At the center of controversy is whether or not Uber drivers should make minimum wage. Uber is a private, on demand car service that one can use as a safer alternative to the traditional yellow taxi simply by pressing a call button on their phone. Uber allows everyday people to be their own boss and set their own hours, and each driver is allowed to pick up fares whenever they would like provided they have a valid driver's license and a safe vehicle. Uber stresses the value of their “self employed” drivers as one of the huge perks of their company, but some drivers argue their employment status is under Uber, not themselves, and therefore they should make minimum wage due to the fact they are a full time employee of the company. In the article by The Washington Post, the case of two Uber drivers against the company is summarized. In October 2016, a London employment tribunal ruled …show more content…
The circular flow model illustrates that consumers who own the factors of production, in this case labor, are the sellers of their labor firms in the resource market. In the case of the Uber drivers, they are trying to maximize the profit they are receiving from Uber in order to gain a greater power to purchase goods and services in the product market. Since essentially everything is scarce, including labor, this gives the trade union leverage to bargain for minimum wage. It is essentially this concept of scarcity that articulates the fact that if Uber continues to forgo this issue of minimum wage, the opportunity cost of their decision would be an eventual loss of workers. Uber would only be able to survive as a business for a limited time in this situation due to the fact labor is scarce and at some point, they would theoretically run out of workers. This point strengthens the dependence upon both consumers and firms to work together in unison based on the circular flow model, because without one party, the other ceases to