Uber - employment lawyers don't understand maths or logic

From the BBC:

Uber drivers have won the right to be classed as workers rather than self-employed.

The ruling by a London employment tribunal means drivers for the ride-hailing app will be entitled to holiday pay, paid rest breaks and the national minimum wage. The GMB union described the decision as a "monumental victory" for some 40,000 drivers in England and Wales…

Fair enoughski, but this is just people fighting over the same source of income. Taxi drivers, collectively have a monopoly - each licence is a little monopoly. the tell tale sign is that an increase in demand for taxi rides does not increase the supply of taxi licences (which are at the whim of a local council or similar), it merely pushes up the value of the licences.

From the point of view of the consumer, Uber busted the taxi drivers' monopoly, bringing down prices and increasing supply, but from the point of view of drivers, it created a new one of its own. The trick with these platforms is to persuade passengers/buyers that they are the biggest and have most drivers on call, while simultaneously persuading drivers/suppliers that they are the biggest and have most potential customers.

Things being what they are, it is far easier and more efficient if everybody uses the same platform.*

Which brings me to this…

The ruling accused Uber of "resorting in its documentation to fictions, twisted language and even brand new terminology", adding: "The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform' is to our mind faintly ridiculous."

No, that is exactly how it is. Presumably, if you register as a driver with Uber that does not stop you from registering as a driver with other platforms at the same time. Question is then - whose employee are they now? Do they have two employers? How is the holiday pay, rest pay and national minimum wage while on call but not driving supposed to be split between the two?

Here comes the maths fail:

Alex Bearman, partner at Russell-Cooke solicitors, said Uber could look to meet any additional costs by increasing the percentage of each fare that it kept as commission: "It seems likely that this decision will be appealed and we may not see a final determination for some time to come."

Again, no. It appears that Uber takes about 25% of the total fare paid by the customer. If Uber takes a higher percentage, then that leaves less for the driver, not more. So either:
- Uber takes a lower percentage (which won't kill it, their income is pure profit/rent once its minimal overheads are paid) or
- prices overall go up by a third to get driver's average hourly earnings up from £5.03 to the National Minimum Wage. And you can't just put prices up, the result will be less demand and fewer Uber drivers. So those at the margin will be unemployed again and those who keep their jobs will earn more for less work. Which is classic rent seeking, it is just when trade unions do it, they dress it up as A Good Thing.
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Then there are taxes on output and employment to consider. Let's assume our driver is genuinely self-employed and is below VAT registration threshold. He makes £10/hour gross, Uber takes 25% leaving our driver £7.50/hour, on which he pays 29% income tax/NIC = £5.33 after tax. The self-employed will also get a full tax deduction for motor vehicle costs.

If the drivers are all now employees of Uber, the full fare will be liable to VAT, so out of £10, £1.67 goes in VAT. This leaves £8.33. Even if Uber generously slashes its fee to 5% (42p after VAT) to cover its minimal overheads, this leaves £7.91 to pay gross wages. 96p goes in Employer's NIC, leaving £6.95 employment income taxable at 32%, leaving our driver with £4.73 per hour. The tax deduction which employees can claim for business use of private car is also much more restrictive than for the self-employed and is more difficult to claim.

So an epic fail all round**!

* Which is why the answer is for the government to simply set up its own low-cost ride sharing app, it can provide it for free to all and sundry and will make its money back ten times over from all the extra income tax/NIC it can collect (even at self-employed 29% rate) now that it knows who is doing what. That still looks like a monopoly in the old-fashioned sense of there being a single provider, but in practice it isn't a monopoly at all.

** Unless you are totally cynical and think that the Employment Tribunal is an arm of government and decided the case this way because it vastly increases the tax take from Uber drivers...

Instant tradition

From the BBC:

Mexico City has held its first Day of the Dead parade, complete with floats, giant marionettes and hundreds of dancers and performers.

Mexican tourism officials say the inspiration came from the opening scenes in last year's James Bond film, Spectre*, which was shot in the city. Bond is seen chasing a villain through crowds watching a parade of people in skeleton outfits.

It is hoped the new parade will attract more tourists to the city… But Lourdes Berho, chief executive of the Mexico Tourism Board, said Spectre had created "expectations that we would have something".

