"It's the economy, stupid" is how James Carville described Bill Clinton's election strategy back in 1992. However apt it may have been at the time, it is senseless today.
Those pundits who claim that blue collar Americans flocked to Trump because of economic woes are wrong. For the economy is doing very well--better than any time in recent history, with record low unemployment, interest rates, and poverty.
Some Democrats argue that Trump is weak on healthcare or the environment. I suggest that these topics will move the electorate not at all--people have already made up their minds. Nor is income inequality a compelling issue--people don't care how much money somebody in Mountain View, CA, earns. The fact is that a rising economic tide lifts all boats, and that some boats are fancy yachts really doesn't matter very much.
Trump didn't win in 2016 on economic issues. Any promises to his blue collar audience about better health care or fancier pensions were brief, pro forma and without detail. Mr. Trump obviously knows nothing and cares less about health care in this country.
Instead, he won the election by flattering and entertaining his audience. He paid attention to people who typically sit in politics' back row. As Michael Moore eloquently puts it "Trump's election is going to be the biggest fuck you in human history. And it. will. feel. good."
Why did it feel so good? Because Trump's election, not about economics, was instead about status. While a rising economic tide lifts all boats, that is definitely not true about status. Status games are inevitably zero-sum--if my status goes up, then yours must relatively go down. Trump rewarded his listeners just by spending hours with them at his rallies, telling them how they were going to Make America Great Again, in contrast to the evil, dishonest media in the back of the room.
He put low-status people at the top of his list and won their undying affection as a result.
Democrats also play status games, but unlike Trump they're not strategic in their choices. The top dogs in their universe are upper middle class white women, and gay men. The leading Democratic issues are #MeToo and Gay/transgender Rights.
Of course there is nothing intrinsically wrong with those issues. Women should be treated respectfully in the workplace, and gays do deserve civil rights. That's really incontrovertible, though opinions will vary on what respectful and civil rights specifically mean. The argument isn't about issues--instead it's about the enhanced status that accrues to those groups.
But if somebody's status goes up, then who goes down? The Dems seem to have forgotten the downside, and that is their Achilles heel. For people who lose status far outnumber the population of upper middle class women and gays, and they will feel their loss acutely.
Trump understands this. 62% of white men voted for Trump. More ominously, 14% of Black men voted for Trump, as compared to barely 2% of Black women. Obviously men see themselves as losers in the Democrat's status sweepstakes. And there are a lot more men than there are upper-middle class women and gays.
A couple weeks ago I heard an interview with Brad Parscale on Fox News. I don't have a transcript, but the gist was the campaign will recruit a million volunteers to pay personal visits to 20 million undecided, persuadable voters.
Undecided voters? That sounds like people on knife's edge: Are higher taxes a good trade-off for better medical care? Or Should student loans be forgiven for everybody, or just for poor people? Of course that's not how this group thinks. These instead are people who don't really care about politics--left to their own devices they might not vote at all. They don't listen to either FOX News or MSNBC.
If they do vote, they'll vote on emotion. And among those, the strongest political emotion is fear. So (and Mr. Parscale did not say this) the goal of all these visits is to make these people afraid--very, very afraid.
Obviously the undecideds do not include me--the only message I'll get from the Trump campaign is a fundraising letter. As readers of this blog, they don't include you, either. We're committed ideologues--unpersuadable by either camp. The folks we're talking about are precisely NOT part of Trump's base, and indeed, may even not have voted in 2016.
I surmise that Black men are a significant number of these undecideds, for they have a lot to lose from the Democrat's program. They are threatened with nothing less than abject servility, doomed to serve at the whim of upper middle class white women. In a word, they face emasculation. For men who historically have been lynched for looking at a white woman the wrong way, the #MeToo movement is a dire threat. Or at least that's how the Trump campaign will portray it.
