Lots of HN comments are here like "I know people who prefer to be contractors", "My sister's neighbours little brother actually doesn't want to be treated with respect by Uber", blah
This is utter nonsense. Being a contractor means being self employed. You don't get paid leave or sick pay. It's a risk taking and doesn't make any sense in the gig economy where the wages are close to minimum rates.
If you are truly self employed then you have a skill which you can market, you can charge fees which allows one to put money aside for things like unpaid leave or sick days.
If you are truly self employed then part of your job is building customer relationship, building up recurring customers, increasing your business through marketing, word of mouth, etc.
You actually have to do entrepreneurial shit.
Uber drivers are NONE of this.
They clock into an app which belongs to someone else and they have no share in. They can't hand out business cards to customers or market their services on a board somewhere. They sit and wait until their master (Uber/Lyft) assigns a ride to them. Then they have merely the chance to accept/decline it. They can't even negotiate their own fees. That itself is fucked up. It's complete nonsense in extremely disingenuous by anyone here to suggest that an Uber driver is a self employed contractor and that this is good for them. They get paid shit and can't save up like a real self employed person, because they also have no say in the ride prices.
Fuck the gig economy. All gig workers are slaves and we should treat each other with more dignity and upgrade them to employees. It's our bloody duty as a decent human being.
Most Uber/Lyft drivers say they don't want to be considered employees because, for most of them, this isn't actually their job. It's just a side gig. I can't really speak to larger urban areas because I tend to prefer public transit when it's a viable option, but, in the smaller cities where I take most my rideshare rides, a pretty large percentage of the drivers I chat with end up mentioning their day job somewhere in the course of the conversation. I agree that these folks, by virtue of lacking any viable way to independently contract work, cannot reasonably be described as independent contractors. But they don't quite fit the mold of "employee", either.
Then there is another portion of drivers who really are doing this full time. I am guessing that they are a small minority of individual drivers, but that, in larger cities, they may account for a majority of rideshare capacity.
Anyway, if this is how it shakes out, then, regardless of the ratios, it doesn't really make sense to speak about "ridehsare drivers" as if they're a homogeneous unit whose needs can reasonably be met with a one-size-fits-all classification. Perhaps there needs to be a tiered designation, comparable to the various employee sub-designations such as "full time", "part time", "exempt", "non-exempt", etc., that states codify.
> Most Uber/Lyft drivers say they don't want to be considered employees because, for most of them, this isn't actually their job. It's just a side gig
For some, sure. Most of my rides have been with Indian/African/East European drivers who do it basically full time. Easily 90% or more.
A small number have been part-timers, mostly stay-at-home moms and retired people. One was a retired bartender and he did Uber mostly because his joints gave out which made standing hard, and Uber allowed him to make some petty cash while talking to people. But hands-down, these were the exceptions, not the rule.
This also heavily implies that online discourse skews away from the full-timers, because:
1. They tend to be from less-online demographics
2. If 90% of rides come from drivers working 50 hours a week, and 10% come from drivers working 5 hours a week, then more than half of the drivers work 5 hours a week. Those 5-hour drivers also probably have a lot more time and energy to discuss things on the internet.
This might also explain the disconnect between "what the survey says," "what my friend says" and "what I say," and what the driver associations are saying. It's conceivable that people who are doing this full time are more likely to let an interest group do the talking for them.
Long story short, I'm inclined to say that any source of opinion that isn't breaking drivers' views down by quartiles, is a highly selective version of the story.
Non-full time employees often do not receive significant benefits. However, being classified as a contractor means paying the employer side of income taxes (yes, "self-employed" contractors essentially pay double the tax rate of employees). On your taxes your gross income compared to take home after taxes is a much larger margin for contractors as a result, disqualifying people for assistance programs and health insurance subsidies at a much lower take home pay than traditional employees.
What Uber and Lyft have essentially done here is to make their employees pay a substantial portion of what would otherwise be corporate taxes, and pocket that difference as profits while their drivers actually meet the legal criteria to require classification as employees. They shouldn't just be getting ordered to begin complying with the law, this should have resulted in a class action law suite for damages and a felony tax evasion case brought against them.
>... we should treat each other with more dignity...
You mean like respecting their decision to engage in gig work despite every other available option? That kind of dignity?
The whole issue is pretty rich coming from California. If people are struggling the answer is never that the cost of living is too high due to rediculous zoning and environmental regulations, clearly it's the greedy companies that are the problem. The whole living wage issue in California reeks of doing every gymnastic available to avoid political introspection that might lead to admitting a lot of well intentioned things aren't working.
Never mind that the state suddenly becomes mute about living wages when discussing its many illegal immigrants who work for /below/ the minimum wage. We apparently don't talk about that because leeching off desperate individuals "is complicated" and something that only companies do. If a large number of workers prefer gig work the problem isn't that they aren't making enough money the problem is that catering to them would undermine all of the previous "benefits" that they obviously don't view as a priority in their current situation. Heaven forbid that we let the actual workers decide how they want to associate.
I had a long rambling reply to this that in retrospect I think missed the forest for the trees. Put simply, most jobs are worked out of necessity because we don't live in a post scarcity society. It's a very privileged position to have a real choice between interesting jobs that aren't just two terrible competing options.
Removing labor options by force weakens the position of low skill workers because it limits how many interests are competing for their attention (labor demand). There is nothing inherently disrespectful about independent contractor work, it's simply another option in a wider pool of choices. What is disrespectful is suggesting that these people are just to dim to see that they're being exploited rather than acknowledging that perhaps the reason they don't care about the benefits of regular work is because a job that fits into their current life situation is more valuable than the other options they looked at.
People pay you for a job because you wouldn't do it for free.
This is why so many scientists work for peanuts. This is why most game developers work 60-80 hour weeks for a salary 30+% lower than what they'd make working that boring Java job at corporation X.
If it’s out of necessity, it’s often because it’s their second job to some other job that _actually has a schedule_ but doesn’t schedule them full time to avoid giving them the typical benefits of full time workers. Or at least that’s what I’m hearing from business owners and part time workers... right?
I tend to think a work-as-you-want service like Uber or Lyft that pay above minimum wage couldn’t be more fitting to a self-employed / contractor description.
I wasn't aware that people working in Uber/Lyft advocate for not being employees? Do you have a source for that?
Are people engaging in gig work because it has several advantages over "every other available option"? What other options do people who drive for Lyft/Uber as a day job have? And what are the advantages Uber/Lyft & working as a contractor offer?
Maybe zoning effects should be part of a discussion on the cost of living in California, exploitation of immigrants is deplorable and awareness should be raised and actions taken, but does that make Uber/Lyft exploiting workers a non-issue?
I'm not from the US and am not aware of the specifics in California, but being from a country which has faced severe economic crises I've seen people "choosing" a shitty option despite every other shitty option.
I can't say I understand where you're going with most of what you're saying, or how informed you are of gig workers situation.
I saw a pretty good movie by Ken Loach: _Sorry We Missed You_, that thought was really spot on on the issues of gig work:
There is labor that is generally understood to be unhealthy to participate in. It’s generally considered unethical to hire children outside of ones own to labor. It’s generally considered unethical to labor in the business of knowingly selling highly addictive drugs, or killing people, or robbing people, or stalking people, or scamming people.
Should we also respect and have no guardrails for people who destroy their lives via cults, MLMs, scam artists, addiction, etc?
>All gig workers are slaves and we should treat each other with more dignity and upgrade them to employees. It's our bloody duty as a decent human being.
Lyft/Uber can upgrade them to employees but the arithmetic of bottom-up economics means Uber has to raise prices to cover full employment benefits. The raised fares conflict with what passengers are willing to pay. E.g. even though yellow medallion taxis often cost more than Uber (especially for suburb trips) -- those yellow cab drivers were not employees with benefits like unpaid leave and healthcare.
I believe what this really comes down to is that society is not willing to pay the higher prices for drivers to be treated as employees. Same situation as not willing to paying higher prices at hair salons so hair stylists are full employees (instead of being contractors) with healthcare. It does seem like constantly blaming Uber for mis-categorizing employees conveniently shifts the blame from the society/customers. The extra money to pay the drivers comes from the passengers.
Let's look at comparison cases: The city of Austin TX temporarily banned Uber from operating there. A non-profit rideshare (RideAustin[1]) was formed. Even though they don't have to implement the same business practices as Uber/Lyft, it's interesting that the RideAustin drivers are also independent contractors and not employees with full benefits. Also as far as I can tell, there is no worker co-op owned by the drivers anywhere in the world that treats members/drivers as employees with benefits. Why is that?
Serious question about the framing of ethics: if (some) drivers see an arbitrage opportunity because potential passengers think Uber-with-employee-drivers "charges too much" so drivers willingly choose a rideshare co-op that treat them as contractors to undercut Uber, are the co-op drivers being unethical towards the Uber-drivers-as-employees?
Yes, a judge can force Uber to convert everyone to employees but that same judge can't force potential customers to pay higher prices. The alternative entities of RideAustin and driver co-ops shows there's a limit to prices that ride shares can charge.
There is no such thing as "society is not willing to pay the higher prices for drivers to be treated as employees." Society isn't a brain which thinks. There is emergent behavior.
* I am glad to be forced to pay more to have Uber/Lyft drivers treated well. I think we should have worker's right protections.
* I am unwilling to pay more myself as a one-off (e.g. through tipping). It's a Prisoner's Dilemma. That's what regulations are for.
If everyone were like me, we'd end up exactly where we are. Do I think everyone is exactly like me? No. But I think it's a similar model.
That said, the concept of treating gig workers as employees is dumb as rocks. It's reusing in 1920 mechanism to accomplish a 2020 goal. My goal is for gig workers to have health care, vacations, and so on, not that they be employees; they're not. The gig workers I know appreciate being able to jump from Uber to Instacart to other life constraints. A half-dozen 1/12th time jobs is just a bad system.
And the medallion cab system was far more abusive of drivers than Uber/Lyft ever was. The power there sits with the medallion investors. The drivers were getting shafted.
> There is no such thing as "society is not willing to pay the higher prices for drivers to be treated as employees." Society isn't a brain which thinks. There is emergent behavior.
I don't see this argument made enough, especially on HN.
I think because a lot of people realize that "brains which think" are themselves emergent behavior of a complex system, which is ultimately not really different.
There is nothing in California employment law that prevents open schedules. Uber can have employees with exactly the same working agreement. The main difference is that Uber now has to pay into things like unemployment insurance and workers compensation.
If I am doing 8 hours Instacart, 8 hours Uber, 16 hours part-time work, and 16 hours part-time study towards my BS, doing a bit of Amazon Turk while waiting for gigs, who pays for my health insurance? And if I'm injured on the job, while having three ride sharing apps and one delivery app open, what happens to my worker's comp?
Once you dive into detail, employment law just doesn't work here. It's not a question of more right or less rights (I'm all for worker protections). It's a question of how we get there.
> I believe what this really comes down to is that society is not willing to pay the higher prices for drivers to be treated as employees. Same situation as not willing to paying higher prices at hair salons so hair stylists are full employees (instead of being contractors) with healthcare. It does seem like constantly blaming Uber for mis-categorizing employees conveniently shifts the blame from the society/customers. The extra money to pay the drivers comes from the passengers.
Generally I'd argue that society/customers, and in particular employees/'contractors' don't have all that much leverage over big companies, especially ones that capture a market. That's why we have regulation.
Blaming the customers for not keeping track of everything and going for the cheapest option is like blaming climate change on the consumer. It's technically sort of true, but practically speaking it makes no sense.
Consumers will keep buying cigarettes, marketeers will keep marketing them via entertainment channels, and tobacco companies will keep rolling in the money and do everything they can to encourage all this. But taxes, anti-smoking campaigns and government-enforced restrictions on where you can smoke have made a /ton/ of difference over the years.
There seems to be a trend to have 'flex-workers' (contractors) where in practice they all quack like employee ducks, without many of the benefits and guarantees. It mostly feels like a loop-hole and /of course/ the average consumer will go for cheap and convenient when they can. doesn't mean it's a good thing for society (and in particular the workers).
Businesses want more profit. Consumers want to pay less. Workers want to earn more. Pretty much always.
This doesn't always result in an optimal outcome. Market power, externalities, information asymmetry, etc.
This is why we have regulations. Forcing the society and Uber to pay for drivers to be treated as employees seems like a very reasonable outcome. If they don't like it they can hire less drivers, but the ones that remain will at least have some minimum standard of living that developed countries pride themselves for.
Which is a perfectly reasonable position whether or not someone agrees in this particular case. We have lots of laws that, for some combination of good and bad reasons, keep services from being as cheap as they might otherwise be.
I have trouble being upset that fewer people will want to afford higher Uber prices. People managed before Uber and it's mostly a luxury good anyway. To be honest, when Uber's management changed, the sensible thing--VC money notwithstanding--would have been to start pricing the service at what it cost.
The biggest difference in the US is that "treated like an employee" also means being paid a minimum wage. As an employee in the United States, your employer is also responsible for paying a portion of your social security and medicare taxes, and for making sure taxes are properly withheld from your paycheck.
Even before the gig economy became a big deal, businesses like yoga studios would attempt to classify their skilled teachers as independent contractors so they could pay them well below minimum wage, but take away their ability to teach at the location if they taught somewhere else as well. Hair salons and yoga studios sometimes go so far as to charge their independent contractors rent, which would make sense if these people were truly renting the space and could freely take their clients elsewhere, but these businesses also frequently limit the contractors' ability to collect personal contact information.
When I volunteered to help people with their taxes, a large number of Uber/Lyft/DoorDash/etc. drivers were surprised to learn that not only did they have to pay large amounts of income tax that would usually be automatically deducted from their pay check, but they also had to pay double the social security and medicare taxes because they had to pay the employer and the employee portions. Companies that classify their workers as independent contractors in this way are taking advantage of the fact it can take people up to a year to realize that taxes and car maintenance will take what little income they have made.
> Companies that classify their workers as independent contractors in this way are taking advantage of the fact it can take people up to a year to realize that taxes and car maintenance will take what little income they have made.
When I drove pizza delivery, I discovered car maintenance took what little income I made. I was a W2 employee, paid less than minimum wage, because I earned tips. Independent contractor status isn't the only method for surprising people.
I take issue with the paternalistic idea that an employee is more deserving than other types of people. The commenter above said, "This is why we have regulations." I interpreted that as beginning a discussion of what regulations we should have. If that was incorrect, I'm sorry for causing confusion. If that was the intent, then I'll reassert that focusing myopically on the distinction between an employee and a contractor is ignoring much better solutions.
No, it just means that contractors are treated as businesses rather than as people, because that's what contractor status is for.
If you hire a company to fix your car or build you a shack, they are not your employee, they are your contractor. You are not responsible for their healthcare or minimum wage or sick days. They are a business, they provide healthcare and all that stuff to their own employees who actually do the work. And this is perfectly fine, everyone ends up happy.
The problem is when individuals try to be a business, working as independent contractors. There is no "minimum profit" similar to "minimum wage", and you are essentially your own employer. Government can't force you to pay yourself minimum wage as a business owner because you'll be able to fudge it easily if you wanted to, being both the employer and employee.
What the government can do however is disallow corporations from hiring contractors for roles and in situations where in reality the contractors are businesses only on paper, where they actually are functionally just employees, like in Uber's case.
Would it be great if healthcare was paid by income taxes rather than employer? Yes, but since we don't have it yet, and since there are other issues differentiating employees from contractors / businesses, this seems like a decent approach.
tl;dr - "employees" enjoy a lot of benefits & protections, both legally required and provided by their employer, that non-employees (like contractors) simply don't have.
That's the current legal definition. But since we're talking about changing the law, our concepts aren't constrained by current law. I'm asking about the concept, not the law.
> Blaming the customers for not keeping track of everything and going for the cheapest option is like blaming climate change on the consumer. It's technically sort of true, but practically speaking it makes no sense.
It's part of the current US economical ideology where individual responsibility is taken as a mantra.
I completely agree with you, it's a good soundbite that any simple analysis and some thinking show how stupid it is.
Divide and conquer is very effective when the unit of measurement is the individual. I'd say this is core to what separates the 'left' in the US from the 'liberals' or 'liberal left'. For better and worse.
>There seems to be a trend to have 'flex-workers' (contractors) where in practice they all quack like employee ducks, without many of the benefits and guarantees. It mostly feels like a loop-hole and /of course/ the average consumer will go for cheap and convenient when they can. doesn't mean it's a good thing for society (and in particular the workers).
Well, instead of abstract descriptions about trends of mis-classified flex-workers and abused loopholes such that nobody can argue about it... I was trying to steer the conversation towards concrete cause & effect.
Let's look at another worker-owned driver rideshare -- Local Driver Co-op:
https://localdriver.co/
It costs members/drivers $100 to join. They are trying to undercut Uber and excerpt of verbiage from their webpage: "Riders save up to 20% versus competition -- Enjoy unbeatable rates, guaranteeing your money supports the drivers and their families."
Some questions of morals and decency:
- Should a judge (or new legislation) force LDC to treat drivers as employees with minimum hourly wage and unpaid time off? Since LDC contractors are trying to undercut Uber, a proposal to force LDC re-classification to "employees" would cause some drivers to protest this. So bottom line is... should drivers even be allowed to declare themselves as independent contractors and form a platform to chase after passengers?
- If LDC drivers don't get decent pay -- and we can predict they won't because history shows that taxi drivers and rideshare drivers in every country don't get enough dignified pay to put kids through college and save for retirement and cover the wear&tear on their car -- who is to blame for "abusing* them? LDC? (That would mean the drivers are abusing themselves.) Or the customers/passengers?
- Should LDC be completely shut down and that business "should not exist" (as some commenters put it) because it pays too poorly?
Let's talk in concrete terms of how "driver protection" laws would realistically affect outcomes. Let's talk about game theory of economics where customers may not willingly play along with the intentions of well-meaning laws and will just avoid paying higher prices. Some drivers themselves may not want to play along with "drivers must be employees with minimum wage". These are the aspects we don't discuss enough.
It sounds like you're already pointing to one concrete outcome that would come from these "driver protection" laws: the proliferation of driver co-ops that are able to undercut Uber and Lyft. Assuming they aren't regulated as Uber and Lyft are(for argument's sake), this would allow drivers the choice of whether to become an employee of the big corps or remain an independent contractor by using the co-op platform.
I don't think it would be much of a stretch to assume that in this situation you would have sleek, more expensive "luxury" services competing against more humble, but cheaper, community run services. Sounds like a much more equitable arrangement that provides greater choice for both riders and drivers.
> Blaming the customers for not keeping track of everything and going for the cheapest option is like blaming climate change on the consumer.
But that's not quite it, I believe. The point isn't that customers choose the cheaper of two options, it's that non-users don't become users of a service until there's a super cheap option. Taxis/Yellow cabs were a thing before Uber, but they're more expensive than what lots of people were willing to pay.
It's not "do I want to buy X for $5 or $2?", it's "I won't buy X unless it's $2 max".
If you increase Uber's prices to those of Taxis, few people will use them. That's not necessarily a bad thing, but it's a thing.
I don´t know how is it in all of the world, but in many countries/cities, the problem with Taxi drivers is that there is no control, they treat you like shit, there is no one else to complain, they take you to the longest route, many have their "clocks" (that is what we call the machine they use to charge you the fare) fixed so that they charge more, and there are illegal taxis that steal from you (as in real robbery). Uber is good because you can complain to Uber, you get refunds, if drivers get bad ratings they are no longer part of Uber, and in general, it is safer than taxis. I was some days ago in another country. I didn't know any Taxi phone number, but I had my uber app, so I just requested an uberx, and it came. Problem solved.
It sounds like you'd be happy with a premium service (like Uber originally was). You pay more than a taxi but you get all the other benefits you list. Problem solved.
Taxi´s companies have existed for a while. Compared to Uber the differences are: customer support is shitty, good luck getting a refund, you need to know the phone numbers or have the apps installed of all of the cities in the world. It is more complicated. Uber is uber internationally. It is only one app, only one (relatively good) support. By the way, I don´t "love" Uber, is just that I see the value on it.
>Lyft/Uber can upgrade them to employees but the arithmetic of bottom-up economics means Uber has to raise prices to cover full employment benefits. The raised fares conflict with what passengers are willing to pay
Then the business is not profitable enough to exist. Simple as that.
It’s incredible how many people just start from the assumption that these services must exist and then work backward from that. Obviously you run into serious dissonance when you arrive at the pricing problem, where the solution is quite simple: they shouldn’t exist.
Then you can start thinking about real solutions to urban transit that have existed for more than a century.
The starting assumption is that free and rational adults are choosing to work for the wage and customers are choosing to pay a sufficient price, so it should exist. That's not working backward, or dissonance--it's an acknowledgement of reality.
It's a different unrelated group claiming that it shouldn't exist if it doesn't provide the pay / benefits they think it should.
I think if we're to the point that we're comparing Uber to the violence market, we're not having a meaningful discussion any more.
True: it is not the case that we should fundamentally allow any association between two consenting adults. No, this does not justify preventing it in other cases.
I don't buy that. These rides are only as cheap as they are because of VC money and they aren't profitable. Imagine the cost of rides without VC money and more pro-worker regulations? If they aren't profitable now I don't see this ever being profitable without some radical change to the business model (driverless fleet for example).
There are some rides that are subsidized as loss leaders undoubtedly, but that's not the primary case.
The way I see it, it's already proven that riders will accept paying X dollars and drivers will work for X dollars, minus Y% for Uber's cut. Uber's Y% is likely higher than it needs to be, but at the end of the day, it's a SaaS app. Even municipalities have set up local competitors / clones.
These companies are certainly pouring a ton of money into expanding into new geographic areas, other business models, and more. But as long as riders will pay an amount even a little higher than what drivers will accept, it can be profitable.
You know the entire purpose of the company that runs this site is to fund businesses that aren’t profitable enough to exist? Only two companies that YC has funded have gone public.
You can build a robust bus system, government run and not expected to make a profit, for example. You can have registered cabs. You can have rental bikes (bonus if they are electric assisted). If you can make sure scooters don't litter the walkways, that works as well. If you already have the infrastructure in place, perhaps trams or subways are a good thing.
We could expand busses to be able to travel from city to city. Same thing with trains: Make them run on time and expand. Busses, however, use the most extensive existing infrastructure and would likely be more cost-effective in most areas.
Not all "busses" need to be large, though. In some areas or at some times of day, a 15 passenger van might be enough. We could have bonus points if we changed school bus laws so that we don't have a duplicate bus system that leaves busses unused for much of the day.
In the US, one could take a sliver of the military budget (where there is plenty of waste) to pay for it.
Uber left Denmark after they decided that they have no interest in adhering to the relevant regulations. We still have trains, commuter trains, subways, busses, bikes, scooters, taxis and cars. People still can get to places and fairly conveniently.
