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Comment by Shivetya | Hacker News Reader

I am really curious how they arrived at any of the numbers in this article. Seriously, what other large employers make it to hundred plus million per year? Are they just up and deciding that anyone who did one trip is now an employee? Is there a source that shows how much each company pays per year in this state? who else is equivalent?

this isn't about protecting the drivers, this is about protecting the taxi industry and metropolitan mass transit unions both of which were under threat of better service being offered at lower costs both to tax payers as a whole as well as customers. you don't have to like Uber to understand what this is really about. It is protecting the current gravy train the politicians rely on to stay in office.

edit:

https://www.njbia.org/get-njbias-tax-changes-for-2019/

Unemployment Insurance, New Jersey Workforce Development and Health Care Subsidy Fund Taxes

> Employee and employer state Unemployment Insurance tax rates will apply to the first $34,400 of an employee’s earnings in 2019 (up from $33,700 in 2018).

> For 2019, employees are subject to a 0.0425% (.000425) Workforce Development Partnership Fund tax rate. The employee Unemployment Insurance tax rate remains at 0.3825% (.003825) of taxable payroll.

View on HN

You make reference to protecting mass transit as well as to the cost to consumers. These arguments make sense if there are zero externalities, but unfortunately there are: carbon footprint, both directly as well as second order effects from increased congestion, commercial exploitation of subsidized infrastructure, increased collision risk to cyclists and vulnerable road users, abuse of contract law by preventing independent rate setting and concealing negotiable information, artificially depressed prices fueled by venture capital in order to create a monopoly and capitalize later. These externalities are borne by society at large, so a pure "let the consumer decide" philosophy is not fully justified in this scenario. Some of these externalities apply to taxis as well, which is precisely why regulating and limiting taxis is good, though I think one could do a lot better than the medallion system.

Regulation is what made taxis so terrible. We don't need the government to control everything. Many of the externalities you describe would be the same if people just drove their own cars.

If ridesharing is so bad then govt should invest in proper public transport to create more choice, not try and crush a valuable service used by millions.

No, taxis are bad because companies try to squeeze the maximum amount of money while providing the least possible service. They could provide a good service within the term of the regulations if it were their focus.

Where I live taxis are regulated yet provide a decent/high quality of service. And it’s true even in cities like mine where the public transportation network is crap (bus based).

Taxis got away with it because there was no competition until ridesharing came around. They wouldn't have provided good service on their own when protected by laws.

Nothing has improved commercial services like competition. Nothing has ruined it like regulation. I've yet to hear how any of these externalities are solved with regulation, or how they are unique to ridesharing vs private car ownership.

The answer to bad regulations is not necessarily no regulations. The taxi medallion system was broken and in need of an overhaul. Replacing a broken system with a ridesharing Wild West is not optimal.

I agree that there needs to be a lot more investment in mass transit but in the meantime governments shouldn't be turning a blind eye to regulating ridesharing.

What's wild west about it? What needs to be regulated exactly vs having people drive their own cars?

I’m no fan of unnecessary regulation, but you cannot compare externalities of driving your own car for your own purposes vs. ride share, accept in cases where people are ride share driving in the same capacity/frequency as personal driving. My opinion is that people who drive their own cars don’t do so at the same clip as people driving for money. In the former, people do so out of convenience or routine. In the latter, people do so as long as needed to meet financial obligations. Maybe I’m wrong and people are out here driving hours and hours for wages they don’t need to survive or support others.

That still doesn’t answer the question of why it’s different in way that we should care

It's the same amount of driving. The Uber drivers are giving rides to people who need to get somewhere, and who would otherwise be using their own cars or taxis.

If anything there are less total cars on the road since the same Uber driver can service many passengers (or same amount of cars delivering more people with less parking).

Car safety, accepting multiple payment options, refusing pick ups or drop offs to particular neighborhoods, scam pricing...

There’s plenty of reasons to have some regulation. What was missing previously wasn’t regulation, it was competition.

And yet, those are all things where unregulated Uber is far better than regulated taxis ever were. Why is that?

What? How are you arriving at that conclusion?

Is this a serious question? Did you ever ride in a taxi in the US?