Then there is affirmative action, which Black men see as their victory achieved during the civil rights movement. Yet today--with Democratic party connivance--the principle beneficiaries of affirmative action are upper middle class white women, who preferentially get jobs in academe or in the corporate suite. A less deserving population is hard to imagine.
Speaking of civil rights, the hijacking of the civil rights agenda by the LGBTQ community is, in the eyes of Black men, a complete travesty. I saw a bumper sticker yesterday: "Pink is the New Black." While I'm not sure what the driver actually intends, as a political statement it encapsulates the feelings of Black men--they're less important than gay people. Despite having fought and won the civil rights struggle, they're supposed to yield status to a bunch of spoiled sissies.
In 2016 Trump won his fraction of the Black male vote mostly by accident. That won't be true this time around--he will aggressively go after those people. The groundwork is laid--criminal justice reform, a thriving economy, Kanye West, the "what have you got to lose?" message, etc. He can't lose support from Black women, so playing the gender card has only upside for him. If he can increase his fraction from 14% to 20%, that likely puts Florida, Pennsylvania, Ohio and Michigan out of reach for the Democrats.
Trump has the advantage of being a very masculine, bad-ass, man. He's a great role model. Especially if the Dems nominate a woman, expect this strategy to work big time.
For different reasons Trump has an advantage among Hispanic voters (28% of whom voted for Trump in 2016), especially Puerto Ricans. Puerto Ricans are American citizens who are now being forced to share their communities and jobs with a marauding horde of illiterate illegals from Central America. They are likely to throw more support to Trump in 2020. That will make a difference in Florida, where it is speculated that Puerto Ricans cost the Dems the election in 2018. (Unfortunately it won't matter much in New York or New Jersey, which are safe Democratic redoubts regardless of how Puerto Ricans vote.)
The immigration issue may also redound to Trump's advantage in Texas and Arizona, where other Hispanic communities are on the front lines.
In summary, Trump may lose votes among "suburban women," aka upper middle class white women, but he'll more that make up for it with additional male, Black and Hispanic support. The gender gap will work in his favor.
Further Reading:
Saturday, April 27, 2019
Friday, April 19, 2019
"Primacy of the Working Class"
The current issue of Socialist Viewpoint contains a wonderful article by Susan Roberts, entitled Primacy of the Working Class. It's long and not an easy read--I actually printed it out and went at it with a sharp pencil. The effort was rewarded.
(I am unable to find any biographical information about Ms. Roberts. It appears she's British, and she's obviously an academic of some sort. But I don't know where.)
She begins with a strange but useful redefinition of the word politics, which becomes "the contestation of power." Specifically, "it contests the balance of power wielded by different class interests." The contrast is with the apolitical--"concerned more with ameliorating the excesses of capitalism than with challenging the system itself."
I think this is the weakest part of her argument. Such a conspiracy would be impossible to keep secret; would require impossible unity among the myriad ruling class actors; and implies an ability to predict and manage an exceedingly complex future from 1970 to the present to ensure that the outcome comes out just right.
There is no conspiracy, and nobody is doing the bidding of the ruling class in any intentional way.
A second argument is more profound. The apolitical movements are principally concerned with moral arguments rather than power relationships. Traditional working class movements were ultimately about money and power, and not about saving whales or eliminating malaria. (The implausible conceit is that proletarians will successfully take on these important issues after they get power.)
The apolitical movements are aided by post-modernism, which suggests that
Ms. Roberts recalls the bygone days of working class politics:
She faults the apolitical organizations.
She's quite right about the effect--and that's what makes her article so interesting. But I think she's got cause and effect wrong. I think the NGOs, etc., are as much a symptom as is the decline of working class politics. The causes of both phenomena are to be found in automation, globalization, and social media.
The decades since 1970 have largely put paid to the angry grey men. The Upper Clyde Ship Building Works were closed for good in 2001. A similar transition has occurred in American manufacturing. For example, Peabody Coal Company--still the largest coal company in the US--only employs 7,100 people total, including white collar workers. Membership in the United Automobile Workers has declined from 1.5 million in 1979 to under 400,000 today. Even retail companies like Walmart, McDonalds, and Starbucks are shrinking their work forces (along with raising the pay of their remaining employees). The era of cashierless stores is nearly upon us.
