Uber and Lyft don't have a right to exist
jalopnik.com
jalopnik.com
I don't think that a common sense definition of what an "employee" is includes "show up to work whenever you want, take whatever breaks you want, knock off whenever you want, show up wherever you want, work for another company at the same instant you're working for us, get paid for jobs completed rather than hours worked, have a genuine prospect to show a profit or loss, use your own equipment" and likely several other key elements of the Uber/Lyft driver-company relationship.
I agree they're not 100% independent either, but I tend to view them as more independent than employees.
from the article:
> Uber and lyft have hung their legal hat on the idea that drivers are not workers because they have flexibility. This has never been the criteria on which courts have ruled if workers are employees.
Excerpts from the IRS "20 questions" test of employee vs contractor [0]:
Work for multiple companies. People who simultaneously provide services for several unrelated companies are likely to qualify as independent contractors.
Flexibility of schedule. People whose hours or days of work are dictated by a company are apt to qualify as its employees.
Demands for full-time work. Full-time work gives a company control over most of a person's time, which supports a finding of an employment relationship.
Need for on-site services. Requiring someone to work on company premises— particularly if the work can be performed elsewhere—indicates a possible employment relationship.
Method of payment. Hourly, weekly, or monthly pay schedules are characteristic of employment relationships, unless the payments simply are a convenient way of distributing a lump-sum fee. Payment on commission or project completion is more characteristic of independent contractor relationships.
Provision of tools and materials. Workers who perform most of their work using company-provided equipment, tools, and materials are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor finding.
Realization of profit or loss. Workers who receive predetermined earnings and have little chance to realize significant profit or loss through their work generally are employees.
I acknowledge that there are other tests which lean towards employee, but it's far from slam dunk, settled law IMO, and flexibility is quite obviously one factor that courts consider.
[0] - https://www.oregon.gov/ODA/shared/Documents/Publications/Nat...
Anyway, these are employe: Amount of training, Degree of business integration, Extent of personal services, Control of assistants, Continuity of relationship, Sequence of work, Requirements for reports, Method of payment, Realization of profit or loss, Work for multiple companies, Availability to public, Control over discharge, Right of termination
For clarity:
Work for multiple companies at the same time: Not simultaneously, Uber actively excludes people from working for multiple companies while logged into their app, so this counts on the employees side. Even just penalizing people for rejecting rides is treating them as employees.
Realization of profit or loss Uber pays people based on the trip in such a way people can’t become significantly more efficient and thus increase profit for a trip.
PS: Degree of business integration is one of the most damaging, Uber has zero business model without drivers. But even Amount of training suggests employees as you don’t require a training course from your plumber you expect them to be able to solve your problems not work as part of your system.
If Drivers can work for multiple companies at the same time Uber loses almost all leverage over drivers and thus can’t develop a long term competitive advantage. It’s a 50+ billion dollar issue for the company.
At most, that ruling would affect whether or not they can operate as today within California.
Possesion of certain amounts of illegal drugs hints that someone's a dealer, but it's not the definition. Selling is.
The real definition of employee seems more related to a higher dependence on the employer.
Looking closer at the points you quote gives a different vision. As an example: owning of tools and materials is actually a burden for the worker. A car, including maintenance, is a significant financial investment. Forcing workers to provide them doesn't make them less dependent on the company, on the contrary.
Similar objections can be put on the rest of criteria. With realization of profit I agree, but are you sure that works well everywhere and for everybody? I suspect that's not the case outside rich areas.
https://www.oregon.gov/ODA/shared/Documents/Publications/Nat...
Lots of companies are very flexible about employees setting their own hours.
Lots of companies in the service business do not care whether an employee has a second job with another company, even a "competitor."
The issue around getting paid for jobs completed is absolutely a non-issue. Lots of employees are paid for piece-work, or equivalently have paid-for-performance structures.
The issue is whether such payment can drop below minimum-wage laws, and the answer in law is, "no."
So, frankly, while Uber and Lyft are certainly doing their best to act like their drivers are not employees, the criteria you give here do not disqualify them from being considered employees, as there are a non-trivial number of companies that have arrangements like this with their employees.
I'm left to think that it is certainly reasonable for a court to consider all these issues in aggregate and make a determination. It does not strike me as "obvious" either way.
