Uber and Lyft are only economically viable because they offload their cost of capital -- the investment and depreciation on cars and the cost of keeping a driver fed and healthy -- onto the drivers, who are only willing to accept such a bad deal because the labor market sucks.
Businesses that can't cover their costs of capital are not sustainable without some source of subsidy (like the food-stamps for McDonald's and Walmart workers that we all pay for). If the labor market improves and workers decline to continue to subsidize rideshare companies they'll need to find some way to get the government or the capital markets to subsidize them or they'll collapse.
The market will not miraculously produce a capital replacing living wage. If it does so in any particular market it is happenstance; luck, not social physics.
This is a social action problem; a race to the bottom issue. It makes sense, individually, to race to the bottom. Company execs and investors get rich, consumers get cheaper rides and drivers get money they need. But this isn’t win, win, win. It is win, win, lose over the not very long run.
The cheaper wages paid to drivers, and thus the cheaper rides, also drive business with capital structures which make social sense out of business. They can’t compete with “drive your car into the ground, make less than minimum wage”.
The Market Fairy will not solve the problems of Uber and Lyft
(Image: Uber Sidecar Lyft, Colin@TheTruthAbout, CC-BY-SA)
(via Naked Capitalism)
The Right to Repair movement has introduced dozens of state-level laws that would force companies to support independent repairs by making manuals, parts and diagnostic codes available, and by ending the illegal practice of voiding warranties for customers who use independent repair services, but these bills keep getting killed by overwhelming shows of lobbying force […]
Equifax doxed virtually every adult in America as well as millions of people in other countries like the UK and Canada. The breach was caused by an acquisition spree in which the company bought smaller competitors faster than it could absorb them, followed by negligence in both monitoring and responses to early warnings. Execs who […]
The next version of Chrome will patch a bug that lets websites detect users who are in incognito mode by by probing the Filesystem API; they've also pledged to seek out and block any other vulnerabilities that will let servers detect users in incognito mode.
If you suffer from sleep disorders, there are a number of methods out there to mitigate them: Ambient noisemakers, relaxation tapes, sleep masks, you name it. One thing that doesn’t get tried is headphones, for good reason. Even the smallest earbuds are liable to wake you up if you roll over the wrong way. Now […]
Looking to upgrade that old laptop or tablet? Holiday sales may be way on the horizon, but there’s an even better way to get like-new tech for a steal. Here are 10 of our favorite deals on personal computers and gaming gear – refurbished, renewed or brand new. Acer Touchscreen 11′ Chromebook 16GB (Certified Refurbished) […]
Vape technology has been around long enough that vapers are starting to get picky about their gear. Luckily, so are we. From disposable models to cutting-edge touchscreen atomizers, there’s a vaporizer in this roundup to suit every taste. Hera 2 – World’s Most Advanced Dual-Use Vaporizer Choose between dry herb or oil extraction modes – […]