Globalization has mostly ended the labor strike as a useful weapon. Production can be sourced anywhere in the world. If the UAW strikes against General Motors, it may lead to the bankruptcy of the company, but it will have minimal impact on the ability of consumers to buy cars. The vehicles will be manufactured elsewhere by other people.
The result of these trends has (so far) not been higher unemployment, but rather different employment. Unskilled labor is devalued in this new world. The angry, grey, faceless men are no longer needed. Instead, one wants smiling, skilled, customer-friendly women. These new employees, far from being faceless, are required to invest their personality into their jobs.
When I was a cab driver back in the 70s, my colleagues were 99% male. And for good reason--cab driving was a dangerous job back then, especially for women. We were faceless, unskilled labor.
Today, with Uber, it's quite different. The app mostly ensures safety for both passenger and driver, and accordingly many drivers are today women. Customers and drivers are rated by each other, with consequences for both. A smiling woman is much more likely to get a high rating and a big tip than an angry, grey, faceless man. He's gonna get left by the side of the road.
So one reason one doesn't see "angry grey men huddled around braziers" anymore is that such gentlemen are no longer employed. It's got nothing to do with any conspiracy theory.
I strongly commend to Ms. Roberts' attention the book by Martin Gurri entitled The Revolt of the Public. Mr. Gurri explores in great detail the effect of social media on our politics. In the past people had no good way to communicate with like-minded folks around the world. The best they could do was listen to the nightly news and latch on to some lowest-common-denominator mass movement--e.g., opposition to Thatcherite economics. Just as there were only three channels on television, there were also only a handful of opportunities for political activism.
Social media changes all of that. This blog, for example, reaches people interested in the residue of Trotskyism, including many on the Right. It's a very small audience, but it is global. Such an effort is impossible absent social media.
Martin Gurri argues that social media empowers the "public," under which he includes all the "particularistic interests" that "impose themselves on inchoate civil society all over the globe." In the 1970s one had a mass movement--called Earth Day. But that has fractured, and today there are undoubtedly Facebook pages devoted to saving whales. And more--there are likely Facebook pages devoted to saving specifically Blue whales.
Each tiny cause attracts its own public, and each public sees its particular cause as reason for revolt. The publics, cumulatively, have buried mass movements. When it's so easy to create an association to promote the specific interests of trans females, for example, it's much harder to maintain a unified LGBTQ community against the rise of all the narrower publics.
We've ceased being a mass movement of angry, grey, faceless men, and instead become members of a myriad of angry, colorful, Facebooked men and women. Politics, as Ms. Roberts notes, is fractured beyond repair.
There is much more to Ms. Roberts' essay than I've discussed here. It is well worth reading. Make sure your pencil is sharp.
Further Reading:
(I am unable to find any biographical information about Ms. Roberts. It appears she's British, and she's obviously an academic of some sort. But I don't know where.)
She begins with a strange but useful redefinition of the word politics, which becomes "the contestation of power." Specifically, "it contests the balance of power wielded by different class interests." The contrast is with the apolitical--"concerned more with ameliorating the excesses of capitalism than with challenging the system itself."
These new [apolitical--ed] players comprise a panoply of “Global Social Justice Movements,” (GSJMs) and “Non-Governmental Organizations,” (NGOs) which impose themselves on inchoate civil society all over the globe. Whilst the range of their particularistic interests is vast, they are generally united in the denigration of working class politics. These movements, which tend to be managed by western, middle class personnel, and are very often funded, directly or indirectly by western corporate interests and unelected bodies, eschew the representational demands of the “old” class politics, insisting instead that their “individualistic” agenda wields a higher moral authority. In the eyes of these new global players, “collective” politics, with its demands of representation, constituency and even democracy are discredited artifacts of a broken system, which needs to be superseded by a more moral form of global governance. [Footnotes deleted--ed]Ms. Roberts elaborates on the themes of this paragraph. The denigration of working class politics is, in her opinion, purposeful. There's a whiff of a conspiracy theory in the plot--the ruling class has purposely substituted apolitical action precisely for that reason. That funding comes from "western corporate interests and unelected bodies" is evidence, along with "western, middle class personnel" hired to do the dirty work.
