We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

Uber drivers often explain why they choose to drive for the company in terms of more flexible working arrangements. Last month, an independent poll revealed that 80% of Uber drivers in the UK would prefer to remain as contractors, but the unions campaigning to give these drivers worker status don’t seem to care about the views of the people they’re claiming to help.

[…]

Although the study’s conclusions are more directly relevant to U.S. lawmakers, they are also a reminder to UK regulators that Uber’s more flexible working arrangements are highly valued by its drivers. They care about having greater freedom to choose their own hours: so much so that they are willing to trade off potentially higher earnings in order to preserve that freedom. The same is also true of Uber’s customers, who benefit from the influx of supply during predictable peak hours that Uber’s flexible surge-pricing model makes possible. If Uber loses its appeal against last year’s ruling that its UK drivers are workers rather than contractors, many of the benefits of flexibility will be lost.

Daniel Pryor

Tweet about this on TwitterShare on FacebookShare on TumblrShare on RedditShare on Google+Share on VKEmail this to someone

23 comments to Samizdata quote of the day

  • RRS

    Are the “Unions” the actual campaigners?

    Not if we still find validity in Robert Michel’s Iron Law of Oligarchy

    which is expressly set forth in his work on Union political organization.

    It is the power structure of the Union oligarchy and its sycophants of necessities that is at the barricade of choice.

  • bobby b

    We had much the same involuntary-unionization fight here over the role of home health aides. (These are the people who work as in-the-home helpful aides to disabled people. Generally, these are relatives – it’s hard to find non-related people who will do that work for the pittance that our state care agency is willing to pay. The hire-the-concerned-relative scheme has worked out very well for everyone, including taxpayers.)

    The local SEIU (Service Employees International Union) rammed through a union certification several years ago (based on 3500 yes votes out of 27,000 employees) making these personal attendants union members. They do nothing for the workers, but the state was automatically taking union dues out of each small paycheck and sends them directly to the union. Quite the scam. Our state pols love unions.

    The employees finally got the government to recognize a decertification vote this past year – the decert won by a landslide – and the unions in the state are in an uproar. It’s been fun to watch. Uber is facing this same challenge all over.

  • Mr Ed

    OK, that’s what they say. Did anyone ask how the drivers working patterns interacted with their benefits, e.g. Tax credits? Putting it bluntly, does the Uber model allow the drivers to ‘game’ the benefits system by working a certain number of hours and getting free money from taxpayers for it? Seems like a fairly important point to me, and the poll does allude to drivers having other sources of income without saying what they are. I smell a rat and the spotty scribblers at the ASI haven’t exactly dug here, have they?

    Why do Unions want drivers to have ‘worker’ status?

    So that they can organise for compulsory recognition for collective bargaining purposes, and impose or get a ‘recognition agreement’ if they have majority support in the ballot and a support threshold of 40% of the drivers.

    It’s not so easy here to get Union recognition aa bobby b’s situation, but it’s a similar game.

  • Runcie Balspune

    Choosing your own working hours and conditions is the ultimate expression of individuality, which is an anathema to the worker-unit collectivism of the left, they absolutely hate this kind of thing to the core, and the union’s puppet Corbyn wont stop at anything until the last SME has been stamped into the dust of regulation and taxation.

    The work-life luxury that was once only available to the landed nobility has been freed by technology and business innovations, but instead of lauding this as a new era in non-exploitive freedom that benefits both provider and consumer, it’s being made out as some form of electronic sweat shop model.

    I caught some union twat pontificating about how the latest tube strike was in the interests of crew safety, and I thought that perhaps we could actually replace them all with robots tomorrow and they’d need not endanger themselves any more.

    It is all rent seeking at its very worst.

  • …and the poll does allude to drivers having other sources of income without saying what they are.

    I am self-employed. I have at least five or six separate sources of income from different clients in two different industries. So you are jumping to conclusions in assuming that they are gaming the system. There being no evidence that they are, innocent until proven guilty applies and it is outside the scope of the piece. Two or three different jobs is not unusual. Why should they specify what they are?

    That said, I do not belong to a union (and my railway work is highly unionised) and have no intention of doing so or having them take any money from me.

  • TomJ

    See also that bête noire of the left, the zero hours contract. When McDonalds trialled offering staff on zero hours the option of fixed hours ”[a]bout 80% of workers in the trial elected to stay on zero hours”.

  • Runcie Balspune

    …and the poll does allude to drivers having other sources of income without saying what they are.

    When the airline industry once described passengers as “self-loading cargo”, you realize that people are not the only things that need moving around, and, being an Amazon Prime subscriber needing to get every ounce of benefit from its free delivery, I have noticed a wide variety of vehicles coming to my door, from vans to, well, private hire cabs, even a standard black cab driven by a very nice lady who likes our dog.

