https://www.nytimes.com/2019/09/05/us/amazon-delivery-driver...
Does this fix a problem? Or does it keep the old problem, just in a new configuration, and add barriers to entry for new participants?
If gig economies lead to working with companies instead of individuals that would lead to two distinct branches. * A self established one would give more regulatory surface for things like training and background check requirements. Not as easy to sign up before any added regulations. Constituents would get more of a pure cut. The barriers to entry would make their labor slightly more valuable. * A traditional company which hires employees. They would have a middleman to make signing up easier but likely less flexibility - which doesn't matter as much to fulltimers anyway.
It likely result in a less flexible market with more barriers to entry but it would solve some problems and act as a framework to add more solutions and problems for better or worse. It could be abused to create cartels again or responsibly handle externalities without unduly privileging - it depends on how the tool is used.
Second order effects are likely a labor pool that cannot rise and fall as quickly which would stabilize prices for the labor supply and turn instability into a company liability as they may be left with a choice of paying for idle labor for availability and meeting demand for sure or risking being unable to fulfill demand.
That said I wouldn't be surprised if widespread roll out of these sorts of laws caused a gig economy bubble to burst - especially given how many are doing a VC dumping strategy of losing money on transactions.
I don't really have strong feelings as to what would be the best nor consider myself above an amateur commentator.
Uber agrees to pay X rate currently to drivers. A law is passed that makes X rate even more unprofitable.
Uber then engages the services of an external company which provides labor at a lower rate, fires all of the current Uber drivers, and encourages them to work for the new external company.
The external company, if sued, does not have the resources that Uber has, and simply goes bankrupt. The drivers are encouraged to work for yet another new company.
This process continues for a while as ride quality and driver satisfaction all suffers. Uber gets to lengthen the runway a bit longer, and either a miracle happens and the company continues operations or some other competitor swallows the market.
If Uber deals with many companies, they can just reduce demand at the company with the bad driver and increase demand at another one. The company with the bad driver can then retrench him, saying they need to cut someone.
(Disclaimer, I know very little about Uber and the US and it may not work for them specifically. But the idea certainly applies to other companies)
Believe it or not, they did think of issues like this when drafting the law. Especially since almost all of these other issues brought up in the comments are decades old and already addressed by existing labor laws.
Company X owns Company Y. Company Y builds an apartment building of low quality and hides the defects. They sell the apartments to individual buyers.
The individual buyers sue Company X years later upon finding the defects. The judge throws out the lawsuit and says "you can only sue Company Y, because that is the legal entity who built the building."
The only issue is that Company Y is several million dollars in debt to Company X and has absolutely no way of repaying anyone who sues Company Y.
When I look at any market where the labor code is excessively protective, I see high unemployment rates specially among the young - Brazil, Spain, France[3]... I don't know about causation but clearly there is a correlation between employee over-protection and unemployment rates. I think it is the law of unintended consequences[4] in action: the legislator intention was good (protecting employee) but the net result is negative.
[1] https://www.jonesday.com/en/insights/2017/12/brazilian-labor...
[2] https://www.capital-ges.com/an-insider-view-of-the-brazilian...
In France for example, it is difficult for a company to fire an employee once they are legally hired.
Oracle, for example, has a policy of initiating an "intra-country transfer" where the employee is mandated to relocate from Paris to Montpellier. Not everyone wants to uproot their family like that. And then if they do accept the move, next year Oracle will relocate them to Bordeaux...
In Brazil employers have to pay a fine if they fire a worker without a "fair cause" (~ 3.2% over the sum of all compensation paid to the employee while they worked for you), so the longer someone worked for you the more expensive it gets to fire them.
Those employees can't sue the client company, they can only sue contractor company - that suddenly goes poof and doesn't pay out anything when a dispute happens. Good luck forming a union coz then the company will go poof too
It basically just moves the onus onto the employee willing to sign up for a shit job with no perks and absolves the govt/client company.
The answer to this is to form a bigger union so that only the bigger contracting companies can survive, and then have high-paid union executives who can negotiate large industry-wide contracts between employer and labor provider that provide some minimal level of protections but largely protect the status quo.
Then, those in the employer camp can donate to conservative causes complaining about unions and regulation, and those in the labor provider camp can donate to progressive causes complaining about evil corporations and lack of worker rights.
From here, the leaders in the two factions will variously ping pong and vacillate and make various and sundry unfruitful negotiations while taking the advice from various lobbyists about how they might improve the state of affairs and generally enrich themselves through back channel dealings with their benefactors from either camp.
Uber doesn't want drivers classified as employees so they don't have to pay minimum wage, provide employee benefits, pay payroll taxes, or otherwise comply with the law vis-a-vis employees.
Yet, it is one thing for Uber to hire drivers as contractors individually where Uber has full control over the terms, in other words no driver is in a position to negotiate their contract with Uber...it is an entirely different thing for the drivers to be organized and those organized drivers now be in a position to negotiate (almost like a union).
I think the last thing Uber would do is assist the drivers in organizing...its not just the ability for them to negotiate with Uber collectively either, at that point said driver contracting firm(s) would then be in a position to launch their own ride-share app to compete, unlike say these Amazon driver firms would can't just launch an Amazon competitor.
The federal minimum wage is $7.25/hr. But certain cities are much higher, for example New York City is $15.00. In San Francisco, it’s $15.59.
Also worth mentioning that most of these averages are not taken from drivers working full-time (40 hours per week). So while they may be able to make near minimum wage on an hourly basis, they may not be able to achieve that hourly rate for a full 40 hours per week due to fluctuating demand for rides.
Companies are not required to offer health insurance to part-time employees. Employers with more than 50 employees are required to offer health insurance to full time employees.
(IANAL)
Once the ride starts with a paying client in the car, the hourly earnings are easily above minimum wage.
But what about the time spent logged into the app waiting for a ride? If you take a standpoint that's friendly to Uber, that is not billable time - the driver could potentially be working in other capacity (including doing gigs for direct and indirect competitors, like Lyft, Postmates, TaskRabbit, etc.) If you take a standpoint that's employee-friendly, this is similar to a store register clerk being by the register with no customers in the store - they're still present to perform their duties when necessary and therefore must be compensated.
How do you factor in the car related expenses? And what about depreciation and other expenses beyond the direct out of pocket costs?
It is certainly possible to spend more than 8 hours trying to get rides, and end up with less than 8 hours worth of minimum wage pay after subtracting vehicle costs.
The main problem Americans seem to face with gig economy is the lack of health care but thats americas problem you can't blame employers or employees for it.
Basically, even if healthcare were taken care of the amount they make would not be a living wage.
If a person has X amount in their savings and their job is not a living wage, then by definition they are likely going to have to rely on their savings to make up the wage differences. This is kind of a bad thing for capitalistic-based societies because you need people to consume, and if you have a large amount of people unable to consume then that negatively impacts the free market.
It's also bad because it places stress on other parts of society. No healthcare means when you eventually get sick or injured the hospital has to take on those costs, which means people pay more while destroying the lives of said injured or sick person.
People will have to make up the wage differential somehow, which also means that underclass of workers is more easily exploitable and/or pushed into illegal behaviors in order to survive.
This is not every job. It is the situation for many in the gig economy.
The reason people don't go do something else more often is something I would love to see studied.