I think this is the weakest part of her argument. Such a conspiracy would be impossible to keep secret; would require impossible unity among the myriad ruling class actors; and implies an ability to predict and manage an exceedingly complex future from 1970 to the present to ensure that the outcome comes out just right.
There is no conspiracy, and nobody is doing the bidding of the ruling class in any intentional way.
A second argument is more profound. The apolitical movements are principally concerned with moral arguments rather than power relationships. Traditional working class movements were ultimately about money and power, and not about saving whales or eliminating malaria. (The implausible conceit is that proletarians will successfully take on these important issues after they get power.)
The apolitical movements are aided by post-modernism, which suggests that
...a range of social interest groups, (e.g., feminism, anti-racism, environmentalism, etc.) can, through “moral and intellectual” leadership, (as opposed to mere “political” leadership) combine to effect such a challenge. Workers remain relevant to that amalgamation of interest groups, but only through their lived, concrete experience and not because of the historicity of their position.The rejection of historicity strikes at the heart of Marxism. Post-modernism denies the objective truth of any history--including Marxist history--substituting instead "lived" fables and tales.
Ms. Roberts recalls the bygone days of working class politics:
In the UK of the 1970s strikes, sit-ins, worker occupations and even work-ins (most famously perhaps at the Upper Clyde Ship Building works (UCS) were common events. Angry grey men, huddled around braziers, were a regular sight on the nightly news, and everyone seemed to be locked in debate about the economic and political future of the country.Today those angry, grey, faceless men are replaced by climate demonstrators, women's marchers, and pleas to close Guantanamo. A demand for power has yielded to middle class, moral lobbying.
She faults the apolitical organizations.
By elevating a spurious moral leadership above class politics a platform has been created for an open-ended plurality of apolitical causes. The effect of which has been to radically depoliticize democracy by removing from its preserve the defining issues of working class contestation.In her view, the social justice movements and NGOs have killed off the working class--and given the supposed conspiracy theory that was precisely the point.
She's quite right about the effect--and that's what makes her article so interesting. But I think she's got cause and effect wrong. I think the NGOs, etc., are as much a symptom as is the decline of working class politics. The causes of both phenomena are to be found in automation, globalization, and social media.
The decades since 1970 have largely put paid to the angry grey men. The Upper Clyde Ship Building Works were closed for good in 2001. A similar transition has occurred in American manufacturing. For example, Peabody Coal Company--still the largest coal company in the US--only employs 7,100 people total, including white collar workers. Membership in the United Automobile Workers has declined from 1.5 million in 1979 to under 400,000 today. Even retail companies like Walmart, McDonalds, and Starbucks are shrinking their work forces (along with raising the pay of their remaining employees). The era of cashierless stores is nearly upon us.
Globalization has mostly ended the labor strike as a useful weapon. Production can be sourced anywhere in the world. If the UAW strikes against General Motors, it may lead to the bankruptcy of the company, but it will have minimal impact on the ability of consumers to buy cars. The vehicles will be manufactured elsewhere by other people.
The result of these trends has (so far) not been higher unemployment, but rather different employment. Unskilled labor is devalued in this new world. The angry, grey, faceless men are no longer needed. Instead, one wants smiling, skilled, customer-friendly women. These new employees, far from being faceless, are required to invest their personality into their jobs.
When I was a cab driver back in the 70s, my colleagues were 99% male. And for good reason--cab driving was a dangerous job back then, especially for women. We were faceless, unskilled labor.