This is a straw man argument. Only because other jobs also have issues doesn't mean we shouldn't try to start improving somewhere at some point. Also customers NEVER want to pay more for anything, so that is hardly an argument to treat some people like slaves.
It is the duty of the strong to fight for better treatment of those who can't fight for themselves because they lack financial security or for other practical reasons. Law is exactly doing that.
>Only because other jobs also have issues doesn't mean we shouldn't try to start improving somewhere at some point. Also customers NEVER want to pay more for anything, so that is hardly an argument to treat some people like slaves.
Please don't paint my intention to describe the underlying economics for higher quality focused discussion as me being against humanity's improvement and you being the one with the moral high ground.
I was emphasizing that there's a dynamic interplay between what drivers (whether Uber or non-profit driver co-op) can charge and what customers will willingly pay. Your comment left the dynamics of out of it which can lead to a naive assumption of what law can realistically accomplish. Consider your next statement:
>It is the duty of the strong to fight for better treatment of those who can't fight for themselves because they lack financial security or for other practical reasons. Law is exactly doing that.
The law isn't just exactly that. A law that attempts to add economic advantage to one group will inevitably make another group worse. The other disadvantaged group often becomes the "unseen"[1] group. Instead of talking in feel-good sentiments that nobody can debate (e.g. "duty of strong to fight for the weak")... let's try to discuss via math/probabilities:
Uber has about ~150,000 drivers in California. A law that forces all drivers to become employees does not automatically mean 150000 get minimum hourly wage of $15 and 2 weeks of paid time off. No, what happens is that many (I'm guessing more than 50%) Uber drivers would be removed from the system to comply with the "drivers-must-be-employees" law. The drivers that remain in Uber would be the ones on profitable routes in more affluent regions of the cities than can pay higher prices. The unemployed drivers that lost income from Uber now become the "unseen". Do the unseen who get $0 because Uber can't afford them as employees get also get attention in our moral framework?
> Also as far as I can tell, there is no worker co-op owned by the drivers anywhere in the world that treats members/drivers as employees with benefits. Why is that?
>Yes, they provide benefits, including healthcare.
But Union Cab Portland does not provide a guaranteed minimum hourly wage (a benefit that real employees are entitled to) and they are exempt like every other taxi company in Portland from the minimum wage law because taxi drivers are treated as contractors.
> RideAustin is a community driven nonprofit ridesharing company founded by local entrepreneurs. The RideAustin launch team is led by Joe Liemandt, a longtime Austin tech entrepreneur, and Andy Tryba, CEO of Crossover. It is powered by donations, with paid and volunteer hours from both the Austin tech community and the broader Austin community working together.
So it's a non-profit, with volunteers ("volunteers"), who can get a stipend.
Sounds like a legal fiction, but I'd need to know more about how much they pay, how much money the founders make, etc. The cynic in me says it's the same shit but marketed better and not publicly traded, but there may be some genuine benefits.
I mean in a EU country a male haircut costs 6€. In another EU country a male haircut costs at least 30€. People can live on both wages. These number are relatively arbitrary as they make sense in the ecosystem of housing and other prices. California can compensate in many ways for the fact that "people don't want to pay the gig workes more". Free/social healthcare, education and housing via progressive taxing etc. Since people in the USA don't want to be "slaves of communism" or whatever, they are wage slaves
Was society willing to pay for workers when they had slaves?
To think that if only the Confederate states would have made that iron-clad argument back then, the civil war would have been avoided. Imagine how low the prices could be if we still had slaves.
If your business is unsustainable without taking advantage of the workers then it ought not to exist.
I don't exactly agree with your conclusions but I upvoted you anyway because you got me realizing what about the whole arrangement of Uber/Lyft really makes me uncomfortable with the "independent contractor" definition: the companies actively impede the self-sufficiency of drivers to cultivate a client base. This would be like if a massive home improvement company which subcontracted all of its labor to smaller outfits had the workers wear some kind of monitoring to watch every step the on site guys did, make sure the sub company wasn't promoting its own signage, or doing any custom work above and beyond to satisfy the client. That doesn't fly in my book. If you subcontract work, your value add is the market penetration that gets the clients in the door, and that's it. If the outfit doing the work is not an employee, then the relationship ends with the fee paid upward. If you believe that business entities have rights, which I am sure Uber's board does, why should it be legally binding in a contract for a business to sign those away any more than an individual can sign away his own?
Well. There have been stories of independent truck drivers that are being forced to leave California because they can’t be independent any more.
Jason Snell, a long time editor of Macworld, was let go years ago and decided to do podcasting and blogging full time, but he still wanted to do freelance writing. The new laws passed in California made it more difficult.
The only reason the gig economy is bad is because we have an ass backwards system
where your health insurance, unemployment insurance, etc is tied to your employer.
Your comment reminds me of this comment[0] on HN from a developer who was complaining he couldn't accept donations in Finland because of the laws of that country.
Should people have the ability to choose to be contractors?
For example, “Accept wage X as an employee, work these set hours, and you have to bring in some multiple of X to justify your employment. Or stay a contractor, work when you want, get the benefit of surge pricing and keep a fixed % of your revenue”
As a consumer of Uber and Lyft, what differentiates them from Taxis is the ability for them to react to changes in demand. (Try finding a taxi in the rain) I can’t see them pulling this off without some portion of the workforce being contingent.
I used to tutor for Chegg tutors on the side--outside my main job. They paid ~$20/hr and for 5-10 hours I week I could bring in some extra money for food and rent.
They shut it down in my state because they reclassified them as employees, and Chegg was not going to do all that leg work to bring people on as part-time employees.
I didn't need benefits like sick days or unpaid leave since it was just a gig I did online for extra money. I didn't need health insurance, since my main job provided that. I didn't need job security that was provided by the inability to fire people.
I was just trying to make some extra money online.
And now I can't because Big Government decided I can't.
You know who it really hurts? The kids I was tutoring. Now there is a huge tutor shortage and kids that need help aren't getting it. There was ALREADY a tutor shortage before they cut off several states from being tutors.
If it's the law, then it's a stupid law and needs to be changed.
It's telling that Uber/Lyft drivers weren't the ones asking for this. They were fine the way they are. No Uber/Lyft driver was saying "Wouldn't it be nice if we were REAL employees??".
It's the bloody taxi companies trying to get back at Uber because taxi drivers ARE real jobs that require real benefits, and they can't compete with a better business model.
>It's the bloody taxi companies trying to get back at Uber because taxi drivers ARE real jobs that require real benefits, and they can't compete with a better business model.
Ah, yes, Big Taxi conspiracy.
I can't imagine thinking a company losing billions while subsidizing chauffeurs for rich people while skirting laws is a "better business model".
>Fuck California.
Have you considered living in a place that doesn't require you to do "gig work" on top of your regular job in order eat? Isn't that the world we want?
> Have you considered living in a place that doesn't require you to do "gig work" on top of your regular job in order eat? Isn't that the world we want?
I love this line because raising uber prices to meet the demands of Big Government will be cost prohibitive for most people. That means, a) uber drives get less than before, and b) fewer people will take uber, and c) the people that do will have to pay more for it.
So... you've just increased the cost of living for everyone, making it harder to live on a regular job.
I've done gig work on top of my regular job to have a little extra in savings. Really helped during the virus when the stock market went on sale. Luckily I'm in a free state and don't have to worry too much about this regulation spreading
I work for a billion dollar tech company. I make plenty of money to take care of myself, but I like a little padding for extra fun things and rainy days. I also find it fun to tutor.
I have plenty of money because I don't live if a shitty place like California.
While I agree with your overall message, I have met an Uber driver that was handing out cards. They really did suggest I call them back directly at any time during our stay in San Francisco. He had an actual mini-bus, not just a car or mini-van. So that guy, at least, was self-employed.
But for the vast majority of Uber's drivers, I think you're correct.
The fact that Japan is abusive to its workers doesn't in any way reduce the OPs point.
Japan should - and I realize that this won't make any difference - get with the times and start treating people like they are something else than lemons that need to be squeezed. It's a cultural problem.
No reason why they both can't be fixed. At least this judge got it right.
I really hope for the Japanese people that this changes with a new generation where family is family, and business is business, and that the former is more important than the latter.
> doesn't make any sense in the gig economy where the wages are close to minimum rates.
It makes sense if it’s better than your next best option.
If the value you are able to bring to an employer is under what minimum wage requires, an employer faces the decision to employ you at a loss to them or to not employ you. Many choose the latter.
> Lots of HN comments are here like "I know people who prefer to be contractors", "My sister's neighbours little brother actually doesn't want to be treated with respect by Uber", blah
It's a willful misrepresentation to characterize these merely as anecdotes. Polls/surveys show that drivers overwhelmingly share this sentiment[1].
> This is utter nonsense. Being a contractor means being self employed. You don't get paid leave or sick pay. It's a risk taking and doesn't make any sense in the gig economy where the wages are close to minimum rates.
This is not a prerequisite for being a "contractor". That the rates are "close to minimum rates" is a reflection of the market demand for the labor.
> If you are truly self employed then you have a skill which you can market, you can charge fees which allows one to put money aside for things like unpaid leave or sick days.
Again, this is nice in theory, but not necessarily true for all self employed contractors.
> If you are truly self employed then part of your job is building customer relationship, building up recurring customers, increasing your business through marketing, word of mouth, etc.
Again, this is nice in theory, but not necessarily true for all self employed contractors.
> Uber drivers are NONE of this.
Correct, but that doesn't change the fact that they are not employees.
> They clock into an app which belongs to someone else and they have no share in.
This was true before Uber/Lyft, where taxi drivers had to pay for the privilege of driving a car with a medallion that belonged to someone else. They were independent contractors under that arrangement.
Today, Uber/Lyft drivers report to no boss and can decide to drive whenever they want on a whim. They can drive 20 hours one week, 2 hours the next, and then take a vacation indefinitely with no repercussions. When Uber/Lyft announce layoffs for cost cutting, drivers are notably not affected. Insofar as drivers have experienced less work during COVID, it’s because there are fewer riders requesting rides, which suggests a rather direct rider-to-driver relationship.
> They can't even negotiate their own fees. That itself is fucked up.
Yes, Uber drivers can’t really set their own rates (this is changing soon), but that’s also not really a prerequisite for independence. There are loads of platforms where the intermediary only buys services by providers at set rates and sells them to a buyer, where the providers are not literally employees of the platform provider, eg: health insurance. This was also true of taxi drivers before Uber/Lyft came around.
> It's complete nonsense in extremely disingenuous by anyone here to suggest that an Uber driver is a self employed contractor and that this is good for them.
This is a borderline rule breaking content on its face, but just to engage with it, how do you know what's good for them? Maybe get off your high horse and speak for yourself.
Agreed mostly with you about negative impact of the gig economy. However, not seeing how the slavery element goes away with your proposal. Better regulations YES, but wouldn't you just be reinforcing the power of the slavemaster by converting his temp labor to perm?
This is repulsive. You denigrate all people who have suffered in actual slavery. Follow your "bloody duty as a decent human being" and learn what slavery is actually like.
If gig workers are slaves, then we must conclude that slavery isn't that bad. Nobody is forcing people to sign up to drive for these companies, and if they don't like it, then they can choose to drop out by tapping on their screen to indicate that they're out of service.
> Nobody is forcing people to sign up to drive for these companies
No single person, sure. But the inceasing lack of secure, reliable income sources remove most other choices.
"gig" work should not be the norm. It should (and always used to) be the job that the teenager does (delivering newspapers, etc) or someone does for a bit of extra cash.
But they're becoming pervasive, normalized and this should be rejected.
That's like your opinion... vs the needs of the drivers. They are free not to work there. The fact that plenty of people still work there, means that it works OK.
I mean, they (unqualified workers) can always go to work to MacDonalds or something like that but they stick with Uber.
Slaves, mmm.... yes I remember the first day that jackbooted thugs from Uber forced me to drive for the company. Every day that I felt like driving instead of doing literally anything else, these Uber slavemasters would show up with their chains and their whips. The horror... I hope Uber goes out of business so I can finally go back to my old life...
>Slavery doesn't come only through the form of physical subjugation
from dictionary:
slavery - the state of being a slave.
slave - a person who is _the legal property of another_ and is forced to obey them.
The fact that you use "slavery" as a synonim to hard work and/or high dependance, doesn't make "doesn't come only through the form of physical subjugation" true.
slavery noun
slav· ery | \ ˈslā-v(ə-)rē \
Definition of slavery
1a: the practice of slaveholding
b: the state of a person who is a chattel of another
2: submission to a dominating influence
3: drudgery, toil
Or [1]:
slavery
in British English
(ˈsleɪvərɪ )
NOUN
1. the state or condition of being a slave; a civil relationship whereby one person has absolute power over another and controls his or her life, liberty, and fortune
2. the subjection of a person to another person, esp in being forced into work
3. the condition of being subject to some influence or habit
4. work done in harsh conditions for low pay
Or [2]:
slavery
Pronunciation /ˈslāv(ə)rē/ /ˈsleɪv(ə)ri/
NOUN
1. The state of being a slave.
1.1 The practice or system of owning slaves.
1.2 A condition compared to that of a slave in respect of exhausting labor or restricted freedom.
1.3 Excessive dependence on or devotion to something.
As a non US citizen that does not live in America and just looks from the outside, I'm always amazed at the rapid transformation going on in the last decade. If hackernews is a sample of the general american population, you guys are becoming communist. And it won't end well.
Don’t worry, the American spirit of liberty and free market capitalism is alive and well. It’s just that most Americans are busy getting things done instead of planning everyone’s lives for them on twitter or HN.
I would be alarmed too, except I hang out in diverse US communities. Hacker News is not a sample of the general american population. Increasingly, it is not even a sample of tech workers. Tech workers tend to be rather libertarian, and this has not changed. HN is becoming a sample of Bay Area politics and/or Twitter, neither of which are representative of the USA.
Sorry about the downvotes you received. I’ve been on HN a long time. It is sad to see the great decline of HN. Check out reddit.com/r/TheMotte if you want something a bit more representative and more similar to the HN of old, with its attendant high level of discourse as opposed to the shit-flinging and downvote brigading you see on HN today.
It strikes me that these articles are always biased in the direction of the benefits of being an employee. I have several friends that actively choose to be contractors because they prefer the (legally protected) flexibility to decide their own hours, among other things. It's a personal decision, and there are upsides and downsides in both directions.
Sure - some (non-insignificant) portion of Uber and Lyft drivers would like to be employees. But surely some (also non-insignificant) portion would prefer to be contractors for Uber and Lyft and keep the legal protections that come with that.
These articles always make it seem like it's a no-brainer win for all drivers no matter what, but it's never seemed so clear cut to me.
I'm afraid you're repeating Uber's favorite talking point, which is that everyone should respect the worker's decision to be an employee or contractor.
Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold.
The problem is that Uber currently exerts so much control over its "independent contractor" relationships that they have become, as a matter of law, employment relationships.
Moreover, in practical terms drivers don't end up with the choice they ought to. If they want any working relationship with Uber, they have to accept a mash-up of all the burdens of employment minus many of the benefits of being a contractor.
"I'm afraid you're repeating Uber's favorite talking point, which is that everyone should respect the worker's decision to be an employee or contractor."
I've never seen Uber argue that everyone should "respect the worker's decision to be an employee or contractor." I have seen them argue that drivers are contractors based on the flexibility in the job, but not that it should be "the worker's decision".
"Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold."
Actually, pretty much all US employment law disputes that drivers should be able to choose what status they hold. Employee vs. contractor is not determined by what an employer says someone is, or what an employee says they are. Instead, it is determined by some key factors about the nature of the job, which (as you do point out) mainly centers around control of important aspects of the job.
But it is important to understand that you never really get to "choose" whether you're a contractor or an employee, it's determined solely as a function of the type or work you do and the nature of your relationship to the employer.
> "it is important to understand that you never really get to 'choose' whether you're a contractor or an employee, it's determined solely as a function of the type or work you do and the nature of your relationship to the employer"
I don't understand what you're trying to say here. In my experience, on both sides of this, a good deal of thought is put into what kind of position to seek / offer. I think employers and workers think a lot about which legal arrangement would work better and there is a great deal of choice involved.
For instance, I can imagine Uber offering jobs v.s. contractor positions with differing levels of support, remuneration, and expectations. That they don't do so seems like a choice to me?
> I can imagine Uber offering jobs v.s. contractor positions with differing levels of support, remuneration, and expectations.
Legally, in California, they can't do that. As outlined in the article, the 'ABC test' is the legal test for determining whether someone is an employee or a contractor. The 'B' part of that test is "The worker performs work that is outside the usual course of the hiring entity's business." If you are an employer, you could not have one group of drivers that you classify as employees and the other you classify as contractors, not if they're basically doing the same work.
Note this is common in a lot of different businesses, and there have been many lawsuits where contractors who DID want to be classified as employees argued that they were basically doing the same work as employees. There was a fairly famous case involving Microsoft 2 decades ago: https://www.computerworld.com/article/2589538/it-personnel-m...
You are interpreting it all wrong. Staff augmentation happens all the time who do same work as employees. The fundamental difference is amount of time you are hiring the person for. If you say I need person to augment my existing staff only for 6 months then they need not be employee. This is why many contractors are forced on leave after certain number of months. A contractor may also chose to work, say, 20hr per week.
Being a contractor is not fundamentally bad if US hadn’t tied medical insurance and companies hadn’t tied stock bonuses with employment. Technically there is no such need for “employment”. You go work for the time and you get paid equitably without an artificial status called “employment”. Unfortunately this status has became part of many arcane laws and difficult to get rid of.
> The fundamental difference is amount of time you are hiring the person for.
That's not the fundamental difference in either federal law or the California ABC test. It's not a factor in the ABC test, [0] and it's one of several factors in the “relationship” prong of the federal test. [1]
No, I am not interpreting it all wrong. You are fundamentally misinformed about what AB5 in California allows. And while I agree, there are many cases where staff augmentation exists, in many of those cases employees would be misclassified under AB5. Also, in many of those cases of staff augmentation the person is hired through as an employee of a staffing company, not as a 1099 contractor by the client company.
> argued that they were basically doing the same work as employees
I think that's case by case though. Contractors usually do finite focused projects and don't want to be employees. I myself was self-employed for 5 years doing specific contracts as a software engineer. I was "writing code" which is "the same work" as employees. Were all those companies breaking the law?
This is actually a really good thread, because most people are surprised to discover that yes, those companies probably were "breaking the law".
As other posters pointed out, AB5 is relatively new, so the test is relatively stricter now, and only relevant in California.
More importantly though, employment classification is only challenged when a plaintiff files a lawsuit. Thus, even if someone is technically misclassified, if the relationship is mutually beneficial, nobody is going to complain. This goes on all the time, which is why most people are surprised to find out they were technically misclassified.
Case in point: I worked at a company (in a state much more permissible regarding employment law than CA, and pre AB5) that forbid using the term "contract-to-hire", even though that happened pretty frequently. Reason being that technically contract-to-hire is not legal unless there is a substantial difference in the work and relationship when the person is a contractor. Now, many times there is, but that phrase alone can make it seem like the work contractors do is too similar to the work employees do, which is why our legal department banned the phrase.
This is fascinating, although I still feel there's too much disagreement for me to have a clear picture of how this works in California.
I'll give a Dutch perspective (which perhaps applies to some degree to other parts of Europe):
Until 2016, clients had to proactively ask for a 'Verklaring Arbeidsrelatie (VAR)'. An 'explanation of the work relationship'. If I understand correctly, the contractor/freelancer had to prove that they had more clients than just that one, and it had to be reasonable. So no having five clients of which one accounted for 99% of all income.
If a client didn't ask for this 'VAR', it could cause problems down the road.
From 2016 on they changed this, but apparently the result has been a confusing mess, so in 2021 they'll try to clear up some of it.
Practically speaking, as a contractor, I've found that only the big clients (with legal teams, I imagine) would ask for a VAR, if at all.
Most of the time, whether working in Holland or Germany, I usually did the exact same work that their employees did. In some cases there seemed to be vague distinction where I worked on shorter projects and they did support and the like, but in practice that distinction was very blurry.
I suppose with some of these clients I could've caused trouble, but because I got paid well, often better than the full-timers (even with insurance and all that deducted), I didn't see any reason to.
My general impression is that NL is a bit more 'liberal' in these matters than many other parts of Europe, so I'd be curious to hear how this works in France/Germany/Italy, etc.
Does this apply also for incorporated /limited liability corporations owned by the contractor, in the Netherlands?
In Sweden, if you want to become contractor, you have two options - start a limited liability company of which you owns all shares (Aktiebolag). Or you can start a business in your own name (Enskild firma), which legally is not separate from your own liabilities.
In the first case, you are making yourself employed by the corporation you own. I do not know if there is any legislation that prevents that business from having just a single customer. But I know that in my own case, my business have had a single customer the entire time it has existed.
I don't know and am curious too, so I'll probably look into it at some point.
But I strongly suspect that this is one of those 'spirit of the law' situations. So I suspect that a company that doesn't want, well, liability, would avoid hiring an LLC that really is just one person working only for said company.
Outside of the VAR thing there already was laws that contractors can't make more than x% of their income from a single customer. If they do the customer would have to treat you as an employee.
Fair enough, but this is a bit splitting hairs. AB5 codified the standard put forth in Dynamex (which was decided in mid 2018), which was much stricter than the previous standard, the Borello test, decided in 1989, and that test more or less followed a common law interpretation that had been the standard.
In the UK, the government has taken the view that in some sense, yes, some contractors who were claiming to be self-employed were in fact employees and therefore have to pay more tax (the same tax as other employees), and can claim fewer expenses against tax (also the same as other employees). The underlying principle is equal treatment.
There is no advantage to the individuals from that decision, nor is there any intended.
So people spending 5 years working for the same company doing the same commute and same work as employees, subject to the same kind of control over their work etc., cannot maintain a claim to be self-employeed for the tax flexibility that goes with that.
However. You "writing code" as a contractor is not the same work as an employee if the manner in which you are doing it differs.
For example, if you have to purchase your own equipment, set your own hours, work on a "statement of work" basis instead of set hours, can substitute a subcontractor to do your work for you, and can and sometimes do work for multiple companies at the same time, and often switch the site at which you are working, those sorts of things signify that you are not operating as an employee would, and that it would be correct to classify you as running your own business and therefore subject to business taxation instead.
Of course every contractor wanted to claim that status for the tax benefits, which are basically less income tax and the ability to deduct more expenses. The government saw this and decided, although the law was what it was all along, people weren't applying it adequately. So they changed who does the assesment, and the tax liability if they get it wrong, from the contractor to the company hiring them. This is called the IR35 reform; IR35 is the name of the legislation that sets out what kind of working patterns must be treated as employment for tax purposes.
