Gig Economy Companies Are Having To Spend More Than Ever To Find Hosts and Drivers (cnbc.com) 55
"The combination of a massive labor shortage in the U.S. coming out of the pandemic and an increasingly crowded market of app-based share-everything companies is raising the prices for freelance and contract work," writes CNBC's Ari Levy. "Companies have to find new ways to bolster the supply-end of their platforms to meet consumer demand and continue growing at a rapid clip." From the report: Far from taking the number to zero, Airbnb said in its second-quarter earnings report on Thursday that sales and marketing expenses surged 175% from a year earlier to $315.3 million. Costs aren't quite back to pre-pandemic levels, but they're not too far off the peak of $437 million in the fourth quarter of 2019. The difference now is that Airbnb is spending to attract hosts, rather than travelers. It's becoming a common theme in the gig economy. Food-delivery service DoorDash said in its earnings announcement, also on Thursday, that it boosted sales and marketing costs by over 150% from a year earlier to lure Dashers, or what the company calls its drivers.
Uber and Lyft have been struggling with long wait times and consumer complaints about higher prices. Uber CEO Dara Khosrowshahi said on his company's earnings call last week that Uber has been spending more to get drivers on the road. "The heaviest driver acquisition spend and incentive spend that we think we will see and we saw was in Q2," Khosrowshahi said. "We really had to take action very quickly because the marketplace was not at a place that we considered healthy, and we wanted to lean in to get wait times down, to get surge levels down."
Uber and Lyft have been struggling with long wait times and consumer complaints about higher prices. Uber CEO Dara Khosrowshahi said on his company's earnings call last week that Uber has been spending more to get drivers on the road. "The heaviest driver acquisition spend and incentive spend that we think we will see and we saw was in Q2," Khosrowshahi said. "We really had to take action very quickly because the marketplace was not at a place that we considered healthy, and we wanted to lean in to get wait times down, to get surge levels down."
Correction, long-term trend, or reaction to UI? (Score:5, Insightful)
N/T ...
On one hand, Uber had been operating at a loss for its entire existence, primarily because its model was whack. There was fat that could be trimmed from radio dispatch taxi services, but ultimately it takes money to run a taxi and the country mostly figured this out in the 20th century. A return to taxis (additionally via Curb and other taxi apps) is long overdue and at least provides a regulated industry.
On the other hand, it's really hard to say how long this lasts once unemployment insurance runs out. How many people decided that the gigs aren't worth it because they're making more on UI than they are there? That's not sustainable, however, and the gravy train will eventually run out. The only question is how long inertia will remain effective.
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People are unwilling to risk death to work at a loss
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Partially blocked. [youtu.be]
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It's almost certainly due to extended UI.
I love how people are so certain about such things. If you look at the actual available evidence there isn't much to definitively link the unwillingness of people to go back to work with increased UI. Indeed what evidence there is suggests that any such effect is very small.
And please don't come back with an argument that "it stands to reason ...". That is an argument that is avoiding evidence and is therefore largely worthless.
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I love how people are so certain about such things. If you look at the actual available evidence there isn't much to definitively link the unwillingness of people to go back to work with increased UI. Indeed what evidence there is suggests that any such effect is very small.
And please don't come back with an argument that "it stands to reason ...". That is an argument that is avoiding evidence and is therefore largely worthless.
Your argument stands to reason!
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. . . so now he's trying to pressure foreign countries into increasing production and lowering prices.
When Biden does it, it's bad, but when Trump did it, it was okay?
Trump says he called OPEC and told producer group to bring fuel prices down [cnbc.com]
or how about when Trump told OPEC plus members to cut oil production because the oil glut was hurting U.S. oil companies
Trump calls on Russia and Saudi Arabia to cut oil production [politico.com]
Re:Correction, long-term trend, or reaction to UI? (Score:5, Informative)
It's almost certainly due to extended UI
Then the states that have already ended extended UI wouldn't be experiencing hiring problems. And when they cut off extended UI, there'd be a huge surge in hiring.
The states that have already ended extended UI are experiencing hiring problems. And hiring didn't change much when they cut off extended UI.
What is "N/T"? (Score:2)
What is "N/T"?
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No Text.
Though... the response had text, so...??
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Thus my confusion.
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Either pay wages that do not require government assistance, or go out of business for lack of workers
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On one hand, Uber had been operating at a loss for its entire existence, primarily because its model was whack. There was fat that could be trimmed from radio dispatch taxi services, but ultimately it takes money to run a taxi and the country mostly figured this out in the 20th century.