Today, with Uber, it's quite different. The app mostly ensures safety for both passenger and driver, and accordingly many drivers are today women. Customers and drivers are rated by each other, with consequences for both. A smiling woman is much more likely to get a high rating and a big tip than an angry, grey, faceless man. He's gonna get left by the side of the road.
So one reason one doesn't see "angry grey men huddled around braziers" anymore is that such gentlemen are no longer employed. It's got nothing to do with any conspiracy theory.
I strongly commend to Ms. Roberts' attention the book by Martin Gurri entitled The Revolt of the Public. Mr. Gurri explores in great detail the effect of social media on our politics. In the past people had no good way to communicate with like-minded folks around the world. The best they could do was listen to the nightly news and latch on to some lowest-common-denominator mass movement--e.g., opposition to Thatcherite economics. Just as there were only three channels on television, there were also only a handful of opportunities for political activism.
Social media changes all of that. This blog, for example, reaches people interested in the residue of Trotskyism, including many on the Right. It's a very small audience, but it is global. Such an effort is impossible absent social media.
Martin Gurri argues that social media empowers the "public," under which he includes all the "particularistic interests" that "impose themselves on inchoate civil society all over the globe." In the 1970s one had a mass movement--called Earth Day. But that has fractured, and today there are undoubtedly Facebook pages devoted to saving whales. And more--there are likely Facebook pages devoted to saving specifically Blue whales.
Each tiny cause attracts its own public, and each public sees its particular cause as reason for revolt. The publics, cumulatively, have buried mass movements. When it's so easy to create an association to promote the specific interests of trans females, for example, it's much harder to maintain a unified LGBTQ community against the rise of all the narrower publics.
We've ceased being a mass movement of angry, grey, faceless men, and instead become members of a myriad of angry, colorful, Facebooked men and women. Politics, as Ms. Roberts notes, is fractured beyond repair.
There is much more to Ms. Roberts' essay than I've discussed here. It is well worth reading. Make sure your pencil is sharp.
Further Reading:
Monday, April 8, 2019
The Militant Hails a Ride
The headliner in this week's Militant is an article by Bernie Senter entitled Uber drivers fight bosses’ pay cuts across California. The lede paragraph:
Then one has to take the "25% pay cut" headline number with a grain of salt. Were the cut that big drivers would be quitting in droves--not simply going on strike. So there obviously has to be more to the story than what The Militant is telling us.
This website lists all changes in Uber pricing in Orange County since way back when. The relevant entries appear to be these:
Another website (here) has information about Uber's pay policies--and as Mr. Senter suggests, they certainly are complicated. The company's cut varies by length of service and geography, ranging from 20% to 28%--though in the latter case the company pays the driver's insurance. That percentage only applies to time & distance charges, resulting in a service fee. In addition customers pay additional fees:
Uber is a platform--it connects drivers with passengers. An analogy is the stock market, which connects stock sellers with stock buyers. The price of stocks fluctuates as necessary to clear the market.
Uber needs all passengers to get rides and all drivers to get passengers. There is a price that will do that--it's called the market price. If Uber charges below market, it is just leaving money on the table--money that could otherwise be shared with drivers. Conversely, if Uber charges more than market, there will be fewer passengers, and therefore also less revenue.
The market price is the price that maximizes total revenue. Obviously that's good for the company--25% of more is better than 25% of less. It is also good for the drivers collectively, who get 75% of more. It may not be good for individual drivers, since more drivers mean that the money gets split up more ways.
So the drivers, as described in Mr. Senter's article, are pushing to limit the total number of drivers, similar to what cab companies did with the medallion system. This is good for those (relatively few) drivers who have a job, but bad for those who are left at the side of the road. Even worse, it's bad for passengers, who will now have to wait longer and pay more to get a ride. And it's bad for Uber who, by charging above market rates, receives less revenue.
