GrubHub Drivers Ruled Contractors
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At that point, I don't understand how could anyone argue they are an employee (in the traditional sense of the word) of either company.
Uber will warn the driver if a ride is especially long and allow them to decline those, but overall the driver is kept in the dark as to which rides are more profitable.
Additionally, until recently, Uber punished drivers who declined too many rides, either by deprioritizing them, or dropping them altogether.
I do support worker's rights heavily in most cases, I just really feel like these rideshare cases (and other similar industries, carefully curated) should be exceptional. It is hard for me to feel like the lack of structure that the driver's operate under is enough to demand full employment rights.
I'm sure that somewhere in their algorithms, there is a way (or a potential way) to discriminate/penalize less active or lapsed drivers when they return to business. But that relatively minor power being said, Uber/Lyft can literally only control their worker's schedules and availability and hours using positive profit reinforcement. Like, are you really an "employee" if you can, without warning or consequence, just not work for a months and then return just as suddenly? I don't know if "contractor" is the right word, maybe this should be considered something new like "micro-contractor" or something, but it operates in a way that is economically and operationally fundamentally different from traditional employers, including taxi companies.
This isn't an acceptable situation because the workers aren't employees. Uber and Lyft can offer below minimum wage to contractors who don't get their "positive profit reinforcement". The contractors will then self-enforce employee-like behaviours in order to get a better wage that still doesn't have to be above minimum wage.
It just seems like this is a case where free-market solutions really could be a powerful optimization for just about everyone involved (already the companies are struggling with drivers exploiting the system themselves). There is always regulation necessary, I just hope that this particular business remains pretty fluid compared to most industries.
Part of this stems from my suspicion that the steady-state of driving services will either require a bulk of the labor to be done by people for which driving is not their primary income anyway, or there to be a very large overhead built into the prices.
Now you could classify them as freelancers taking contracts at will, or you could classify them as employees working out with their manager which shifts they will work so they can get to their second job. It's just that the shifts are a few minutes long and spread out throughout the day. To most people the freelance classification probably makes more sense.
How can they possibly claim to be ride-sharing services if the driver doesn't know where they'll be going until they've accepted the ride?
How is that an argument against drivers being contractors? My parents tried to get some contractors to work on the roof of their house. The contractors wouldn't do it. I suspect they may get deprioritized, or dropped altogether, for future roofing work.
No. It's a tax construct, and that is the only criteria we should use to measure it.
If I sign up on one of those freelance coding websites and I get no work offered to me, can I claim they need to pay me a minimum wage? What is the difference between that website and Uber that makes them entitled to be treated as employees?
I could be a server who works shifts at two restaurants. They both call me the same morning with available shifts that day. I pick the one that usually gives better tips. I’m still an employee of both.
Edit: Guess the Uber shills don’t like it and downvoting is easier than admitting you’re wrong.
This breaks not one but two of the site guidelines. Would you please (re-)read them and not do that? https://news.ycombinator.com/newsguidelines.html
For uber/lyft that's not rare at all, that happens multiple times a day if you want to extend the shift analogy to giving someone a ride.
And again these are irrelevant details. The point remains solid.
The reason you are an “employee” and not a “contractor” at the restaurants is because they dictate your hours and place of business.
Your example about filling in is a red herring as by its nature it’s an atypical circumstance.
These arguments are ridiculous.
Other dishonest conduct during this lawsuit further supports the Court’s finding that Mr. Lawson intentionally manipulated the app to get paid for not working. During discovery he produced a resume that falsely represents that he attended a Loyola Marymount University Master of Fine Arts program from August 2012 to May 2015, and even lists a specific grade point average; however, Mr. Lawson was only enrolled in the program for one year and did not graduate. When confronted at trial with this misrepresentation, Mr. Lawson testified that he listed all three years because he was “still involved in various activities” and he felt “still part of [the Loyola Marymount] community.” (Dkt. No. 208 at 48:13-16.) This explanation is not credible.
That aside, reading the linked court documents that contract has major problems. It requires deliverers to sign up for a weekly block and to be available (except under extenuating circumstances) for work, and not refuse work, during that time. That sounds like being a part-time employee to me, regardless of the preceding prose specifically disclaiming employee-employer status (why would they need that I wonder!), and saying the driver was free to work other gigs. If you're free to work other gigs how can you not often have to refuse jobs?
I'm not saying Lawson's been harmed, I didn't read enough to know, but that contract looks like it's demanding exclusive employment for a particular company within a given time range; that looks terrible for GrubHub from where I'm sitting.