The only way Uber makes sense is if they believe they can hold on until fully automated self-driving vehicles are a thing. And I'm betting that's exactly what they've been saying to their VCs all along.
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If they're making more on UI, then whoever isn't able to hire isn't much of a viable business in the first place.
If you pay them, they will come!
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If they're making more on UI, then whoever isn't able to hire isn't much of a viable business in the first place.
If you pay them, they will come!
That's only true if UI is set at its intended stopgap: a temporary social payment after unexpectedly being put out of work.
The supplemental UI funding coming at the Federal level is skewing state UIs to the point where it's above the starting wage at many jobs. While progressives may be overjoyed at their "one weird trick" to raise the minimum wage, that doesn't change the economics of the situation. A restaurant isn't going to pay above what the dining market can bear (especially in this economic environme
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That's only true if UI is set at its intended stopgap: a temporary social payment after unexpectedly being put out of work.
The supplemental UI funding coming at the Federal level is skewing state UIs to the point where it's above the starting wage at many jobs.
Many jobs which are not paying a living wage.
While progressives may be overjoyed at their "one weird trick" to raise the minimum wage, that doesn't change the economics of the situation.
No, it doesn't. And the situation is that the minimum wage was explicitly meant to be a living wage, and those crying about not being able to find workers have businesses which are not viable without being effective slavery, and I do not feel bad for their inability to continue to exploit their fellow man. They have been fucking their employees over their inability to develop a sustainable business model and now they want to cry about people being treated like hu
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In other words, these 'businesses' wish to pay people less than they need to live.
It's true that in the short term, you can starve the slaves to force them back in to the field, but sooner or later, master gets murdered in his sleep.
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Good. (Score:5, Funny)
People working for sub-livable wages is a sign of an unhealthy economy. Uber has historically been a reverse-mortgage on your car that you have to work for. Uber should be nearly as expensive as a taxi.
Weirdly expensive (Score:1)
Re: Weirdly expensive (Score:2)
Gig platforms are just an excuse to vacuum money out of your workers. They buy the car, pay for maintenance, insurance, gas, etc shoulder all the risk. I think people have caught on
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First off, an hour ride should be twice $15 plus twice mileage. At 50mph, it puts you at wait for it $~90/hour! The driver needs to get to you and back to their starting location. Also, you should be paying some factor to cover a surplus of drivers so they are available when you want them.
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That only makes sense if you assume they will drive back to their starting point in an empty car. Nothing stops them from waiting at the first passenger's destination for a second passenger that wants to travel in the direction that takes the driver home.
If the Uber/Lyft system only sends jobs near the location of the driver's ho
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Nothing stops them from waiting at the first passenger's destination for a second passenger that wants to travel in the direction that takes the driver home.
Uber stops them from doing that. Drivers can only set a preferred destination/direction twice each day.
Yes, this is stupid, and I don't know why they do that.
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Uber stops them from doing that. Drivers can only set a preferred destination/direction twice each day.
Yes, this is stupid, and I don't know why they do that.
It is simple. Uber is supposed to be a way to make extra money by bringing someone with you on your way to some place you are already going. For most people, this is from home to work in the morning and from work to home in the evening.
It only fails to make sense if one is trying to make a full time job out of driving for Uber.
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You can either pay extra, or wait hours for a taxi.
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The reality for me is that ~75% of my trips have the driver travelling about the trip duration to get to me. I’ve taken a few Uber/Lyft rides that were over two hours; if you are going from an airport in a major city to a minor town two hours away, a driver is going to struggle to get fares that bring them anywhere close to their home. The system could be better optimized to make those things work, but they aren’t.
Paying the round-trip distance and time builds in that availability, if my exper
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no cabbie union pushing for high pay
Taxicab drivers are independent contractors. They have no collective bargaining rights and no protection under the FLSA.
An hour ride shouldn't cost much more than $15 labor + IRS mileage
That would only be true if Ubers were always 100% occupied. They spend more than half their time waiting or deadheading.
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There are two ways to treat something like Uber:
It is a way to earn extra cash by giving people a lift from near where you are now to near where you are planning to go.
OR
It is a full time job
People actually treating it as a way to earn a little extra cash by getting money to bring someone along for the right, should have a lower cost because they aren't doing anything they wouldn't be doing otherwise.
However, people who are trying to make a full time job out of driving for Uber and are adding costs including fuel, maintenance, consumables, etc. to the vehicle that wouldn't occur other
Uber IS nearly as expensive as a taxi now! (Score:2)
Uber isn't necessari
Chaos at work (Score:2)
The pandemic basically shuffled and scrambled everything such that it takes roughly 15% more human labor to do an average task compared to the past. This results in inflation and labor shortages.