Absolutely none of them will let you be on the clock with a competitor at the same time you're on the clock with them.
But in doing so, they open themselves to the following reasoning: “Just as they bring a new and hitherto unique model for transportation companies, they also bring a new and hitherto unique model for employer-employee relationships.”
They are by definition unicorns, so while the courts may rule that their drivers are contractors, if they were to rule that the drivers are employees, it seems appropriate to accept that its relationship with its employees would also be unique.
Yes, those people are called "contractors"
I don't care that they're slightly more independent. They're paid far less, and they deserve the same kind of legal protections.
Do you actually get paid per job worked, and not salary? How does that work? What metrics do you use to determine the amount of work done? This is a genuine question. Most setups like this I've seen are with freelancers, and those are contractors.
Being a developer doesn't make you an employee.
The point of qualifying them as employees is offering the (little) protection the state grants those, acting as a negotiating agent in a relation that is typically disproportionately favorable the larger party, i.e. the company.
Most drivers I've met don't do that for fun but because they have to. They are usually not part of the upper or middle classes but or the more vulnerable. And as such, getting some status that prevents companies known for their bad hr practices to do whatever they want is the human thing to do.
California is one of the richest state. How about you introduce affordable healthcare for all citizens if the state? I'm sure it will bring the working class more good than all uber laws combined.
Subsidizing health care in the US has to be done at the Federal level. The Federal level can require the states to contribute, and I think that is what the Federal Affordable Care Act does, but that is politically palatable only because all 50 states must contribute.
Also you have somehow assumed that a person with health problems is a net burden for the state. When all the progressive humankind have recognized that disabled people can and do contribute a lot to the society, you are dismissing their contribution calling them "a burden".
https://www.natlawreview.com/article/ninth-circuit-concludes...
At the very least, if they are reclassified, california should allow the lyft drivers to choose to be contractors. Then lyft and uber could prohibit employee drivers from working for the competitor.
Having driven rideshare for an year and a half I think the reclassification is not really going to work in the driver's favor.
This makes perfect sense.
And let's forget competition for a moment. Let's say I'm working for a company I shall call BeeperShift, or "BS." If I am working for BS today, and while I am working for BS I write some code for my side-hustle.
Does BS still owe me minimum wage? I think that unless their terms of employment prohibit working on anything except the company's business, they owe me minimum wage.
But if they neglect to prohibit me from working on anything else, and if they neglect as employers to set up appropriate supervision and direction of my activities, I think they owe me minimum wage.
It's not my fault if they don't give me other work to do. I could only give them an out f they give me work to do and I don't do it, i.e. I don't respond when they beep me.
In which case, their recourse is to fire me with cause.
The whole gig economy thing is bad for the working class. People need real jobs, not sitting in their car waiting for an app to tell them to do some slave labor for a rich person.
In any case, IDK if these reasons do or should preclude uber drivers' definition as employees. Flexible hours and/or having your own equipment isn't the norm, but it does exist within employment. So does piecemeal work.
Regardless, I think the situation merits new regulation. One reason is competitive fairness. Smartphone ubiquity enabled these companies to form business models that keep them just outside of the "taxi" & "employer" definitions. This isn't fair to taxis and employers and it may force others into also becoming non-employers, to avoid the burden of labour laws.
Less trivially, these platform tech companies are, in my opinion, monopolies. In fact, their operating rationale from day 1 is to eventually monopolise a large market. Uber raised so much money from investors, despite reliably losing money specifically because successful platforms are expected to become monopolies. Even if you define drivers as independent business people, they should be protected from monopsonist pricing (including terms) power. So should consumers and (very importantly in a monopoly situation) potential rivals.
Here also the existing definition of monopoly is not as important as what the definition should be. Current anti-trust laws were designed for the 20th century commodity and infrastructure monopolies which emerged at that time. New laws need to target the types of monopolies that readily emerge now.. that means platforms. Google's adwords platform & amazon's ecommerce platform, for example, are monopolies. They control enourmous market share. They give their own participant businesses an overwhelming advantage. They're both markets where network effects make market share an overwhelming advantage, locking them into place.
Monopolies are inefficient. The logic of antitrust is economic, not just moral.
