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Comment by jasode | Hacker News Reader

The traditional taxi drivers in UK are already classified as independent contractors.[1]

If Uber wanted to stay in the UK market, what would be the minimum they would have to do so that the Uber drivers are considered "contractors"? Is it just letting the drivers set their own fares?

In other words, if sellers on ebay are not employees of ebay and programmers submitting apps to Apple iTunes Store are not employees of Apple, what does Uber need to do so they are considered a platform instead of an employer?

[1]https://www.gov.uk/government/publications/vat-notice-70025-...

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Apple doesn't tell developers which apps they must develop. They don't insist that all development work is done by the named person. eBay doesn't tell sellers what they have to sell, nor boot them off for listing things that don't sell. App developers and eBay sellers can choose their price, and what they're selling. Uber drivers can do neither. If they're "on duty", they must accept rides or be penalised, and must charge the price set by Uber.

The full judgment is here: https://www.judiciary.gov.uk/wp-content/uploads/2016/10/asla...

Page 29 gives a good summary of the reasons that point towards the drivers being workers.

But how many enterprise shops hire contract developers, hand them a laptop and cubicle and say be here from 9-5.

They'll get paid at much at more competitive rates though.

Usually in this case the developer is an employee of another company (this company can tell them what to do) and the first business is paying the second for this developers time.

Being employed via 1 or more companies is not protection. The UK government is persuing people who were hired as contractors via a staffing agency which then encouraged them to set up a personal Ltd company.

Typically these contractors pay themselves a mixture of dividends and normal paye pay to minimise tax, and the gov is saying the dividends were never really dividends so they need to pay tax and ni on them including the employers ni.

Currently this is limited to specific staffing agencies who actively instructed new contractors to create a personal company but I don't think it will stop there.

I've long felt most contractors are well within ir35 and it has been tollerated. This may be ending.

Isn't the tech industry notorious for abusing contractor law to avoid paying for things that are required for their employees, particularly startups?

And in the UK if the contractor is self-employed they are at risk if being caught by IR-35: http://www.contractoruk.com/ir35/what_is_ir35_rules_explaine...

IR-35 is employment duck-typing. If it walks, talks, and quacks like an employee, then it's an employee and should be taxed as such, even if it claims it's an independent contractor.

English law recognises that there is a continuum between obviously employed and obviously self-employed, but the categorisation in any particular case will be down to the reality of the actual relationship between the employer/contracting company and its staff/contractors. There's no bright line, edge cases are ruled on case-by-case in the tribunal, as here.

The actual criteria are pretty complicated - see the guidance manual at https://www.gov.uk/hmrc-internal-manuals/employment-status-m... - but the essence of it is control ("does the boss have the right to tell the worker what, where, when and how to work?"), personal service/substitutability ("can the worker send someone else to do the job, instead of doing it himself?"), risk ("who is on the hook if something goes wrong?") and some other factors. Very fact-specific.

Incidentally, one of the standard features of traditional taxi drivers in the UK is that they don't set their fares, that being the responsibility of the local government. Uber drivers are licensed in the separate category of 'private hire', which has less stringent licensing (and the right for a firm to set its own fares) but a prohibition on picking up passengers by being hailed, and some other restrictions.

> English law recognises that there is a continuum between obviously employed and obviously self-employed

Very similar here in Germany, I guess. There is the term "Scheinselbstständig", which roughly translates to "fake self-employed". If you are formally self-employed but meet certain criteria, your "customer" (who is then considered to be more your employer than a customer) has certain obligations to you, and you have certain rights, which you can't easily trade away.

In the UK (and also in, for example, Poland) self-employed people pay much lower taxes than the employees - hence we're all very happy to trade away our rights.

But that has a social impact. You might be chuckling to yourself over how much NI you're not paying, but if you are injured the NHS will still treat you, and the money has to come from somewhere.

That's interesting, in the US it is the opposite, although you might be able to write off certain things as expenses so your overall taxable income is lower.

I believe you are thinking of people who set up companies and pay themselves through dividends (which have a much lower tax rate), which is now (highly controversially) illegal -- search for "IR35".

Ordinary self-employed people and sole traders pay nearly the same tax rates as employed people (National Insurance, a strange disguised tax, is at a different rate), but have many fewer rights, eg. no right to paid time off or sick pay.

The question in this case is whether Uber drivers are self-employed or not. Not as it turns out.

> pay themselves through dividends (which have a much lower tax rate), which is now (highly controversially) illegal

What on earth are you talking about... taking out dividends is not illegal, even for individual company owners. IR35 is about HMRC forcing self employed people to apply payroll taxes as if they were employed. Again, nothing to do with dividends.

I was "self-employed" ("Freiberufler") and working for a US startup 100% of my billable hours. They hadn't formed a company in Germany at that point, so I just send them a bill and paid the employer and employee part of my health insurance.

I got some letters about that and they asked me to prove that I was indeed self-employed. They didn't like the argument and concluded that I wasn't. The only thing that actually happened after a while is that I had to pay into the public retirement fund against my will. The "Deutsche Rentenversicherung" are seemingly the only people that care. From what I can tell there were no other obligations/rights that appeared after.

I'm not a lawyer, but what I remember from talking with self-employed family members:

There are different parts of German law/government that are affected, retirement is only one of them (and just because one authority noticed/thinks you qualify doesn't automatically mean that the others do).

Tax avoidance (since payroll taxes on your salary weren't paid) is another angle.