Whenever something is described as 'tradition', it always strikes me that it can't always have been tradition; there was a first time for everything. Most things are never repeated, but sometimes, a year later, people do the same thing again because they enjoyed/profited from the first time; after a few decades it is simply 'custom' or 'tradition' and it somehow has to happen in a certain way.

Social scientists, anthropologists, theologians, historians and so on will debate the origins of things more and more as time goes on and longer after the reason it happened the first time is lost in the mists of time. These people will look for deeper symbolism and so on, nearly all of which is is ascribed, attributed and invented long after the event. IMHO, the first time was just an unusual set of circumstances which people repeated a year later for a giggle and so on.

On the other hand, there are customs and traditions which die out, be that 'penny for the guy' being displaced by Halloween or some sacred Native American ritual. People bemoan their loss and talk about homogenisation of culture and so on. Well so what? I vastly prefer watching telly to Morris dancing or compulsory archery practice on the village green. Who are we to tell Native Americans that they should be performing certain dances at certain places at certain times of the year instead of watching telly?

Clearly, newer traditions serve people better than the ones they replaced and that is the end of that.

So well done Mexico City, and I hope it works out for you!

* Which in turn harks back to the opening scenes of Live and Let Die, thus possibly establishing a 'tradition' of their own…

Christmas is coming, and Hornby's last boat before the holidays will soon be in, full of goodies.

Some time ago I toyed with the idea of buying some shares in this famous, British brand. I knew their history, what they did, and they were doing well at the time (see share price 5 years). I am glad I did not. The Hornby management went on a European wide, 'rivals' buying spree and bought into some very poor marketing tie-ins: The Olympics for one. They bought the enlarged group to its knees.

But my original concern before this, was their wholesale shift in production from Margate to China and the long term issues with that. They provided fantastic models and kept price inflation low over a decade. The central problem was the planning, communication and supply issues. They could never hit their deadlines and customers and retailers assumed all delivery date promises were fictions. Their customers also could not grasp how expensive it was to develop and tool up every new product they promised to bring to market (£100,000+). On the hobby sites some cool heads, who knew the tooling up problems, tried to calm the frustrations. In this context then, this anecdotal caught my eye on a blog: *Kader is a giant toy manufacturer

As people from factories in China talk to each other, it need hardly come as a surprise that A knows a little about what B is doing, it need also not comes as a surprise that C lets drop a hint that he is doing it just to test the water. Hornby now buy stuff through a multiplicity of factories, at least one of which has some ex-Kader folk working for it; some factories are known to be making models for several (widely different) concerns which happen to have 'a presence' of some sort or other in the British market so it is hardly surprising that word might get around.

If Hornby happened to have a concern that - not for the first time - a competitor is working on something which they are also working on it strikes me as good business sense to 'let slip' hints about what they are doing and where they have got to with their version. Hornby have had a vast amount of panning on here in the past (some of it from me) about not responding to what many of us consider they should be doing or what 'the market' wants (or what we think it wants).

Hope it works, but that seems a funny old version of the free market if true.

Reader's Letter Of The Day

From yesterday's Metro (Scottish edition):

Made Of Tougher Stuff, I agree with you. I have been married for 40 years and my hubby has never once worn a hat, gloves, vest or pyjamas. He is a real man!

IK, Glasgow

I don't know what MOTS's original vicarious boast was, but this one could run and run, culminating with something like this…

I have been married for sixty years and my husband has never worn anything but underpants. When we are snowed in, he marches out and kills a polar bear with his bare hands so that we have something to eat.

EW, Lapland.

"Morrisons raises Marmite price by 12.5%"

Says the BBC.

Why is this a headline? Didn't everybody panic buy a year's supply a week or two ago?

Notwithstanding the stuff is wholly UK made and not imported anyway...

Hookem, Hook, Hokum?

It seems that The Express still has a forensic interest in the prostrate body of UKIP's Mr Woolfe. It has become something of an iconic image.

Having no idea who Mr Hookem was, I had assumed that the figure standing over the political corpse was just a security guard who had arrived late on the ramp and found the body. I am now wondering if the figure leaning over Woolfe is in fact Mr Hookem. Anybody UKIP savy put me right on this point?

What a differencea few months make...

From The Guardian, shortly before the referendum...

Negotiations about the shape of the UK’s post-Brexit trade arrangements would have to start from scratch after a leave vote in the EU referendum, the head of the World Trade Organisation said as he admitted there had been no preliminary discussions with the UK government.