Car safety = Uber knows the drivers, has real-time tracking for your entire trip, and lets you call for help quickly and silently. Taxis have none of this, and there are lots of bandit/underground cabs where you have no idea if it's legit.

Payment options/scams = Uber lets you pay however you want through the app/apple pay without any need for cash, with an upfront price. Most taxis only accept cash, have unclear pricing that you only know at the end, can easily pad the meter in various ways, and may extort you if you really need a ride.

Refusing pickups = Uber drivers don't know the destination until you get in the car, and get kicked off the network if they cancel too many rides or abuse riders. Taxis are notorious for ignoring people based on looks, destination, convenience and usually won't deal with any trip they deem is not worth their time.

The difference in service and safety is magnitudes better with ridesharing vs taxis, that's why they're so popular.

"Sorry, I don't go east of the river"

"Sorry, the meter is broken"

"Sorry, the card reader is broken, cash only"

"No, don't worry, this is really the fastest way"

Also your Uber driver doesn't know your race when he accepts your ride or not. Which is probably why I find it a lot easier to get an Uber than a taxi.

> Also your Uber driver doesn't know your race when he accepts your ride or not. Which is probably why I find it a lot easier to get an Uber than a taxi.

Not being able to hail a cab due to racist drivers is a problem. However, in your example, the Uber driven can see your name, which is a pretty reliable proxy for your race, unless it's highly generic like John Smith or something.

Taxi drivers have to accept cash and cannot force you to pre-pay for your ride like Uber can. That at least reduces the number of drivers who would otherwise refuse to pick you up because of a perception that you wouldn't pay.

Don't forget insurance minimums, accessibility issues, the general ability to block someone forever ultimately denying them a mode of transit....

> If ridesharing is so bad then govt should invest in proper public transport to create more choice

This is an excellent idea, and is consistent with also taxing any societally borne externalities caused by ride-sharing, the primary being congestion. And taxis should be held to the same regulatory standard.

The congestion would be the same if people just drove on their own. You can see this in Los Angeles and New York. The answer to getting cars off the street (whether private or shared) is to build other options that people can use.

Taxis are cars too by the way. How did all those taxi regulations improve externalities?

There's studies that show uber increasing congestion. It makes sense when you think about it. Uber drivers are routinely on the road with no passengers. Either waiting or driving to or from picking up a passenger.

Those passengers would be in a car anyway. They don't stop going places. Like I said, ridesharing either reduces cars on the road or decreases the amount of parked cars for the same amount of people.

The biggest study was in SF and was inherently flawed by looking at traffic over years. It's obvious that an increasing population will generate more traffic, and Uber has allowed more people to travel than before. Serving more people isn't a bad thing, it's a natural situation that cities should plan for instead of being constantly surprised by.

> Those passengers would be in a car anyway. They don't stop going places.

Are you sure?

100% of riders, for all rides they take, would choose to use a car if they could not use ride sharing?

Absolutely none would walk, ride a bike, take a bus, take a train, choose not to go?

I have a hard time believing that it's purely a "car I have access to or a ride share," 100% of the time. So I believe some amount of rides are happening that would not have people driving.

Of the drivers for ride sharing, there is some amount of time between trips that they are simply waiting for the next customer. This is time they wouldn't be on the road if they were not driving, and time the person who is using the ride sharing wouldn't be on the road either. So, I also believe that drivers must be on the road more often than the sum of the time they've kept other people from driving.

If drivers are on the road more with ride sharing, and if less than 100% of people using the ride sharing service would choose a method of transport other than a car, I cannot see how ride sharing wouldn't strictly require an increase in traffic?

Obviously not 100% but that would be a minority of rides. If you need a car to get to your destination then you either drive or use another car option (like Uber or taxis). Uber is too expensive (and sometimes too slow) to replace other choices for equivalent distances all the time. It's likely used in situations like rain or emergencies or something else. And people who had no options before or lacked last mile reach can now use Uber so of course there's net new riders too.