Although the reform will change who is liable for making the assessment, in principle it is still possible for a contractor to be retroactively assessed for their past as having been an employee all along, and have to pay back-tax. That's because you are supposed to have done the right assessment for yourself already, or perhaps your accountant should. This seems unlikely for most people now as long as the changes are followed through, but some people have been caught out by it.
> I think that's case by case though. Contractors usually do finite focused projects and don't want to be employees. I myself was self-employed for 5 years doing specific contracts as a software engineer. I was "writing code" which is "the same work" as employees. Were all those companies breaking the law?
The AB5 law has only been in effect since Jan 1.
The federal rules are already very strict. Generally contractors violate them a lot. The law was pushed by IBM to eliminate competition, and the feds incorrectly thought they would get more tax money by making the software contractor industry into employees. It's a sordid tale ending in domestic terrorism and murder: https://www.nytimes.com/2010/02/19/us/19tax.html
I am saddened to be reminded of the story in your link, as I read it at the time it was posted, and was also saddened then.
I’m not convinced you have adequately eliminated other potential reasons he may have done the uncharacteristic thing he did. Even if he was in his right mind, I’m not convinced he had anyone’s interest at heart but his own personal one, as jobs are a form of social control. He desired to be free of this control. Even if individual liberty is worth fighting for, the Constitution doesn’t grant you the right to the job you want on the terms you want. That’s what the courts are for.
This guy was wrong to do what he did in every way but for the right reasons in a very minor way that is more a matter of principle rather than tax law. No matter his beef, it was just his own, and as such, it doesn’t justify so much as slapping someone’s hand, let alone the stunt he pulled.
That story is a perfect encapsulation of the faux-compassion mindset that seeks to stamp out all forms of entrepreneurship, including driving for Uber/Lyft instead of being an employee.
Based on what? Were you a contractor while AB5 was in place? Everything I have seen suggests that Uber and Lyft will be legally prevented from having drivers that are classified as contractors.
Gotcha - so a company can choose to use employees or contractors for a given type of work, but must be consistent within that type of work?
So, for instance, you might hire initially a contractor to create the encrypted part of your product, but once you had hired someone to do that work full time you would be legally barred from hiring additional contractors to do that?
> so a company can choose to use employees or contractors for a given type of work, but must be consistent within that type of work?
Pretty much, though even then it is determined by what the courts decide is the company's "normal course of business." Obviously there are big gray areas here. And, also obviously, there are many cases where both the worker and the employer would prefer to treat the relationship as a contractor relationship, and if they both agree there is nobody to file a lawsuit contesting it (unless, of course, there are lots of people in the exact same role who could challenge the classification, as is the case with Uber).
Also, note while there are federal rules that determine IRS classification, California has stricter laws when it comes to employee vs contractor.
Would setting up another company that would employ drivers and provide services to Uber do the legal trick?
I don't know about Uber in US, but in Russia this is how it typically works. Drivers are hired by local taxi companies, which partner with large-scale Uber-like aggregators. This way, user-facing (aggregator) companies don't have drivers as employers, but contract other companies (or individual drivers, shall they want to act as sole proprietors) for the actual transportation services.
> Would setting up another company that would employ drivers and provide services to Uber do the legal trick?
That is exactly how software development contract jobs are handled in the US. They are called contract companies (and many other names) but essentially find talent, place them at a contract position, then bill the company for that contractor. They pay the contractor directly, with or without benefits (W-2 vs 1099). And in most cases, the contractor gets to choose contract or employee status with the contract company, although at different pay.
> You've effectively spend a few paragraphs adding nothing of value to the conversation.
You might want to check what you consider "adversarial" when it comes to a discussion forum.
The issue is that the comment I responded to seems to be under the false notion that workers (or employers, for that matter) get to "choose" how they want to be classified, and that's what this debate is about. My point is that, when it comes to employment law, a worker or employer's preference about how they are classified does not factor in at all about how the law classifies the job.
Quibble, far as I understand the law in California doesn't force you to be a contractor. But it's hard nosed about when someones an employee. If the law allows you to be a contractor you're free to choose whatever. Currently I'm an employee being paid twice a month. I could get overtime if I ever worked that much, which I don't.
If I owned slaves and called them unpaid indefinite interns the law would rightly disagree. You can call the relationship whatever you like, but the law is there to keep the playing field level for everyone. That it's taken Uber so long to play by the same rules as everyone else is a travesty and should take a billion dollar law suit or two for damages to sort out.
> They are employees in that they cannot negotiate rates.
Hmm... How is an Uber driver different from a plumber here?
Let's say Google needs some pipes fixed at one of its offices and they tell me how much they'll pay, refusing to budge from that figure. That doesn't make me Google's employee. I can choose to do the work for that price, or I can go fix Apple's pipes instead. What am I missing?
I don't see how Uber's relationship with the passenger has any bearing on a driver's relationship with Uber.
If instead, my analogy were that I was a general contractor who built water slides and a water park put out a bid on construction of a water slide and refused to negotiate, my only option is to take that bid or leave it. Why does it matter what the water park is going to charge the people to ride the slide?
Your analogy doesn't map to this situation. Google and Apple would be the people you're driving around, not Uber. The company that employs you as a plumber maps to Uber, which of course would just be you if you were self employed.
Many service companies are passed down in the family, or bought out for plum rates by star employees. Others are sole proprietorships. The service worker analogy is problematic because of the storied history of regulatory capture in the taxi industry, and the century of bad legal rulings that allowed it to continue. I guess licensed professions and gatekeeping like the AMA does to limit residency spots are the closest analogues I can think of off the cuff, but I also think those things are wrong for similar reasons, so moving on.
Now that the app driving companies turned over the apple cart by essentially cyber-squatting on the legal system while backed by high power lawyers paid by VC cash, the driving companies themselves want to cry foul when they don’t get the way they bought and paid for. I guess what they didn’t foresee is the long view of judgeship, and their concomitant dim view of cheaters, no matter the problem domain.
It’s too ironic to be believed. The judges apparently agree with me.
Seems like it maps to me. Google and Apple are hiring me to do work, then they are selling the output of that work to someone else (indirectly, in this case, but I don't see how that matters.)
Given that rates are determined collectively by deciding whether or not it's worth your time to go online given the current level of surge. If enough drivers decide it's not worth it, the price will change. This is a pretty standard pricing mechanism in any market for an easily fungible good or service (read: commodity).
Having been a driver for 1.5 years my questions for you are these:
1. If Uber and Lyft allow their drivers to choose, would it be reasonable for them to make "having the other app on at the same time" cause for dismissal? I know of no other employee that is allowed to simultaneously bill time on a competitor. Contractors, absolutely. Employees, no.
2. What if Uber, instead, charged $1.00/mo for the drivers to use the app, thereby making them customers instead of contractors?
Regarding #2, that's just generally not how the law works. There may be some cases where legal technicalities are successfully argued, but in general the legal system doesn't put up with someone sticking their finger a millimeter from its face and saying "technically I'm not touching you."
okay, let's make the price higher. Let's make it $150/mo. Now we're about 10 centimeters away from your face, and not too far off from what taxicab companies do.
Yeah. I pay PayPal to process payments for me: I don't work for them. Hell: I pay Apple to publish apps to the App Store on my behalf, and they even decide whether my app is "OK" or not: when they tell me to make a change to my app, I must do that or I lose my ability to collect revenue. They even require I use certain tools that I have to purchase from the company store to do my work. I have no direct relationship with the customer. They collect all of my money, and then pay me. Am I somehow an employee of Apple? Supposedly I am Apple's customer, but it sometimes doesn't feel like that ;P.
And, perhaps more importantly, the user sees your app and branding in the end and they can choose to pick you again. Which is not the case for uber either.
Not sure about California, but here in France it's the kind of difference that would change the nature of the relationship. Although it would be evaluated as a whole, and would be under a lot of scrutiny to determine whether this change wasn't meaningless for practical purposes.
I suspect that in practice there seems to be a political consensus in Californian that Uber is evil. The rest is just trying to find ways to punish them.
If the existing laws can be interpreted to punish them, they will be used. If not, the coalition against Uber will look into getting new laws passed. (As they already have.)
Thus rendering any discussion about whether existing laws can justify punishment somewhat moot.
(Of course, even a moot discussion can be interesting. Just like people can have fun arguing whether the Stark Trek Enterprise would beat a Star Wars Destroyer.
The legal discussion is also very important to Uber lawyers. Even if they lose in the end, any delay is worthwhile.)
I think giving the ability for one driver to promote their services over other drivers is also a key feature. Each driver needs to be able to differentiate themselves and not be essentially interchangeable.
That's the a key difference for me to consider it a contractor/client relationship rather than a employer/employee relationship. I'm not a lawyer, so I don't know what the law says in each country Uber operates.
They already do it. I've spoken to several drivers who rent their vehicles through the ride sharing company just like a Taxi driver does, and the price per day is about the same as the local cabs.
For #2, are you suggesting that the drivers would then get the full fare in exchange for the payment for the app? If so, yes, that would clearly be a great, extremely driver-friendly change that would defuse the employee vs contractor controversy... But, I suspect it would also result in layoffs and perhaps lawsuits from the shareholders.
I'm currently interning at a startup called Empower. This is their exact business model, the company provides software, the driver can set their own rates and they get the full fare. The drivers pay a monthly subscription free.
Ah, then the reason this wouldn't work is that the court would still deem them to be employees, after seeing through this incredibly transparent and cynical facade.
There's nothing in the law that prevents employers from giving their permission to remain available for competitive work at the same time. Indeed, isn't that quite close to the dynamic of a union hiring hall situation, where union members are simultaneously available for jobs from any of the employers with contracts with that union?
Of course, one wouldn't be actively working for two employers at the same instant, but neither would one be simultaneously driving an Uber ride and a Lyft ride.
So when lyft is liable for meeting a minimum wage, how is time calculated? Based on logged-in time? Based on in-ride time? What if I'm in ride and I leave the other app on, and get a ride on the tail end of the ride I'm in (I've seen a driver do this).
Judges have lots of experience at (and precedents for) figuring out when employees are on the clock in many contexts, including ones where employees have some degree of ability to select whether and when to accept a given work shift. Guidance does exist.
I don't know California law on this specifically, but any state would definitely include time when actively serving as a driver for a ride, many would include time driving to pick up an accepted passenger, some might include time when logged in as a driver.
>Of course, one wouldn't be actively working for two employers at the same instant, but neither would one be simultaneously driving an Uber ride and a Lyft ride.
Until someone figures out how to multiplex the cabshare part of the two apps :p
Hehe, true. :P Well I imagine both companies would kick you off their platform under either type of worker status if you did that, and being an employee wouldn't protect you (the typical default duty of loyalty probably does extend at least as far as working for just one company per ride).
1. Makes sense. CA is wrong to outlaw voluntary working relationships between two parties.
2. Interesting idea, but then all companies could just do this and make the same claim that their employees/contractors/vendors are just customers too! Not gonna fly.
In practical terms, this is trivial for uber to dodge. All they need to do is transform from a company offering rides, to a company connecting riders to drivers. It sounds like a big difference but I susoect very little about the user experience would change.
For instance they could allow riders to offer different rates, but heavily favour (through ui and other soft incentives) the suggested rate.
In the end the drivers would be driving the same car at the same price with the same benefits.
> In practical terms, this is trivial for uber to dodge. All they need to do is transform from a company offering rides, to a company connecting riders to drivers. It sounds like a big difference but I susoect very little about the user experience would change.
There's typically an agenda behind these laws in terms of trying to increase the benefits and power of workers at the expense of the company. So I'm not sure Uber will be allowed to sidestep that goal by simply changing the way things are handled and presented. The govt could simply argue that giving users the option to choose a ride from Bob or Sally is meaningless since customers have no idea who these people are and just choose the first or cheapest on the list. Especially considering the amount of gray area already crossed to classify uber drivers as employees in this ruling.
I submit that it's not trivial, in that Uber will have to either let drivers set their own rates, or let drivers cherry-pick without penalty the contracts they wish to accept. Either change constitutes a monumental change to the rider experience.
2. Just FYI, this is basically what the taxicab companies do. And a lot of companies that you interact with basically do this, except at a higher level of organization: namely franchises. A manager at a mcdonald's is not typically an employee of mcdonald's, and is responsible for paying a lot in fees (and has to fulfill a lot of XYZ requirements to maintain the franchise).
> 1. Makes sense. CA is wrong to outlaw voluntary working relationships between two parties.
Wrong in what sense? In a moral sense I might agree with you. In a legal sense, governments around the world do that all the time, and get away with it.
1) if they forced that requirement on drivers, that would 100% indicate an employment relationship. But note that it is generally regarded as fraud to double bill multiple clients for the same unit of time.
2) irrelevant to the employee/contractor determination. It is possible for an employee to also be a contractor, see for example restaurants...
#1, If you pick to be in a contractor relationship you can do whatever with regards to having both apps on simultaneously.
#2 If you pick to be in an employee relationship, uber and lyft have a right to exclusivity during all phases of the ride. Of course a driver can choose to work for both, but lyft can terminate a driver if they find that a driver is online for uber, and vice versa.
Or #3, the state can decide that the "employees" are "not working" unless they are in the phases where they are going towards an accepted ride or have a passenger in the car.
The state will almost certainly not go with #3. Between #1 and #2, I can tell you which option 90% of drivers will take. It's not #2. So we will be back to square one.
AFAIK here is a "duty of loyalty" that requires you not to compete with your employer so working for a company that directly competes with them would be out. Like working for both Waymo and Uber self driving cars at the same time "as an employee". As a contractor no such standard exists.
That's an oversimplification. Uber could just as readily add an exclusivity provision in an independent contractor agreement as waive (or strengthen) any default duty of loyalty in their employment contract.
The fact that this question is practically speaking unilaterally up to Uber and not the result of any meaningful negotiation between the parties makes the relationship even more employment-like, as there's usually much less negotiation around terms of employment (certainly some still happens) than in true independent contracting.
What's more, it's not clear to me that courts would enforce the duty of loyalty (and maybe not even an express contractual provision depending on the state) against a part-time rank-and-file provider of comparatively unskilled labor, just as they wouldn't prevent a 20-hour-per-month sandwich shop employee from spending an additional 20 hours per month at a different sandwich shop in parallel. Maybe a guarantee from Uber of full-time pay would change that. I believe a federal trial court has even ruled that non-fiduciary employees in California have no duty of loyalty, though I don't know if that was overturned on appeal or whether state courts have agreed.
A lyft driver can have the uber and lyft apps on at the same time during the phase when you don't have a passenger in the car. This is basic driver strategy 101. It's generally good etiquette to turn it off when you get pinged for a passenger, but that doesn't always happen[0], and for sure I have seen drivers flip the other one back on towards the end of their ride. This is critical question for employment law because: how do you calculate minimum wage hours?
[0] I did this once, uber had a really stupid and un-thought-out halloween weekend bonus on a weekend where halloween fell on a friday night (people don't party hard on saturday night of a halloween weekend like that), and pink mustache copied with their own equally asinine bonus. So I went out to a place within the service area where I knew I would not get very many uber or lyft rides, and left both apps on for hours while reading inside a Denny's. I did happen to get ONE ride, and I left the other service on to rack up bonus time on it. I was definitely nervous as hell though, which in retrospect, was unnecessary.
A lyft driver can have the uber and lyft apps on at the same time during the phase when you don't have a passenger in the car.
I'm well aware of this. If you look in my comment history, you'll see that I drove for Uber and Lyft, too.
But the point stands — You can't earn money from both at the same time, just like someone can't earn money from waiting tables at two different restaurants at the same time.
uber had a really stupid and un-thought-out halloween weekend bonus
Ick. Don't get me started about Uber's promotional games. Like making everyone sign up for a big promotion during a big event, and then there are no qualifying rides.
The fact that it's Uber's talking point doesn't make it any less true.
If rideshare drivers are employees, then there's going to be fixed overhead costs of hiring employees and drivers will not be able to set their own hours. The rideshare company would not recoup the costs of benefits for drivers that drive less than a certain number of hours per month, and so drivers would have to be required to work at least that many hours.
Can you elaborate on what you mean by, "in practical terms drivers don't end up with the choice they ought to"? I know people who drive for Uber and Lyft less than 10 hours per week, and some do it nearly full time.
Employees can set their own hours. White collar employees do it all the time...
It's up to the employer what freedoms they allow. Generally, like with existing businesses, it would probably utilize a shift assignment system, where employees get assigned shifts but can swap them with other employees.
An employee working 10 hours a week is already a thing, it's called part-time work. Part time employees have fewer benefits and exist in many industries, e.g. food service. A weekend barista at Starbucks is not an independent contractor.
A weekend barista is only comparable to a gig economy driver the day that they can decide on a whim to show up to work for an hour or take a 2 week break unannounced, bail in the middle of a shift, or skip a shift altogether with no repercussions.
The barista doesn’t bring their own espresso machine, isn’t expected to eat all externalities and fund their own healthcare and pension. Granted I don’t know how that works for employees in the US either, but that has always been the point of contention in Europe.
The ability to choose their own hours is only one of many complimentary litmus tests that determine whether or not someone is an employee or a contractor. It is not a solely sufficient, nor a necessary condition of classifying someone as a contractor.
> The way I see it, as employees, their employers will either give them benefits for 10 hour work, or force them to work 40 hours.
Most benefit mandates apply to full-time workers, usually triggered at somewhere between 30-35 hours/week; those that apply to part time workers at all tend to be scaled down for them based on working hours.
> If rideshare drivers are employees, then there's going to be fixed overhead costs of hiring employees and drivers will not be able to set their own hours
There will be less flexibility about hours, but less risk that an hour reserved for work will be unpaid. Within the need not to overbook available business, and laws requiring payment for scheduled time even if cancelled at the lat minute, there's no inherent reason rideshare companies couldn't provide scheduling flexibility, including a notice-of-availability system for immediate call-ups.
(Optimizing decision algorithms for when to bring on additional staff becomes is a challenge that this opens up, also similar with when to accept the cost of short-noticd cancelling scheduled shifts.)
> The rideshare company would not recoup the costs of benefits for drivers that drive less than a certain number of hours per month
Nor would they be required to provide benefits for them; most benefit mandates apply only to full-time employees, not part-time employees.
Of course, 'employees' vs 'contractors' are purely terms made up by the legal system. So the people in charge of the legal system, both on the law making side and the law interpreting side, can over time change what they mean, and the meanings don't have to be particularly sensible nor consistent.
The argument which won was not that there is some legal reason Uber can’t have both independent contractors and employees, but rather that the relationship between Uber and it’s drivers is de facto employment and should therefore be subject to employment law.
Huh? The whole point is that the California judiciary is literally saying that legally Uber cannot classify drivers as contractors.
So no, they cannot have independent contractors, unless you mean for the operations side of their business, which nobody is talking about so I hope not.
I don't think so... The ruling is that the relationship as it is in employment. The test is:
A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
B) the worker performs work that is outside the usual course of the hiring entity’s business; and
C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Of course you can argue about the minutia of each test (that's what lawyers are for) but there's nothing stopping the hiring of drivers as contractors per se. It's just that the judge thinks the current relationship as it is does not pass this test.
Right, but the issue is that there doesn't seem to be any clear way Uber as an entity with the business model that it has (make an app that connects drivers with riders, take a portion of proceeds) can ever have drivers that are contractors.
Said another way, what could Uber change from their current policies that would pass ABC if they don't at the minute?
> B) the worker performs work that is outside the usual course of the hiring entity’s business;
This seems to be the insurmountable point; the judge seems to be inclined to see drivers as within the usual course of business, which means nothing changing on A and/or C would matter, and, assuming the strong statements in the injunction reflect the eventual ruling on the merits, Uber would have no means other than radically changing the business they are in to have drivers-as-contractors.
There's correct, under CA law Uber would need to restructure its entire business model if it wants to treat drivers as contractors. (The ABC test in the other reply was codified into CA law.)
The Carlifornia judge also agrees, just that the definition of a contractor is based on more than flexible hours. If Uber truly wants to have contractors, they'll have to cede more decision-making/autonomy to drivers; or alternatively have 2 classes of drivers and have them choose to be employees or honest-to-goodness contractors with full autonomy (or enough autonomy to cross the line between employee and contractor).
One part of the "ABC test"[1] used to check the "contractorness" under law requires that "...the worker is free from the control and direction of the hiring entity in connection with the performance of the work..." - Uber controls every minute of drivers work time, so this will be a high hurdle to clear.
Part B is similarly challenging, because it requires that the contractor & the work they are doing not be in the same line of business as hiring entity
Being an independent contractor is about more than "choosing your own hours". you can be an employee and have flexible hours. You can be a contractor and have fixed hours. There are plenty of examples of both in the tech industry.
Hmm, maybe I just don't know enough people, but I don't know any employee (with benefits and such) that can just stop working for their company for 12 months with no prior notice, and then pick it back up whenever. And infinite variations on that refrain.
I also don't know any employee who gets paid money by the customer to do a job, of which a small portion is taken by the company. For every "employee" I know, it works in exactly the opposite way.
Uber gets paid, not the driver. The money does not drop directly into the driver's bank account. The driver cannot decide to change his rate or charge extra if the customer pukes in the car.
And besides, Getting a cut of your sales and it's called commission.
Independence goes much further - can the driver assign someone else to do the job?
Uber collects the payment. But it belongs to the driver. Uber then takes a fraction of it.
As with any other marketplace/platform: Amazon, Patreon, App Stores, Twitch, Steam, etc.
Stripe collects payments for me when I sell my app. The money does not drop directly into my bank account.
And I don't think Uber has any problem with drivers hiring other people to drive their car and do Uber for them. The people that take an issue with that are the municipalities that want to require background checks, etc. for drivers.
Uber doesn't tell the driver how much it's charging the customer, takes an arbitrary cut, and doesn't let you decide of the price, exactly unlike the Apple App store, Amazon, Patreon, and Steam. There are also more reasons why they are employees, but these are material to your claims.
A quick search is showing me a ton of answers on Quora of being emphatically stating that Uber actively allows you to hire people to drive your car for you, as long as you can show they are insured to do so: the money goes to you, to the one parent account, so you get to decide how to pay your subcontractors; supposedly you can even register as a corporation?
I don't think the CA Judge disputed that Uber could have a relationship with drivers that was legally structured as "independent contractor" but rather that the relationship Uber currently has with drivers does not meet the legal requirements to be classified as "independent contractor". If Uber wanted to change the requirements they place on drivers nobody is saying they couldn't be contractors under different circumstances.
Nothing about the ruling prevents Uber from having contractors. It prevents them from having employees (as determined by California law) that they label as contractors in order to skirt around legal requirements for employees.
True, but when 100k uber drivers (contractors) in California are reclassified as employees, it seem fair to say a "dispute" is happening.
For the record, I am not saying the ruling is incorrect, but it does make me feel uneasy because:
1) I think that Uber does provide a public good (increased efficiency compared to a taxi)
2) If all drivers are employees, the business does not seem sustainable
I think that new laws are needed rather than using pre-sharing-economy labels like employee, but that the ruling by the judge may be correct given the current laws.
