[notl4wy3r]

I don't get paid more when CPC goes up, either. Pay is related to the value of the work done, but it is not yoked to it. An important additional factor is how much it costs to convince someone to work for you. For some reason, this is a unpleasant concept for a lot of people, even though these people in turn shop for deals at stores and on professional services.

[s73ver_]

To be honest, this just sounds like a bunch of hand-wavey excuses as to why someone shouldn't be paid more when the value of what they're doing goes up.

[saas_sam]

Where do you see that the value of driving for Uber has gone up? I'll grant you that Uber customers are valuing the services more, but how much of that "value" should be going to the drivers vs. the programmers and support staff? How much should be divided among the accountants and cleaning staff at Uber offices? More importantly, who should be the one deciding what the most effective distribution of "value" should be -- maybe Uber should democratize it and ask you to vote on companywide compensation through their app? Let's cross our fingers their users have done their homework before voting, else the drivers and everyone else will have to find new jobs.

[s73ver_]

The drivers are the entire reason the company is successful. Why should they not share in that success?

[saas_sam]

If drivers were the entire reason, why do they need Uber at all?

[notl4wy3r]

I wasn't trying to make a normative statement (should vs. shouldn't), just an indicative one.

[joelrunyon]

Eh -

For a lot of marketing companies, fee is based on a % of ad spend. So increased CPC does increase the overall fee.

[shostack]

As someone with quite a bit of experience negotiating and scoping agency fees, I'll say this only works to an extent.

Sure a % of media pricing model might net them more in the immediate term. But if it comes at the expense of reduced performance, that relationship won't last because at some point, the client will fire them.

Various fee models have their own strengths and weaknesses, and each has their own weighting of which party shoulders the bulk of the risk. % of media models shift that burden heavily to the client whereas rev-share models do the reverse.