Uber will add to traffic but traffic always increases anyway. Check any city over any period of time. It's normal. Uber isn't the problem, it's the lack of capacity for a growing population and other viable transportation. For example, look at electric scooters and bikes in big cities that people are using for medium distances instead of cars. That's what happens when there's progress and competition instead of regressive regulation.

Those passengers would already have the car parked at their house, or the restaurant they were at.

The Uber driver has to drive to pick them up. Then once they drop them off, they have to drive to the next fare. Sometimes they even circle around high traffic areas in heavy traffic in order to get to customers faster.

Basically anytime you see an uber driver without a passenger is likely extra car time on the road compared to what those passengers would have done with private cars.

Many of these studies are fraught with problems. The one that researched SF congestion for example almost perfectly coincides with the multi-year construction on Van Ness completely disrupting north-south traffic in the city.

You also have more and more people in every growing city supercommuting due to rising housing costs. A lot of these supercommuters are driving their own personal vehicle because they are now living in places where a personal vehicle is a necessity. Once you have your own personal vehicle for local use, it's economically advantageous to use it for commuting to work.

Given all the changes in growing cities in the past 5-10 years, you couldn't even begin to isolate the cause of congestion down to just one cause, but that's what these studies falsely claim because they don't understand the null hypothesis and that correlation does not imply causation.

> The answer to getting cars off the street (whether private or shared) is to build other options that people can use

I think we agree completely on this, and the best other options in cities are all mass transit, not individual cars.

> Taxis are cars too by the way. How did all those taxi regulations improve externalities?

Taxis didn't impose nearly the same congestion externalities as ride shares (or single occupancy cars) simply because there just weren't as many of them, due to the controversial medallion system. They were never a form of mass transit.

And as anyone who waited hours for a taxi before the ride share era knows, the lack of supply was the primary frustration with taxis. Ride share simply multiplies out the taxi technology of low occupancy cars, which while it solves the taxi supply problem increases the existing congestion problem wrought by low occupancy cars in general. Therefore it is not the way to achieve scalable transit in even somewhat dense environments.

But to your question, maybe congestion taxes on single passenger ride sharing pushes us toward a form of dispatchable mass transit which shares many of the conveniences of ride-share with the social benefits of mass transit i.e. a fleet of dispatchable municipal minibuses that work like a larger Uber Pool.

That would be especially helpful for last-mile connectivity for mass transit like commuter trains, whose parking lots are today overwhelmed by single occupancy cars.

As a user I don't care. I would rather have a transportation option than not. What do you expect millions of people to do? Either don't travel or go back to driving their own cars? What is this abstract "social good" where nobody is served and everyone is miserable?

Lack of alternatives is the problem. Externalities of Uber are nothing but political outrage and a distraction. If the govt put even a fraction of the effort in battling Uber into building more rail and bus lines then everything would be solved.

This has been proven by the massive surge in electric scooters and bike sharing companies, which Uber also provides. Are those externalities too? Or do people just want to get around and need ways to do so?

The externalities of driving should be and largely are paid for by fuel and plate taxes, and also tolls. If those things need to be adjusted, then adjust them. But it doesn't make sense to me to particularly punish rideshare miles driven compared to commuter miles driven.

> But it doesn't make sense to me to particularly punish rideshare miles driven compared to commuter miles driven.

I agree. We should be making it more expensive to operate any low-occupancy vehicle during peak congestion hours in congested areas, not just ride-shares.

All of those taxes are already per vehicle. The license plate tax is per vehicle. The tax paid on a gallon of gas is per vehicle. Tolls are per vehicle. There is already an embedded penalty for low occupancy because the costs are spread across fewer people. Fighting congestion is already a major cost: time. Who are you trying to decongest the roads for? How will you avoid creating a situation where only the wealthy are allowed to drive, and now all you've accomplished is making their driving experience more pleasant?

There are some crap Taxi's in Tokyo, but on average they're amazing. I'm sure there is still regulation and taxes they need to pay in Japan too.

It's not just because they're Taxis they suck. There is also bad Uber drivers too.

Never had a bad uber driver, but I've had a ton of bad taxi drivers -- and I've ridden in uber far more.

Why are they amazing? Japan has great public transportation and very dense cities. It's not as car-centric as the US but the taxi system still has similar problems.

