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Comment by panarky | Hacker News Reader

> Paying them what the high-flying executives make would mean a few dollars per person

Let's radically simplify Uber's stakeholder into five classes: executives, investors, engineers, full-time drivers and occasional drivers.

Each of these five classes of stakeholders have contributed to create Uber's market valuation of $55 billion.

The first three classes are already well compensated because executives, investors and engineers have negotiating leverage.

But the full-time drivers are the one stakeholder class that created much of Uber's value yet receive very little of the value they created.

Maybe they're 10% of the total driver base, or 300,000 workers. How much of Uber's value do they deserve?

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I mean, if drivers shared in Uber's net profit thus far, they'd have to pay Uber to drive. Do you think Uber is actually worth $55 billion? If it goes to zero, should the drivers pay back what they've earned?

I think you make an excellent point that Uber wouldn't exist without drivers, but I feel like the inverse is also true? How much would a driver make just posting on FB or wherever that they were willing to drive people around for what they make driving for Uber? I feel like the vast majority of them would make basically nothing, otherwise there would be a lot more people doing that.

People made non-insignificant amount of money driving around and looking for hailing hand. Maybe not in the US, but that worked in Russia.

The full time drivers have not generated the value. They are a replacable function and the market has priced their low-skilled labor in various other situations.

What about the car manufacturers? The reliability and availability of the cars has "generated value" in an analogous way for Uber as well. Should they be compensated or should the cars be priced at what people are willing to pay for them?

Revenue for Uber last year was $14 billion. Divide that by 300k workers and you get $47k/year. The average full-time driver makes $36k/year (https://www.thestreet.com/personal-finance/education/how-muc...). So drivers are getting 75% of Uber's revenue. This matches up with other sources that say Uber's commission is 25%. Is there a reason 25% is a bad number, besides that Lyft's commission is lower (20%)?

>because executives, investors and engineers have negotiating leverage

Are you sure it's not because their marginal product is higher? Are you implying that collectively those groups managed to finagle a situation where the marginal worker is paid more than their marginal value, persistently and across multiple rounds of hiring? If it's not that, I think the more correct thing to say is they're paid higher because they're worth more to the company, not because they have "better negotiating power".

Don’t they have better negotiating power because their marginal product is higher (and their supply is more limited)? I don’t think you’re necessarily contradicting them

Key principal taught in business school: pay people what it costs to replace them. Which in Uber's case is very low.

> taught in business school

The school is ethically wrong here.

Now we’re back to the opening comment: who’s job is it ethically to ensure people receive a living wage? The companies that employ some people or all of us?

Most people don't have leverage to negotiate a fair compensation for people to do it on their own. So you're presenting a a false dichotomy. "all of us" includes the companies that employ "some people". For better or worse, America seems to reject the idea that "all of us" means the government should help people out through taxes. That therefore leaves that companies must do it.

Just realistic, not idealistic.

Exactly. This has nothing to do with ethics and the school wasn't wrong from an economic perspective, which is what you learn about in, ah, business school.

Furthermore, there's a presumption of ill intent - a question begged: do all employee replacements occur because the employer unethically fires their employee?

Get a broader education.

"But the full-time drivers are the one stakeholder class that created much of Uber's value"

This is not a true statement. Uber is not worth $55b because they have performed a lot of driving work. Uber is worth $55b because they have constructed a system in which driving work can be easily scheduled and allocated.

The value is the system and the system was not created by drivers.

The system was created to serve drivers and riders together.

"yet receive very little of the value they created."

They have received all of the value from the driving work they performed, in the form of a 1099 paycheck. There is a fairly clear market rate for driving work.

They did not contribute to the construction of the $55b system.

"How much of Uber's value do they deserve? "

None.

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