    Same goes for takeways, they rarely arrived on your common or garden moped, only the chain restaurants seem to have those.

    It’s all just driving, really.

  • Lee Moore

    It’s not very surprising that people value flexibility positively. Plenty of self employed people earn less than they would if they were employed, have riskier income, and take on the hassle of running a tiny business which employees don’t have to bother with. There’s got to be some compensation for all these downsides, and it’s……paddling your own canoe. Same principle applies to spending. Who would pick a £50 Marks and Spencer voucher over £50 cash ? How about a £55 voucher ? £60 ? And so on.

    Which brings me on to the substance of my digression. One of the links a while back to a Tim Worsthall piece happened to lead me to another TW piece in which he repeated the economic orthodoxy that it’s better to give people on welfare cash rather than provide benefits in kind. I understand the theory – cash of £x has flexibility value and so is more valuable to the welfare beneficiary than vouchers for specific benefits adding up to the same £x cost to the Treasury.

    But I don’t think that the “economic efficiency” of cash benefits proves the case that cash is a better thing to pay welfare beneficiaries. Indeed it’s precisely because £x in specific benefits is worth less to claimants than £x in cash that paying cash benefits digs a deeper poverty trap than specific benefits. If you spend £x on specific benefits that you conclude will satisfy the beneficiary’s needs, it will provide the claimant with, say, 100 utils. A nasty low paid job may provide the claimant with cash worth 150 utils (at the cost of having to do a week’s actual work.) But if you provide the claimant with £x cash benefits that will provide,say, 120 utils (the flexibility of cash adding 20 utils.) The claimant’s incentive to take the job is reduced by the flexibillty utils.

    Flexibility is valuable. Consequently it’s doubtful that providing cash welfare benefits is good policy (in cases where the welfare is a disincentive to take a job – sometimes welfare is provided to those who are incapable of working at all.)

  • Mr Ed

    Longrider,

    So you are jumping to conclusions in assuming that they are gaming the system.

    No I am not, you have jumped to a conclusion that I have jumped to a conclusion. I have simply posited a question as to whether or not Uber drivers (or perhaps I should say some of them) might be gaming the system, which from their own point of view is quite rational behaviour, and it might be that working full-time as an Uber is not economic not only because of benefits, but also that they might be picking peak times for optimal utilisation and revenue generation. My complaint is that there is not enough information of the context in which they operate for the ASI to be making a piece about it.

  • Mr Ed (October 12, 2017 at 6:26 am), it would be strange if no Uber driver ever had overlap with the culture of both earning by working and earning by claiming benefits that exists in parts of London (or maybe all of it for all I know). IIRC it was three decades ago I happened to note a school trip to the local market in Walthamstow had to be warned not to let the kids take any pictures, lest they be suspected of being children of department of stealth and social obscurity inspectors, and thus experience a possibly alarming response from people who did not want to be shown their own picture on their next trip to the claim centre.

    I think we both assume the union is not motivated by any such concern. It is well known that every inspector added to the number of benefit fraud investigators earns their cost-to-employ many times over. It would seem Uber drivers could easily be added to their statistical samples since claimants addresses are (in principle) known and Uber drivers respond by location to public requests. Going by known precedents, I would expect unionisation to become merely another layer of obstruction as soon as they acquired an interest.

    If by “game the system” you instead mean the new law is either so ill-written as to create a margin or else is intentionally a negative income tax then you go beyond my knowledge of it – which you almost certainly do because I know very, very little about it.

  • Tomsmith

    Which brings me on to the substance of my digression. One of the links a while back to a Tim Worsthall piece happened to lead me to another TW piece in which he repeated the economic orthodoxy that it’s better to give people on welfare cash rather than provide benefits in kind.

    Lee Moore- why not just go to Tim Worstall’s blog and discuss it with him there. He has a post on it this very day. Strange to attack someone here who doesn’t often post here.

  • bobby b

    Mr Ed
    October 12, 2017 at 6:26 am

    “Putting it bluntly, does the Uber model allow the drivers to ‘game’ the benefits system by working a certain number of hours and getting free money from taxpayers for it?”

    The American take-money-from-me model allows me to game the system and limit what I donate to tax by working amongst qualified (deferred-tax) accounts, cap gains, allowed deductions, normal income, barter . . . well, okay, not barter . . . The give-money-to-me model works much the same.

    Of course the answer to what (I think) you’re asking is “yes.” Everyone who interacts with a tax system has ways of gaming the system to small or great extent. It’s so accepted and legal and normal that we don’t even call it “gaming the system” – it’s just tax planning.