No apps, need to communicate destination (possibly in a foreign language), primarily use cash, expensive, paper receipts, no real-time status/tracking, hard to get back lost items, etc. They might be cleaner and quieter but those are minor details.

No apps

Wrong: https://apps.apple.com/us/app/japantaxi/id481647073

Need to communicate destination.

Not with the app.

Primarily use cash

Wrong, you can pay by many means, including the IC card, this is a good option and can be used with Apple wallet, super convenient.

Expensive

Compared to what?

Paper receipts

Not when using the app, you can just say you don't want a receipt.

No real-time status tracking

Wrong, the app does this too.

Hard to get back lost items

Call taxi company, get it back? Tokyo taxi drivers usually inspect the taxi before you get out too, I notice they do this every time I get a cab.

Another benefit IMO is there are cabs driving around everywhere, you don't have to hail and wait for a cab, if it starts raining, you can just jump into a cab usually in under a minute.

> Many of the externalities you describe would be the same if people just drove their own cars.

no, this isn't correct and on its face looks like a straw man, so i'm pretty sure you're arguing in bad faith, but i'll try to give someone of the "market" mindset a market argument.

market zealots tell us that as things become cheaper, people do more of them. subsidizing ride sharing, evading regulations, etc. generally made ride sharing become a cheaper alternative to taxis. as a result, it suddenly became generally affordable for well off people to "ride share" around everywhere as a manner of commuting. this very likely led to more congestion than a world without ride sharing would have.

that some of these well off individuals could have done the same in private cars is not really relevant. ride sharing became so economical that bus riders, pedestrians and cyclists changed their behavior to make use of it. this isn't controversial - there's at least one study from SF that found this; i'm guessing other municipalities have found the same.

This is such a bullshit argument. What you're basically saying is people wouldn't have driven their cars and stayed at Home if Uber wasn't a thing. That's such an inane argument. Ridesharing is good and reduces overall traffic. It doesn't make people go out more than they require. No one says "it's a good day to Uber today ".

> What you're basically saying is people wouldn't have driven their cars and stayed at Home if Uber wasn't a thing

He didn't say that at all, read his post again. He says that uber takes pedestrians and cyclists and PT users and turns them into car (Uber) users.

Go back to pre-Uber. No one called expensive taxis and used private cars, including the cyclists for non trivial distances. Uber came and solved the first step. Maybe some cyclists even take it for trivial distances. But that's blaming Uber for a good product and promoting a protectionsist scheme. Rather if you want more pedestrians and cycling, have more infrastructure and incentives to promote that rather than ban Uber.

For all those downvoting ...what's the solution ? Go to phone call expensive taxis ? Uber is such a useful utility, most people won't let it go away. Too big to fail

I've read a dozen studies so far that indicate Uber increases traffic and congestion in cities it operates in. Quite a lot, actually. Increasing commute times by 40% or more in some of the studies. Venture capital is paying people to idle around the city, clogging the roads. It's a sort of denial of service attack.

"Uber and Lyft Admit They're Making Traffic Worse"

https://www.citylab.com/transportation/2019/08/uber-lyft-tra...

You didn't answer the core point. People don't sit at home if there are no taxis. That's never happened. And if cyclists take cars now, it's probably because it's safer to do so than riding around traffic. These aren't bad things.

This is the normal outcome of more people going to more places. Ridesharing definitely increased the total amount of people taking cars that didn't before from a lack of options, but that's minor in terms of general population growth.

Traffic always increases over time, that's a natural thing that cities need to plan for. It's great motivation to build public transportation instead of complaining about Uber helping people get around.

> no, this isn't correct and on its face looks like a straw man, so i'm pretty sure you're arguing in bad faith, but i'll try to give someone of the "market" mindset a market argument.

Please refrain from ad hominem attacks. GP has a valid point.

> ride sharing became so economical that bus riders, pedestrians and cyclists changed their behavior to make use of it.

If that is your concern, what explains popularity of Uber in London / Paris, which have excellent public transport as well as massive customer base for that public transport? Clearly, Uber is providing good value there.