For the employer, not paying their part in your social security contributions is similar to not paying you your full salary, and thus a criminal matter as well.

>English law recognises that there is a continuum [...] There's no bright line, edge cases are ruled on case-by-case in the tribunal,

Sure, I understand that. USA law is fuzzy in the same way. (The IRS 20 rules[1] are guidelines and not binary true false criteria usable for perfect machine learning classification.)

But for the sake of discussion purposes on HN, I'd like for you or anyone to play the role of general counsel for Uber and say exactly and concretely what they would need to do.

[1]https://www.google.com/search?q=irs+20+rules

I'm not a lawyer; my exposure to employment law came in a previous existence as a workplace union rep and this is somewhat outside my expertise.

As I understand it, if the Uber driver were allowed to have someone else drive their car for Uber when they felt like it, and had the freedom (actual, not nominal) to decide which clients they'd like to take on, and had control of their pricing, then there would be no question it was actual self-employment.

Or, they could:

* Give them basic rest breaks

* Give them basic holiday

* Pay them the minimum wage

Remember, they're not employees, they're workers.

[edit - I'd be very interested to know why this is downvoted, these are the things afaik that they are required to do for workers (who are distinct from employees)]

There seems to be an assumption of full-time drivers implicit in your message. Uber drivers may only be driving a couple of hours a month. What does rest mean when someone can stop working at any time?

The positive I see in the so-called gig economy is far more flexibility in employing underutilised labour. If government increases the transaction costs of employing underutilised labour, then it will probably stop employing underutilised labour. It could easily be a net negative.

If there's an efficient way of working it out - i.e. keeping the transaction costs low - I'm not against regulating Uber as an employer. But it is a different form of working, and it's the kind of working that connected communication technology is best positioned to enable. It would be best if we didn't crush it under an assumption of regular employment.

It's really not a different form of working, we've had irregular gig-like work for a long time. That's rather why the "worker" status exists as distinct from "employee". Just because you throw in an app or tech doesn't make it any different.

> What does rest mean when someone can stop working at any time?

It means that once you've been working for a given period of time you get a short period of (paid) time-off. A few lines of code in the scheduler to not assign work for 15 minutes to people in this position, and a corresponding credit in the billing system, would do.

The point applies more generally. I had a zero-hours contract with my university to teach very irregular hours on some IT training courses. I was entitled to holiday pay like every other worker. It accrued at a rate of something like one hour for every ten hours I worked, and was added to my pay.

This form of working isn't in any way new; piecework, home working, day labour and similar things have existed for as long as employment law has, and there are low friction solutions already in place to make meal breaks, holidays and minimum wage calculations work. The tribunal judges here specifically ruled on when Uber drivers are working (in licensed area with app switched on) so everything else is pretty straightforward from an implementation point of view.

> The positive I see in the so-called gig economy is far more flexibility in employing underutilised labour.

That flexibility is nothing more than shifting risk from the employer, who is most able to handle it, to the employee, who is least able to handle it.

I'm not sure I understand how it's supposed to work. Say, somebody drives for Uber 2 hours per month. So, Uber must pay them whatever is minimal per-hour pay in UK, even if they had no rides but just were available for 2 hours? Then, they also have to pay them for holidays? How many hours? That doesn't sound like sane business model - pay for a whole workday on holiday to somebody that otherwise worked couple of hours per month.

> Then, they also have to pay them for holidays? How many hours?

Simple, it's scaled for how long you work. 2 hours per.month would mean they also have to pay you for 2 hours 53 minutes per year of holiday.

Really, uber are not the only company that hires people for irregular work. This stuff has all been worked out a long time ago.

> That doesn't sound like sane business model -

It's just paying people to work for you, hardly a crazy business model.

> 2 hours per.month would mean they also have to pay you for 2 hours 53 minutes per year of holiday.

But the money is paid for driving people around, not for being there. So where 53 minutes come from?

> It's just paying people to work for you, hardly a crazy business model.

Nope, it's paying people to work for you and also paying money just because. If somebody works for you for 2 hours and you have to pay for 2 hours and 53 minutes that's not paying for work.

> So, Uber must pay them whatever is minimal per-hour pay in UK, even if they had no rides but just were available for 2 hours?

Yup. The tribunal judge ruled that, as having drivers waiting around with the app turned on was an essential part of Uber's operations, their workers were doing work for Uber while waiting and in a position to take calls.

This is analogous to call centres: the operator can't just tell its workers that they're 'not at work' and not pay them when they're logged in and waiting for inbound calls.

Of course, mostly this matters for minimum wage calculations. As long as Uber have sent the driver a handful of trips in these two hours they'll have to pay no extra.

Call centers explicitly pay for being there. That's their job description - being there and being ready to answer calls. That's the whole purpose of call centers - so that you have a phone that you can be sure there's a person waiting on it for your call. That's not what Uber is doing.

It's like I would call an electrician and he'd charge me for a month of work because he sat there for a month being available for my call, it's not his fault I called only now! Would you hire such an electrician? To me it sounds insane.

> As long as Uber have sent the driver a handful of trips in these two hours they'll have to pay no extra.

This makes even less sense. If "being available" has monetary value, as you claim, why this monetary value does not have to be paid regardless of additional monetary value of driving around? If, as you claim, being on call is a separate payable service, it should be charged in the same whatever happened after.

It sounds like this argument is not genuine and is just dragged in to arrive at predetermined conclusion about minimum wage, but as soon as this is not a concern, this argument is discarded completely.

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