the other Anonymous is attempting to avoid creating a culture of dependence among the elderly.

  34. iRobert
    Posted June 26, 2019 at 10:09 am | Permalink

    I think the other Anonymous is an idiot that doesn’t understand the data FF was asking about.

  35. Anonymous
    Posted June 26, 2019 at 10:13 am | Permalink

    Using the power of an incredible innovation called a search engine, I have learned the approximate answer to the question.

  36. iRobert
    Posted June 26, 2019 at 10:16 am | Permalink

    You have not. Because there are many answers based on which level at which the drivers are registered on the driving apps. There is no one answer, stupid.

  37. Anonymous
    Posted June 26, 2019 at 10:18 am | Permalink

    I think that it doesn’t matter whatever the other anonymous finds because iRobert already has a premade rebuttal depending on what is presented. He’s not really interested in the answer. He just wants a pretense to post some rhetoric.

  38. iRobert
    Posted June 26, 2019 at 10:18 am | Permalink

    That is the actual reason you have not answered the question, and as usual have tried to turn the discussion into a desperate attempt to recover from your feelings of inadequacy through the sensation of superiority mindless sarcasm provides you. I figured that out without a smart phone, by the way.

  39. Frosted Flakes
    Posted June 26, 2019 at 10:22 am | Permalink

    Anonymous,

    Why do you have to be such a creep?

    I did look at some info last night. The per mile take-in for drivers varies in each city-market and it seems to vary at different times within the same city-market, plus Uber apparently gives out bonuses. It is complicated and each driver is going to have a different take-in per mile–and it is going to vary week to week for the same driver. There are quite a few YouTube videos where drivers try to break down the actual amount they are making. I watched a few last night. IRobert is right. Most of the drivers who are going out of their way to calculate their true hourly wage, and reporting on them in YouTube videos, seem to gloss over important expenses and risks, imo.

    iRobert brings up good points. I think it would be great for a local driver to calculate true profit and report here. We need their individual information to give a meaningful assessment…

  40. Anonymous
    Posted June 26, 2019 at 10:23 am | Permalink

    Looking at many answers, I learned the approximate answer.

    Approximation

    a value or quantity that is nearly but not exactly correct.
    “these figures are only approximations”
    synonyms: estimate, estimation, guess, conjecture, rough calculation, rough idea, surmise;

  41. iRobert
    Posted June 26, 2019 at 10:27 am | Permalink

    That’s why I suggested we analyze a single case, and then maybe case by case, anonymous. Keep going. You may eventually catch up.

  42. Frosted Flakes
    Posted June 26, 2019 at 10:39 am | Permalink

    Approximations are not good enough if a person is a professional driver and trying to make ends meet. Having approximately enough money to pay rent and pay for groceries is a recipe for being approximately homeless and hungry…It’s a big deal. I don’t know why you insist on being so petty, Anonymous.

    Figuring out the numbers is complicated and obviously need to be individualized. I will post some of the videos I found interesting tonight.

  43. iRobert
    Posted June 26, 2019 at 10:48 am | Permalink

    It’s an emotional reaction anonymous is having to their own feelings of inadequacy. They likely have attention deficit disorder and can not concentrate sufficiently to follow along with the actual discussion. So, in frustration, they have to do something which appears to mock and at the same time allows them to avoid the little bit of thought required to engage.

  44. iRobert
    Posted June 26, 2019 at 10:55 am | Permalink

    By the way, this disorder is common among the smart-phone dependent, ironically. Many have not learned the skills involved in reasoned, intelligent, discussion. They sense it, and are set off when they encounter situations where discussion is necessary for progress.

  45. Anonymous
    Posted June 26, 2019 at 10:59 am | Permalink

    I’m not the anonymous you are referring to, but what is the point of this individual analysis? FF has already discovered the answer, which is a few drivers do ok, many drivers scrape by, and some drivers lose a lot of money. You’re (I mean iRobert) right in your original comment, and I don’t really sense that there’s any major disagreement with you in this section. It’s not really a viable sustained career, and I think most drivers realize this at some point or another.

  46. Frosted Flakes
    Posted June 26, 2019 at 11:10 am | Permalink

    What is the point of calculating individual Uber drivers actual profits in a conversation about the dangers of the “uberization of America”? I don’t know. What is the point of anything? Why bother Ross School of Business? Why bother social workers? Why bother with cost benefit analysis which might guide life choices? Why should we care if some anonymous Uber driver can’t figure out why he can’t pay rent? Why should we care if Uber is soliciting drivers with illusory profit predictions? Why? Why? Why?