1) In Victorian Britain, child labour provided a great many public goods. 2) After it was outlawed, many of businesses that relied on it became unsustainable.
I don't think it is sensible to justify exploitation with "but the public benefits from it' and 'without it the business might go under'. By that logic we'd still have Victorian workhouses, 12-hour workdays, and there'd be no health & safety.
Driving for a living is hard on a person. Truck drivers have bad health and quite high divorce/problematic relationship rates. Taxi driving is relatively dangerous. Driving is the most dangerous activity we commonly perform today and the risk corresponds to miles driven.
driving is one of the most dangerous things you can do nowadays. most Uber drivers have to support themselves and possibly others. Many drivers can’t afford private healthcare so in the case of an accident it would really suck for them and their family.
Maybe they’re not losing their fingers in factory machines like child laborers are but I think they deserve employer provided healthcare at the very least.
> By that logic we'd still have Victorian workhouses, 12-hour workdays, and there'd be no health & safety.
What makes you think so? There's more than one reason for the demise of child labour. Society has gotten richer over time, and so families place a comparatively higher value on not having their children work.
But for Uber being allowed to seize the market with their ultra low prices, which are only possible because they class their labor as contractors, there would be companies more like Uber than like taxis but that treat their employees like employees.
The problem with taxis was the medallion system and other crazy regulations.
There is a middle ground. No medallions or other protectionist measures, but you have to treat your employees like employees.
If all drivers are employees, the business does not seem sustainable
Uber lost $19,000,000,000 in 2019. It lost money last quarter. Uber is already unsustainable. Despite its labor practices, Uber has been unsustainable since its founding. And it’s not like Amazon’s early days where lack of profits was offset by acquisition of physical infrastructure. Uber loses money on via unit economics.
Uber has not ever been more efficient than the services it replaced. Better in many ways, definitely for riders and arguably for some drivers, but not efficient. Uber has simply been shoveling tens of billions of dollars in funny money into the maw of their attempt to corner a market, which has never worked.
Yes, and from my reading, Uber cannot possibly change anything without literally becoming an entirely different company with different business model in order for their drivers to be classified as contractors.
This is an argument against treating drivers as contractors, but it's not an argument against the OP's point, which is that a contractor relationship might be beneficial for some non-negligible part of the population, even if it's not beneficial more generally. And the fact that articles don't acknowledge this is notable.
Going to be the big reason is that is makes it easier to reach into their deep pockets when one of the drivers does something bad. Where there is an overtly obvious benefit to one group it usually means someone else is using it as a cover, that is going to be the trial lawyers.
I am in the group that says if you want to be a contractor and the employer agrees so be it. I have a good number of friends doing uber after hours aimed at specific purchases and the flexibility is what sold them. Not the life for me but for some it is a good alternative.
Plus the biggest benefit was the kick in the pants traditional taxi services got so they now how to treat their "drivers" better. How they get off with how that business is run and Uber and Lyft get called out should tell you the priorities here.
> The problem is that Uber currently exerts so much control over its "independent contractor" relationships that they have become, as a matter of law, employment relationships.
Sure, this could be true.
But people should recognize that a possible solution to this, is for companies to provide more flexibility and control to these people, such that they stay contractor but also get the additional contractor benefits, as opposed to forcing the employee relationship.
This would likely involve allowing drivers to set their own rates or handing over driver allocation responsibilities to another party. It’s really hard to envision a world where Uber hands over those kinds of abilities to someone. Companies like this rely on owning and setting the conditions of a market to keep prices competitive.
Why? Uber could easily set up an auction system similar to how Google auctions off ad space. And Google is certainly happy with the amount of control they retain.
You realize there are tons of jobs with employees that allow employees to chose their own hours.
There is nothing in this ruling that prevents Uber from allowing people to chose rides _exactly_ as they are doing it now.
The changes are:
1. Uber needs to pay into unemployment insurance.
2. Uber needs to pay into workers compensation.
3. Uber needs to pay into social security.
4. Uber needs to collect payroll taxes in advance.
5. Uber cannot discriminate based on protected classes such as race or gender.
6. Uber must comply with the WARN if large scale layoffs occur.
7. Uber has to provide for heath insurance depending in accordance with local and federal laws.
8. Uber needs to verify the legal working status of their drivers
9. And many other things all other businesses pay into and rules they have to follow.
We make businesses pay into this because the general public is ends up footing the bill anyway. Like right now where we’re providing Uber drivers with unemployment benefits even though Uber cheated their responsibility. And when a driver gets in an accident and we have to pick up the bill of unpaid hospital bills and disability payments.
Flexibility has nothing to do with it. Paying into the system everyone else has to and following the rules everyone else needs to follow is.
Current employment law really isn't well suited for cases where someone can be an "employee" of 4 or 5 companies at a time, and stop and start on a whim as they see fit. I mean, just look at unemployment insurance. When the nature of the job is essentially a bid out to people willing to do the work, what does it mean for someone to be unemployed in the first place if there is just less work to go around? Flexibility DOES have a lot to do with it: I'm fine with the company not guaranteeing me a set number of hours per week if I can just choose to not work a particular week if that's what I want.
I agree with some other posters, I think a new categorization for "gig" workers is necessary, as I think a lot of your other points (e.g. paying workers comp) make sense.
I wonder if a model, more like the SAG-AFTRA union would be possible. Register with the union and workers can operate on as many platforms as possible. Common reporting on hours could prevent worker overlapping across platforms against a minimum wage. Health insurance is available through union with companies paying portions in.
Workers can choose platforms that maximize the worker's wages while platforms would need to minimize costs for customers. The more efficient the platform gets, the better position they would be in vs competitors.
> what does it mean for someone to be unemployed in the first place if there is just less work to go around?
As we've seen with the pandemic, unemployment can mean withdrawal of healthcare and eviction.
Really the question here is risk. Who takes the risk that employees can get sick? Who takes the risk that levels of work coming in can vary?
Should it be the individual employees, who generally have a couple month's income saved or less, or should it $50 billion market cap company? Which is better able to absorb risk? Or should the risk instead be handled by the state or federal government?
Absolutely they can. California, like almost all states in the US, is an “at-will” employment state.
None of these things are required under employment law at all. Can I ask where you found this wildly false information? Do you happen to live outside the US?
Nowhere in California labor law does it prevent people from taking vacations or anything else you mentioned if they are an employee.
> Can I ask where you found this wildly false information? Do you happen to live outside the US?
I worked in California for a few years but I'm not longer there. And those were questions, they weren't meant to be stated as facts.
> Nowhere in California labor law does it prevent people from taking vacations
Hmm, maybe I understood my rights wrong, but from my understanding I wasn't free to take an arbitrary number of vacation days without getting fired. I know Netflix allows that but other than them, wouldn't most employers let you go if you just decided to not show up on random days?
Also, again I'm not expert, but are you sure that someone can simultaneously work for Apple and Google? That doesn't sound right but again, these are mostly discussion questions, let me know if I'm missing something here.
In California employers are absolutely not allowed to prevent workers from working for competitors outside of their working hours.
You are correct that they can limit vacation time, but Uber could also limit vacation time for contractors. There is nothing specific in California employment law that does not allow employers and employees to mutually agree to open vacation time.
22 CCR § 1256-32: "If an employee, without the knowledge and approval of his or her employer, accepts work for a competitor, the employee has engaged in misconduct."
Why don't we legislate a new category of taxation for gig economy companies like Uber? Make them pay more taxes and support a new social safety net (especially universal healthcare) without changing their business model.
The term "dependent contractor" is sometimes used for this idea of a third category. Whether it actually provides workers with the benefits and protections that employees with similar working arrangements are entitled to remains to be seen.
It's the consumers using the services that pay extra costs associated with these services. Socializing the costs through general taxes across the greater public that does not use gig economy services is not good.
And the benefit of doing it my way is that it takes one session in congress and no further actions, whereas building, maintaining, and policing an entirely new regulatory framework would likely be on net costlier than raising income taxes by a few basis points on the top couple tax brackets.
Up to a certain point, corporate taxes do have a marginal benefit to society as a separate source of taxation. Generally speaking you want to spread your sources of tax revenue to minimize distortions and maximize revenue. This advice breaks down for small tax haven countries of course, and I think that larger countries should mitigate their most disruptive schemes. Citizens of large countries should not be deprived of a great avenue for taxation because of financial acrobatics devised by smaller countries. That all being said, I also think that income taxes should be increased at the higher end to support a greater safety net.
Do you have a link to the California law that states that an employee is not allowed to work for any other company? If anything California has specific non-compete laws and moonlighting laws that forbid a company from preventing their employees from working for another company.
Hilariously, you are so far off that you don’t realize that the only legal way Uber could prevent their drivers from working for Lyft in California was if they were contractors and not employees
Some things, like not being able to set their own rates, meant drivers were never contractors, even if they wanted the perks of contracting (e.g, choose your own hours). Saying 'I wish to be a contractor' isn't legally sufficient: the agreement needs to permit setting rates.
Not all contractors set their own rates. Sometimes they bid on an already published rate. Which is what happens here. Uber/Lyft tell you what you will make before the ride starts.
And maybe if you keep signalling to a company that you want to do contract work for them but never submit any bids for what they put out as jobs, they'll start ignoring you as not serious.
Being a contractor doesn't mean you get to pick where you work, it means you get to pick where you work out of the people willing to hire you for contract work. Many companies have different criteria for what they require out of contractors. I don't see this as all that different.
> And maybe if you keep signalling to a company that you want to do contract work for them but never submit any bids for what they put out as jobs, they'll start ignoring you as not serious.
Okay, but none of this is about people who wanted to do work for Uber but didn't. This issue is about people who did in fact do work for Uber. If you never submit any bids and never do any work, you're neither a contractor nor an employee.
Well, this specific tangent is about whether Uber drivers are like contractors in that they get to choose their jobs/rates or aren't. Specifically, I was responding to:
>>> except uber/lyft will remove you from the platform if you decline too many rides, thereby only giving the illusion of choice.
I don't see any real difference to that than to someone who was is contractor and maybe did some work, but hasn't responded in a while and the company removes them from the list of people they notify (and fast-track) for bids. If I'm at a company and I have a couple preferred contractors and one hasn't even bothered to reply to my the last few times I contacted them, maybe I'll lose faith in them being responsive while they're on the job.
Any contractor relationship is a two way street. If either side doesn't maintain the relationship, the other side may choose to alter it or cut if off entirely.
I would say it's the equivalent of going through the process of jumping through hoops to be a contractor at a company, maybe doing some jobs (or not), and then failing to respond at all if they send some work your way. If you show yourself not responsive to their time constraints, they very well may decide it's not worth notifying you of work items, and ignoring any bids you submit.
Contract work is all about trust. If you show any behavior that makes you look less reliable, are they going to trust you with work? Flipped around, if the company doesn't respond to requests for payment, are you going to want to do work for them? It works both ways.
A town wants a bridge built. They set a maximum price. Three contractors submits bids. They are all at the maximum price – instead the contractors differentiate themselves based on quality of previous work and distance to the construction site.
A fourth contractor thinks the price is too little and rejects it outright.
The fourth contractor has "submitted a lower bid"?
I see your point too. Essentially, rather than contractors proposing prices and then clients accepting or moving on, if clients propose prices and then contractors accept or move on, it's still a market with negotiated rates.
> except uber/lyft will remove you from the platform if you decline too many rides, thereby only giving the illusion of choice.
Factually incorrect for Uber drivers in CA, the platform no longer penalizes drivers for declining trips and now allows them to pick and choose trips without any impact on driver rating. (I worked in Uber Eng up until the 5/18 layoffs)
This is the bigger problem. None of the people even here on HN actually now how Uber works and how different the experience for rider and drivers can be varying on city, state, country etc. Just a bunch of people repeating what they hear from anti-tech journalsits writing about startups.
Uber app is very hyperlocal because each location has different requirements/challenges especially around fare calculation, taxes and levies, how the app works in CA is very different from London and different from New York. The Driver app in CA was reworked on extensively during Q4 2019 in response to AB5 in order to strengthen the Uber case that it is essentially a platform that matches riders to drivers. Internally those changes can be rolled out to all cities in the U.S. if the AB5 tide goes beyond CA, but to be honest no one knows if those changes will make the case for Uber or not, they are the proverbial canary in the coal mine.
Imagine the fun metagames this would cause. If the government took Uber's stick away, the company would be forced to find a rate at which they'd have enough drivers to allow for reasonably short pickup time. Drivers then could, over their local "$city Uber drivers" FB/WhatsApp group, agree to not take any ride below $X, thus forcing Uber to raise their rates to $X (+ Uber's cut).
(While dropping drivers from the platform if they refuse too many rides doesn't make such collusion impossible in theory, it introduces enough individual risk to make such coordination unlikely in practice.)
>Drivers then could, over their local "$city Uber drivers" FB/WhatsApp group, agree to not take any ride below $X, thus forcing Uber to raise their rates to $X (+ Uber's cut).
drivers already have those groups btw. they use to coordinate a LOT of stuff. i've seen a driver on a huge whatsapp group where they basically tried to set some areas to surge so they could earn more money.
They've pulled this stunt at LAX before. I got off the plane and suddenly all the Uber rides were over $100. Googled around and apparently this was a game they were playing to drive up rates.
I took a flyaway to Union Station and then got an Uber from there for $15.
> "the company would be forced to find a rate at which they'd have enough drivers to allow for reasonably short pickup time."
Oh the humanity, how will they manage? They only have like the entire dataset of all rides ever taken plus a world class data science team plus a ton of market power. Will they be able to negotiate on equal footing rate with cab-drivers?
There is no stick; they already have to do that. If the drivers don’t like the rates and think they earn too little, they quit. Uber has to ensure that drivers make attractive rates if it wants retain them. And indeed, it offers lots of bonus pay, special deals etc precisely for that reason.
> Drivers then could, over their local "$city Uber drivers" FB/WhatsApp group, agree to not take any ride below $X,
Collective bargaining is always price fixing on the price of labour. So is the minimum wage. It also explicitly legal, and generally good for the common person.
In general, price fixing of the cost of labour is only found to be illegal price fixing when the people fixing the price are not (or not only) employees/workers. Which isn't the case here.
Collective bargaining applies when you are demanding things from an employer. But in this case, drivers colluding to not accept ride-shares under a certain price would be demanding a price from the consumer (which again, ride-share companies are only taking a fraction of, so it really is a price-fix on the consumer). And under such a scenario where that was allowed by the Ubers/Lyfts of the world, drivers would certainly be private contractors, and therefore business entities in their own right. So price-fixing.
Firstly, if you consider that Uber is only an intermediary and nothing else, then the consumer is the employer. Making this collective bargaining, Employers are consumers in the labour market. Price fixing is always against the interests of a pure consumer, including collective bargaining. Unions are beneficial because (and only if) the vast majority are workers much moreso than consumers.
Secondly, as we have seen, since the money is paid to Uber, and Uber decides how much the rides cost and to who they are assigned when, as well as the fact as Uber pays drivers, and in combination with the fact that drivers are the core business of Uber, they are indeed employees, and this is collective bargaining.
In both cases, it is collective bargaining. If the consumer is the rider, and they directly pay with a cut to Uber the fare, as well as decide the price they are offering and control how the ride goes, then the driver is the employee. In the real world and according to California statute, the driver is the employee (of Uber).
So if you live in a town with three welders, and those three welders come together and agree that they will not ever weld for below $X/h in the town (which is significantly above market price of nearby, equivalent towns), then that is not price-fixing, because the people that want welding services are suddenly "welder employers" because they are buying a service? I... don't think that's right.
The price of rides is determined by the market. Uber arguably has the least say of the three stakeholders – their goal is to merely "make the market". Riders demand low-prices, drivers demand high ones. Uber doesn't really "choose" a price, they just find the happy medium that the market demands.
Uber pays drivers in the same way that Stripe "pays" me when I make a sale of my app – that is to say, not at all. Stripe pays me, but they are clearly not my employer. Uber is collecting payments and then disbursing them, as literally any marketplace does. Does Steam "employ" all the game developers that sell on their platform? Does Etsy employ all the independent makers? Apple's App Store? Twitch? Amazon? Patreon?
The core business of Uber is an app/marketplace for transport, not drivers. This is obvious when you consider the fact that Uber also provides things like scooters and e-bikes through their app (and in London, now boat services!), which obviously don't involve mostly independent driver-contractors.
To compare this to Steam again – the core business of Steam is not "game developers", even though their core business would not exist without game developers. Their business is a marketplace. I actually really like the Steam comparison because it literally ticks all the same boxes you are ticking for Uber: they set prices, accept/disburse payments, and wouldn't exist without 3rd parties and their labor. But nobody is claiming that Steam should start paying health/holidy/etc benefits for all the indie game developers that sell games on their platform.
The example with welders would work if there were consumers individually bargaining with each welder / driver. However prices are set by an opaque algorithm, and I as a consumer or as a driver cannot actually control the offer, or offer more/less. In this context, I believe the algorithm/Uber is the one doing price fixing in real-time, and the drivers are merely trying to reign it in.
>So if you live in a town with three welders, and those three welders come together and agree that they will not ever weld for below $X/h in the town (which is significantly above market price of nearby, equivalent towns), then that is not price-fixing, because the people that want welding services are suddenly "welder employers" because they are buying a service? I... don't think that's right.
There is a huge difference between this and an Uber driver. All Uber drivers are commodified, there is no distinction between them outside what Uber itself does. Uber's drivers have no control over how they do their job. Uber's drivers have no control over the fares they charge outside accept/refuse.
If the three welders were indistinguishable from each other, and all had the same entity decide vast amounts of how they do their job and for how much, then yes, it would be simply collective bargaining.
Once again, there is massive strawman going on here that you are perpetuating. I'm not saying that it isn't price-fixing. All collective bargaining is price fixing. All of it, without exception. As a society, we allow workers to engage in price fixing because workers have very low individual power and it is in our collective interest for workers to negotiate together. That is the point I'm trying to get across. All square are rectangles, not all rectangles are squares. All collective bargaining is price-fixing, not all price-fixing is collective bargaining.
>The price of rides is determined by the market. Uber arguably has the least say of the three stakeholders – their goal is to merely "make the market". Riders demand low-prices, drivers demand high ones. Uber doesn't really "choose" a price, they just find the happy medium that the market demands.
This is ridiculous on its face. Unless there is a mechanism on Uber for drivers to bid on rides, then fare prices are not fair market prices negotiated between drivers and riders, but instead prices decided between Uber and riders. Uber very certainly chooses a price, and the riders don't. They do not participate in market pricing any more than a factory worker threatening to quit their job contributes to increasing the price of a widget. Most importantly, Uber does not allow the drivers to even know the actual price the riders pay, so this is just ridiculous.
>Uber pays drivers in the same way that Stripe "pays" me when I make a sale of my app – that is to say, not at all. Stripe pays me, but they are clearly not my employer. Uber is collecting payments and then disbursing them, as literally any marketplace does. Does Steam "employ" all the game developers that sell on their platform? Does Etsy employ all the independent makers? Apple's App Store? Twitch? Amazon? Patreon?
If Stripe told you exactly which app to make and how, and did not let you explicitly state which price you would sell the app for, and did not even let you know which price consumers were paying, had a variable cut that is obscure to you, did not let you market your apps individually, and only gave you the option to either make the app or not, then you would be an employee of Stripe, yes. If Steam told you which app to make and how, which price it would give you, didn't tell you how much they would charge customers, and didn't differentiate you from other gamedevs then yes, you would be an employee of Steam. Rinse and repeat.
The core business of Uber, in revenue and valuation, is 100% to provide rides for people. Scooters and bikes are a drop in the bucket, and technically come from an acquisition and thus are not a core business. This is like saying that the core business of Apple isn't to make iPhones, it's connect consumers with engineers and factory workers that make phones. Except the consumers don't choose which engineers make them, how much they are paid, or even really differentiate them before paying at all.
>To compare this to Steam again – the core business of Steam is not "game developers", even though their core business would not exist without game developers. Their business is a marketplace. I actually really like the Steam comparison because it literally ticks all the same boxes you are ticking for Uber: they set prices, accept/disburse payments, and wouldn't exist without 3rd parties and their labor. But nobody is claiming that Steam should start paying health/holidy/etc benefits for all the indie game developers that sell games on their platform.
Steam does not set prices. Steam lets the gamedevs/publishers decide of they price they want. Steam lets you market yourself. Steam does not tell you what game you should make (what route you should take), they do not tell you which programming languages you can use (which cars you can use), and does not rely on contractors for its core business (Steam does not rely on one-person indie game developers for their core business). Steam is incomparable to Uber. The idea of why Uber doesn't let you use any car, by the way, is in order not to damage their brand. Because you, as a driver, represent Uber, and they know it. In a way, your most important asset, Uber's brand, is not owned by you but by Uber - you then generate profit from someone else's capital for a wage - an employee.
1. Uber drivers are not commodified. There is in fact a difference between drivers, both known in advance (rating) and during/after the actual trip. I have had very pleasant experiences with some drivers, and very unpleasant experiences with others. The pleasant drivers I tipped extra and gave high ratings. The unpleasant ones I did the opposite.
2. I am not perpetuating a straw man that "all collective bargaining is price-fixing". I am arguing that in this particular case, this is the bad one (price fixing), not the good one (collective bargaining). This is because the drivers (not Uber) have monopoly power in the market. The disagreement is stemming from the fact that you believe that any action taken by "labor" cannot be price-fixing, which I disagree with.
3. "This is ridiculous on its face." It is not ridiculous. This is called supply-and-demand and it actually works quite well for pricing things. If Uber "sets" the price too high, riders will not use the service. If they "set" the price too low, drivers will not want to participate and then you don't have a market. Again, the price is "set" at whatever value riders are willing to pay and drivers are willing to accept. Anything else and the system fundamentally doesn't work.
4. At least in California:
a. you choose which rides you want. you are not forced to take certain rides ("make a certain app").
b. drivers can set prices
c. the Uber cut is not obscure (pretty sure it's always been 30%). The time this doesn't apply is when Uber gives both counterparties a great deal by paying the driver more and charging the rider less and using VC money to split the difference.
d. you can ride for Lyft as well, or be a private car for hire without a ride-sharing app ("market yourself")
e. my option with Stripe is "sell my app using them or not", ditto for Steam. Can I sell it without them? Sure. Just like a driver can sell private car-for-hire services without Uber.