Eventually it should go back to almost normal. I say "almost" because some practices will be changed in perpetuity to be ready for the next pandemic. For example, just-in-time inventory is probably history. It saved money, but didn't handle supply hiccups well.
Then again, society did forget about the 1918 pandemic.
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Then again, society did forget about the 1918 pandemic.
Well, it coming at the tail end of a World War probably helped - much of the western world was already in hell, the influenza outbreak probably just felt like piling on.
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The pandemic basically shuffled and scrambled everything such that it takes roughly 15% more human labor to do an average task compared to the past.
[Citation Needed]
Unemployment insurance isn't to subsidize the lazy (Score:5, Informative)
Morning Consult surveyed 463 out-of-work American adults at the end of June. 13% — roughly one in eight — said that they had refused job offers while unemployed because they “receive enough money from unemployment insurance without having to work [axios.com].”
Unemployed Households Can Earn $25/Hour on Welfare in 21 States, [fee.org]
Re:Unemployment insurance isn't to subsidize the l (Score:4, Informative)
A job that pays less than it costs me to do it is a job I'm richer without.
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I'm not about to believe a think tank. And if unemployment pays more than your regular employment does, then you must live in some third world shithole with "jobs" that aren't worth doing or having.
Re:Unemployment insurance isn't to subsidize the l (Score:5, Insightful)
.... said that they had refused job offers while unemployed because they....
To refuse a job offer, means that you applied for a job and received a job offer. If you applied for a job, you're probably willing to work. So what really happened is people applied for a job, received a job offer, but turned it down when the employer told them what their salary or hourly wage would be. The employer could have offered more, but chose not to. Probably because if they brought in a new person at a higher rate than their existing employees, they'd have to raise everyone else's wage to at least match.
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A household can't live on a single income of $25/h and to qualify for that you actually need to be a household, not a single person.
You use the word "lazy". Yet you talk about people who live well below the poverty line and by your own assertion were looking for a job.
You are the problem. You and the people who think that it's acceptable to not pay someone a living wage.
Call a cab? (Score:2)
Oh, nevermind.
I forgot that Uber and Lyft drove the cab companies out of business. And that everybody went along with it.
What they haven't been doing (Score:5, Insightful)
The real problem there going to have is that they're running out of people who used to have good paying middle class jobs. Those were prime Uber, because they often had low mileage cars they could run into the ground in exchange for rent money. There were lots of 'em after the 2008 market crash.
But Uber doesn't pay enough to maintain those cars. So eventually they were gonna burn through them. It seems that they have.
Best description of Uber I've ever heard: It's a Payday Loan where the interest is the mileage on your car.
Well, is it reinvestment time already? (Score:3)
And your "drivers" realized that they worked for wages that doesn't allow them to sustain their business model, i.e. recover the cost of their cars?
Or did they just realize that doing their "job" costs them more than they make that way?
Comment removed (Score:3)
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It went into the owner's inflated expense accounts. Most capitalists are just fine with socialism when it's for them.
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Infrequent Uber user (Score:2)
Usually I just use them to go to or from the dealership when I'm having service done or things like that. The last ride was a bit os a shocker price-wise. I'll find other ways to get a ride. If you need to have employees losing money and also need the company to lose money to have a viable business, sorry, "viable" (in air quotes), it's not a long term viable model. I don't fault the drivers, but it's also at a point where it's not a very appealing service for me to use anymore.
Pay more (Score:2)
Companies have to find new ways to bolster the supply-end of their platforms to meet consumer demand and continue growing at a rapid clip.
Simple. Pay drivers more money.
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How much more cash can the 're-intermediaries' bur (Score:2)
...before true peer-to-peer buy/sell/interact networks arrive, with automated small-world trust dissemination capabilities and zero 'enrollment' cost?
The internet was supposed to 'dis-intermediate' - commerce, communication, everything! Instead a bunch of Web 2.0 websites and apps 're-intermediated' the lot and fought and clawed like wildcats to 'acquire' users, keep them walled in, and monopolize their attention.
It should not be long, I hope.
Wait... (Score:2)
Uber and Lyft have been struggling with long wait times and consumer complaints about higher prices. Uber CEO Dara Khosrowshahi said on his company's earnings call last week that Uber has been spending more to get drivers on the road. "The heaviest driver acquisition spend and incentive spend that we think we will see and we saw was in Q2,"
Isn't this the same guy who said Uber was an information services company and didn't need drivers?