I realize this is mostly a discussion about labour rights. These are ultimately important too. I do think the gig economy has advantages. It can't stay a loophole for sidestepping labour laws... but OTOH, I think diversity of employment types is important. Besides flexibility, these are low gatekeeper "jobs" and that has value. Regulation always carries a danger of uniformity. All that said, we can't just move on with the status quo, where Uber drivers have fewer legal rights because they use surge pricing instead of weekly shifts.
Also, many high-tech companies have some of the software developers "show up to work whenever they want" etc. Doesn't make them non-employees - it's just that those companies don't need inflexible hours from them.
2. Drivers can't "take breaks whenever they want" - only between rides and while not committed to an upcoming ride.
2). How is this different from any other contractor? Are you saying a true contractor can stop working right in the middle of a job? Imagine if you hired a plumber and they took apart your toilet and then just left in the middle of the job. The nature of the work determines when someone can start/stop working for any reasonable contractor.
I doubt they would need to require anything as surge pricing would increase the incentives to drive until some equilibrium was reached, presumably.
except this doesnt cover the flexibility to work 5 hours per week; most high tech companies require full time employment.
If you're 100% independent you're not a contractor, you're retired.
The plumber is free to set their own rates, an uber driver cannot.
No one can unilaterally fire the plumber from 50% of the plumbing market. Uber or Lyft can ban a driver at any time for any reason.
You probably didn’t order up your plumber through PlumbersRUs. If you did, they would almost certainly be an employee of that entity.
Actually, they can. They can refuse any trip if it doesn't pay enough. The difference is that the existence of Uber and Lyft makes the market more efficient and transparent to the customer than the plumber market.
> No one can unilaterally fire the plumber from 50% of the plumbing market.
The fact that the driving market is consolidated doesn't change the underlying economic dynamic. A lawyer can be "fired" from 100% of the lawyering market by the ABA. But if I hire a lawyer that still doesn't make her an employee.
> You probably didn’t order up your plumber through PlumbersRUs.
Not yet. But even before Lyft and Uber, many (perhaps most) taxi drivers were independent contractors, not employees.
The difference is the firm can assign a junior to do all of the work and keep the senior for trial or face-to-face meetings. If you hired a person they can't really do that.
Can I change the driver? If my wife uses my account is that allowed? Can I subcontract to my team? If not I'm an employee.
That’s not how that works. There is a reason they are called contractors. All kinds of stipulations about who will do the work can be loaded into a contract.
And refuse a few trips and you will be unable to get any trips at all.
Not setting your own rates pushes them towards employees.
The freedom to work for any platform at anytime pushes them to contractors.
But I think we are missing the bigger point. Regardless of their status they deserve protection. All contractors should have additional protection.
.... and gets paid 10x more.
Ad hominem attack based on conjecture: check.
Non-sequitur: check.
This comment shows all the symptoms. I regret to inform you that it is officially retarded.
They’re not taking coding contracts ...
Your full time w2 job comes woth exact the sane flexibility - you are allow to show anytime you want to, take breaks as long as you want to and do whatever task you want to. Slavery is over. But just so you know - if you don’t play by the rules you will get fired probably on day one. Similar with share ride apps you are being scored and valuated on every single fart you pass, including amount of signouts, miles you drive, score you get for riders etc. same story you are not forced to do some quota but if you don’t score high enough on their weekly “goodbye to all that didnt fit top 60%” you are not part of family anymore.
What full time job do you have that allows you to show up whenever you want, work as little hours as you want, and do whatever you want? Sign me up.
The only thing from your list that we could argue about is "do whatever task you want to", but that doesn't apply to drivers neither - their task is very strict in fact - they supposed to take riders from A to B, period. No form of deviation is allowed. So actually this alone locked them into a full/part time employee, because they do not have a freedom to do any job they want to, similar to how as a contractor you can chose what you do next.
I get that there's a big difficulty in creating these laws, with politicians who don't know exactly what the solution is, but someone needs to start by saying look, these gig economy workers are neither "employees" or "contractors" with the current law definitions, so we're going to create a new definition of worker geared towards these cases which makes sure employees aren't being taken advantage of, but also makes it possible for these companies to continue.
Taxi companies have been following worker laws for forever, it's not impossible at all. These companies are just spreading FUD, like big ISPs did back when net neutrality was imposed: https://www.techdirt.com/articles/20151001/12131332412/hey-r...