The guy was working other jobs, including for other gig delivery companies, at the same time he was delivering for GrubHub. It was clearly a flexible arrangement for him, and GrubHub was not able to control his activities much or prevent him from working for other companies. That's probably what decided the case.
If you were a lawyer looking for a sympathetic plaintiff to fight for employee status at gig economy companies, this guy is a pretty bad choice. First of all, he can't be trusted. Even worse, he was clearly benefitting from the gig economy in exactly the way that gig-economy proponents say people benefit -- flexible hours, the ability to pursue other work, etc.
The ruling specifically says that this is not the case:
"The driver is not precluded from doing business with others and Grubhub does not have the right to restrict the driver from being concurrently or subsequently engaged in performing delivery services for other companies, even those that compete with Grubhub."
I am actually pretty impressed with the efforts Grubhub was making for compliance here.
"The driver may (1) lease insulated delivery bags from Grubhub in exchange for wearing Grubhub t-shirts and hats"
Since requiring someone to wear a uniform or use your logo is a strong sign of an employment relationship they make wearing the uniform consideration for a separate contract. Clever.
So if another source of bags were founds the Grubhub contractors could be wearing clothes that advertise a competing service, or is loaded with restaurant sponsorships, to make more money? Hrmmm...
None of that is contradictory as described. He attended. He had a grade point average.
Perhaps there’s more to it than you’re describing.
I would welcome the more nuanced view of a litigator — I was a transactional lawyer and am just remembering my law school lessons about precedential authority.
Edit: corrected an autocorrect.
Would someone familiar with the California standards summarize the contractor/employee test? The article doesn't make specific reference to the criteria. (I'll hunt the internet now myself, and report back.)
edit: From the California Tax Service Center...
> Does the principal (you) have the right to control the manner and means in which the worker carries out the job? The right of direction and control, whether or not exercised, is the most important factor in determining an employment relationship. The right to discharge a worker at will and without cause is strong evidence for the right of direction and control. When it is not clear whether you have the right to direct and control the worker, you must look further into the actual working relationship by weighing the ten secondary factors.
There are secondary tests as well.
> The right to discharge a worker at will and without cause is strong evidence for the right of direction and control
One usually thinks of a contract worker as being totally de facto dischargeable (contract says you do N jobs, if I don't like you the N+1th job doesn't get contracted), whereas an employee as being entirely nondischargeable due to union agreements or labor laws, but the law itself says the reverse elsewhere.
P & !P => Q
That's not dischargeable at will, that's an option to not renew after a set point.
> whereas an employee as being entirely nondischargeable due to union agreements or labor laws
“At will” employment makes employees dischargeable at will (hence the name). Labor laws add specific prohibited bases, but still make discharge less restricted than a contract. A union contract is a special case, a contract on top of general labor laws that covers people who are otherwise regular employees.
What if N == 1
Or you could look at like the contractor will get paid for N jobs regardless, while the employee can be discharged at N - 1 and only get paid for N - 1.
Even in non at-will jurisdictions you can end an employment relationship whenever you want, you just have to follow the rules established by legislation to do so (notice or in lieu, just cause, etc)
Uber, Lyft, et al contract individuals to work for them, not companies.
Having been a full time Lyft and Uber driver for 1.5 years, I honestly don't think classification as employees makes sense. I'm paid by each ride (which you could think of as an individual contract). I have walkaway rights at any given time. I could be logged on to both platforms simultaneously and pick up whichever came first (logging off of the other one as appropriate). Nobody forced me to work any given hours. This is very much unlike any employment condition I've ever been in.
The self employed painter could send some one else to do the work for example - I know employment law is a trickily area for civilians (ie non hr specialist and lawyers) to get there head around
You might hire Joe Blogs And Son's to do a painting job but it does not mean Joe Blogs does the work personaly it might be his son or he may "get a lad in" to do some of the work
Sooner or later our legislatures are going to have to deal with this issue.
https://www.courtlistener.com/docket/4537667/rittmann-v-amaz...
Why not just say all employees are contractors and working "as needed"? No more pesky employment tax, unemployment tax, health care benefits, etc.
But that is not to say this guy was in the right. Just that it's rarely obvious.
The judge notes however that under California law, you’re either an employee or contractor, there is no in-between, and she presumably wants to see that fixed.
This is an old issue that goes way back to Microsoft hiring contractors and treating them really well like employees, until the IRS discovered they were also doing it to not pay payroll taxes :(
Afterwards, Microsoft had to significantly dock contractor benefits to show there was a real distinction and it was not an accounting gimmick.