The drivers become rent collectors--selling access to a licensed, Uber slot--and can charge a premium for the privilege. Perhaps that's good for those drivers, but rent collecting never generates social utility.
Contrary to Mr. Senter's quote, Uber does not dictate its prices. The market does.
Still, the drivers have a case. Given that Uber has maximized total revenue, how should that revenue be split between driver and company? The drivers argue for more, while Uber wants to give them less. But the company can't dictate this, either. It is also determined by the market.
The market price is established by that equilibrium where the number of drivers equals the number of passengers. If the drivers are paid more, there will be too many drivers. Conversely, if they're paid less, there won't be enough drivers. The company has no real discretion over what that pay is. Indeed, it varies by time of day--during rush hours more drivers are needed and therefore a surge price is added.
Uber also has to cover its own expenses. It has to handle requests from customers, process payments, and arrange for pickups. Payment processing alone probably accounts for the majority of the booking fee--that's a real expense. The service fee likely pays for the elaborate computer navigation systems, which has to be absolutely fail-safe. That's expensive.
It's worth noting that neither Uber nor Lyft are profitable. So the incipient union (Rideshare) demand that the service fee be capped at 10% is a non-starter. Both companies would go bankrupt.
Likewise, demands that Uber pay for gas, car repairs, taxes, health insurance,... is a non-starter. Uber is a software and payment processing firm. They're not a transportation company. Folks in the transportation business need to cover their own expenses. It's a hard-scrabble, low wage industry to be sure, but asking Uber to manage a business for which it has no expertise will not make it better.
I think Uber is better for drivers than my initial job as a cab driver in the mid 1970s. I worked for Checker Cab in Chicago and received 42% of the meter, plus tips. Tips were about half my income. Apart from social security I got no benefits, but Checker covered all the car expenses (including gas).
It was a lousy job, and within a year I switched cab companies to one that operated more like Uber.
Further Reading:
Uber drivers held a 25-hour strike March 25 to demand the company reverse a 25 percent per mile pay cut it imposed on drivers in Los Angeles and parts of Orange counties. Two hundred of the striking Uber drivers were joined by drivers for Lyft to protest in front of Uber headquarters here. Protests were also held in San Francisco and San Diego against similar cuts.There's reason for skepticism. Uber drivers go on strike all the time--whenever they turn off their app--say to sleep, eat, or pick up their kids from school. That a few drivers turned off the app for 25 hours to uselessly rage against the machine is irrelevant to the company. I doubt it even noticed.
Then one has to take the "25% pay cut" headline number with a grain of salt. Were the cut that big drivers would be quitting in droves--not simply going on strike. So there obviously has to be more to the story than what The Militant is telling us.
This website lists all changes in Uber pricing in Orange County since way back when. The relevant entries appear to be these:
UberX cost per mile decreased from $1.06 to $0.80 - 3/11/19So the dramatic cut in per mile compensation is at least partially offset by a comparable increase in per minute pay. This is good for drivers who spend a lot of time in traffic, but less beneficial for those out on the open road. The decrease in the minimum fare only affects very short trips. I think The Militant's "pay cut" phrase is an exaggeration.
UberX cost per minute increased from $0.24 to $0.28 - 3/11/19
UberX minimum fare decreased from $7.30 to $6.10 - 3/11/19
Another website (here) has information about Uber's pay policies--and as Mr. Senter suggests, they certainly are complicated. The company's cut varies by length of service and geography, ranging from 20% to 28%--though in the latter case the company pays the driver's insurance. That percentage only applies to time & distance charges, resulting in a service fee. In addition customers pay additional fees:
- A booking fee--that goes entirely to the company.
- A surge fee--applied in cases when there is a shortage of cars, and that goes entirely to the driver.
- A tip--which also goes entirely to the driver.