5. You might want to break it to a number of companies that some of their core businesses don't actually exist because they came out of acquisitions. Regardless, that wasn't my point. Investors invested in a ride-sharing app. Uber makes money because they have an app. Without the app (but 1000s of drivers) they would not have a business. They would literally be a cab company. But actually they wouldn't be because they don't have any medallions, which you need if you're not connecting riders directly to drivers with... your app. The core business is definitely the app. That's how Lyft can also exist in the same space with the same drivers. Because their business is in making an app that enables a marketplace for ride-sharing, just like Uber. But it's a different app. But the same drivers. Given your assertions, I guess they're pretty lucky to exist in an industry where you could have 100 competing ride-sharing apps, but because "the drivers are their core business", they will all do just fine because they all have drivers!
6. Most of this is addressed in 4. For the rest of it, you're just tacking on more and more made-up criteria that obviously don't apply. If I hire a guy to mow my lawn, I can stipulate that he uses an electric mower. Maybe this is because I care about the environment, don't like gas fumes, or want to look fancy in front of my neighbors. My reasons are my own and he is still an independent contractor. Likewise, Apple forces you to develop in a certain way for the App Store – still a marketplace. They require you to adhere to certain standards of app design/development – ya know, so you don't hurt their brand. Steam could (does?) do that too, and it wouldn't make them not a marketplace. I also notice you ignored Etsy/Twitch, which most certainly do rely on one-person delivery for their core business.
>. Uber drivers are not commodified. There is in fact a difference between drivers, both known in advance (rating) and during/after the actual trip. I have had very pleasant experiences with some drivers, and very unpleasant experiences with others. The pleasant drivers I tipped extra and gave high ratings. The unpleasant ones I did the opposite.
This rating is given by Uber only. It is a single number, with nothing else. This is literal commodification, the exact same way that housing or vegetables are com modified following a grade or a rating. When drivers will be able to market themselves and make a case for themselves it will be something else. A synthetic, numerical rating is literally a hallmark of commodification.
>2. I am not perpetuating a straw man that "all collective bargaining is price-fixing". I am arguing that in this particular case, this is the bad one (price fixing), not the good one (collective bargaining). This is because the drivers (not Uber) have monopoly power in the market. The disagreement is stemming from the fact that you believe that any action taken by "labor" cannot be price-fixing, which I disagree with.
I've written about a dozen times. All collective bargaining is price fixing. Your argument that I am saying that it's not or that I am applying an inconsistent standard is literally a strawman.
>3. "This is ridiculous on its face." It is not ridiculous. This is called supply-and-demand and it actually works quite well for pricing things. If Uber "sets" the price too high, riders will not use the service. If they "set" the price too low, drivers will not want to participate and then you don't have a market. Again, the price is "set" at whatever value riders are willing to pay and drivers are willing to accept. Anything else and the system fundamentally doesn't work.
It is indeed ridiculous. It isn't the drivers negotiating with the riders, it is Uber negotiating with the riders. This is absolutely crucial. The driver has only the option to refuse work. This is, quite literally, how being an employee works. You have no input over the price of the good, you can only refuse or accept the job at the price and in a perfect frictionless vacuum your refusal or acceptance is perfectly mirrored in the end price. Which it isn't in practice for endless reasons, and certainly not in Uber where the margin Uber takes is a secret that no one knows and that varies instantly.
>a. you choose which rides you want. you are not forced to take certain rides ("make a certain app").
If you are an employee, you also aren't forced to make a certain app. You can refuse and either be assigned something else (that you didn't decide), or be fired. If you were a developer on Steam for example, you would be able to make any software, in any way you like, and charge exactly how much you like. All things you can't do on Uber. The right of refusal is also key to being an employee. Contractors, in general, have more than the right of refusal - they decide how the job is done.
>drivers can set prices
Only in California, in a transparent attempt to skirt the letter of the law, and only very, very indirectly through a multiplier.
>the Uber cut is not obscure (pretty sure it's always been 30%). The time this doesn't apply is when Uber gives both counterparties a great deal by paying the driver more and charging the rider less and using VC money to split the difference.
Not always! Uber claims that their cut is around 25-30%. You have to trust them, and independent analysis shows that the cut can exceed 50% in some cases : https://arstechnica.com/tech-policy/2019/08/uber-and-lyfts-c.... In any case, the algorithm used to calculate the fare charged to the rider and credited to the driver is different, so there can never be a fixed cut. It is obscure, and you can never know.
>my option with Stripe is "sell my app using them or not", ditto for Steam. Can I sell it without them? Sure. Just like a driver can sell private car-for-hire services without Uber.
On Stripe, you can sell almost anything. On Steam, you can sell any software at all. On Uber, you can only do the specific trip that Uber wants you to do at the price that Uber decided to offer you, and only in the specific route that is calculated, only in the specific allowed vehicles.
>You might want to break it to a number of companies that some of their core businesses don't actually exist because they came out of acquisitions. Regardless, that wasn't my point. Investors invested in a ride-sharing app. Uber makes money because they have an app. Without the app (but 1000s of drivers) they would not have a business. They would literally be a cab company. But actually they wouldn't be because they don't have any medallions, which you need if you're not connecting riders directly to drivers with... your app. The core business is definitely the app. That's how Lyft can also exist in the same space with the same drivers. Because their business is in making an app that enables a marketplace for ride-sharing, just like Uber. But it's a different app. But the same drivers. Given your assertions, I guess they're pretty lucky to exist in an industry where you could have 100 competing ride-sharing apps, but because "the drivers are their core business", they will all do just fine because they all have drivers!
Does Uber not have a contractual relationship with Uber drivers in which they must complete a ride? Does Uber not spend the vast majority of their revenue in this contractual relationship? Then it is core to their business. If Uber's job was only to connect riders to drivers, then the contractual obligation would be between drivers and riders, and not between drivers and Uber. This is as absurd as claiming that the core business of Microsoft is to connect users of operating systems with programmers. It isn't, it's to sell software, because the engineers have an obligation towards Microsoft.
>If I hire a guy to mow my lawn, I can stipulate that he uses an electric mower. Maybe this is because I care about the environment, don't like gas fumes, or want to look fancy in front of my neighbors. My reasons are my own and he is still an independent contractor.
If you hire a guy to mow your lawn, tell him exactly how to do it, specify the equipment with which you do so, and if he has no lawn-mowing practice, then yes he is your employee. Furthermore, you seem to be missing the fact that Uber drivers are contractors of Uber, not contractors to the riders.
That’s an interesting question actually. Can a third party who technically has no say in setting the actual price of a product be said to be engaging in price fixing by refusing to enter into a market, even if done collectively?
The bonus pay and special deals are actually what would make the contractor classification somewhat questionable, even without the California law. Uber is using incentives to try to control its drivers' hours.
"> Drivers then could, over their local "$city Uber drivers" FB/WhatsApp group, agree to not take any ride below $X,
This is, of course, illegal."
Although I am not 100% certain on this, I think that these kinds of anti-trust laws only apply when certain companies have huge amounts of market power. I believe that certain "anti-competitive" behavior would not be illegal, if done by a whole bunch of small contractors.
The obvious example would be unions that do this. But it is possible that this is a special exception to the law.
You are free to fire a contractor for any reason, but if you consistently fire contractors for doing things that you would prefer that they not do but which you cannot mandate they not do because they are not employees, then you undermine the claim that they are in fact contractors.
If by overcharging you mean billing for more hours than were in fact done, that's fraud and is a different matter entirely.
Obviously you may stop working with a person if their prices are too high or because quality of their work is shit.
However if you use this as a pretence for firing contractors, but the real reason you are firing them is because of their sex / gender / race - that would be illegal.
In the same vein, if you fire contractors for doing things that are none of your business, and it is common knowledge that you do that and exercise control you should not have over them, then a court may decide that in fact the relationship is not that of a contractor. That in fact this is nothing more than a legal fiction created for the purpose of tax avoidance or similar.
>In the same vein, if you fire contractors for doing things that are none of your business
Like what?
I'm pretty sure you can put all the terms you want in a contractual relationship. Even things that are none of your business (as long as not protected class).
To my understanding, at least for the public sector, is that the government will post a project. Organizations will then place 'bids' (that includes their contractor's price, time to complete the project, a general plan for how the project will be completed), and then the government will choose one of the bids.
I get what you're saying, but I don't think "setting their own rates" has anything to do with it. Any driver would be able to set their own rates by going at it alone, completely independent from a ride share company. They would create their own service and charge what they want.
However, because the drivers choose to participate in the Uber/Lyft marketplace and benefit from the network affects that they have created, it follows that Uber/Lyft would have a say in the cost of goods sold in that marketplace. Just because the drivers can't set their own rates doesn't mean they aren't independent contractors.
If I hire you to mow my lawn, we mutually come to an agreement of what time and price you would perform the service. Just because you want to work for $100 / hour doesn't mean I'm willing to pay that. And because I'm only willing to pay a certain price only for your services doesn't make you an employee.
I think it's that simple. Uber/Lyft have a price they are willing to pay for services. They even allow their drivers to pick their own schedule (unlike my lawn service example). Drivers are not setting the price directly with the customers, they are getting paid by Uber/Lyft, but that doesn't make them employees.
In your lawn care example you used the word "mutually". That is a difference between the Lyft/Uber relationship with drivers and your relationship with the lawn care contractor.
Maybe if Lyft/Uber allowed drivers to bid on rides drivers would become more contractor-esque? But then the latency would be much higher for users. The system would likely also regress to the proposed price, as well, since drivers would likely just accept the price proposed by the platform to save time.
You are expecting that Uber/Lyft creates an "auction" environment in order for their drivers to be considered contractors? In my world view, an auction is not requirement for a driver to be considered independent. Drivers can:
- drive on their own schedule
- drive for competing ride share services (concurrently even)
- drive for themselves
- not drive at all
Seems very independent contractor. Uber/Lyft created a marketplace; drivers are agreeing to drive within the constraints of that marketplace. They can also create their own customer relationships and ride share marketplace if they choose.
If Uber/Lyft imposed restrictions on things like who a driver could give rides to or restricted concurrent ride share engagements, then that starts to feel like an employee. Rates have very little to do with it, in my humble opinion.
Part of the whole argument is not only whether drivers are technically employees or contractor but also whether Uber/Lyft are stretching those category so much that neither is a good fit for the situation.
As far as I understand one of the problems is that the drivers' market is so saturated that both Uber and Lyft can act as if they where monopolies (or maybe monopsonies). They can technically move to a competitor but that applies no pressure on the market.
Again, what makes this situation tricky is that it is essentially creating a new kind of employement-like relationship that current laws and regulation do not really account for.
This is only true if either company ever risk running out of (good) drivers. As I understand it currently there are more workers than jobs, so if a driver decides to cut ties with one of the oligopsies they are unable to get the same amount of work from the competitor.
So: "moving to a competitor definitely applies pressure" -> true; "keep both companies in check" -> false
There are not more workers than jobs, ive worked in the industry and this is a fact. Workers on ridhailing platforms come in varying levels of quality and amount of hours they can supply
You are thinking too much about just workers, when actually the smalelst divisible unit is hours. There is portion of drivers that barely ever switch, and then there is another portion that are constantly looking for the better deal, switching through outh the day. Its a scale.
So to keep drivers happy and on your paltform, you need to implement bonus schemes or have certain base pays.
Im not sure why so many people feel that they can comment on how the ridehailing platforms work without having any real experience in driving for them or working for them.
Your argument is right in principle, but it hides a proving-too-much fallacy.
By a similar reasoning one could claim that waiters/factory workers should also be independent contractors. If they don't like the pay in one business they can go work in another marketplace.
By this contrived example I mean to say that your analysis applies only to the superficial structure of the concept of employment. Ultimately social structures are not axiomatic field and should be treated accordingly.
Interesting that you picked "mow my lawn" as an example.
In California, gardeners are considered employees. The only reason most people don't have to deal with employment taxes, payroll, insurance, etc., is because they typically hire gardening companies that actually employ the workers.
Yeah - and admittedly I don't know California law at all. So it could very well be the State of California looks at this differently than other states and possibly different than the IRS, which might be throwing me (and maybe others) off.
> "However, because the drivers choose to participate in the Uber/Lyft marketplace and benefit from the network affects that they have created, it follows that Uber/Lyft would have a say in the cost of goods"
I can participate in Ebay / Amazon marketplace, and I can set any price I want if I decide to sell my TV there.
They take their commission, and provide some conflict mediation.
This is certainly the (fairly robust) legal argument. My hesitation is that I think a significant amount of drivers prefer and would benefit from the arrangement that Uber and Lyft have set up, and it's a shame that we aren't discussing how to write legislation to fit those people in.
It just feels like forcing everyone to be an employee will box out a large number of happy part-time drivers who weren't too concerned with setting their own rates.
I agree. I think the "gig-economy" is clearly a third type of worker - not quite and employee and not quite a contractor. It makes sense to embrace that and make sure everyone benefits the most, instead of shoving this new situation into an old leagl framework that doesn't quite fit.
That isn't remotely what the comment you're replying to said. I agree that thinking about the gig economy as a different type of worker opens to door to a "how might we" conversation where everyone has the opportunity to win.
> thinking about the gig economy as a different type of worker opens to door to a "how might we" conversation where everyone has the opportunity to win.
We, the readers of Hacker News, are going to fix the gig economy! Everyone, download a copy of your local laws and send a pull request to your country's highest Court.
But seriously, I think having a discussion, working out a perfect system where we'll all be better off is more than a bit hopeful.
I mean, you joke, but if we all took a more active role in forming educated opinions and voting, we'd all be better off. There isn't much of a reason to not find the time to familiarize with local laws and send a letter to representatives, vote on policy over party, have more nuanced conversation with family and friends, etc.
The part time drivers aren't the problem, it doesn't cost much to move them into being employees assuming they made above minimum wage to begin with. The problem is with all the people working uber full time and over 40 hours a week. At that point, a lot of things get more expensive like the burden of providing health insurance
Why is there a need to "write legislation"? If Uber wants to treat drivers as contractors (or employees), California's lawmakers & courts have already set out a clear path toward legally doing either. Meanwhile, I'm sure you're right that many drivers would prefer to be contractors.
So who's the resistant party? Right -- Uber. Why? Because they can't make their unit economics work either way.
"But if the drivers want this intermediate arrangement, and Uber wants it, why should Calif stand in the way?" States make a lot of contracts, especially labor contracts, illegal because they go against public policy (including externalizing too many costs on state & local govts themselves). Still, Uber would be welcome to restrict its activities to states and countries that have labor laws more to its liking. Chemical & manufacturing & agricultural firms have been doing this for years. But Uber can't turn a profit without being in dense cities in liberal states (where labor laws are usually stronger)
One more argument is often advanced, which is "there is no scenario under which Uber could use contractors." This is also untrue. For instance, instead of working directly with individual drivers, Uber could pursue a franchise-style model, where it might, say, solicit bids among companies representing groups of drivers to handle all the rides in a certain zip code. Variations of this model are already used in a lot of industries, of course. But Uber's margins are already too thin, and it would have to give up too much control. Uber prefers the current model precisely because the balance of negotiating power is permanently asymmetric.
It's ultimately the passenger who would afford or not afford whatever rate. If drivers were truly contractors, Uber would just act as a a middleman and take a cut of whatever rate the driver set.
Edit - Or allow customers to set the rate, and again take a cut of whatever that was.
Huge generalization that says nothing about what taxi drivers you are talking about. Taxi Drivers in Estonia for example have been able to set their own rates for a long time.
This is an interesting flavor of ad hominem. While the post isn't a personal attack, it severely degrades the argument by calling it a 'meme'. Omitting the first sentence, and leaving the second, would be far more effective.
Would it be better if I called it a "misconception" perhaps? If it matters, I meant it in the "idea that spreads between people" sense, not the animal-gif-with-block-text sense.
Saying an argument is false because it's a meme isn't a rational way to argue against a thought. You argue against things with facts and evidence. It's more disrespectful of the opposition if that's the strongest remark the opposition can make.
I suppose the great-grandparent is more an 'appeal to emotion' fallacy rather than ad hominem.
The word "meme" isn't doing any argumentative work here. It's just a handle for the claim that's being contested, with some extra connotation that the claim is typical or customary rather than unique to this thread.
What if Uber adds an option where a driver can set a minimum rate per mile or per estimated minute, does that shift the balance back to making them contractors again?
The answer for contract software engineering is: "Technically, but not really". You interview, then they offer you a job/ contract which pays a certain hourly amount, and you can accept/decline/counter offer just like a full time job.
The equivalent here would be something like, "Okay candidate, I offer you a job as a contractor and the contract says you get paid based off of this algorithm. Accept or decline?"
This is only true at the start of your career. I’ve been consulting and contracting for decades; customers call me following word-of-mouth recommendation and ask me what my rate is.
Even when I was starting out, years ago, the palette of contract work offered was vast. I was never obliged to follow a cab-rank rule.
Typically, you're employed by the contracting agency (with benefits), they work out a deal with the business and take a cut off the top, though we informally refer to this as contracting.
If you were to set up an agreement with the software company yourself, then it'd be conventional contracting.
Yes? Who else would set them? Pedantically, the market sets the rates, but the contractor is the one with the power to say yes or no. Gig platforms take that power away (either through a reduction in rating or deplatfoming if you decline work requests).
This is simply closing a loophole gig platforms were built on (misclassifying workers in violation of labor law).
Pedantically, sure. Ethically, maybe? Legally -- we'll see how this case goes.
I think it's reasonable to argue that because the contractor had no input into the rate, and if they decline too many rides they might be removed from the service, that they do not have the power to set rates.
Having no input into the rate is meaningless. If they can decline work below a given rate then that's equivalent to setting their own rate -- the rate is set at the point where they start declining work. Obviously that may mean they don't get as much work, but setting your own rate doesn't grant immunity from supply and demand.
What would make this a lot easier is if the apps would just allow you to set a rate below which you're not willing to accept work. The reason they punish you for declining too often is that they don't want the rider to have to wait for multiple drivers who regularly decline all offers before finding one willing to accept it, so that would solve that because you wouldn't even get the offer.
I'm curious to see how this shakes out in the end, because we keep getting these decisions where they say they're employees because X, but then won't they just change X to make them contractors again?
> If they can decline work below a given rate then that's equivalent to setting their own rate
It is clearly not equivalent since uber literally determines the rate. Yes, they can refuse to work below a certain threshold but they aren't in-fact "setting the rate".
A software contract offers $50 an hour. I can either take it or leave it.
Uber offers $x an hour (or mile, or however it works.) Drivers can either take it or leave it.
What do you think is the essential difference here?
Do you think software contractors can somehow force clients to accept any rate they want? No. If they client doesn't want to pay above $x then there's nothing you can do but decline the job. Just like Uber driver can do nothing but decline the job, surely?
> What do you think is the essential difference here?
The essential difference is that the role of uber is absent from your analogy.
> Do you think software contractors can somehow force clients to accept any rate they want
I'll just assume that's a sarcastic quip in rhetorical question form rather than what you actually think I believe. Obviously, a software contract is negotiated between two parties, unlike in the case of Uber where all possibility of negotiation is eschewed for a price explicitly set by uber. If a driver wants to offer their services for more or less than uber decides, they cannot, and are forced to lower or raise their price in order to gain access to the market.
> If a driver wants to offer their services for more or less than uber decides, they cannot, and are forced to lower or raise their price in order to gain access to the market.
The drivers can ask for any price they want from Uber. Uber can either accept it or not. That’s a negotiation. What more do you think it needs to be a negotiation? That’s just like a normal contract. I may want my fence painted but I’m not paying over £500. If I won’t go below that is it no longer contracting?
Uber drivers don't have the option to set their rates. They cannot "ask for any price they want from Uber", they agree to accept the rates explicitly set by Uber: that's the contract; not every employment contract meets the legal definition of "contract employment"
> they agree to accept the rates explicitly set by Uber
Like any contractor!
If I offer to pay $500 for get my fence painted, a contractor can either accept that or not.
If you want to hire a web developer for $500 a day, a contractor can either accept that or not.
The fence painter, the web developer and the Uber driver, can all set their own rates by either accepting the job or not, can't they? I don't understand what you think is the difference between the first two and the last one?
Uber does not determine the rate, the market does. Uber won't find drivers if the rate is too low, for example because it's lower than the costs, lower than the risk, or lower that the competition. Uber (and the driver too) won't find customers if the rate is too high.
Not true. Uber's algorithm sets the rate within certain profitability margins which are determined by uber, "the market" is very artificial since customers only ever see the rates that uber decides they should see rather than what some drivers would actually offer.
> Uber won't find drivers if the rate is too low, for example because it's lower than the costs, lower than the risk, or lower that the competition. Uber (and the driver too) won't find customers if the rate is too high.
Right... uber deliberately structures the market through their explicit control of the price. The price is only "too low" or "too high" with respect to uber's business goals not with respect to what the actual market would do.
There are other market players than Uber, and Uber is in no way a taxi monopoly. You could say this about literally any marketplace and especially about any taxi company (nearly all taxi companies have independent drivers-contractors, usually driving their own but branded cars - at their own expense, and with exclusivity contracts; taxis all over the world work this way), but only the more modern marketplaces are forced to modify their relationships. I both as a customer and a occasional driver hate this, thankfully I am driving in Czechia where no such law would ever pass, the traditional taxi lobby is not as strong - but they're trying hard.
> There are other market players than Uber, and Uber is in no way a taxi monopoly
True, but not relevant to my point which is that uber explicitly sets the rates, not drivers, and not the market. I understand why they do this, but it's simply false to say that drivers having the option to sometimes pass up on rides is the equivalent of setting their own rate.
Let's consider me, an IT contractor. I have a profile with IT staffing agency. They offer me contracts with a predetermined rate that I can accept or decline; I was offered an exclusivity contract for additional 5% income, but I declined. Why is me, an Uber driver so different that I am to be forced to be an employee?
Is the amount a driver makes totally transparent to them ahead of accepting a ride, sufficient that they could refuse anything that makes them less than $XX/hour or travels to an area they don't want to travel to?
Are drivers removed from the platform if they refuse too many rides?
It seems like the drivers actually have very little power to enact any effective bargaining over rates in practice.
If I had a dispatch company that phoned/radioed possible drivers in some round robin order, if driver number 4 always tends to decline I would stop wasting my time and my rider's time in contacting him again, after a point
Sure, but in this example the situation only happens because the dispatcher controls all the prices, if the drivers could set their own prices then they would have no reason to decline.
No, it is not at all identical because riders only get to see the prices that uber wants them to see rather than all the rates that would be available if drivers could set their own rates, thus "the market rate" cannot escape a threshold that is contrary to uber's business prerogatives.
Second, Uber is running the supply/demand auction system behind the scenes already. Prices are not fixed but dynamic and change in real-time based directly on supply and demand.
I’ve often brought up the app to check prices and decided not to ride for a while. Drivers do something similar.
> thus "the market rate" cannot escape a threshold that is contrary to uber's business prerogatives.
I’m not sure what this means. I’m sure Uber sets some reasonable floor on the price, but it’s more in the driver’s interest than their own. There are absolutely drivers who would drive for below operating cost of the vehicle because either they aren’t bothering to calculate it or they aren’t the ones actually paying for it (e.g. a car that is late on payments and soon to be repo’d).