    The benefits system is the same. The rules are out there for all to see, and so you can change your behavior and have good or bad effect on your benefits. If you’re smart, you strive within the rules for good effects. If the rest of us are smart, we examine the rules regularly and fix gaps.

  • bobby b

    Tomsmith
    October 12, 2017 at 10:02 am

    “Lee Moore- why not just go to Tim Worstall’s blog and discuss it with him there.”

    By doing it this way, he introduces TW’s blog to people who maybe haven’t seen it and might like it. I know that I wander into good places by following such leads. It never hurts to have your page discussed on other pages.

    Having said that, I think his argument is wrong. He tried to argue that paying benefits in cash results in a higher disincentive for employment, but really he’s made the argument that paying too much for benefits no matter the form results in a disincentive for employment.

    In his example, if we merely correct benefits downward when we pay in cash so that we equalize his util measurement, we’ve corrected the problem.

    What we really lose by paying cash is the coercive effects that benefits-recipients sometimes need to feel. Look at (USA) food stamps. You cannot use them to buy cigarettes, wine, motorcycle parts , or prostitutes. You can only buy foodstuffs. This is good because I’m willing to pay to support the benefits programs to the extent that the hungry are fed, but I’m damn well not willing to supply them with fun, too. That is a great incentive to work – the ability to finance your own fun. (Plus, if we’re paying basic benefits that are being used for desires beyond sustenance, we’re overpaying.)

  • I’m not immediately sure that Lee Moore (October 12, 2017 at 8:14 am) is wholly wrong. I am quite sure that gutting the ‘respect’ aspect of “I stand on my own two feet” was both an aim of the PC and an evil outcome of the welfare state (the point is discussed in works by Thomas Sowell, in Charles Murray’s ‘Losing Ground’ and elsewhere). Like bobby b, I’m glad to see the Lee’s post here and to think about it. The question of how do we get back to where we were from where we is difficult.

  • tomsmith

    By doing it this way, he introduces TW’s blog to people who maybe haven’t seen it and might like it. I know that I wander into good places by following such leads. It never hurts to have your page discussed on other pages.

    I think it is a bit unfair of Lee Moore to attack TW on a different blog to the one where he is actually making his points. Since he is posting about it on his blog today, why not go these and make these points to the man himself?

    I think that if Lee Moore made the effort to do this, and then posted here about his opinion of TW’s argument, then it would look less like whisper and gossip, and more like an honest disagreement.

  • Runcie Balspune

    I’m not sure how Uber drivers can game the system, after all, it is all recorded up front, and Uber will see it is in its best interests that their system is not abused, for example, a driver and client abandon the Uber transaction and pay in cash, even then, its been recorded somewhere.

    In fact, Uber must be a social security or tax inspector’s wet dream, as they’ll easily be able to get an approximate (taxable) income from anyone using it (with appropriate warrant), alternatively, it would be easier to drivers to declare by listing their Uber account. And it may also be harder for Uber to “tax-efficient” (read: offshore account) a business that is clearly involving UK workers and clients.

    It is incredibly hard to see how it is not the case that everyone benefits; drivers, passengers, Uber, social security, tax office. That is, everyone except the taxi drivers, their union, and the monkeys in parliament and the mayor’s office being paid by the union.

    Black cabs lost their advantage of direct hail a long time ago when the mobile phone arrived, their “problem” was partially solved by licensing, but Uber is really the final straw, they need to adapt or perish, I don’t hold out for the former, when Hailo decided to take on private hire vehicle they responded in the time-honoured left wing tradition

  • Mr Ed

    Runcie B,

    By ‘gaming’ I am not talking about any Uber drivers cheating the system, but playing it to their advantage, by working to the targets that the state sets. I suspect that it would be open to an Uber driver to go ‘on Uber’ for a traceable 30 hours a week, and then do Private Hire on a rental scheme which could be ‘off-books’ at another private hire firm.

    So in effect, the ability of Uber to recruit drivers and charge the rates that they offer might in part be a side-effect of our ludicrous tax credits system. I am not making an argument against Uber here, but perhaps against what I perceive as a vision of Uber as some libertarian dream, as opposed to an industry that might have popped up in part due to the vagaries of a welfare state.

    I’m sure that if Uber can find a way to route your payment for tax purposes through, say, Luxembourg they would do so, or perhaps they are paying royalties for the use of their own name to a sister company etc.

  • Paul Marks

    The original difficulty was that the government (of all parties – for the leaders of all of them receive much the same “education”) decided that “rights” were gifts from government (although paid for by employers) and gave employees lots of these “rights”. So, to avoid mass unemployment, the economy adapted by many people becoming “self employed” or “contractors” and thus not eligible for these “rights”.

