Lyft and Uber threatened to stop doing business in Minneapolis after the city council adopted a new rule Thursday that would set a minimum wage for rideshare drivers.
That’s a weird reaction. Why not just ignore the bill entirely? It’s not like a municipality has any viable enforcement mechanism against what amounts to a smartphone app.
Definitely true, which is why I included that line.
But, the truth is that if you’re not doing well enough as a server to hit minimum wage in tips, you’re probably going to get let go anyways. It’s stupid easy to get minimum wage in tips.
Government: We believe that you need to pay your workers more because we feel like it's not enough.
Companies: The workers agreed to the pay when they signed on. If you make us pay them more, we cannot afford to pay the workers without raising our rates to levels that people don't want to pay for.
Government: You will pay them more money.
Companies: We can't afford to do that so we will be pulling out of this area and now they will make exactly $0 and now people have fewer transportation options.
Government: We did it, we successfully raised people's earnings to $0! pats self on back for a job well done
The problem with your scenario is that you’re assuming an increase in payroll expenses will have enough of an affect on the company’s profit margin for them to go negative.
This is almost never the case, and if your business can’t survive without paying slave wages, then your business doesn’t deserve to survive.
The truth is that companies don’t want to raise wages because they’re on a quest to hoard as much wealth as possible. Just look. The country is in a recession and corpos are reporting record profits.
It’s at least worth pointing out that Uber in particular broke several laws to establish themselves in various markets and never suffered any real punishment.
Sure they do, they can fine them and if they don't comply they can go to state court to get it enforced. Individuals may be able to flout overdue tolls or traffic tickets or whatever for a while, but it's extremely easy to impose a fine on a public corporation.
Exactly. I envision them threatening to leave, but ultimately not taking the revue hit by raising prices for the end users.
I don’t agree with profits over everything. I anticipate the public narrative blaming the drivers or politicians for them exiting the market, but in my opinion its their own corporate greed thats pushing them out. This is unfair and people shouldn’t be vilified for standing up for workers rights.
It’s like when Amazon threatened to leave NY when AOC was campaigning for higher minimum wage over there or whatever it was. I forget the exact details, but the point is that it ended up being a bluff and of course they stayed.
Okay bye bye. It’s not like they suddenly take all the drivers and their cars with them. Are they forgetting what business they are in? All they do is match drivers with passengers. Some other scrappy startup can easily fill that gap when they leave. Uber became only big because of first mover advantage and cut throat capitalism. Their tech is not groundbreaking.
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