Wow. This decision might upend the whole gig and sharing economy. Now every company needs to tread carefully in UK. Uber is struggling to achieve proper profitability even with "gig" and "sharing" economy and now this.
For any company actually following the rules it is good news that companies like Uber aren't allowed to flout them.
You can argue about whether or not these regulations should be there, but as long a they are they need to apply equally across the board.
Besides I doubt Uber is struggling financially, it's one of the largest companies in the world and did so by paying their drivers only a fraction of what they'd earn as regular taxi drivers. Mind you the cost for customers was similarly lower, but apparently, too low.
Uber is one of those companies that lives off of investment money, using that to be able to dive under the price of their competition and putting them out of business. I'll shed no tears for them.
>>It's the best option available to them because Uber's driven out the competition. Like, people choose to work at Walmart because it's the only employer in a fifty mile radius - for example. They can't work for a local store or start their own anymore because everyone's going to Walmart.
We're not talking about a small town here. These are large cities with diverse economies that contain thousands of employers. Uber drivers can do other jobs besides driving.
There is absolutely no evidence at all that Uber has a employer monopoly in the areas it operates, and that this is why people choose to drive for it.
Anecdotally I've heard that a lot of Uber drivers are very happy about being able to drive for Uber. And by anecdotally I don't mean a survey funded by Uber. I mean from internet comments where somebody claims to know someone who drives for Uber and really likes it. Take that for what it's worth.
>>Yes, in fact, we do. A whole lot of practices have ended predominantly due to legal changes
The vast majority of practices ended because the market value of labour increased as a result of growth in per capita productivity.
Any mandatory standard that gets ahead of the prevailing market value of low-skilled labour just creates unemployment, meaning it doesn't raise the standard of employment for the less skilled.
There's no free lunch in economics.
>>Allowing these jobs to undercut competitors that pay properly propagates low paid situations where society end up having to subsidize the behavior of the companies in question because they don't pay livable wages.
It's exactly the opposite. A mandatory minimum wage, like any price floor, leads to unutilized supply, which in the case of labour means greater unemployment. So you're increasing welfare costs by instituting a minimum wage.
The market value of labour doesn't increase because low-paying jobs were made illegal. That's not how supply and demand work.
Actually you do, in almost every case from the length of the working week to health and safety to the right to paid time off.
Yes, in fact, we do. A whole lot of practices have ended predominantly due to legal changes.
A major historical example from the US being the infamous Triangle Shirtwaist Factory fire [1] where 146 workers died in part because the owners locked the factory doors to prevent unauthorized breaks.
The outcome was both an increase in unionization and legal changes.
Employment standards are the way they are today not in general because companies have decided to act nice, but because they've been forced, through law and union action, over a very long time, to adhere to minimum levels.
> Low paying jobs work for some people because their circumstances don't give them the opportunity to get anything better.
Allowing these jobs to undercut competitors that pay properly propagates low paid situations where society end up having to subsidize the behavior of the companies in question because they don't pay livable wages. I for one would much rather have a proper welfare system than a system that rewards companies like that.
[1] https://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fi...
The sharing economy always was about exploiting workers (and externalizing costs), and this has created an additional cost for society.
For example, DHL’s drivers are "self-employed", as result, in most countries their healthcare is funded by themselves, or by society (instead of the employer), and this means you (and your company) pay more taxes, just so that Uber, DHL, Amazon and co can save money.
As long as the self-employed person doesn't pay tax on their insurance (which AFAIK they don't), it is exactly the same thing.
What is relevant is NI ("national insurance"), which pays for a bunch of unemployment and similar benefits: https://www.turn2us.org.uk/Benefit-guides/National-insurance...
What is also relevant is driver liability insurance - normally if you take paying passengers it invalidates your insurance, so commercial drivers either need to be insured by their company or pay more for correct insurance.
If the big company is not willing to pay X+Y to the self-employed guy, they won't be willing to spend X+Y on an employee.
The only difference is if the big company can get better rates on the relevant goods than a self-employed guy.
How does an employee having to buy their own healthcare mean I pay more tax?
How does DHL buying healthcare for employees mean I pay less tax?
How do either of those affect my socialised healthcare charges which would remain fixed even if DHL cease trading?
Same reason tax evasion by corporations should be ended since it not only devalues society but actively feeds on it while undermining the positive potential that a managed free market actually allows ALL players, not just the few that have gotten too big to fail.
That assumes better jobs would exist if these didn't. This is the Nirvana fallacy.
Define "exploit". Depending on the definition, you could argue that all economy is about exploiting workers.
Yes. When the basic income comes, it will redefine all the parameters by which we judge the qualities of jobs. But that doesn't mean that such jobs are not exploitative now, according to current standards. Your snarky quotes are unwarranted.
Ah, so you're familiar with Marx?
I have 3 personal anecdotes, you can ignore them if you'd like, but I'm a proponent of the sharing economy.
1. I'm from Austin, Texas where prior to Uber it was impossible to get a ride unless you were directly downtown. I've called cab companies and they no-showed, leaving me stranded in the middle of no where. There isn't enough density for public transit and when Uber and Lyft entered the market, it changed our lives. Prior to the existence of these companies, there was rampant drinking and driving. I went to school here, and every party was essentially binge drinking followed by a harrowing 30 minute drive where everyone on the roads at 2am is a drunk driver.
2. My sister is a teacher, single mother, and low income. She uses Uber on the weekends to make extra income and help support her child. For her, the flexibility of being able to drive whenever for a quick buck is key to closing the gap that Texas politics hasn't quite solved. I'm going to preempt the argument and say I agree that UBI may be the solution more generally to workers needing to rely on their employers.
3. My mother is retired and generates ~1000/month in income from social security payments. She did not plan for retirement, has no savings, and has moved in with my sister to help out. Her day job is managing Airbnb rentals in Austin and she rents out a room in their house for extra income (~700/mo). Her quality of life is much higher than it would be without Airbnb, and her ability to schedule, find and vet potential tenants without Airbnb would be pretty much nil.
I recognize these are not the same 'workers' whom are being pathologically disadvantaged by the rules of these platforms - I think they're the ideal users that product people pin on the whiteboard. I come from a low income background and only see positives, had Uber been around when I was in school I wouldn't have worked for $5.15 washing dishes in a rat infested kitchen, done tech support for wireless hotspots in trailer parks or been a valet on 6th street dealing with intoxicated people. I've had about ~20 low skilled, hourly jobs that essentially dominated my life at the time and I had very little mobility or earning power, having the opportunity to leverage my vehicle and time flexibly would've been enormous.
oh no, what a travesty.