In actuality these actions aren't so different, I could offer my services to Microsoft at 200k an hour and they're free to decline me.
I think the real issue here can't be resolved by an examination of terms - it involves a power dynamic where Uber contractors are extremely at disadvantage when it comes to being able to set your own rates. I don't know if Uber even has someone on staff that's qualified or expected to negotiate with independent drives that are interested - they have a posted rate that you either accept or they walk away. And, the worst part, they change that posted rate for BS reasons constantly in a way that people can't predict, it makes for an unreliable and misleading income.
When it comes to standard W2 employment, an employer can also list $X/hr or an annual salary.
You can absolutely go in and demand whatever you want. If you ask for 3x, you probably won't get the job. But 5% or 10% over x? It's possible. I don't see how contracting is 'locked in'. You are certainly free to negotiate, unlike on Uber or Lyft's platform.
"Rating" is generally accepted as the "star rating" or some other statistics that users will see. Yes your "acceptance rate" will be affected, but this is a vanity metric that is secret to the driver => It is irrelevant.
There is no mention of deplatforming in any of these articles.
Drivers set their own rates via a reverse dutch auction. Uber offers a short term contract at a certain rate. If no contractor accepts that rate, Uber increases the contract rate until someone accepts.
> I have several friends that actively choose to be contractors because they prefer the (legally protected) flexibility to decide their own hours
Those legal protections can be enforced by those who have the means to hire a lawyer. Yes, white collar contractors often get to enjoy the legally enshrined protections to decide how, when and where their work is done. They are often paid twice as much or more than their salaried peers to make up for the increased costs of self-employment and lack of employer provided benefits.
Blue collar workers working as contractors are almost always doing so not for their own benefit, but for the economic benefit of their employers. The workers get little say in how, when or where their work is done. Their pay does not reflect the increased cost of self-employment, and they are not offered benefits.
Uber drivers can't even set their own rates.
As an aside, there are plenty of people employed as employees with flexible hours and schedules in the US.
Uber drivers can set their own rates in some parts of CA [0]. It’s a pretty big change brought out by these lawsuits to make the drivers as independent as possible.
That's a weird message for Uber to send, that Uber drivers are only contractors in some parts of California where judges are upholding the law, but in the rest of the US Uber drivers are employees.
Why is that weird? If the rules vary by jurisdiction, I expect compliance to follow suit.
I suspect that you're implying some sort of objective universal metaphysical state of "being an employee" or "being a contractor", but that's pretty clearly false.
They don't. The distinction between a contractor[1] and employee[2] has a broad rule at the federal level[3]. Contractors decide their rates and how they're paid, and they determine how, when and where their work is done.
People who work for Uber outside of a part of a single state can't set their rates or how they're paid, nor can they determine how or where their work is done because Uber only allows drivers to use certain vehicles.
California imposes a legal standard called the “ABC” test, which not all States apply.
“States will vary on exactly what parts of the test they apply and when they apply the test to workers. In September 2019, California put into place Assembly Bill 5, which found that a worker could only be an independent contractor if they met each of these three factors...”
1) The worker is free from the control and direction of the hiring entity in connection with the work's performance, both under the contract for the performance of the work and in fact.
2) The worker performs work that is outside the usual course of the hiring entity's business.
3) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
IANAL but this ABC test reads to me as markedly different from the typical IRS “balance of factors” tests and significantly narrows the scope of “independent contractor”.
The feds seem satisfied to allow Uber to classify workers as contractors so far, and California doesn't, so yes, the rules do vary.
People who work for Uber as contractors can accept or decline rides, and only accept rides at a rate they want, so yes they are setting their rates. Just as a software contractor can accept or decline a job based on the rate offered. You're entitled to accept work at a rate you want, but you are not entitled to be guaranteed work at the rate you want.
> I have several friends that actively choose to be contractors because they prefer the (legally protected) flexibility to decide their own hours, among other things. It's a personal decision, and there are upsides and downsides in both directions.
What "legal protections" are you talking about? Uber can put out a notification right now that if you don't take 1 ride in the next hour that you are banned from the platform and there's nothing your friends could do about it.
A contractor gets to work w/e hours they want because they are their own boss and collect their own contracted work. Uber basically forms a new contract with a driver per-ride. There's no promise of future rides, and Uber has every right to withhold new rides for whatever reason, including that they do not like your schedule.
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee type benefits? Will the relationship continue and is the work performed a key aspect of the business?
Autonomy. The worker must be free from the control and direction of the hiring entity with regard to how the work is performed.
Business Dissimilarity. The worker’s labor or services must fall outside the usual course of the hiring entity’s business.
Custom of the Worker. The worker must be customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Are they software contractors making a couple hundred an hour, or Lyft/Uber drivers making a $25 an hour? I think the problem some people see is many Lyft/Uber drivers don't have that wealth of choice.
I think the core issue as to why employeeship is favored is that those folks that want the freedom of contracting have more personal power and are less disadvantaged compared to the employer. If you are choosing to favor the flexibility of your own hours over other work benefits then you have a much more secure source of income than a lot of working Americans. I think that ensuring that those poorest off have the ability to keep themselves above water is vital - and while I think everyone should be able to better control their work-life balance we live in a society where that isn't valued, so I'm not holding my breath.
This lawsuit was filed by the state of California - this is how the government is providing it. It might be weird (and it is really weird to look at the US) but most of your regulations seem to work by hoping people do good things and then trying to sue the bad actors enough times that everyone backs off of doing not good things.
I'd love to see the US government actually step up to the healthcare plate though - especially after so many years of terrible FDA & Dept. of Edu. policies have led to widespread obesity. Personal responsibility doesn't really work as an excuse when your entire country is an outrageous outlier compared to the rest of the world - that seems more systemic.
I definitely want a gov't healthcare solution here, but I don't think that it's the whole picture. Australia is worse off[1] and they have a better system
I was a 1099 contractor for several years and couldn't agree more. It drove me nuts when I'd read articles like this, since I had made a conscious choice not to be an employee, for all of the pros and cons that implies.
That option is still completely possible under this law. One of the provisions that allows you to remain a contractor is "The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed."
I work as a 1099 contractor under my own LLC consulting business. This is valid under CA law. The law is meant to protect people who are unfairly classified as contractors outside of a trade.
The law at issue simply codifies (and adds some new exceptions to, allowing what otherwise would be employees to be contractors) the California Supreme Court’s interpretation of the law that existed before it was passed.
It's not a decision if they have no choice in the matter (one way or another).
Large companies can use their massive leverage to force sub-optimal conditions which are in their favour.
Though there are definitely arguments to be made for 'prefer contractor' - there is no doubt, that on the aggregate, there are huge, systematic problems with the new 'gig economy' that need to be sorted out.
Free markets work when people have skills and at least some leverage, but at the bottom end, where people are less skilled, it doesn't work well, which is why we need to have minimum wage, possibly unions in some cases etc..
I don't see where you're getting that "bias" accusation. The subtitle of the article is literally written from the company's perspective ("A stunning court ruling puts Uber and Lyft in a tight spot"), and not the drivers'. In fact the benefits to drivers as employees don't even get treated until the end of the second paragraph, after the author has explained things like the already-filed appeal.
Honestly, I think objectively I'd look at this as very much sympathetic to the employers, if I had to assign bias (though honestly it's fairly neutral).
As far as the law goes: this result was coming for sure, the only surprise here is the fact that it happened via injuction. The California "AB5" law under which the suit was filed is a new law from last year, and it was very much written with the intent to make gig economy positions into "employee" relationships. There's a link in the article to this explainer, which is pretty good:
I'm an on-and-off Uber driver. It's a great gig to supplement my income. As someone who has many limitations from a disability, it's almost impossible to find a job that classifies me as an employee. I just don't get hired. And I need to take a break when I need to take a break. I can't have someone dictating my hours for me.
In my city, which fortunately is not in California, being classified as an Uber employee would destroy my 10-20 hour weeks at $20-$30/hour. The key is to work during busy times and for $30+/hour you generally have to be entertaining to get tips (which I have tons of fun doing). If you work during slow times, then it's $10/hour or less.
Busy times are too nuanced for a manager to determine when the best time to work is.
And I don't want to subsidize other drivers with my hard work because they don't want to do the market research to know when to drive.
Maybe Uber can keep all the incentives the same (like surge) and classify drivers as employees, but I doubt it.
Incorrect. I cannot do these jobs. I would quickly lose my ability to walk and use my hands. And no one hires someone who randomly needs to take weeks off and can only work 5-10 hours a week when they can work at all.
Not sure why you think you know what my limitations are. Or where you get the idea that employers actually hire disabled people. Look at the unemployment rate for disabled people.
No, I am not saying you can be a nurse. I am saying there are jobs out there that Uber can model a employer / employee relationship after that will still give you the flexibility you desire and need.
Nurses and restaurant workers never do a 2 hour shift, whenever they feel like it, deciding at the last minute. Nor has surge pricing ever been used in nursing or restaurants.
There are alot of cities that have so many drivers uber and lyft wouldnt even be able to employ them all. If all of them were required to be employees, there are many drivers that may be out of a source of income. Personally, i think that its the contractor agreement that should be drawn into questiom. There are rules tgat are forced upon by uner and lyft that gives drivers no option but to agree to. Secondly, is this really even needed to be a talking point now? Not only are we in a pandemic with so much uncertainty relating to drivers not knowing even if they can go back to driving, bit alos just with autonomous cars likely to be here within 5 years.
I'm an employee, I pretty much decide my own hours. Sometimes it's 20 hours per week, sometimes it's 60, most of the time it's around 40. I can work Saturday and not Monday, I can work 4-10's and take Friday off, etc.
Uber and Lyft employees are paid on commission. Uber and Lyft don't call it commission, but that's exactly what it is. You get X% of your sales, with bonuses, etc.
For me, price was never the primary motivator of using Uber or Lyft. It's the convenience and having a well known brand that will more likely than not actually come pick me up.
Free choice to work and free choice to pair drivers with riders is as close to a free market as you can find. It works great. As soon as regulation enters the room the dynamic changes.
It should be illegal to pay any form of wages, whether gig work or 9to5, without paying into social security, medicare, medicaid, and unemployment insurance.
This pandemic has proven that EVERYONE needs unemployment insurance, and it is already well-known that everyone needs income and healthcare in retirement.
Sp sure, let people do gig work on their own time, but don't let them opt out of the basic social safety nets we all need to survive.
I'm not American so I'm curious, do contractors not have to pay into these systems themselves? I'm from a European country, and if you're self-employed and working contracts, when you do your taxes, all the social insurance stuff instead gets paid by you directly (so your total income tax is much higher as you're paying all the employment taxes that are normally hidden from you)
In Netherlands you can skip out on paying various things, e.g. pension, and various social insurances. E.g. to get paid if you're not working any more, work disability, long time sickness pay.
Various companies forced people to become fake contractors. They didn't pay them enough that these fake contractors actually could still have the same social benefits/security.
This resulted in the government bailing out loads of contractors. Basically the "profit for the company, losses for the government" way of working.
There is no legal obstacle to Uber/Lyft continuing to allow drivers all of the flexibility they currently allow, even if they have to treat them as employees. That can even be legally protected in an enforceable way by the employment contract if desired, as can any other current Uber/Lyft driver flexibility you're referencing.
The only thing that is being lost here is the inability of Uber/Lyft to pay less than a minimum wage and otherwise deprive the drivers of the benefits that employees are entitled to.
Anyway, it's not like Uber/Lyft were giving drivers the choice whether to be contractors or employees so that the drivers could pick the status they prefer - nor does the law ever truly allow that except when the genuine nature of the services relationship is adjusted based on the answer to legitimately conform to the desired status. They're forcing everyone to pick the status that's generally more expensive and precarious for the worker.
given that progressives, myself included, tend to believe healthcare and retirement should be assured with or without employment I am baffled that some are against gig work in principle. with those two entitlements gig work is the most worker friendly approach to employment. What am I missing?
Your friends could still be considered contractors under this law. One of the provisions that allows you to remain a contractor is that "the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed." The other prongs of the test have long been part of IRS law.
I work as a 1099 contractor doing software engineering under my own LLC consulting business. This is valid under CA law. The law is meant to protect people who are unfairly classified as contractors outside of a trade, not restrict choice of those of us already working in this capacity.
There's no reason why you can't be an employee but also be in control of your own hours. It's not much different from a part-time job that I had while going to school. I'd provide my manager a list of times that I was available to work for the week and he'd slot me into shifts.
Technology has decreased the lead time needed to let someone know that you're available to work to 0. There's absolutely no reason why that should mean that you can't be an employee.
Sure, it would be beneficial if they had this flexibility, and nothing here prohibits this. Literally nothing prevents an employer allowing an employee from setting their own hours.
This ruling is a reclassification - the work that they have been doing in the manner they've been doing it is already employment. Or, in other words: the current relationship doesn't have to change a single bit, they just get additional benefits.
What legal protections? Most "contractors" are actually employed by their own personal shell companies, specifically because there is no meaningful protection for contractors. No protection from IRS, from customers, from law enforcement, from health insurers, from COVID. But you get to make your own hours, and work with no bosses no homework no bedtimes no rules, and that's cool I guess.
Why does this have to be an exclusive or? I don't see how drivers would not be able to choose their own hours or the amount of work just because Uber has to treat them as employees? I live in Germany, I work when and as much as I want, and my employer still pays health insurance and I get sick leave and paid holidays, based on the average time I work.
> I have several friends that actively choose to be contractors because they prefer the (legally protected) flexibility to decide their own hours, among other things
I'm sure the flexibility is nice when you are making $100+ per hour but drivers make a tenth of that and struggle to get health insurance
I don't see why Uber couldn't offer that same flexibility to employees. I'm an employee and I have a lot of flexibility about when and how much I work - that's a matter of policy that Uber could offer if they chose to.
The thing is that the option to be a contractor can always exist, along with having an option to be a full time employee. Generally, I agree that a company shouldn't be an entity that its core workforce is a bunch of "temps"
What behavior on the worker side will being classified as an employee preclude? E.g. nurses are employees but in many cases set their own hours and take on more shifts if need be. Same for restaurant workers.
Being an employee officially and being able to choose your own hours are not mutually exclusive. You can be an employee without having fixed hours or a fixed salary.
Uber and Lyft could still grant the same flexibility to employees. If they don't wouldn't it kind of blow their entire "contracting is better anyway" argument out of the water?
That's not fair. It's like claiming that airbnb hosts spend 500k to earn 100 dollars a night. Most people own cars anyways, this is an opportunity for them to make money off of that investment.
The sharing economy, gig economy, concessionaire model, MLM ponzi, franchise system, value-added reseller channel are minor variations of a time proven wealth transfer scheme.
The mark provides the capital and labor, and carries most of the risk.
The landlord, platform, broker, aggregator extracts all of the profit, value, wealth.
Any time a serf prospers is accidental. And quickly remedied.
By any other name, right?
It's be nice if the critics would reject the frame. Instead of phrases like late stage capitalism, just speak plainly.
It's feudalism. Repackaged and rebranded. But still just plain old feudalism.
These articles are written by people who have incentive to write such articles. Those who are contractors do not bother running around asking journalists to write stories about how much they enjoy being independent they just focus on driving Uber. A small % of people on other hand try to create a lobby for this sort of things and the opportunist politicians will use this to arm twist Uber and Lyft to seek rent. This creates a need for journalists who write these biased stories.
The consequences of this ruling are probably not going to be known for a while. This is certainly bad for Uber & Lyft insofar as it will greatly increase their operating costs. The question is what effect the ruling will have on drivers.
Uber is not a profitable company with fat margins like Google, Facebook, Amazon, Apple or Netflix. I don't see any way for Uber to absorb the increased costs that come with full employment without reducing the number of drivers and increasing the cost of rides in California.
The change in employment classification means that drivers will no longer be able to choose when they work. Uber will choose when they work, and for how long. The barrier to becoming an Uber driver will increase. Currently, in most cities it's possible to sign up to drive entirely online and basically just requires a license and a completed background check. Going forward people who want to drive for Uber will have to interview like any other job, probably in-person with a resume, and jump through the many hoops which that process entails.
My guess is that for new drivers who can pass the interview and existing full-time drivers who don't get laid off this will bring a big improvement in quality of life and provide some much-needed financial security and benefits. The rest will be out of a job.
I think it's unfortunate that some kind of compromise couldn't be reached which would have provided some economic security for these workers while accounting for the real differences between gig work and regular employment.
Profitability should have no bearing on whether drivers are classified as employees or contractors. If these companies can’t turn a profit while complying with the law then they don’t have a viable business model. That is entirely their problem.
Furthermore, the assumptions you make regarding future hiring practices are unfounded. Nothing stipulates that resumes or interviews, let alone in person, would be required to extend employment.
There might be no stipulations, but do you really expect Uber to be completely different to every other company when hiring actual employees? People that you are legally liable for?
>If these companies can’t turn a profit while complying with the law then they don’t have a viable business model. That is entirely their problem.
But let's completely ignore the part where companies lobby for laws that protect their market. Can't wait to go back to the old taxis.
> If these companies can’t turn a profit while complying with the law then they don’t have a viable business model
Are you seriously telling me that if people don't interact freely in the way bureaucrats want them to interact, then those people should, by law, not be allowed to interact?
The whole point is that Uber isn't actually treating its drivers like contractors. Any theoretical benefit to being a contractor is not really relevant if they don't have those rights in practice.
I'm not sure you can claim that with confidence if you haven't driven with Uber before. Many drivers hold the opposite opinion as well and prefer to keep their job and only drive whenever they're free.
>drivers will no longer be able to choose when they work
Why? Uber is still free to let them choose if they choose so.
>Going forward people who want to drive for Uber will have to interview like any other job
Why? Uber would be free to hire without interview.
>this will bring a big improvement in quality of life
That's the point.
>The rest will be out of a job
It was deemed that this kind of a job is not worth having people in, often being below minimum wage and with no protection. In a bit of hyperbole, abolition took jobs from slaves as well.
To answer your first "Why?" it's because employees have to be paid much more when working over 40 hours / week. Drivers will no longer be able to work an extra 5 hours when they need extra money: They'll have to have a second job. Similarly, there are certain minimum costs associated with each employee above and beyond the costs of a contractor. This may mean Uber is forced to favor drivers who commit to a certain minimum of hours per week, ridding themselves of the "before and after work" driver crowd. The net effect of these two forces means Uber will just be another part-to-full-time job.
Basically you're arguing that the race to the bottoms is good for everyone involved.
From a country that has hard fought-for USD16/hour minimum wage, paid 10 sick leave and 20 annual leave days per year, this doesn't appear true at all.
Nothing precludes proper employees with flexible arrangements. Forfeiting overtime pay and other labor protections afforded by law are definitely race-to-the-bottomy.
What a tasteless and tortured analogy. I'm sure the slaves hated being freed as much as my brother will be when they tell him that he needs to drive X minimum hours a week to keep his employment status with Uber/Lyft. More realistically, there probably won't be an Uber/Lyft left to drive for if this ruling sticks. God knows they're already bleeding funds as we speak. There's no way they'll stay afloat.
No matter how you want to spin this, it's not going to be a victory for the majority of the drivers. Let us, in our high and mighty chair, obliterate a burgeoning industry filled with people voluntarily making money on their own time. Let the taxi medallions flow back in its stead. Problem solved - slavery is no more.
I think Uber already chooses when they work and for how long. Uber will have to cap the hours at 8 hrs a day to save on overtime. But the "new employees" can work multiple jobs if they want.
Are there employment laws I'm not aware of that require "interviews"? Most fast food works can become employees by just walking in the door, I think.
The judge does not understand what a "gig" is. Uber drivers can choose to drive one, twelve, or zero hours in any given day. They can suddenly stop working by simply not accepting any more ride requests. It's the ultimate remote, self-directed, self-managed job.
An employee can't make such decisions; they do as they are told or they are fired.
Uber drivers are private, self-owned businesses that rent out their time and equipment to a corporation on a completely arbitrary basis. The company counts on an oversupply of such drivers to meet demand and does not need to manage the supply other than to continually recruit more people.
I suspect this ruling will be overturned, if not in the Ninth Circuit Court of Appeals, then in the Supreme Court.
The judge certainly does understand what is going here. Secure employment is being replaced with "gigs" to the point where a huge chunk of the country has no stable income and is one week away from homelessness.
I guess that's one theory: Uber, purely by existing, somehow managed to significantly reduce the number of secure employment opportunities available in the US and lured happily employed people onto a life that's inches away from homelessness. In the same vein, if we were to shut down Uber right now and went back to the taxi model we should be able to salvage our economy.
Can you? Not trying to argue, I am a limey brit so I don't know the exact details. /r/legaladvice seems to be filled with people being fired for no reason or just de-scheduled or having their wages cut and it's all perfectly legal...
> Uber drivers are private, self-owned businesses that rent out their time and equipment to a corporation on a completely arbitrary basis.
As far I know, this is not true. Uber dictates the prices that drivers can charge, they cannot set an arbitrary price for their own labor. Is that not the case?
I'm not sure that this makes an economic difference - ultimately Uber's algorithm will set the price where supply intersects demand. Or equivalently, drivers can raise their own prices/restrict supply by only working during surge hours.
Is the driver charging the passenger? Or is Uber charging the passenger, and putting forth a contract at a set rate which individual drivers can accept or decline?
It's interesting how often Silicon Valley companies blitzscale an unsustainable business model and then leave public investors holding the bag. In the Uber and Lyft case, the time bomb was the regulatory issue. Which investors should have known about, given that these companies have been breaking the law since day 1. Tesla with their full self driving is also an example of this dump the risks on the bag holders pattern.
Their labor issues are hardly new. If you did not know about them when you invested in Uber, you didn't even read the news articles, yet alone the filings. You were supposed to price that in to your investment if you purchased.
To be fair, the founder didn't want to do IPO and according to rumors that was the reason why he was kicked out. All the toxic workplace stuff was just a narrative tool to make it happen more easily.
Also, it's a public market. No one is "holding the bag". This may be true if Uber crashed before the IPO because private investors can't easily sell, but once on the public and liquid market, it is the public investor's own choice to invest or divest in these companies.
I think he was arguing that the execs at Uber didn't really care about the toxic workplace stuff until Uber's founder said he didn't want to IPO, then they used it as a way to kick him out.
So basically the workplace is toxic, but that's not the real reason why he was kicked out (according to the comment you were replying to).
He effort you have him ousted was led by Bill Gurley of Benchmark and several other VC investors in Uber. Essentially the board asked him to step down and he did.
If you look it up, there are plenty of articles of rumors saying that the VCs schemed to kick him out because they wanted to IPO and the founder didn't.