Like a lot of labor and tax law, these were all put in place 60+ years ago and have pretty much been stretched to the maximum. Ironically, this makes me see people going to Law School as in a really cool spot for the future. I thought I’d never say this, but I can imagine us needing more lawyers in the future to hammer all these things out for whatever the next de facto American System is.
That's not obvious at all.
Why is this bad? It means people can have lots of flexibility on when to work, and for who. For some people this is very valuable.
It also means a lot more flexibility to those offering work (i.e. they can scale up or down based on short term demand), which means there are now more companies willing to offer work, and again that's a win for the worker.
To me, it's a net win because it results in more work being available, and more work being done (i.e. people getting paid).
From where we sit today, it is a very long road to getting most of the population saving even 6-12 months living expenses. To get there, we need to take many intermediate baby steps. Perhaps special tax treatment for savings accounts belonging to taxpayers below a certain income level, and the account balance meets some kind of latency metrics, or outright grants for hitting metrics in lieu of EITC.
So those contractors basically have ~%8 less pay because they pay the employer part of the tax, unless MSFT paid them more to compensate.
So what is the incentive for MSFT to do that in the first place? Is it just to fool the people who don't realize they might be paid less in a complicated way?
But there are things other than FICA that employers have to pay for employees but not contractors. The most obvious one is unemployment insurance, both state and federal. There are likely others, in various location-dependent ways. Obviously contractors effectively self-insure for unemployment; this is a major reason why contractors are typically paid more on a nominal basis than employees are.
In addition to that, there are compliance costs with employees (having to do tax withholding, pay reporting requirements to states and the IRS, etc) that are somewhat lower with contractors.
They don't want to have to pony up for all the support staff, even though we worked at a facility, 8-5, 40 hours or more a week, with basically an infinite contract length. They paid for our healthcare plan as well - like an employee might get? :)
There wasn't really anything to complain about, as the pay and benefits for even the contractors were really nice (we had "unlimited PTO" before it became a thing in the startup world), but the debate about employee vs contractor is interesting in this particular case.
PEO's (Professional Employment Organizations) will have a future as more and more laws are enacted about how we classify an employee.
A trial court ruling isn't binding authority even on the same court, much less others, and unless it is (unlikely) a published decision, it won't, IIRC, even be citable as persuasive authority in other cases.
Now, if it gets appealed and an appeals court rules on the case, things change...
Taxi drivers have been working as contractors for decades.
Just because a tech company is doing it, doesn't mean that the law has changed its opinion on the matter.
In the present regulatory environment, sure; one could argue that that environment is using employers as a vehicle for general social services in a way which is undesirable and reduces employment, economic output, and well being especially for the poor.
Moving the basic protections to public benefit schemes with appropriate tax support might be a better option. E.g., UBI instead of minimum wage, universal (single-payer or mandatory and subsidized default minimum coverage) healthcare instead of employer-mandated insurance, etc.
In almost any likely regulatory environment we are likely to see in the next decade, and definitely in absolutely any regulatory environment that the the-poors-are-revolting HN zeitgeist has any influence on forming.
I realize I am not telling you anything that you, specifically, don't know. (And I don't think you are the type to approve of those environments.) But having that out there provides important caveats for your "might be"'s. The problem exists and the problem is real and bad people are using it to hurt people and while I know you know the difference, underlining that "might be" might be doesn't erase what is.
But, it also brings an expansion in available jobs, and much greater flexibility in deciding when to work.
For a LOT of people, those are worthwhile tradeoffs.
> of some smartphone app having been created.
Piecework (which is basically what this is), long long long predates the smartphone.
"Flexibility" is what it's called when PR flacks, from their actual-full-time jobs (but, ha ha, not for long, the bell tolls for thee too), have to hide the hatchet job they do to the poor. It's not some "but fairings!" situation--it's a systemic attack on people.
It's an indisputable fact that these gig economy jobs provide more flexibility in the form of being able to choose your hours of work.
Is this flexibility a critical motivation to accepting work? For some people, yes. For others, no.
Is unemployment a critical motivation to accepting this type of work? For some people, yes. For others, no.
You want to paint this as black and white when the reality is only SOME of the workforce is faced with unemployment as the only alternative.
My question to you is: Do you know what fraction of gig workers would actually otherwise be unemployed?
If I had to guess, it's a small minority.
Unemployment is historically low right now. Yet, tons of people are still choosing gig work.
So there is something about it that people value. You can't just say there are no other jobs, because that's just not true.
This may very well be the more common case but it's not responsible to generalize either way. If you have evidence to support your claim please share.
Maybe I'm being too anecdotal, but I can only think of a couple of rides (out of dozens) where I would have called a cab had Lyft not been available.