  47. iRobert
    Posted June 26, 2019 at 11:10 am | Permalink

    Anon: I’m not the anonymous you are referring to, but what is the point of this individual analysis?”

    The point is that it would shed much more light on exactly what is happening, rather than just generalizing on perceptions.

    Anon: “FF has already discovered the answer, which is a few drivers do ok, many drivers scrape by, and some drivers lose a lot of money.”

    I don’t know where you saw FF say that, but anonymous did, and it was purely his opinion based on some limited observation I am sure. FF and I were discussing more concrete data.

    Anon: “You’re (I mean iRobert) right in your original comment, and I don’t really sense that there’s any major disagreement with you in this section. It’s not really a viable sustained career, and I think most drivers realize this at some point or another.”

    My only disagreement is with ADD commenters who attempt to cope with their inadequacy by diverting and insulting. If we want to have a thread of insults, I’m all game. But I assume Mark prefers thoughtful discussion. And FF has been genuinely engaging.

    Anonymous, is there some reason you are uncomfortable with a more in-depth analysis of data on this topic?

  48. Anonymous
    Posted June 26, 2019 at 11:19 am | Permalink

    I think that everyone should post as Anonymous. It would make this place a lot more fun.

  49. Frosted Flakes
    Posted June 26, 2019 at 11:24 am | Permalink

    I already know the answer, Anonymous? It ranges from driving doing “ok” to drivers losing money? I don’t know the answers at all Anonymous. Plus there is a ton of grey area that will dictate profit margins. To be honest, I think I could probably make as much as anyone could possible make driving Uber but I: 1) have vehicles that are are already significantly depreciated; 2) I live in a central location of Ann Arbor; 3) Perhaps most importantly, I have all the tools and most of the knowledge to maintain and repair vehicles at a fraction of the cost that most other drivers would spend taking their car to a shop; 4) I know how to make vehicles last a long time past their ordinary lifespan; and 5) I don’t mind holding onto vehicles when they have high mileage.

    Each person is going to be different. Profit margins will fluctuate but there are ways to control those margins.

  50. Anonymous
    Posted June 26, 2019 at 11:25 am | Permalink

    Agreed

  51. Anonymous
    Posted June 26, 2019 at 11:26 am | Permalink

    I also agree.

  52. Uber
    Posted June 26, 2019 at 11:27 am | Permalink

    What’s the point in this conversation?

  53. Uber
    Posted June 26, 2019 at 11:34 am | Permalink

    Let’s talk about mirror stores.

  54. iRobert
    Posted June 26, 2019 at 11:47 am | Permalink

    Come to think of it, most of this blog could have been averted had Mark known how to google.

  55. Anonymous
    Posted June 26, 2019 at 11:57 am | Permalink

    So we have our answer. Thank you FF. Some people who are very good at vehicle maintenance, savvy enough to take advantage of temporary bonuses, and fortunate enough to be based in a high demand location might be able to do ok when driving for Uber, if they are on top of all their true costs. But is that the typical Uber driver? Wouldn’t somebody with all those skills have better opportunities than driving for Uber? I mean, really, does anybody think Uber set their commission and bonus system in such an arbitrary fashion such that more than a few drivers can succeed in the long term? They are professionals at finance, legalities, and arbitrage. Their drivers just drive.

  56. Anonymous
    Posted June 26, 2019 at 12:02 pm | Permalink

    So the message according to FF is that some motivated people of decent means will do well, some motivated people of lower means will do not as well and all unmotivated people will not do well. Seams pretty obvious, even without googling.

  57. iRobert
    Posted June 26, 2019 at 12:04 pm | Permalink

    Uber has a 4% retention rate with drivers after one year. So it survives on recruiting new suckers continually. There is nothing which would keep the constant ratchetting down of pay from dipping below break-even status for all drivers. Only 4% stick around after a year anyway.

  58. Anonymous
    Posted June 26, 2019 at 12:06 pm | Permalink

    People likely get into it thinking it will be easy money, do it in a half hearted manner, make no money and give up. Those who stay are motivated so they will do better than the people who quit. Those with means will do better than anyone else. No one gets rich except Uber. It is worth noting that turnover in standard taxi businesses is also very high.