Incidentally, the "Gig Economy" has all the necessary features to serve as the Corporate Neoliberal version of pseudo-Communist China's Social Credit System. Possibly that may serve as motivation to address GP's excellent point regarding a new class of workers and the necessity to craft new laws.
[FLSA]: https://en.wikipedia.org/wiki/Fair_Labor_Standards_Act_of_19...
Healthcare is the biggest item but seems unlikely to budge. Payments for, say, a driver vs. a dog walker are going to vary significantly due to different scheduling expectations, different time values, etc.
It’s not clear what is meant by making it possible for these companies to continue either, as most of these companies are not currently running a profitable business.
Sounds good to me. Only that, maybe, the most important innovation of those companies, is that they found a way around the existing laws.
If that is the case, both, protecting the employees and making possible for these companies to exist are contradictory goals.
I agree that Uber or its representatives may contact me by email, phone, or SMS at the email address or number I provide, including for marketing purposes.
[1] https://www.irs.gov/newsroom/understanding-employee-vs-contr...
I think where we’re splitting hairs is whether the drivers have a direct relationship with Uber and Lyft that entitles them to the rights of a W-2 employee, or whether they are actually working for the passengers and are therefore 1099 workers merely using Uber and Lyft as a platform to find work.
You see, there’s a decent case for the latter, it’s what they predicated their original business model on, but given the amount of control that Uber and Lyft does exercise on the drivers, I think that pushes them into W-2 territory. Drivers can’t even set their own rates for which they will take a job for example, Lyft and Uber hands the fee scheduling down from on high. The choice is binary, work for Uber or Lyft, or don’t work for Uber or Lyft.
There was an interesting but failed startup called Sidecar I think it was. Never got to use it, but the description I received was you put in your pickup and drop off points and the amount you would like to pay, and then it broadcasts this fare out to potential drivers that happen to be available. They see it, and decide if they want to take the fare or not. If Sidecar were still around, I think they would have a much easier time proving their case that their employees are 1099 contractors, not W-2 employees.
EDIT: Some additional thoughts I had after posting this.
As a customer paying for a ride, are you paying to call a Lyft or an Uber? Or are you paying to call a driver. Lyft gives me no options to call upon specific drivers that might be available, or to eliminate certain makes of car that I dislike (damn Prius C drivers), and penalizes me if I cancel. When I’m calling a car, it certainly feels like my relationship is with Lyft the company, not the guy who eventually picks me up. I have no idea who that will be.
EDIT: took a moment to look into AAA, they advertise themselves as a federation of regional clubs and their customers are less customers and more members. This may not be an Apples to Apples comparison, but lacking sufficient information and experience, I defer to people with more knowledge in this case.
By the same token, neither does that establish a direct contractual relationship between the tow truck driver and the owner who called AAA. Neither third party may negotiate the conditions of the service provided.
Sure. But that's not what the text says.
And BTW, the amount of time that an Uber/Lyft driver works is entirely up to them. They can work one day, take a month off, and then come back and work another day. Any Uber/Lyft driver who works 5 days a week, 52 weeks a year, is doing so because they choose to, not because they fear being fired if they don't.
I agree that the rules don't consider the current reality of tools and global connectivity.
Your example sounds exactly like a statement of work in a contract. My example reaches past that into the company to manage their use of labor.
This doesn’t necessarily apply directly to Uber because they may argue that they are contracting a single ride, and the driver/contractor is fulfilling that small contract in any way they see fit.
But this legal notion has multiple criteria, all of which need satisfaction to arrive at a conclusion. Cherry picking a single criterion in this instance makes no sense unless you apply all to your metaphor.
This wouldn't change if the drivers were classified as employees.
Also, do you have any proof drivers are actually able to pocket those missed tolls?
Seems like a win/win, drivers get higher fare due to time, and Uber pockets toll. Why should Uber care?
Appeal to Uber for a credit on those trips. I don’t know the process for Uber, but on Lyft I had someone bypass me entirely, drive just far enough away to give “me” a ride and collect partial credit, then “drop me off”.
Lyft credited me, changed my rating on the driver (I fat fingered the rating on my way to call another car, I only call Lyfts when I’m in a hurry, not when I have all the time in the world), and gave me a guarantee that I would never see that driver again. I hope they also took notes on the scam that driver was running, but I stopped caring once I got my money back.