Trying to get a cab ride from my house to a random place 15 miles away was a nightmare. Bad dispatch, no-show drivers, etc. Never really bothered after a few bad experiences, just designated a driver instead.
Uber did not invent this practice. They took it from the existing industry.
The existing industry was actually WORSE in that you would have taxi medallion owners who would charge people rent for the luxury of using their taxi medallion!
So please, do not blame Uber for the existing taxi cab contractor business practices.
(You can certainly argue that now having all these extra cars on the road is a bad thing, but that's a separate issue.)
If america had universal health care like the rest of the developed world, would anyone really care about this stuff that much?
There are others as well, which stems from the fact that for the most part the law considers contractors to be entities negotiating on equal footing with their customers (i.e. those who would otherwise be considered employers), whereas employees are required to have certain protections.
The "gig economy" is designed to break employment. It's designed to turn people who already are living hand-to-mouth or worse into always-available scutworkers for the upper class and the (smaller than one would expect) middle class that serves them in ways the participants in that "gig economy" cannot. But you can choose to not do it! And when, obviously and inexorably, that becomes the game in town available to vast swaths of the working poor, what then? There aren't even any workhouses anymore. Scrooge can't even offer that whatabout.
Most people may not have much of a choice about feeding themselves (ourselves) or their (our) kids into the thresher, but the people who do can have the minimal decency not to oh-but-it's-fine about it. And that includes most people on HN.
The reality is that these companies are just being driven by profits. And, one way to maximize profits is to minimize costs by offering fewer benefits to workers.
This outcome has a lot more to do with capitalism as a whole than the gig economy.
If you are a proponent for worker's rights and mandated benefits then by all means argue for that. But, please don't make it seem like there's some evil person on the other side that you're seeking justice against. That doesn't exist.
Maybe capitalism has problems and it's not just the "gig economy"? This is creeping towards an epiphany--maybe choosing to participate in capitalism at a high level rather than mitigate its excesses makes you complicit? Maybe you own what you do and when what you do hurts people, you own that harm and that hurt?
Yes, this does characterize many HN-sanctioned heroes. Too bad. Maybe they should instead be decent.
Nobody forced these companies to exist. If you can't do business without bloodying the poor who are your "human resources," maybe you shouldn't do business.
Well that's a lot of money. Of course I expect you'd probably say that that's because the 'bourgeois' are holding back the 'proletariat.' Okay. Let's go full on social system economics. Let's just pretend the entire GDP in the US is spread completely evenly between each and every person. And that's quite unreasonable as our GDP would decrease dramatically under such a system, but for arguments sake I'll give you that. Okay, that's easy. That's the GDP/capita or $52k. The total value of all annual goods and services in the US produced works out to $52k/person/year. But we can't forget about taxes now. To sustain our social utopia we'd need quite a high tax rate. But again, I'm going to let you have that and we'll just maintain current taxes. So we're each taking home about $42k. I'm also going to pretend that state and other taxes don't exist.
Now look at your $15/ride. If somebody was going to depend on that, they'd end up spending nearly 40% of their entire income just getting around even with a perfectly fair share of all income generated nationwide! And I gave you several unreasonably optimistic assumptions that makes that number a real lowball. The point here is that even in what I assume is your idealized system, this would not be a sustainable industry. It's very easy to see things through the lens of a victim complex because of the apparent inequality of our society. But these optics are in large part caused by inconceivably large population numbers. Imagine you earned just $1 from each person on this Earth. You'd be the 65th richest person in the world! Far from a 1%er, you'd be a 0.000000001%er. Earn $12 and you'd be the single richest person alive. Even if we just consider the USA. Imagine you took every penny Bill Gates, currently the richest person in the world, is worth and equally distributed it to each and every person in the US. That'd be a total of $275. Maybe you would say well do that to them all! By the time you're down to the 100 richest person you're only getting $17/person, and again that's for the US population only.
Most people in places where wages are livable walk, bike, ride a bus or train or drive themselves around. For the infirm there are subsidized transportation services.
[2]https://www.federalreserve.gov/newsevents/speech/yellen20141...
- Wealth is not renewable, which is why income is vastly more important. If you have $100 of wealth and you only spend 10% of it a year. You're completely broke a decade. 'Only' spending 5% of your total wealth on transport per year is a path to very rapid ruin.
- There's nowhere near the amount of 'real' wealth as there is 'paper' wealth, which is the number you're indirectly citing. Most wealth is tied up in the form of various investments, stocks, and so on. When you liquidate these assets, it results in a decline in their value. If you were to liquidate large amounts of market assets into spendable money, simultaneously, you would find the total wealth in the US to be a very small fraction of the numbers stated.
