Great interview! This is someone I was really looking forward to hearing more from.
One question that came up as I was reading the report on low-paid misclassified workers. I was reading the original report [1] and found that the 873,000 figure (used to establish ~10% of NYS's 8.8M workers are misclassified) is a simple count of the number of contractors in low-paid industries. This is irregardless if those workers are doing it to supplement a primary income source or are relatively 'independent' to draw from Juliet Schor's work distinguishing between different types of platform workers [2]
I'm fully in support for giving all workers in low-paid industries more rights and protections (even if some of them are truly supplemental income earners that already have a lot of protections from another income source/spouse/etc) but wasn't sure if legally at this point in time New York would find *all* of those workers to be misclassified.
Parrott & Reich's pioneering analysis of ridehail operations in New York highlighted the misaligned financial incentives between Uber and its IC drivers. Uber is unequivocally better off, with more drivers logging into their app, for three reasons:
º More drivers = shorter rider wait times
º More drivers = lower trip pay (particularly under Uber's new "upfront price" driver comp policies)
º More drivers reduce r utilization rates, but with no financial penalty on Uber
For drivers, the incentives are exactly the opposite, with fewer drivers yielding higher utilization, higher pay rates and higher aggregate pay.
The Parrott/Reich minimum pay/utilization rate formula attempted to strike a reasonable balance in aligning the interests of Uber and its stakeholders: drivers and riders.
To this day, Uber still steadfastly refuses to disclose information on its driver utilization rates or driver pay per online hour in any of its major metro markets. Moreover, the opacity of Uber's upfront driver pricing algorithms and reverse Dutch auction "Trip Radar" program give Uber greater opportunities than ever to improve their "take rates" (share of gross bookings) at drivers' expense.
Recent changes in Uber's driver compensation policies are already making their mark on improving profitability. Uber's Mobility take rates in 1H 2022 increased by ~65% year-on-year, and in Q2, the company reported its first ever positive free cash flow quarter ever.
It's not a coincidence that the transparency of Uber's rider pricing/driver pay policies, and the company's financial performance are moving in opposite directions!
Great interview! This is someone I was really looking forward to hearing more from.
One question that came up as I was reading the report on low-paid misclassified workers. I was reading the original report [1] and found that the 873,000 figure (used to establish ~10% of NYS's 8.8M workers are misclassified) is a simple count of the number of contractors in low-paid industries. This is irregardless if those workers are doing it to supplement a primary income source or are relatively 'independent' to draw from Juliet Schor's work distinguishing between different types of platform workers [2]
I'm fully in support for giving all workers in low-paid industries more rights and protections (even if some of them are truly supplemental income earners that already have a lot of protections from another income source/spouse/etc) but wasn't sure if legally at this point in time New York would find *all* of those workers to be misclassified.
[1] https://static1.squarespace.com/static/53ee4f0be4b015b9c3690d84/t/62b29d354dfc96468ac9a02b/1655872843122/CNYCA+June+21+IC+report.pdf
[2] https://www.youtube.com/watch?v=TiY6A2gPkjw&t=615s
Parrott & Reich's pioneering analysis of ridehail operations in New York highlighted the misaligned financial incentives between Uber and its IC drivers. Uber is unequivocally better off, with more drivers logging into their app, for three reasons:
º More drivers = shorter rider wait times
º More drivers = lower trip pay (particularly under Uber's new "upfront price" driver comp policies)
º More drivers reduce r utilization rates, but with no financial penalty on Uber
For drivers, the incentives are exactly the opposite, with fewer drivers yielding higher utilization, higher pay rates and higher aggregate pay.
The Parrott/Reich minimum pay/utilization rate formula attempted to strike a reasonable balance in aligning the interests of Uber and its stakeholders: drivers and riders.
To this day, Uber still steadfastly refuses to disclose information on its driver utilization rates or driver pay per online hour in any of its major metro markets. Moreover, the opacity of Uber's upfront driver pricing algorithms and reverse Dutch auction "Trip Radar" program give Uber greater opportunities than ever to improve their "take rates" (share of gross bookings) at drivers' expense.
Recent changes in Uber's driver compensation policies are already making their mark on improving profitability. Uber's Mobility take rates in 1H 2022 increased by ~65% year-on-year, and in Q2, the company reported its first ever positive free cash flow quarter ever.
It's not a coincidence that the transparency of Uber's rider pricing/driver pay policies, and the company's financial performance are moving in opposite directions!