this post was submitted on 12 Jul 2023
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I think delivery workers deserve a fair, livable wage, but I am not sure that this is the way to do this.
If this goes through, I could see this playing out in a couple ways:
I would guess that fees go up to cover increased mandated wages. However, since the apps will not want headline costs to rise much more (already have a reputation for large markups, large percentage of fees, and consumer is getting more and more stressed), they could remove the ability to tip, and advertise that slightly higher fee is now “all-in” pricing, to keep headline costs similar on average. This is potentially detrimental to delivery workers depending on earnings/tip mix and shares that the apps skim from each.
Adding an additional fee per order (on average $5 per order as quoted in a NYT article) on something that has relatively elastic demand, will likely be detrimental to all involved, as volumes could drop more than the increase in price. In this scenario, everyone loses: the consumer, the delivery worker, the third party, local restaurant.
Adding an additional fee per order, and the apps experience little to no change in demand (relatively inelastic). This would only hurt the consumer, and would benefit delivery work and tech co’s. However, I have a hard time believing that demand for delivery is super inelastic given food inflation, state of the consumer, and generally perception on food delivery price already.
Not trying to be a corporate shill, but the economist in me is always hesitant when the solution is market interference. In reality, its probably somewhere between the extremes of 2 and 3, and determining where on that spectrum it ends up is quite nuanced.
The article already said that drivers aren't earning the minimum wage after tip, so this will increase their earnings.
1.) Not the drivers problem
2.) Not the drivers problem
3.) Not the drivers problem
I didn’t say it was
I didn’t say it was
I didn’t say it was
1.) It's the subject of the article
2.) It's the subject of this discussion
3,) It's relevant to my point that all your scree is irrelevant. Get over it.
How are you not talking about drivers? Are you still in middle school??
We need additional regulation about profit margins and executive compensation, or something along those lines, to prevent cost increases from being passed on to the consumer when it could just as easily come out of the profit margin or executive compensation.
It's a good joke, right?
The only alternative is to use the tools we have: let the free market work, but not at the expense of the employees. This means, yes, wage increase will be passed into the customer, who will reduce how much they use the service (decrease demand), which will either drive down supply to justify higher prices or drive down prices to increase demand again. Either option creates opportunities for competitors to enter the market which also drives down prices.
All that said, let me be clear: I prefer option A over option B, but I'm not getting my hopes up.