Many of them are people seeking a little extra money, a way to fund a new car, something to hold them over between jobs, a way to pick their own schedule... I have had a lot of conversations with a lot of workers in the gig economy and never have heard "I wish this was my full time job". Maybe that is the random set of people I've interacted with, maybe there is a bias for what people want to talk about.
What is absolutely clear though, is that a sizable amount of people participating in the gig economy are doing so because they want to take advantage of how it works, not despite how it works.
Many of them had other jobs, many of them clearly wouldn't want a full time job doing the gig.
The guy who was the creator of a local web design business driving me around on a weekend afternoon wasn't choosing between unemployment and the gig economy, he was supplementing his income while worked on his dream.
The programmer giving me a ride to SFO from the peninsula wasn't choosing against unemployment, we had worked at the same company in similar positions, we had a great time talking about how things were going. He was just making money as he commuted home.
The Afghani translator who immigrated after the war was a student making money over the weekend on his own schedule. Neither of us understood football at all.
A lot of the things I pay for "gig economy" employees to do are things I think would be awful as full time jobs, it would make me sad to support a business that put people in the position where that was their life. When it's optional, people using those bits of work to fill in the gaps or add a bit of extra on top of whatever else they were doing with their life, I am a lot happier to support those workers and those businesses.
Not so say that the businesses are doing everything perfect, but I think it's obvious that the 'lead generation' role (companies like uber, lyft, etc) are going to become more of commodities to the benefits of the workers using them.
Really the only problem here, and the only reason why there are lawsuits, is that these workers aren't being paid enough. I really doubt any of these people care whether they're classified as employees or contractors; they just want to feel like they're making enough money to support themselves (plus take care of self-employment taxes and healthcare costs) without feeling like to do so they need to work themselves to the bone. If these jobs provided a decent standard of living, I don't think these issues would exist at all.
Someone is hungry and now they have food delivered. Someone doesn't have a job and now they have a delivery job. It's a win-win situation in a short-term micro scale and people are just responding to short-term incentives. It may have a bad effect in the long term but hungry/unemployed people don't have time to think about that and middleman-apps are making good profit exploiting that.
They have been working as contractors, for companies, for decades.
Maybe you think the law should be changed, but situations like this have been established and determined for a very long time.
Bad case, bad case law.
I have also failed to do all of those things for Mr. Lawson, fortunately like GrubHub I did not tell him I ever would.
The problem - in America, at least - is that contractors are denied benefits like health insurance and pensions/401k plans. But the issue of an inadequate social safety net is separate and much deeper than a mere employee/contractor distinction. Otherwise it remains a game of IRS musical chairs.
The problem is much larger, and the "sharing" economy companies (and YC) are way ahead of you. It's more accurate to call it the "loophole" economy. A hotel chain that doesn't have to obey health and safety rules? It's called AirBnB! A taxi company that pays its under-insured drivers less than minimum wage? It's Uber! Exploiting a legal loophole and calling it "tech" is currently a lucrative enterprise.
As their own employers, independent contractors can (and probably should) set up one-participant 401k plans for themselves. This can have significant advantages, since the "employer" gets to select the terms for the 401k, and employer-sponsored plans often drop terms that cost less than the value it'd provide you (eg, in-service Roth conversion + after-tax contributions).
The lives of a high-flying contractor doing skilled work are very, very different than someone who faces a the "gig" contracts.
There are plenty of employees who work on piecework or an ad hoc basis. Setting ones own hours isn't really a cornerstone test for contractor status. Certainly much less so than the ability to set prices or subcontract.
You can, sure. Doesn't mean anyone will hire you.
The fact that someone offered a particular rate, and you agreed, doesn't really change anything material.
To me a contractor can decide to work that day, or not work (doesn't matter why - could be timing, or doesn't agree with the pay), and it's fine - if he works he gets paid, if not, he doesn't.
In contrast an employee has to work every day (other than agreed breaks), or he'll be fired, and no further work will come.
But you're not forced to set prices. It's just you won't be hired if your price is too high.
Is a grocery forced to set a particular price, if people won't buy the product at a lower price because a competitor has it?
If I say "I'll buy rice from you for $10", am I forcing the other guy to sell at $10? He can set whatever price he likes. I just won't buy it. Maybe someone else will.
GrubHub drivers can do... neither?
Your example is nonsensical. We're talking about the distinction between an employee and a contractor. Not a store selling products. And again, to my knowledge drivers cannot set prices no GrubHub to begin with, so what you're saying is just irrelevant.
Grubhub is only one client. If you want different pay, get a different client.