Roberto Azevêdo, the WTO director-general, said he expected any talks to be long and difficult, adding: “We haven’t had any discussions about the process. We don’t know what the process would be. We do know it would be a very unusual situation.”

From City AM, yesterday...

UK's transition out of the European Union will be fast and smooth and there will be no disruption to trade, the head of the World Trade Organisation (WTO) said today.

Roberto Azevedo vowed that the UK would not face a vacuum or a disruption when it leaves the bloc and it would continue to be a member of the WTO.

Azevedo has been in discussions with the trade secretary, Liam Fox, and vowed to make the transition as smooth as possible. His comments will reassure some who fear uncertainty and repercussions on trade if Britain did not secure a trading arrangement quickly.

'What is not seen' or Perhaps it is?

Here (£)

and

Here (Some free articles)

So, is £45Bn the true cost of the National Living Wage?

A Goldsmith fashions his own demise

Well, he said he would if Heathrow went ahead, and he has gone and done it. I hope you don't mind if I sit back and enjoy it from my seat in the grim, North. I would have voted for expansion for Blackpool or John Lennon myself. Plenty of capacity and anything is better than the planned fracking.

The one fact we can assume from the situation though, is that Tory HQ in London has had plenty of time to consider what to do if Prime Minister May chose tarmac over the sexy, old Etonian.

Many of you here, no doubt, had already guessed they would shoot Zac's fox by not standing against him. Just a little disagreement amongst the sixth form boarders, nothing to get the whole school worried, don't you know. United front. With, 'Neat solution old chap' echoing down the quad.

But what a chance for the Labour Party, up the ante, and also not stand a candidate? Interesting. Take some faux, outraged, moral high ground and bring it straight back to pure 'Blue on Blue' fire. (Always assuming the electorally challenged, Lib Dems, play with a straight bat). Now, even a very average cavalry commander, in battle, seeing utter disorder in the enemy ranks would simply turn his horses around and charge straight through the gap.

But Labour's top brass in Parliament, is cursed by senior commanders who have long records of persistent, misjudged, half-hearted, confused failure when fantastic opportunties present themselves.

So take the wisdom of  serial offender, Staff Officer, Tom Watson here:
https://www.theguardian.com/politics/2016/oct/26/labour-frontbenchers-urge-party-not-to-contest-richmond-park-byelection

In short, faced with heaping pain on the enemy, all Watson can contribute is the lazy idea, that Labour is a 'national party' and focus on the old internal issue of always fielding a candidate no matter what.

So the question is, how many here agree or disagree with Jabber the Hut above: Labour is still a 'National Party' and we can show this ideal in any way we like, except by winning a general election?

Fun Online Polls: The 'price' of Single Market access & Refuelling the Admiral Kuznetsov

The results to last week's Fun Online Poll were as follows:

Which 'price' is worth paying to retain tariff and quota free access to the EU Single Market?

Freedom for EU workers to come to the UK to work - 15%
A market access fee of about £5 billion a year - 8%
Both - 2%
Either/or but not both - 1%
Neither. I prefer Hard Brexit - 72%
Other, please specify - 2%

Good, that's that settled then. I hope the government is on message. Exactly 100 people took part (thanks all) so no 'differences due to rounding' this week either :-)
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A strange quandary again today. From the BBC:

Spain has said it will review the permit for refuelling it gave to Russian warships expected to support a bombing campaign against rebel-held eastern Aleppo, in Syria.

The decision to allow the use of the port of Ceuta was criticised. Nato expressed concern that the ships could be used to bomb civilians...

That's more than a tad hypocritical of 'Nato' (when did it stop being called 'NATO'?) if you ask me, and it  serves the Russians right for not having seen this coming and built a nuclear powered aircraft carrier (lack of easy access to the oceans was always the Russian Navy's Achilles' Heel), but hey.

The whole concept of allowing foreign warships to use your ports has always puzzled me, there is a very strange legal status to all these things and it's always surrounded with diplomatic flummery, but AFAIAA, Spain is not in any way at war with Russia and it's entirely up to Spain whether they want to allow it or not.

So that's this week's Fun Online Poll: "Would it particularly bother you if Spain allowed a Russian warship to refuel in a Spanish-controlled port?"

Vote HERE or use the widget in the side bar.