>what explains popularity of Uber in London / Paris, which have excellent public transport

That's entirely consistent with parents point though.

I think you're reinforcing my point that existing transportations options suck, but I don't see how Uber is economical enough to compete with buses, bicycles and walking, especially if you're doing that at any regular frequency like commuting.

If you could walk somewhere then you don't need a car, but if you need a car then you weren't a pedestrian or cyclist anyway. There are also many people who didn't have any good option at all before (like kids, disabled, elderly, etc) and it's a good thing that they can get around now.

Perhaps government would invest in proper public transport if so many businesses weren't trying to figure out ways to avoid taxes by, say, insisting a huge number of people who contract full-time and long-term for them aren't really employees?

What taxes are being avoided? Contractors pay just as much, if not more tax. There's no magical loophole.

Also the govt is not lacking for funds. The problem is poor spending and that will never get solved by giving up even more money. I'd rather have private businesses that actually produce valuable services then wait on crappy transportation delivered a decade late by the state.

Uber could very easily reduce carbon emissions if they bias their payments/ride assignments towards EVs and other efficient vehicles. I'm not sure about the legality of that, but its definitely an interesting idea if they need to pull some PR shenanigans.

>Commercial exploitation of subsidized infrastructure What makes trucking different than Uber in this scenario? Is driving my own car around not abusing the infrastructure, but hailing an Uber is? Uber doesn't make money if nobody is riding somewhere in the car, so the market forces try and make utilization as efficient as possible.

>Increased collision risk to cyclists and vulnerable road users Are Uber drivers more likely to hit people than non Uber drivers? If you control for the population utilization of the roads, does this have a measurable affect?

>Abuse of contract law by preventing independent rate setting and concealing negotiable information You have a point there, but personally I disagree that these should be required by law in the first place.

>Artificially depressed prices fueled by venture capital in order to create a monopoly and capitalize later Well its doing a pretty bad job if the goal is to create monopolies. For most tech companies, they have a reasonable amount of competitors given the chicken-and-egg situation they need to solve. Prices are artificially depressed, not going to lie, but a lot of prices are artificially depressed to make them usable by the masses, and its all the better for it.

> if they bias their payments/ride assignments towards EVs and other efficient vehicles.

This happens naturally. From a previous calculation I did, I estimate that a hybrid Prius allows a full-time rideshare driver to gross more than $500 each month than a typical ICE sedan. The economics of more efficient vehicles biases drivers to get more efficient vehicles with fewer externalities. This is why Priuses and other hybrid cars are the most common vehicles used by rideshare drivers.

Taking drunks off the road, providing carpooling options, reducing need for parking, making it possible for for people to not need cars who are on the fence about buying one, frictionless payment options over cash, eliminating "zoning" by different cab entities that block off under-served neighborhoods. There are plenty of positive externalities to Uber too. I don't know about you, but I'm old enough to remember when cabs sucked and you dreaded it or considered risking just driving yourself after a night out. Uber made things easier, better, and safer.

> Uber made things easier, better, and safer.

Are you seriously suggesting that an entity could have both positive and negative effects? That's unpossible!

Mass transit in most places doesn’t come out ahead even accounting for externalities. The average passenger vehicle emits 0.91 pounds of CO2 per mile. Many estimates of CO2 price it at $30/ton. At that rate, the CO2 externality from driving is 1.4 cents per mile. The cost of CO2 recapture puts a cap on the cost of CO2, and currently it’s $100-$230 per ton. At that price, we are looking at $0.10 per mile.

Typical subsidies for transit are in the $0.50+ per passenger mile range for rail, and $0.80 for bus: https://opportunityurbanism.org/2019/09/transport-costs-and-... (scroll down to the graph).

In my country the most common uber vehicle is a Toyota Prius which uses about 4 L per 100 kms. As our buses are poorly run and empty the majority of the time, Ubers are the optimum environmental option to get from A to B.

We need some Pigovian taxes.

This must mostly be penalties for not paying any taxes for 4 years. Unemployment in New Jersey is taxed at 0.3825% of the first 34,400$ of income so it cap’s at 132$/employee per year. The other tax is uncapped but at ~1/9th the rate.