Somebody chose to pay the IPO price. Nobody could've offered to buy at that price, or interested parties could wait for the price to fall (if the party felt the IPO price was unreasonable). Typically, the underwriters will ensure there's interest at a given price range, prior to the listing. The demand was there.
I place some blame on the companies (and it is their responsibility to list potential risks in their public filings), but also it's somewhat the fault of buyers who scooped up millions/billions dollars worth of shares at sky-high valuations.
Uber has never made money. They haven’t even come close to making money. It’s hard for me to have any sympathy for investors who keep funneling money into a company that defines “success” by lowering their quarterly loss to a mere billion.
It’s not as if this information isn’t public. Everyone can see that Uber can’t make money.
Amazon has gone very long stretches without making money, too. They're still a trillion-plus dollar company and nobody seems to care.
I was under the impression that the markets that are mature for Uber were profitable, and they've been plowing capital into growth, hence the losses. Feel free to correct me if you have sources that show otherwise.
You’re being downvoted because this is a commonly quoted and false claim about Amazon; here’s some reading on free cash flow vs. profits that will explain it better than I can:
I'm not sure I follow the "holding the bag". The regulatory risks were really obvious when Uber IPO'd last year. If investors lose money because of those risks, it's their fault for not accounting for them.
As other commenters have mentioned, all the company has to do is disclose risks in their public filings and it's up to investors to do their due diligence. It's safe to say that unless they lied to investors, the majority of capital coming in is from people who know what they're doing and are comfortable with the risks.
To be fair, that is the investors' risk and part of their return. Uber very likely didn't lie about their risks in their investment prospects so everyone buying UBER should be aware of the inherent regulatory risk for the business.
I don't agree that investors should be protected from this (or from TSLA assertions), if you are investing you should be more sophisticated than buying stocks blindly, there is a risk to any investment and, obviously, that is why it can be so profitable.
Poeple shouldn't be protecting investors. It's literally public market job and only job to access risk and pick stock. Why are we protecting them from their only job.
If Uber and Lyft are forced to classify drivers as employees, doesn't that mean these companies will try to lock them in? For example Uber won't allow their drivers to work for Lyft, and vice versa.
If this is the case, I think Lyft will die very quickly because as far as I know, most drivers prefer Uber over Lyft.
Well... many people work more than one job. IANAL, but I don't think your employer can forbid you from working more than one job.
But Uber and Lyft are direct competitors. I have a clause in my contract that forbids me working for a direct competitor, but I'm a software engineer and I have knowledge of trade secrets. A driver? Not so much.
So I think that a court would find a restriction that you couldn't work for both to be an unreasonable exclusion... but I don't know.
But let's say it was legal. Uber still might not be able to do it. They need onboarding to be as frictionless as possible. Tying their hands by saying they can't also drive for Lyft might make people think twice.
> many people work more than one job. IANAL, but I don't think your employer can forbid you from working more than one job.
Sure. But employers can prevent you from working for someone else at the same time as you are working for them.
So if you wanted to do a 6 hour shift for Uber and then after that do another 4 hours for Lyft. That would almost certainly be legal.
But the common practice today is to run both apps at the same time and pick up clients on both networks as requests come in. This is what people are talking about, and will almost certainly be banned.
I think Uber can also 'terminate' you if you choose to work for a competitor. IANAL, but if I work for Google, Google most certainly wouldn't let me work at Facebook as well even if I was spending 8 hours a day working for each.
I don't see why. Currently, drivers are being paid by the ride, not by the hour. If they aren't available for a ride, they don't get paid for the ride.
If Uber wants that kind of exclusivity, they're probably going to have to pay drivers for idle time.
> If Uber wants that kind of exclusivity, they're probably going to have to pay drivers for idle time.
I don't think that's true. There are many sales employees who are compensated almost exclusively on a commission - per sale - basis. None of them can work for multiple companies concurrently.
It gets complicated. See [1]. Basically, if Uber wanted to prevent employees from also taking rides for Lyft it would have to provide several minimum guarantees that would significantly increase driver costs. Namely, total comp regardless of rides provided needs to meet or exceed minimum wage and worked overtime would need to be paid as such. In other words, to prevent a driver from accepting Lyft rides for 8 hours, Uber would either have to pay the driver for any time they are not driving fares around during those 8 hours or increase payment until the drivers get the equivalent of minimum wage.
If this were to happen in practice, you would most certainly see a drop in the number of drivers and an increase in per-mile costs to customers.
They can't forbid you from working in your off time but now you're their employee -- you work 8 hours straight during which you're not allowed to work for a competitor or you're fired. If you want to work for Lyft for another 8 hours after that, go ahead. But Lyft isn't going to let you work for 2 hours and pay you benefits.
That wasn’t the point. The point is you won’t be able to work for Lyft because they won’t take someone on to work 2 hours a day because it costs too much. So you will work for one or the other and you will have zero flexibility in the matter.
From my experiences I've heard they prefer Uber solely because of surge pricing, so they can make more money. Many drivers only drive Lyft because Uber attracted early on the more price conscious users, who initially likely checked both apps for cheapest price and cancelled more expensive ride; Uber subsidized rides to a higher amount and in more markets AFAIK.
IANAL, but to my knowledge, in California, a company cannot[] legally prevent their employees from working a second job in their spare time, so this kind of lock in would not work.
[] some exceptions apply, mainly related to IP I think.
But it's not a "spare time". A driver literally has to constantly make decisions whether to take the next Uber call or Lyft call. A lot of drivers have both Uber and Lyft apps running and take the ones they prefer at the moment. Some have become tired of this and just choose Uber.
If Uber or Lyft are required to legally hire these drivers as employees, they will probably develop a technology to track the drivers so that they won't take a Lyft call when there's an Uber passenger nearby, for example. This effectively means lockin.
Also, Uber (or lyft) may even compensate these behaviors by giving the drivers base salary as long as they don't take their competition's calls. Of course, this is until one becomes the dominant player and the other goes out of business.
> A driver literally has to constantly make decisions whether to take the next Uber call or Lyft call.
Under an employee model, they would do this while on the clock of a particular company (and being paid by it). Sure, Uber could choose to employ a driver for 16 hours a day, but they'd have to pay for that time.
That is total BS in california then - if an employer is paying you by the hour for your time, while you are collecting that money they HAVE to be able to expect you are working for them (only).
This idea that uber / lyft drivers (both phones are always running) can work for BOTH companies at the same time seems ridiculous to me.
> This idea that uber / lyft drivers (both phones are always running) can work for BOTH companies at the same time seems ridiculous to me.
Yes, I agree, and I did not mean to imply that. What I meant is that a company has limited ability of restricting employee behavior during the time they are NOT paying them.
Could both companies require employees to be full time? Thereby restricting employees to one company?
Although, if everyone did prefer driving for uber over driving for lyft, I’m sure lyft would sweeten the pot to the point that they were competitive.
Uber will be always better at this game than Lyft will ever be. This is why I think Lyft will be dead when this happens.
The only reason Uber couldn't dominate was because there was a factor of "choice". Now that the drivers are classified as effectively taxi drivers belonging to a taxi company, there is no choice. And the funny thing is, the drivers will actually prefer this.
Mostly it's been people working for both at the same time, and then taking the best fare as it comes up. Employers can definitely prevent them from doing that, and then there would be additional friction over who gets to schedule drivers for rush hour.
> Will we see employees (drivers) get a say in their shifts? An employee can be asked to work a 3AM - 9AM shift for example.
>
> Can not arriving to shifts on time be grounds for dismissal?
>
> Can refusing a shift be grounds for dismissal?
If Uber requires someone to work a "Shift", then they have to pay them for that shift regardless of miles driven. Uber doesn't want that. I don't believe the state is requiring Uber to pay hourly and Uber almost certainly doesn't want to pay people hourly either so none of this is relevant.
> Can Uber/Lyft systemically set employee hours to like 29 per week to avoid FTE status?
This is what most low-wage jobs do so why wouldn't they?
> Will multihoming (ie working for multiple "gig" apps) be grounds for dismissal as a conflict of interest?
Maybe. But since a big chunk of the appeal of working for Uber is flexible hours that work around the hours of other jobs or responsibilities, why would they?
If Uber prevents drivers from doing other gig-jobs, they will have a hard time finding drivers.
> I don't believe the state is requiring Uber to pay hourly and Uber almost certainly doesn't want to pay people hourly either so none of this is relevant.
Pay may be calculated based on metrics other than time, but must be at least the minimum wage, which is based on time at work. For employees, if you want to pay on trips/widgets/sales/whatever, you have to also track hours. So, yes, the state is requiring Uber to pay hourly.
Uber may allow flexibility of when you're on the clock, though they won't have to, but you can bet they'll require a certain amount of productivity.
Nothing, but since now they have the added cost of health insurance, minimal wage, etc, it would make more sense for them to arrange pre-set shifts for the drivers to optimize for supply/demand based on time of the day.
Some drivers would like that arrangement, especially if that's their full time job. But some drivers who do this for supplemental income may not be able to meet the demand of the new fixed schedule set by Uber/Lyft.
You'd think a multi-billion-dollar company with so many smart engineers could figure out how to fit both types of work into their system, if it really mattered. Silicon Valley exceptionalism is a garbage dream if paying your workers minimum wage and having flexible schedules at the same time is an insurmountable challenge.
I think Uber & Lyft are just using flexible hours as a red-herring. They certainly can offer flexible hours to full time employees - no where does it say "Americans shalt work from nine until five so sayeth we the founders". They're just griping that they need to start paying benefits.
>They certainly can offer flexible hours to full time employees
They can't guarantee flexibility and full-time employment. That's the point.
>"Americans shalt work from nine until five so sayeth we the founders".
If there is no demand or there is over-supply at some particular time in some particular area, you can't will a job into existence.
>They're just griping that they need to start paying benefits.
Are they griping? The costs are going to be passed down to the consumer. They will still be more competitive than taxis (which are still abysmal with customer service). And by raising regulatory costs and requirements, you're making it harder for any new entrants to come in and compete. Sounds like Uber and Left break-even, and everyone else loses. Alternatively, if this new regulation kills Uber and Lyft, then everyone loses.
I find it somewhat amusing there are still people bought into the self-driving hype other than in limited circumstances.
Does anyone actually believe these companies at this point? Who actually aren't saying much any longer.
I'd be far less surprised if Google shutdown Waymo in a year or two than if they actually introduced a door-to-door driving service in an urban area without a safety driver present.
Would you believe someone who in 1970 said, "We landed a man on the moon. In 50 years we'll surely have flying cars!"
I'm sure a lot of people believed that in 1970 but look where we are now. Technology accelerates at a much faster pace but often times in ways that you don't expect. The people in 1970 probably didn't imagine smartphones with a global 4G network but instead of flying cars we got this.
Or fusion power. Or natural language conversations with computers (as opposed to largely rote voice recognition).
Deep learning/machine learning have made remarkable advances in recent years--primarily because of both computational (esp. GPU) and storage/data advances.
However, in spite of a lot of money and talent expended on understanding organic brains and human-level cognition over the decades, progress has been slow and there's a general belief among scientists who work in AI spanning CS and neuroscience that there are aspects to human learning and reasoning that we just don't really understand yet.
And that more deep learning, data, and programmed rules won't get you to autonomous vehicles outside of some limited domains. (Which is valuable by itself; it just doesn't get you to robo-taxies.)
The problem isn't in the availability of technology but the (lack of) problem it solves. People can barely drive on roads safely and there are infinitely more regulations and skills required for flying, even with the relative little amount of air traffic. If anything, autonomous vehicles could be precursor for individual aerial transport.
I would actually love to be wrong but nothing I can see convinces me that I am. I don't see the path to getting door-to-door in congested areas with pedestrians and cyclists that isn't even more dangerous for them than it is today.
I actually do think highway driving can be automated relatively easily but that still assumes a competent licensed driver behind the wheel.
There's a difference between believing in start up hype and looking at the evidence on the ground. It's an even larger leap in claiming it's decades away while the technology is in testing right now.
Self-driving in good weather on specific roads (probably limited access highways) is indeed a very useful goal for both convenience and safety. It just won't satisfy the people who want to be driven everywhere and never have to even own a car.
>They certainly can offer flexible hours to full time employees - no where does it say "Americans shalt work from nine until five so sayeth we the founders".
I don't think you understand how a business like this works. For a customer serving business, they need to make sure they are staffed appropriately.
Would it make sense for a restaurant to offer all of their staffs "flexible hours"? Is it ok for the waiter to show up at 3am when he has trouble sleeping and just get paid doing nothing?
It's not about 9-5, but it's about when the customers show up.
I seriously doubt there's anything in labor law which would prevent Uber from allowing flexible (fractional) hours to their workers, so long as those hours pay at least minimum wage.
Uber isn't against this because it would make it impossible to run their business, they're against this because they're being forced to pay into things like unemployment which will make it more difficult for them to be profitable.
Yeah but drivers currently are free to choose their hours however they like. Surely allowing them to continue to do the thing they already do and the platform is designed to allow them to do isn't going to cause the same problems as a waiter not showing up during normal meal hours...
Sorry, I'm really confused, how is moving from contractors to employees supposed to make covering certain periods of the day harder for uber?
Normal businesses with normal benefits that hire for off-normal shifts generally pay higher for those shift slots or find an employee that values that shift higher than mid-day and employers absolutely can have an expectation of business hours and fire people for failing to meet that. They can also choose to allow their employees to work more flexible hours but this choice is entirely disconnected from contractor vs. FTE.
In the service industry in particular (as you noted above) showing up to work outside of core hours isn't likely to result in any productive work - maybe that waiter could run inventory or do some prep (and actually 3 AM isn't insanely early if you get a big breakfast rush) but that's entirely disconnected from uber saying: "Darn - we wanted to give them flexible hours, but now that they're employees I guess we can't let anyone work after 5PM" that's just BS PR from the company.
Because benefits like healthcare are gated on the number of hours worked. Uber isn't going to (and can't possibly afford to) pay healthcare for someone who drives 2 hours a week.
The existence of employment tied health insurance isn’t that surprising historically. Some of the first companies to offer healthcare were risky jobs where the job could cause harm and then it became more standard as a non-wage perk under wage controls enacted during the second world war. This timing also coincides with the rise of modern medicine as we know it today (Labor, eduction, and R&D intensive).
The truly crazy part is that core issues with the system weren’t addressed over the last 70 or so years. Not working should not mean that I’m only able to participate in health-seeking behaviour if I’m wealthy enough to maintain my own health care coverage.
Not to mention conflicts of interest, had a former classmate who’s an ER doctor tweet that he saw a patient who’s chronic condition was causing emergency healthcare needs because insurance was paying for treatment every 4 weeks when the doctor prescribed every 3.
You're right. Health insurance was originally fought for by the unions, which was why they are historically provided by employers in the US. Other nations underwent similar demands from their people, but it ended up being tied to government provision, not corporation.
With employee unions being neutered in the past century, and exponential privatized healthcare cost increases, you start to see broad swaths of employees go without insurance in the US, while other countries nationalized their healthcare to keep costs down and continue providing it to their people.
Yea - this is a real employment advantage up here in Canada. Due to lifetime healthcare Canadians tend to cost less in emergency procedures over their lifetime and employers don't need to worry about standard healthcare for employees (drug coverage is still a thing and WorkSafe (basically OSHA) can still end up costing a lot for on-the-job accidents though).
Universal healthcare is not the only way to fix that....
You could use the existing healthcare exchange, and just give people a certain percent of their salary that can only be used to buy healthcare. Then let them buy as they choose.
The difference being the employers have buying power for all their employees and can keep costs down, as opposed to individual buyers on the exchanges.
The problem with switching healthcare in America is that any new system that doesn't allow Americans to think, "I've got mine, you can worry about you" is difficult. Whether that's forced exchanges where everyone pays the same or universal healthcare (where everyone pays the same).
That's not a reason why Lyft and Uber couldn't just reclassify everyone. That's a consequence of the reclassification, but that's a distinction those companies don't want to make because they'd prefer their drivers be confused.
Even if you drove 2 hours a week, there's still 1 reason to prefer being an employee over a contractor: Minimum wage. Uber drivers might only make peanuts once you factor in gas, car payments, and all the time they wait between rides. At least an employee driving 2 hours a week will get a fair paycheck.
Why would increased operating costs mean they can't offer flexible hours to drivers?
Setting and maintaining a new schedule would ADD to operating costs (gotta pay someone to administer the calendar), so there has to be some other reason.
Is there some magical cost per-driver that nobody (even the Uber CEO) seems to be able to articulate? Stuff like withholding for W2s seems to scale really well. The only cost I can think of that doesn't scale basically linearly with hours worked is healthcare (only kicks in at 30hrs/week).
If anything, Uber and Lyft should be threatening to limit drivers to 30hrs/week. That's what I'd bet on actually happening.
> Why would increased operating costs mean they can't offer flexible hours to drivers?
Because in no universe does it ever make sense to pay healthcare and numerous other benefits to an "employee" who is working 2 hours a week. Thats why.
> Is there some magical cost per-driver
Yes. It is called fixed costs. Full time employees have a certain level of fixed costs. The obvious example being healthcare.
Because they're already losing money, and they would lose money even faster if they have the same inefficiencies while also paying for new costs. They would eliminate flexibility to capitalize on reducing costs by having fewer employees with fixed costs that reliably cover the clock efficiently based on demand.
In other words, the same reason why restaurants don't allow a waiter to show up to work for 2 hours at 4AM.
The same reason it doesn't work in other industries: if you pay everyone the same wage and let them pick, everyone will work the quite shifts. This is doubly true for Uber: why would I work a shift when I have to actually drive places and burn gas when I could insist on doing shifts I knew no one would use the service?
So if Uber & Lyft lose their appeals, I’m taking bets on how long it will take before they cease operations in California. I’ll set the over/ under starting at 65 days.
In all seriousness, I’m not sure they will stop operating completely, but I have a hard time imagining this will be good for a large number of drivers who do it part time, or for consumers.
If they have to be employees, then I imagine Uber/Lyft will only want to keep the most productive drivers around. The ones who do already do it full time. They will likely have to enforce real working hours/ actual schedules, based around demand.
This means any of the fringe drivers, who do it part time for supplementary income will be out. They might not have the option anymore of just turning on the app and working a little bit when they decide. This will mean less choice and higher prices for riders.
What would happen if both Uber and Lyft would stop providing the service in California? Would other States follow with that kind of legislation or would it make them less likely to introduce such legislation? I can't imagine the customers would be too happy with Uber and Lyft gone.
2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
This seems to pretty conclusively result in Uber drivers being employees, then. Specifically, in B. It's going to be hard for Uber to argue that driving cars is outside of the usual course of Uber's business.
I actually don’t think that point B is the ones they failed off. They claim that they are in the business of facilitating a connection between drivers and riders, in the same way that Youtube connects creators to viewers without employing them.
The main thing they failed on is that the court thinks that they exert too much control on the drivers. For example, they don’t allow users to choose their own drivers. They also don’t allow drivers to price their ride.
>They claim that they are in the business of facilitating a connection between drivers and riders, in the same way that Youtube connects creators to viewers without employing them.
This doesn't stand. If YouTube hired every single YouTuber as a contractor it would be forced to reclassify them as employees. Because Uber doesn't facilitate connections between two third parties, it facilitates connections between clients and their contractors. If drivers on Uber were neither contractors nor clients and if contractual obligations were between drivers and riders then it would make sense.
So your argument is that since Uber was classifying them as contractors, they should always be able to?
According to a quick search, they have 900,000 drivers and 27,000 employees. At most 3-ish% of the people that they pay to work for them are tech employees (and we can probably safely assume most of those 27,000 are not tech).
My argument is actually the inverse: currently uber has no driver employees, the only way to change that under this law is to assume they do, then you can use that to argue any new driver is an employee. You need a first set of driver-employees to argue others are now employees. But there has never been a first set of driver-employees. Its actually a little confusing that that is required as it seems to allow Uber etc to skirt this definition (unless they have been taking on drivers as full employees without my knowledge?)
I'd be interested to know how many creators YouTube "employs" or how many retail workers Ebay has and what their percentages are. This is where this whole thing confuses me: If Uber drivers are employees (and maybe they are?) then basically every major tech company has millions on employees they have been misclassifying. Paying them all minimum wage with benefits and taxes deducted etc will be a massive massive change for these companies.
> I'd be interested to know how many creators YouTube "employs" or how many retail workers Ebay has and what their percentages are. This is where this whole thing confuses me: If Uber drivers are employees (and maybe they are?) then basically every major tech company has millions on employees they have been misclassifying. Paying them all minimum wage with benefits and taxes deducted etc will be a massive massive change for these companies.
YouTubers are not contractors of YouTube. eBay sellers are not contractors of eBay. Uber drivers are contractors of Uber.
This is why Uber will be affected and not YouTube, nor eBay. Uber would also be free to have a system where drivers are not contractors nor employees of Uber (but it would not fit their business model).
Whats the difference between youtube paying creators $x/1000 views and Uber paying drivers $X per km/minute of driving? Surely they're both contractors right? What distinction am I missing here?
YouTube is actually very different. As a YouTuber, you, by default, have no monetary transaction with YouTube. It is possible for you, however, to ask YouTube to place ads on your video, where they get a 30% cut of the ad revenue. Crucially however, you are allowed to place your own ads and monetize your videos any which way you like. So YouTube just acts as an ad agency, and as far as YouTube is concerned you are just a user of their ad service, or in the majority of cases just a user of their video sharing platform.
There is no contract between you and YouTube where you do work and in exchange you get money. There is only the option for YouTube to choose ads for your videos and give you a cut in exchange - it's quite literally just like placing ads on your website using AdSense. No guarantee of $ per video or even $ per view, it works almost exactly like AdSense.
Which is crucially different from Uber where the contract is that you do a task in exchange for some money, therefore meaning that you do the work for Uber. On YouTube, you're allowing YouTube to place ads on your IP for money, and you're allowed to do anything else with your work and monetize it however you like, so really YouTube is providing a service for you.
The law was drafted to formalize a set of legal criteria that was established and enforced by Californian courts. The spirit of the law was not to target Uber/Lyft. The letter of the law, according to the courts so far does not appear to clear Uber in anyway. We will see how the appeal goes.
Edit:
I don't see how you think the letter of the law clears Uber, Uber sea to fail every part of the test.
A) Uber does exert control over many aspects of how the work is performed, e.g. acceptable car models, acceptable ride acceptance rates.
B) The rides provided by drivers are central to Uber's business. Uber has no business model without its drivers.
C) Many drivers do drive for other companies and would pass this critiwia but some do completely different work and have not done any driving work independently from Uber. These drivers would not pass this criteria.
The corollary to this is that Uber and Lyft will now be able to exert more control over drivers.
Contractors have certain legal freedoms that employees do not, such as setting their own hours, being able to turn down work, driving for both Uber and Lyft, etc -- that last one seems pretty common.