The booking fee is per trip and looks to cost about $2.30. On a short trip that will be a substantial fraction of the fare, which inflates Uber's percentage of the total haul. A long post from an Uber driver (well written, despite typos, from somebody who self-identifies as Underachiever (1970-present)) details an example:
- The customer paid $9.90.
- Booking fee--$2.30
- The time & distance charge is the difference--$9.90 - $2.30 = $7.60
- Service fee (25% of time & distance)--$1.90
- Total paid to Uber--$2.30 + $1.90 = $4.20
- Total paid to driver (75% of time & distance)--$5.70
For short trips the booking fee is substantial. For a $50 airport run, on the other hand, it's nearly trivial.
Mr. Senter quotes an Uber driver:
“In 2015, I was making between $1.15 and $1.20 per mile,” driver Esterphanie St. Juste, an organizer of the action, told Los Angeles Magazine. “Today, I’m making 50 percent of that. They call us partners, but we’re not. They dictate everything.”As just documented, Uber drivers have not taken a 50% pay cut. But let's focus on the last sentence: "They dictate everything." They don't, and here's why.
Uber is a platform--it connects drivers with passengers. An analogy is the stock market, which connects stock sellers with stock buyers. The price of stocks fluctuates as necessary to clear the market.
Uber needs all passengers to get rides and all drivers to get passengers. There is a price that will do that--it's called the market price. If Uber charges below market, it is just leaving money on the table--money that could otherwise be shared with drivers. Conversely, if Uber charges more than market, there will be fewer passengers, and therefore also less revenue.
The market price is the price that maximizes total revenue. Obviously that's good for the company--25% of more is better than 25% of less. It is also good for the drivers collectively, who get 75% of more. It may not be good for individual drivers, since more drivers mean that the money gets split up more ways.
So the drivers, as described in Mr. Senter's article, are pushing to limit the total number of drivers, similar to what cab companies did with the medallion system. This is good for those (relatively few) drivers who have a job, but bad for those who are left at the side of the road. Even worse, it's bad for passengers, who will now have to wait longer and pay more to get a ride. And it's bad for Uber who, by charging above market rates, receives less revenue.
The drivers become rent collectors--selling access to a licensed, Uber slot--and can charge a premium for the privilege. Perhaps that's good for those drivers, but rent collecting never generates social utility.
Contrary to Mr. Senter's quote, Uber does not dictate its prices. The market does.
Still, the drivers have a case. Given that Uber has maximized total revenue, how should that revenue be split between driver and company? The drivers argue for more, while Uber wants to give them less. But the company can't dictate this, either. It is also determined by the market.
The market price is established by that equilibrium where the number of drivers equals the number of passengers. If the drivers are paid more, there will be too many drivers. Conversely, if they're paid less, there won't be enough drivers. The company has no real discretion over what that pay is. Indeed, it varies by time of day--during rush hours more drivers are needed and therefore a surge price is added.
Uber also has to cover its own expenses. It has to handle requests from customers, process payments, and arrange for pickups. Payment processing alone probably accounts for the majority of the booking fee--that's a real expense. The service fee likely pays for the elaborate computer navigation systems, which has to be absolutely fail-safe. That's expensive.
It's worth noting that neither Uber nor Lyft are profitable. So the incipient union (Rideshare) demand that the service fee be capped at 10% is a non-starter. Both companies would go bankrupt.
Likewise, demands that Uber pay for gas, car repairs, taxes, health insurance,... is a non-starter. Uber is a software and payment processing firm. They're not a transportation company. Folks in the transportation business need to cover their own expenses. It's a hard-scrabble, low wage industry to be sure, but asking Uber to manage a business for which it has no expertise will not make it better.
I think Uber is better for drivers than my initial job as a cab driver in the mid 1970s. I worked for Checker Cab in Chicago and received 42% of the meter, plus tips. Tips were about half my income. Apart from social security I got no benefits, but Checker covered all the car expenses (including gas).
It was a lousy job, and within a year I switched cab companies to one that operated more like Uber.
Further Reading:
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