Nationwide Walmart has 2,300,000 US employees. If they are paying an average of 150$ each nation wide on similar taxes that’s 345 million per year. However, I doubt even 20 million of that is in New Jersey.

It’s 120 in interest and fines. The rest accrued over four years

> Uber and subsidiary Rasier LLC were assessed $523 million in past-due taxes over the last four years, the state Department of Labor and Workforce Development said in a pair of letters to the companies. The rideshare businesses also are on the hook for as much as $119 million in interest and penalties on the unpaid amounts, according to other internal department documents.

Also it's unemployment + disability insurance they're being charged for.

“At the end of each calendar year, any tax, penalties, and interest remaining due (unpaid) will become part of the balance on which interest is charged.” https://www.state.nj.us/treasury/taxation/njit19.shtml”

So, that 119m should be this years penalties. If this thing is growing at over 22% per year and 4 years ago the already had a 54m unpaid tax bill, then I can see this snowballing fast.

Also the acid test is whether the drivers are qualified for unemployment benefits.

If they're not considered employees, I don't see how they could claim unemployment.

And if that's the case, this statement from TFA makes no sense:

> The money that they’re not paying into the unemployment and disability systems is being picked up by the states and the taxpayers.

Because there's nothing to be "picked up" if those workers don't qualify for unemployment and job-related disability.

I get the argument about having more freedom when you're not an employee. But these people are generally getting screwed, I think.

How are they getting screwed? Drivers do it by choice, and many of them do have a full-time job or other commitment and like Uber for the flexibility. They specifically don't want a full-time driving job.

From what I've read, they often don't make enough to even cover their increased vehicle expenses. And then there's insurance exposure.

Also, TFA notes that classification of drivers as employees would increase costs by over 20%. If that's true, someone here is getting screwed. Drivers, governments, or both.

But still, I value freedom highly. So I do get the argument that people ought to have the right to work how they want. Even if they're getting screwed.

Articles are a poor source. The drivers wouldn't be driving if they weren't making any money. I've taken thousands of rides and discussed Uber with about 90% of my drivers. While they all would like to make more money (who wouldn't?), they all make a profit and enjoy the flexibility the most.

Are they pricing in vehicle wear and other long-term expenses? Many people only think of gas and other short-term expenses when they calculate vehicle cost-per-mile.

That's on them and not Uber to calculate and make the choice.

>> The drivers wouldn't be driving if they weren't making any money.

This might surprise you, but most people are absolutely terrible when it comes to making complex financial decisions involving multiple variable factors over a period of time.

The tiny percentage of ride-share drivers who do meticulously keep track of their finances have all said the same thing: at the end of the day, when you factor in everything, you barely make any money - if everything goes well.

Sure people are terrible at decisions but that doesn't mean they're all stupid. I find it hard to believe that all these drivers can't figure out their costs, and everyone I've talked to has been fine with it.

The only time I hear complaints that driving isn't worth it is specific trips with traffic or a long dead leg back home, but that's not their entire driving history.

The other possibility you are ignoring is that a lot of those drivers may be aware that they are breaking even or barely making any profit, but may be choosing to continue driving because they love driving, or they love meeting new people, or they simply want to stay busy and be out and about instead of sitting at home and getting bored/depressed.

Basically, I don't buy the "so many people wouldn't continue doing it if they weren't making good money" argument.

Do you honestly think that is the majority? That they're doing it for fun? Have you ever driven for Uber? Have you talked to drivers? Why assume they're all irrational or incapable of figuring out what their time is worth?

I have direct experience with hundreds of drivers including many students, retirees, elderly, disabled and my own friends. They all do it because they get paid.

There are thousands of other things they would rather do for fun or to stay busy, not sit in traffic to drive strangers around.

I'm not sure how things work in America, but in the UK employment does not mean or require full time work or even fixed hours. We also have a lower status of "worker" which has fewer rights / fewer responsibilities.

Do they not require independent contractors to contribute premiums for that? That's how it works here in Canada (same for mandatory pensions/"social security").

If you're an independent contractor here you're expected to pay into the pools yourself, yes.

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