If Uber gives a damn about customer retention, which they should, they predicated their entire business model on being the biggest, only game in town, you should expect a similar result.
Uber and Lyft are a scam to drain both investors and drivers of money which is skimmed off and goes into the pockets of the CEOs, and other business managers.
There is no true profit generated by either the company itself or by the drivers. All business is being permitted by using the investors' money to undercut taxi companies' prices by subsidising customers.
Once the investors finally wise up, both Uber and Lyft will disappear like they never existed.
This is a bit unrelated, but how would this affect software contractors?
I know that in Australia 20 years ago, there was a big push to make everyone contractors, to get rid of employee obligations, the rules were changed to be similar to NL now, but I don't know what has happened in the meantime.
Employee classification only benefits tax authorities who get to collect more money. Why we penalize hiring employees I have no idea but that’s how it works.
how does this follow? Regular employees are entitled to minimum wage, overtime pay and reimbursements for work expenses. The latter in particular would finally put an end to Uber's business model of outsourcing maintenance and risk to drivers, costs which many drivers are very likely not fully aware of.
Being treated as a regular employee, possible unionizing and being entitled to full benefits is a huge boon for working people.
Things that would actually help drivers:
- Limit Uber's share of the fare to 10%. Or 5%. And the driver gets the rest
- Let drivers set strict limits on where they are willing to pick up/drop off, etc
- Let drivers set their price/terms
Give drivers more control, not less. Making them employees gives them less control
Literal price fixing might seem simple but seems like a bad market intervention in comparison to giving workers reasonable negotiating power and representation.
> Maybe we could start with not making developers millionaires in their 20s and hiring 1k+ sales people for a company that makes a smartphone app.
That's why its called "gig economy".
I wish drivers could organize and set up ride-hailing collectives, so that we would just cut out Uber and Lyft as the middle-men; prices might be higher because of wages, but it won't all feel like an anti-social scam - and drivers will be able to participate in managing their own lives and put in their professional input (together with consumer groups / regulators) into standard of conduct, service and safety.
What's tricky is that while there are benefits to business because now their business is business, not retaining workers longer than they should, it makes them cold and heartless. But we're humans, we don't respond will to that, and we want to be treated with dignity, even in business transactions.
background on homeless Uber drivers: https://www.theguardian.com/us-news/2017/jun/17/uber-drivers...
in which case they would not be Uber/lyft drivers and you would not have the convenience of these services available to you, back into the "dark ages of taxis" .
> Yet people are still taking these jobs over more traditional ones.
yes, and they are living below the poverty level by doing so. The fact remains that your experience of convenient uber/lyft rides depends upon people who willingly or not place themselves into poverty-level wages. For the moment, your convenience requires that people suffer in poverty.
OTOH, if regulations were imposed such that Uber/Lyft had to raise their prices, then you can have the convenience of these services, at a higher cost (more likely though, it would be simply be a regular low-margin business like taxis and supermarkets and no longer profitable to investors), and it would not require poverty-level workers in order to achieve it. This is the purpose of the minimum wage - so that the job market isn't crowded with jobs that do not provide a living wage.
I wouldn't mind if uber/lyft prices went up some to pay the employees better but I don't see it as a moral evil to make side jobs available where you're not paid for time doing nothing because there's not a job yet. Re: healthcare it should just be single payer and not tied to employment.
Or they are being shafted by life so hard that this represents less shafting that all their other options. Otherwise, if they had better options, why would they take the job?
I believe the real issue is the distinct lack of investment in public transit infrastructure in the US. Uber and Lyft claim they're providing a valuable service. In developed nations cities build subways and bus routes to meet the needs of residents. America's philosophy seems to be to never provide a necessary service for free when somebody could be making a buck off it.
"The Market Fairy Will Not Solve the Problems of Uber and Lyft" (2016)
https://www.ianwelsh.net/the-market-fairy-will-not-solve-the...
> Here is the thing about Uber and Lyft (and much of the “sharing economy”).
> They don’t pay the cost of their capital.
> The wages they pay to their drivers are less than the depreciation of the cars and the expense of keeping the drivers fed, housed, and healthy. They pay less than minimum wage in most markets, and, in most markets, that is not enough to pay the costs of a car plus a human.
> These business models are ways of draining capital from the economy and putting them into the hands of a few investors and executives. ...
From the drivers' POV these companies are parasites.