    The intellectual elite and the “activists” are not happy with this – so they wish the “self employed” and “contractors” to have these “rights” as well. This will lead to mass unemployment.

    The establishment elite seem unable to understand that wages and conditions of work need to be determined by SUPPLY AND DEMAND – not regulations (“rights”) from the state that lead to mass unemployment. There is no such thing as “fair” or “just” in prices and wages (a wage is a price – of work) different from what is arrived at by buyers and sellers, the market place.

  • Lee Moore

    Just for the avoidance of doubt, I have no intention of attacking TW. He’s a clever chap and though I don’t always agree with him, he’s usually sensible and usually interesting. So my only argument is – occasionally – with his arguments, not with himself. In any event, he seems a self confident fellow and I doubt very much that his feelings are bruised by counter-arguments from the likes of me.

    I did intend to comment on his blog when I saw his post about cash welfare benefits, but failed to spot any way of doing so. I presume (a) that some sort of registration is required or (b) I was too late or (c) I’m none too bright and just missed the obvious way to do it. Or possibly all of the above.

    The reason for commenting here (and now) is that my thoughts about cash welfare reoccured to me when I read the argument above Uber drivers. Flexibility is valuable. I expect a clever economist type like TW would be able to put it in proper economics-speak. Something to do with options, no doubt.

    As to bobby b’s point :

    He tried to argue that paying benefits in cash results in a higher disincentive for employment, but really he’s made the argument that paying too much for benefits no matter the form results in a disincentive for employment.

    I agree that what we’re talking about is the disincentive caused by paying the beneficiary too much, ie too close, by his valuation, to the value of (the cash value of a job minus the labor required to hold it down.) Theoretically we could tailor this individually to each claimant’s subjective valuation, enabling us to spot that for claimant X, he is indifferent between a pile of specified benefits costing the taxpayer £100, and cash of £80. In which case we’d obviously pick the £80 cash. But I doubt that in practice this is possible. Ok, I know that in practice it’s impossible. I suppose we could offer a specified set of benefits to all claimants costing £100, and then invite bids by each claimant for a cash alternative. Mr A might accept £81 and Mr B might accept £66. But even then, I think my point stands. If Mr A accepts £79 cash and Mr B accepts £66 cash, that implies that each prefers the cash to the specified benefits. And consequently the cash represents a greater disincentive.

    But, again for the avoidance of doubt, I have little doubt that the biggest item in the equation for most claimants is the labour term in the equation. If you get specified benefits costing £100 or cash of £79, and there’s a job out there you really don’t want to do that pays £110, it makes a real difference as to whether you have to do as much disagreeable labour to get your benefits as you would have to do to get your wage.

  • tomsmith

    I did intend to comment on his blog when I saw his post about cash welfare benefits, but failed to spot any way of doing so. I presume (a) that some sort of registration is required or (b) I was too late or (c) I’m none too bright and just missed the obvious way to do it. Or possibly all of the above.

    Click on “comments” for the post you want to comment on, type name and email address, type comment. It is just like here. No need to register for anything. No time limit.

    Go here: http://www.timworstall.com/2017/10/12/of-all-the-idiot-suggestions/#comments

  • No I am not, you have jumped to a conclusion that I have jumped to a conclusion.

    Nope. I responded to what you said. The article is about why Uber drivers might prefer to work flexibly and the unions are working against their interests. As such, it contains sufficient information. The “gaming the system” point is entirely irrelevant. As I explained, flexibility is desirable for many of self-employed contractors for differing reasons. Doesn’t mean they are gaming anything, so no need to raise it. As I said. Irrelevant.

  • Lee Moore

    moi : I did intend to comment on his blog when I saw his post about cash welfare benefits, but failed to spot any way of doing so.

    tomsmith : Click on “comments” for the post you want to comment on

    “his blog” was inaccurate. I meant :

    https://www.adamsmith.org/blog

    on which I can still see no means of commenting

  • Paul Marks

    I repeat – wages and conditions of work (such as holidays and hours) should be determined by supply and demand, the free working of the market place (buyers and sellers – “market forces” are actually MARKET CHOICES as Mr Ed is fond of pointing out).

    People moved to being “self employed”, “contractors” and so on to avoid the MASS UNEMPLOYMENT which is the result of the government giving employees lots of non market “rights” – if the “rights” follow them in this and other areas, then MASS UNEMPLOYMENT will be the eventual result. If people do not want the mass unemployment of, say, Italy they should avoid the endless “employment rights” of, say, Italy.