  59. Hyborian Warlord
    Posted June 26, 2019 at 12:09 pm | Permalink

    They don’t care about drivers. They will go driverless as soon as possible. All they have to do is limp along with these inconveniently necessary humans until the technology matures.

  60. iRobert
    Posted June 26, 2019 at 12:13 pm | Permalink

    The 4% of drivers who don’t quit after a year are probably subsidized by a parent, significant other, or a pension. Those are the only drivers Uber cares to retain. The new suckers can go through the revolving door and provide the vast bulk of their fleet of suckers.

  61. Frosted Flakes
    Posted June 26, 2019 at 12:14 pm | Permalink

    I don’t know at all Anonymous. I am not sure what the typical Uber driver’s situation is. I have never even taken an Uber myself.

    It is cool if you are not interested in discovering the numbers but why would you feel this on-display-strong-need to discourage other people from discovering the numbers? If we are to take Mark’s “uberization of America” thesis seriously then we might get an idea of the extent of the problem by looking at individual cases. If we run the numbers on individual cases we might help a local driver modify how he runs his business in a more profitable way. If we run the numbers then consumers might have a sense of how much they ought to tip drivers.

    I question your motives, in behaving so silly and flippant about our non-controversial desire to discover some information, which might actually be helpful, on multiple levels,Anonymous. You are a strange one.

  62. Uber
    Posted June 26, 2019 at 12:19 pm | Permalink

    Leave anonymous alone, FF.

  63. iRobert
    Posted June 26, 2019 at 12:21 pm | Permalink

    I think anonymous may have not taken his ADD meds this morning.

  64. Anonymous
    Posted June 26, 2019 at 12:26 pm | Permalink

    I agree.

  65. Anonymous
    Posted June 26, 2019 at 12:27 pm | Permalink

    I also agree with one of the other anonymouses, I think.

  66. iRobert
    Posted June 26, 2019 at 12:28 pm | Permalink

    In the interest of full disclosure, I will confess I’ve riden in an Uber twice. The first time was in Ann Arbor when Uber first kicked off their service here. The driver stopped at green lights the entire ride. My second Uber ride I took was in Puerto Rico a few months after the hurricane hit. I couldn’t find a taxi, so I requested an Uber to get to the airport. I was impressed with the skill with which the driver made his way through the chaos of aggressive traffic with no functioning traffic lights. I tipped him 200% for keeping me alive.

  67. Uber
    Posted June 26, 2019 at 12:31 pm | Permalink

    Ok, we’ve all said what we feel. Now let’s move on to other topics or close this one. There’s nothing more to see here folks.

  68. iRobert
    Posted June 26, 2019 at 12:36 pm | Permalink

    Maybe Mark could set up a special section just for all the anonymous folk to confuse, insult and distract each other. Kinda like an adult day care.

    I’m guessing at least one of the anonymous individuals is an Uber/Lyft driver who can provide us their specific data.

  69. Uber
    Posted June 26, 2019 at 12:42 pm | Permalink

    Tell us more about your trip to Puerto Rico, iRobert. That sounds much more interesting than all this other talk.

  70. Anonymous
    Posted June 26, 2019 at 12:48 pm | Permalink

    I agree, let’s hear about iRobert’s trip to Puerto Rico. That sounds a lot more interesting than anything else here.

  71. Frosted Flakes
    Posted June 26, 2019 at 2:06 pm | Permalink

    I wanted to come on here to point out that whether or not a driver is “motivated”, as Anonymous suggested, is not at all the deciding factor determining the profitability of a particular Uber driver’s business. I think Anonymous is underestimating (or just does not understand) the complexity of running even a small business in a way that yields profits that are acceptable to the particular business owner.

    The misapprehension that “being motivated” is the determining factor, is likely coming from a gross place of condescension, imo.

  72. iRobert
    Posted June 26, 2019 at 2:42 pm | Permalink

    Suggesting that a drivers success is tied solely or primarily to the degree to which they are “motivated” sounds like something Uber would say in their propaganda.

    My trip to Puerto Rico was actually not that interesting. It was very short and not terribly eventful. It would have been a lot more interesting if my Uber driver would have started talking about the specifics of his income and expenses in driving for Uber.