I wouldn't expect those freedoms to last long after they are reclassified as employees. After all, this is Uber and Lyft we are talking about. We know how they behave. Now the government has both increased their operating costs and given them the ability to exert more control over their drivers.
Medallions were first implemented based on the idea that medallion regulations would improve things for both taxi drivers and taxi riders. Limited medallions meant drivers would make more, and riders would be safer as the driver would be known by the city and invested in the medallion.
Instead, they had the opposite effect as taxi conglomerates quickly emerged and cornered the medallion market due to economies of scale. Individual drivers could not compete with medallions priced based on 24-hour usage.
Most drivers became low-paid employees of these conglomerates. Users suffer because drivers no longer had much incentive to keep the shared company cars clean. The conglomerates lobbied to reduce the supply of medallions to protect their now sizable investment and eliminate potential competition.
In this Uber/Lyft case we are also adding regulations which make barrier to entry higher for any incumbent companies. The complication of having thousands of salaried employees is more than most startups can handle, so we are basically cementing the established players Uber/Lyft as the only options.
The parent's point brings up the fact that the medallion system wasn't particularly beneficial to all drivers (or riders); medallions are good for medallion-holders, which are usually taxi companies.
a) a class A CDL takes a lot more effort to obtain than a regular driver's licence. there's a much more constrained supply, so you don't end up with a race to the bottom on the demand side as much.
b) the quantity of hours truckers can work is set by the federal Department of Transportation. with electronic logging becoming mandatory, that'll cut down even more on people being able to work off the clock.
For taxi drivers:
you absolutely do end up in this situation. there's just no multi-billion dollar company to make headlines about. medallion owners in NYC are all shady characters too.
Exploitation isn't limited to quid pro quo or antitrust corruption.
It's easy to sit from a seat of having a salaried ~40 hour week job with health benefits and safety standards, which were fought for from past generations, and then scoff when similar people are trying to fight for the same.
It’s also easy to sit in that same seat and interfere with an arrangement to satisfy your own moral stance without actually being affected by the outcome. All of these Uber drivers have phones, why are they always absent in these conversations?
Maybe help me understand how having a phone means you're present in a conversation? There have been class action lawsuits filed by uber and lyft drivers.
This conversation has been going on for years. I rarely see Uber or Lyft drivers participating and when i do they generally just want the company to take a bit less out of the deal, that’s it.
Starvation and rent suggest otherwise. We're not so sufficiently advanced that anyone can choose not to work and expect meals and a roof over their head.
How does the existence of Uber impede on your ability to get another job? Do you really think if the company shut the lights off today all of its drivers would be better off?
It seems inevitable that the government will make reactionary, uninformed decisions. The question is, how do we revert to normal (a freer market) and begin to teach those in power some basic economics lessons? I'm not hopeful that an op-ed by Uber's CEO will help. Perhaps it needs to look more like a grass-roots movement.
This doesn't sound reactionary or uninformed at all. There's a decision that the benefits of stable employment are more important than flexibility. You can be free to argue whether it's better or worse bit it's not about ignorance.
For the vast history of humanity, "Normal" was little more than serfdom or outright slavery. I'm not sure what "normal" you're actually implying, but if you're referring to the post-War era as normal, that's really just a microcosm.
I find it really interesting how rigid this all is. No one is willing to accept that Gig-work might be a thing and that we need a third category of work to cover it. It seems to me (the outside observer) that the US labour market is deeply dysfunctional. But the best anyone can muster is trying to force Uber drivers into the OTHER deeply dysfunctional category...
Fair enough, the court's job is just to interpret the law; it's the law I object to. But a lot of people advocating for these types of laws make the moral argument that companies are exploiting workers. Given the evidence, I think that's a pretty difficult case to make in good faith.
It seems like a very easy case to make. Regardless of whether the abstract corporate entity is losing money, Uber's founders, employees, and early investors have all done very well for themselves.
I'm not saying the companies need government assistance. I'm saying they and their drivers should be able to come to whatever agreement they want to come to (or not).
A worker’s will to do something does not necessarily mean that thing is good for the worker or society. Lower classes are currently forced to work for survival, there’s a lot of room for improvement.
Poor management of investments on Uber/Lyft’s end is a burden the lower classes should not be forced to take on.
right? i mean, i'm a software developer contractor. should i be able to keep doing it so, or am i too dumb to realize that "my situation is actually bad"?
i get it, gig jobs are not perfect -- but for a lot of people, it's the only job they have. do california lawmakers think that no job is better than a shitty job?
This is part of a super generic tradeoff between liberty and public good that differs from case to case depending on your culture and values. For example, should we ban smoking? What about meth? And so on.
If Uber and Lyft weren't around, people in a state of economic desperation would have fewer options.
California is basically saying that if you can't provide a good job with benefits, you aren't allowed to provide a job at all. That will result in fewer jobs.
This is effectively the same as enforcing a minimum wage. An argument for it would be, its collective bargaining at a national level, while avoiding the coordination problems associated with unionizing.
Well maybe the unemployed masses in that situation will vote for universal basic income or better distribution of wealth to fix that? Full employment as an economic goal
or even a feasible tactic has been obsolete for a long time if I understand correctly
Would it though? How do you get to that conclusion? My understanding is that many drivers for those companies do it as supplemental income because their regular jobs seem to be unable to cover their living expenses. But doesn't that then lead to additional economic pressure for everyone else because i.e. now there's more renters willing to pay inflated prices, so more people get economically desperate and need to get supplemental income?
Uber/Lyft/etc create jobs that otherwise didn't exist, thus providing an additional option for potential workers. With the additional option, maybe that option is better than some people's alternative options. We can surmise that it probably is for a lot of them, as evidenced by their choice to be drivers for these companies. If they had a better option, they would presumably take that instead.
Your proposition that if one person makes more money then other people are worse off has an element of truth to it, since, sure, more demand for a given item (like housing) will tend to increase its price, all else equal. But I think that's the wrong way to think about the situation. Wealth creation is not zero sum.
>Leave it to California to stick it to a company losing $7 billion per year trying to find its footing.
Uber has spent their entire existence dancing in legal gray areas. It's hard to have a ton of sympathy for them when their over-generous re-interpretations of the law bite them in the ass on occasion.
> Drivers are voluntarily entering into the current work arrangement. Why does the government need to have an opinion on the matter?
This is the argument used against every single labor law ever passed. It's not even an argument.
Our government and current economy is poorly equipped to handle the gig-economy. This decision doesn't really help it, but maybe it will motivate some lawmakers to try and address it longer term.
> Uber has spent their entire existence dancing in legal gray areas. It's hard to have a ton of sympathy for them when their over-generous re-interpretations of the law bite them in the ass on occasion.
True. But it's also hard to have sympathy for taxi medallion companies.
> It's not even an argument.
? It is, though. It's an argument that adults should be able to agree to whatever they want to agree to (or not). It's an argument for freedom.
> Why does the government need to have an opinion on the matter?
Because constituents voted for that government which gave them the power to vote employment laws that apply to Uber/Lyft. Or are you contesting the legitimacy of the democratic process, and California's constitution?
Uber/Lyft are free to move their business to another state.
> Drivers are voluntarily entering into the current work arrangement
Irrelevant, not all "arrangements" are legal. By that logic slavery should be legal as well, if the slave enters in a slave agreement willingly, to settle a debt for instance.
I'm confused how they are violating Assembly Bill 5 (workers can generally only be considered contractors if they perform duties outside the usual course of a company’s business)?
Do any employees working at Uber or Lyft currently do any driving?
Their business is providing riders with drivers. The driving is not their business.
This decision technically doesn't find that Uber/Lyft are violating the statute. The analysis considers: (1) the likelihood that the prevailing party will ultimately prevail on the merits; and (2) the relative interim harm to the parties from the issuance or nonissuane of the injunction.
Here, a Superior Court judge found that the State of California is likely to prevail on the merits in the end. The reason being that Uber/Lyft failed to satisfy the prong "(B) The person performs work that is outside the usual course of the hiring entity’s business." Basically, the judge thought that Uber/Lyft is in the transportation business, not some "multi-sided platforms" as they claim to be.
Can this injunction be overturned by a higher California court? Absolutely. Does it look bad for Uber/Lyft in the court of public opinion? Yup, very much so. That's why three's an Opinion piece in the Times today by the CEO of Uber.[0] He knew this was coming.
>Their business is providing riders with drivers. The driving is not their business.
Can't you use this excuse to bypass that clause altogether? eg. a pizza restaurant that classifies its delivery drivers as contractors: "their business is making the pizza. delivery is not their business".
I mean it's that how contracting is supposed to work? If your core competency is in making the product expecting you to become experts on delivering it too is crazy.
What I'm guessing will happen if Uber/Lyft are forced to treat drivers as employees is that those driving full-time will be hired and everyone else will be let go. The employees will lose some control over what hours they work and may be forced to sign non-compete agreements (not sure if that would fly in CA).
What I don't understand is why Uber/Lyft don't just allow drivers to set their own prices. Whatever their pricing algorithm is it cannot possibly be better than an efficient market of riders and drivers bidding on trips.
There’s a lot of discussion in this thread about whether or not it’s a good idea to force Uber and Lyft to classify drivers as employees.
I think that discussion is a tangent the real issue.
California’s elected officials already ended that discussion by writing it into law. If you live in California and don’t like the law you can call or write your representative and see if they’ll repeal or change it.
But that law is the law. It seems unlikely that Uber and Lyft will win this appeal.
What we have here are two corporations ignoring the law because they don’t agree with it, and the “hire lawyers to endlessly fight this” number is lower than the “paying payroll tax for all our drivers” number on the spreadsheet.
Just my opinion, it’s frankly disturbing how many people are ready to jump to these companies’ defense. They’re proclaiming imminent disaster, that this business model can’t possibly work with W2 employees, but I doubt that’s true.
Nothing stops Uber and Lyft from allowing their W2 employees to make their own schedules, and nothing stops them from hiring directly from the app with quick approval. They just don’t want to pay their share of the payroll tax, and they don’t want to provide family and medical leave that their upper caste employees enjoy.
From AB5 (and yes, I posted this in another topic today, but few here seem to know it.)
...shall be considered an employee unless the hiring entity demonstrates that all of the following conditions are satisfied:
(1) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(2) The person performs work that is outside the usual course of the hiring entity’s business.
(3) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
#2 is the key issue for Uber. Uber claims to be merely a booking agent, not a ride service. This is not believed by their customers, drivers, or the courts. Nor is it the message on Uber's web site, which says "Sign Up to Ride - Reliable rides in minutes". Uber is in the taxi business.
Uber has been trying to get around #1 by allowing drivers a bit more flexibility. A tiny bit. Not too much.
Seems like crux of this disagreement is that there is a large group of drivers that do it full time as their primary source of income, and they want protection from all the part time gig workers that flood the market and depress their earnings.
Changing to employee model will result in fewer drivers (better protected), but lose out on the gig workers or even those doing multiple jobs just to make ends meet.
> Under the ABC test, a worker is considered an employee and not an independent contractor, unless the hiring entity satisfies all three of the following conditions:
> The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
> The worker performs work that is outside the usual course of the hiring entity’s business; and
> The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
It's not enough to just say "they feel like they don't work for Uber" you have to put forward a more coherent case than that.
That's the bill that cost hundreds of freelance journalists their jobs in California, right? I wonder what the full consequences of it are going to be.
> labor unions and elected officials contend this deprives them of traditional benefits like health insurance and workers’ compensation
This is the real problem that needs to be fixed. Most other developed nations have affordable, if not universal health care that isn't tied to their employment. The status of Lyft/Uber drivers wouldn't be as much of an issue if this was solved.
This debate seems to be about what's a user vs. a contractor vs. an employee. Does the fact that I walk a Google device around enabling Google to record rich profitable data, in exchange for extracting some value from their services, make me a contractor or an employee? Because for sure it doesn't sound like it makes me a user.
It would be interesting to let passengers have a slider that let them show how price sensitive they were and the drivers were able to set a minimum price for total (driving to passenger + driving to destination). Maybe you'd be willing to wait for 15 minutes if Driver B would be cheaper than Driver A, even though Driver A was 3 minutes away.
Even better (if drivers are really treated as contractors) would be to show you the rates from Driver A, Driver B, and Driver C and you can pick one:
The issue for Uber/Lyft is they're focusing on the ride and that's nice - I don't know that drivers rejected me since they're just showing the ride cost from Point A to Point B. But that ignores actual driving time for the drivers, plus that they might end up in an undesirable area.
If you think about this dispassionately, the biggest likely effect of implementing this is as follows:
Uber rides become more expensive.
That money largely will go to the government in the form of various payroll taxes.
No one will remember this in a couple of years.
Because of the forgetting, we will in the future be skeptical that labor compliance was so important to the price. The idea that gig workers could have ever existed without all this compliance will seem alien and barbaric.
If anyone suggests removing all this compliance, they will be called a free market purist.
It’s odd, because I think most people actually think what is going on with gig workers right now isn’t horrible oppression, but rather adults agreeing to working conditions and having a ton of freedom.
I don’t think we will see it that way in the future. And I don’t think we will ever be able to deregulate this after the fact.
I mostly agree, but shouldn't the competition between states in the US be able to lead to the best solution? Maybe that is overriden by the large variance in the bag of different things (regulations etc.) one gets from being in one particular state vs another. This does not play well with the low dimensional action space of moving from one to another state.
Maybe it is time to think about "virtual" citizenship so there is competition between states on may distinct levels
Uber wants you to believe that the cost of paying drivers as employees is that you won’t be able to get a car in most places.
This can’t be true.
Uber replaced a poorly run system that actually covered most places and employed it’s labor force.
If Uber and other car services were forced to recognize their workforce as employees, there would be market incentives to support doing so.
American taxpayers pay for Uber and Lyft driver’s subsidized medical plans and other public benefits they receive because they are not paid as employees with the right to organize. Your ride may seem cheap, but you pay for it in your tax bill.
Thanks for pointing this out - in SF there was an intentional effort to destroy the employee taxi driver system in the late 70s. This is talked about at length in the article you linked to.
Many other places still have working employee systems for taxis. SF could too if they wanted to change this law.
I don't know how a judge can so cavalierly grant preliminary injunction in this case when the facts have not been examined.
Anyway, it must be due to the recent law passed in California. Ultimately the citizens of California determine its shitty laws, and they can enjoy their rideless future and the bad old days of taxi cab monopolies because they went along with taxi medallion holder propaganda.
I'm sure someone has thought of this, but why don't we have ridehailing apps where the contract literally is between the driver and the passenger(s)? The app can merely suggest a rate but the driver can set whatever price they want. The app takes a very small finder's fee.
What if drivers can't make a living wage using such an app because there is too much supply driving prices down? The app will be crucified for "exploiting drivers"
Why would there be any more or less supply than what's available via uber or lyft and why would the app be at fault when decisions are made by the driver? Now there are more choices you can be your own contractor or work for uber/lyft as an employee. People who have older cars and can charge less may drive down prices but I think there will always be a market for being driven in newer cars, suv's, luxury cars, etc. You can schedule rides ahead of time and set contract breakage penalties. All these can be suggested by the app but again it's up to the final decision made between the customer and driver.
This has been going back and forth too much. I am not even sure why single person (judge) wants to make such sweeping decisions. These drivers work on their own whims. They may decide to show up or not. They can cut short day anytime. Uber or Lyft don’t require them to start their shifts and work 40 hours a day. The drivers don’t commit to any full time work schedule. So at best things are muddy and lawmakers needs to come together instead of individual judges start writing laws according to their individual whims and philosophy. This will most definitely be get challenged and ultimately SC will not want to hear this anyway so it’s just massive waste of time for everyone.
Only lawyers are getting rich in the process.
Bear in mind that these ridesharing companies are basing their entire business model vs taxis not on some dumb app, every taxi company tries to get you to install its app. Instead its innovation, is reducing labor and capital costs in order to offer cheaper rides than taxis to corner the market. In order to reduce capital costs, they have workers bring the cars. To reduce labor costs, they pay less. Uber is a cash inferno and they have been fighting against employee status because for various reasons the workers get paid more overall.
Honestly, I've lost track of the actual argument in this app-taxi space. Is it primarily health insurance? What is the employee benefit that is the crux of the issue for the average driver?
What does this mean for other on-demand type of businesses like Handy (on-demand cleaning) that also employ Independent Contractors? Would they bring on their ICs as employees or would it be too cost-prohibitive and thus they'd opt not to operate in California?
Finally, California tends to set trends for the rest of the country. Would we see other states go the California way and change classification of ICs to employees?
Drivers in less population-dense areas such as my own keep both the Uber and Lyft apps open in order to fill enough time. Would this still be possible if they were an employee?
If I were Uber and Lyft I'd dropped the issue in California and instead of paying drivers directly, pay intermediary companies with full time drivers on their payroll.
I would agree that someone who drives for Uber about 40 hours a week is effectively an employee, however it leaves out a lot of drivers who only want to offer certain rides at certain time.
For example, if every weekend I drive to my vacation home, which is in an area not practically reachable by public transport, and offer a ride, does that make me an employee? That's nonsense.
Why doesn't Uber just let Californian drivers set their own rates? Would it really be such a huge deal to their business model if drivers could set their own price per mile, or similar? Uber still takes a percentage cut and I assume the free market cost would work out to be in the same ballpark as Uber's pricing model.
"B test requires that the worker performs work that is outside the usual course of the hiring entity’s business"
Isn't this a bad test in the first place. Let's take game studios, they need contract developers for a game, wouldn't that make them fail the test and make them an employee?
What a lot of people in this thread dont seem to understand is that the article is not making the case for Uber/Lyft drivers to be classified as employees (traditionally cab drivers have almost always been self-employed contractors), its simply reporting that under the current arrangements, Uber/Lyft drivers clearly _are_ employees. Legal scholars frequently cite the ability to set a price as a key criterion for being classed as a contractor. Maybe all Uber needs to do is to introduce some kind of "bidding" system in order to maintain the status quo. (They probabably wont though because Ubers entire value proposition to its shareholders rests on its ability to drive down the pay and conditions of its drivers)
To satisfy the "C" of "ABC", I reckon this provides an opportunity for small companies to start up, with drivers as employees, to contract out driving work for both Uber and Lyft.
I kind of hope that both companies just decide to not shut down the app in California. Otherwise I’m nervous that other cities might end up subsidizing the California market.
I'm not surprised. Uber and Lyft try co classify their workers as contractors when it comes to taxes and benefits, yet undermine workers abilities to actually be independent contractors when it suits them to do so. If you want to be a platform that helps connect drivers with passengers, then be that app. You can't then go in and set rates, not pay per client, not give contractors the ability to work for the customers they want, etc. These companies have such a strange culture of hubris and trying to skirt the law, its only a matter of time for that to catch up with them.
Part of the reason Uber and Lyft work so well for riders is due to how they structure the relationship between drivers and their platform. Drivers are required to conform to the platform's payment structure. This enables predictable up-front pricing for rides before they are even requested. This enables the surge pricing system, which rapidly ramps up supply to match surges of demand.
Drivers can decline rides at will, but if a driver excessively declines rides there is punishment for this. This makes perfect sense as the platform calculates projected rates and surge pricing based on driver availability. Unnecessarily declining rides provides a poor user experience for riders, and riders ultimately can choose to take their business elsewhere. This means drivers need to be disincentivized to decline rides in order to maintain the quality of the platform.
Ultimately the relationship between driver and platform is structured to ensure a consistent driver and rider experience. The benefits arguments are more interesting, and maybe there does need to be a system for driver benefits like health insurance if they are working full time for the company, but ultimately these costs will fall squarely on consumers.
If your points are true, then all that really means is that there is a structural, economic incentive to not be structured as a platform and that the old model, of having cab companies with drivers who are employed by that company, is the most naturally efficient structure. That's fine, except for the part where they claim their employees are independent contractors, which would be tax fraud if they didn't try to structure in plausible deniability as best they could. That was the criticism I started with: they want to treat their workers as independent contractors when and to the extent that it benefits to do so, and they want to treat them like employees when it doesn't. "the relationship between driver and platform is structured to ensure a consistent driver and rider experience" - yes, that relationship has a specific name and that name is "employer." Uber and Lyft want to employ drivers to work for them, but want to avoid paying taxes on it. This is a dangerous game they're playing.
1099 contracting is a cancer that's eating the entire sub-$50K job market. Most of my friends are 1099 contractors and every single one of them wishes they weren't.
Funny, unlike whatever these busybodies in California are doing, I'm actively working to go the opposite direction in my own life - from full time work to the gig economy. I'm hoping to write about this some more, but so far so good a year and a half in. Here are a few directions I'm working towards:
- 40 hours -> 20 hours or less
- boss -> employee-owned
- office -> remote or shared workspaces
- set schedule -> set our own schedule
- being on call -> tech to free us from obligation
- brands -> anonymity
- benefits -> societal evolution towards public healthcare
- egalitarianism -> shared prosperity
- job security -> a scalable job market in the gig economy
- scraping by to make rent -> substantial cashflow (donating plasma, Uber, Lyft, Grubhub, Airbnb, etc etc etc)
I think that last point is the one that the status quo will go after, since they always start with the $$$. I'm dismayed that California has chosen to go this route, as they used to be at the forefront of tech and innovation.
The above points are loosely based on concepts from Burning Man (although I've never attended, sadly). Mostly regarding humanism and decommodification.
Can anyone think of some more points to add, or other sources of cashflow?
This lawsuit isn’t being filed by drivers, according to the article it’s being filed by “the California Attorney General Xavier Becerra, along with city attorneys of Los Angeles, San Francisco, and San Diego”.
I mean drivers may or may not prefer freelancing, and certainly Uber will say whatever supports their case, but I don’t think the State suing Uber proves what drivers want in any way.
This is utter nonsense. Being a contractor means being self employed. You don't get paid leave or sick pay. It's a risk taking and doesn't make any sense in the gig economy where the wages are close to minimum rates.
If you are truly self employed then you have a skill which you can market, you can charge fees which allows one to put money aside for things like unpaid leave or sick days.
If you are truly self employed then part of your job is building customer relationship, building up recurring customers, increasing your business through marketing, word of mouth, etc.
You actually have to do entrepreneurial shit.
Uber drivers are NONE of this.
They clock into an app which belongs to someone else and they have no share in. They can't hand out business cards to customers or market their services on a board somewhere. They sit and wait until their master (Uber/Lyft) assigns a ride to them. Then they have merely the chance to accept/decline it. They can't even negotiate their own fees. That itself is fucked up. It's complete nonsense in extremely disingenuous by anyone here to suggest that an Uber driver is a self employed contractor and that this is good for them. They get paid shit and can't save up like a real self employed person, because they also have no say in the ride prices.
Fuck the gig economy. All gig workers are slaves and we should treat each other with more dignity and upgrade them to employees. It's our bloody duty as a decent human being.