  73. Anonymous
    Posted June 26, 2019 at 3:06 pm | Permalink

    I don’t think there is a pressing need to explore individual cases when the Uber retention rate is 4%. I think that speaks for itself. FF, again you are correct. Running an Uber successfully requires significant small business skills. Most people with those skills apply them to more profitable ventures than being an Uber driver.
    If, FF, you are suggesting that these skills can be taught to Uber drivers so that they could be more successful Uber drivers, then I think your suggestion would be for naught, as Uber would simply just change their payment rubric to extract that additional profit from the driver back to the company.
    If, FF, you are suggesting that these skills can be taught to Uber drivers so that they can move on from being an Uber driver to a better paying job, then that might be more useful in a general sense. But then a better venue for that really isn’t this blog. It might be as a class at the WCC.

  74. Anonymous
    Posted June 26, 2019 at 3:21 pm | Permalink

    I have used Uber occasionally in larger cities, but not Uber X (the basic Uber). I pay for Uber Black, knowing full ahead that Uber Black drivers are fully licensed limousine drivers with commercial licenses and appropriate insurance that also usually drive for a black car service with Uber Black filling in dead time between. I understand fully that I will pay rates similar to that of any generic black car service, with the convenience to me being not having to arrange a ride ahead of time through a dispatch service as well as not having to negotiate different accepted forms of invoicing and payment. I also tip accordingly ($5/$20, minimum $5) as I would for any black car service, with the drivers being true professionals. If I’m in a situation where I want a ride at a cost similar to that offered by Uber X, I take a regular cab service. My tipping rate for a cab is ($2/$10, minimum $2). There is one level of Uber even less expensive than Uber X, which is Uber Pool, where you would ride share with other riders, like a jitney van in the Caribbean. In that situation, I just take the bus or train. Not all these Uber levels are available locally. I think the highest level in this area is Uber Select, which I have used just once when I needed a ride on short notice from my mechanic’s shop to home, and then back when the job was done. In that instance, I tipped as though I was using Uber Black.

  75. Anonymous
    Posted June 26, 2019 at 3:25 pm | Permalink

    I forgot to mention that I did not start to use Uber until they added the tipping option in the app. I have a relative in NYC that works as a driver, both black car and cab (with his own medallion), and I know it doesn’t pay well. He uses Uber and Lyft to fill in dead time, but specializes in airport to downtown runs, where the fares and tolls are fixed.

  76. another mark
    Posted June 26, 2019 at 3:50 pm | Permalink

    The Instant Pot example cuts in two ways though Mark. That company was just started by an engineer who otherwise never would have been able to scale up to create the product he has. Its not like he started with just a few hand hewn multi-cookers, then added staff as business picked up. He needed manufacturing that would have been beyond his individual ability to do and hire for. It enables him keeping the company under his control, rather than selling out to VC’s that would have messed it up. In this case, his company does the design of the product, and outsources construction, it democratized access to a broad market rather than keeping in the hands of two or three companies.

    That said, its one example of a complicated problem. For every person able to scale a business by contracting out tasks beyond their capacity, there is an Uber that is perverting that system, fucking over tens of thousands of workers at a time.

    I think this is where we need some level of regulation of labor markets, where the federal government says ‘though shalt treat employees at least X well’. Thats why despite some initial hesitation I’ve gone in on Team Warren, I think she gets it.

  77. Frosted Flakes
    Posted June 26, 2019 at 6:57 pm | Permalink

    I think the 4% retention rate is a good fact to keep in view thanks. There is almost certainly a reason behind 96% of people quitting after a year. It is good to be aware of and talk about those reasons, right?

    I also think there are probably reasons why Uber is able to reload with new drivers despite the very high driver turnover. It is good to be make those reasons explicit by talking about those reasons, right?

    It might be that Uber is being deceptive in the possible/ likely hourly rate that can be achieved by a driver. It is good to explore and talk about potential deceptive driver recruitment practices, right?

    Your attitude is strange. 96 out of a hundred figure out it is not very profitable within a year so no worries? I don’t know, maybe by not being so very oddly resistant to an an analysis and a conversation we might be able to inform and help people?

    Your positions are consistently odd my friend.

  78. Posted June 26, 2019 at 8:12 pm | Permalink

    I prefer to think of those 96% as people we helped transition to new careers. We’re helping people here. We’re practically the Red fucking Cross!

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