Uber and Lyft ordered by California judge to classify drivers as employees
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This is utter nonsense. Being a contractor means being self employed. You don't get paid leave or sick pay. It's a risk taking and doesn't make any sense in the gig economy where the wages are close to minimum rates.
If you are truly self employed then you have a skill which you can market, you can charge fees which allows one to put money aside for things like unpaid leave or sick days.
If you are truly self employed then part of your job is building customer relationship, building up recurring customers, increasing your business through marketing, word of mouth, etc.
You actually have to do entrepreneurial shit.
Uber drivers are NONE of this.
They clock into an app which belongs to someone else and they have no share in. They can't hand out business cards to customers or market their services on a board somewhere. They sit and wait until their master (Uber/Lyft) assigns a ride to them. Then they have merely the chance to accept/decline it. They can't even negotiate their own fees. That itself is fucked up. It's complete nonsense in extremely disingenuous by anyone here to suggest that an Uber driver is a self employed contractor and that this is good for them. They get paid shit and can't save up like a real self employed person, because they also have no say in the ride prices.
Fuck the gig economy. All gig workers are slaves and we should treat each other with more dignity and upgrade them to employees. It's our bloody duty as a decent human being.
It's called Karoshi.
No modern society should have such a common problem that you have to invent a specific word for it.
Japan should - and I realize that this won't make any difference - get with the times and start treating people like they are something else than lemons that need to be squeezed. It's a cultural problem.
No reason why they both can't be fixed. At least this judge got it right.
Lyft/Uber can upgrade them to employees but the arithmetic of bottom-up economics means Uber has to raise prices to cover full employment benefits. The raised fares conflict with what passengers are willing to pay. E.g. even though yellow medallion taxis often cost more than Uber (especially for suburb trips) -- those yellow cab drivers were not employees with benefits like unpaid leave and healthcare.
I believe what this really comes down to is that society is not willing to pay the higher prices for drivers to be treated as employees. Same situation as not willing to paying higher prices at hair salons so hair stylists are full employees (instead of being contractors) with healthcare. It does seem like constantly blaming Uber for mis-categorizing employees conveniently shifts the blame from the society/customers. The extra money to pay the drivers comes from the passengers.
Let's look at comparison cases: The city of Austin TX temporarily banned Uber from operating there. A non-profit rideshare (RideAustin[1]) was formed. Even though they don't have to implement the same business practices as Uber/Lyft, it's interesting that the RideAustin drivers are also independent contractors and not employees with full benefits. Also as far as I can tell, there is no worker co-op owned by the drivers anywhere in the world that treats members/drivers as employees with benefits. Why is that?
Serious question about the framing of ethics: if (some) drivers see an arbitrage opportunity because potential passengers think Uber-with-employee-drivers "charges too much" so drivers willingly choose a rideshare co-op that treat them as contractors to undercut Uber, are the co-op drivers being unethical towards the Uber-drivers-as-employees?
Yes, a judge can force Uber to convert everyone to employees but that same judge can't force potential customers to pay higher prices. The alternative entities of RideAustin and driver co-ops shows there's a limit to prices that ride shares can charge.
Then the business is not profitable enough to exist. Simple as that.
You can build a robust bus system, government run and not expected to make a profit, for example. You can have registered cabs. You can have rental bikes (bonus if they are electric assisted). If you can make sure scooters don't litter the walkways, that works as well. If you already have the infrastructure in place, perhaps trams or subways are a good thing.
We could expand busses to be able to travel from city to city. Same thing with trains: Make them run on time and expand. Busses, however, use the most extensive existing infrastructure and would likely be more cost-effective in most areas.
Not all "busses" need to be large, though. In some areas or at some times of day, a 15 passenger van might be enough. We could have bonus points if we changed school bus laws so that we don't have a duplicate bus system that leaves busses unused for much of the day.
In the US, one could take a sliver of the military budget (where there is plenty of waste) to pay for it.
Uber left Denmark after they decided that they have no interest in adhering to the relevant regulations. We still have trains, commuter trains, subways, busses, bikes, scooters, taxis and cars. People still can get to places and fairly conveniently.
Then you can start thinking about real solutions to urban transit that have existed for more than a century.
It's a different unrelated group claiming that it shouldn't exist if it doesn't provide the pay / benefits they think it should.
And there are plenty that argue that under capitalism one isn't fully free. There is always the threat of losing the roof over your head.
The way I see it, it's already proven that riders will accept paying X dollars and drivers will work for X dollars, minus Y% for Uber's cut. Uber's Y% is likely higher than it needs to be, but at the end of the day, it's a SaaS app. Even municipalities have set up local competitors / clones.
These companies are certainly pouring a ton of money into expanding into new geographic areas, other business models, and more. But as long as riders will pay an amount even a little higher than what drivers will accept, it can be profitable.
See heavy drugs, prostitution and violence market as some examples where two consenting adults is not enough to form a legitimate business.
True: it is not the case that we should fundamentally allow any association between two consenting adults. No, this does not justify preventing it in other cases.
Generally I'd argue that society/customers, and in particular employees/'contractors' don't have all that much leverage over big companies, especially ones that capture a market. That's why we have regulation.
Blaming the customers for not keeping track of everything and going for the cheapest option is like blaming climate change on the consumer. It's technically sort of true, but practically speaking it makes no sense.
Consumers will keep buying cigarettes, marketeers will keep marketing them via entertainment channels, and tobacco companies will keep rolling in the money and do everything they can to encourage all this. But taxes, anti-smoking campaigns and government-enforced restrictions on where you can smoke have made a /ton/ of difference over the years.
There seems to be a trend to have 'flex-workers' (contractors) where in practice they all quack like employee ducks, without many of the benefits and guarantees. It mostly feels like a loop-hole and /of course/ the average consumer will go for cheap and convenient when they can. doesn't mean it's a good thing for society (and in particular the workers).
It's part of the current US economical ideology where individual responsibility is taken as a mantra.
I completely agree with you, it's a good soundbite that any simple analysis and some thinking show how stupid it is.
Well, instead of abstract descriptions about trends of mis-classified flex-workers and abused loopholes such that nobody can argue about it... I was trying to steer the conversation towards concrete cause & effect.
Let's look at another worker-owned driver rideshare -- Local Driver Co-op: https://localdriver.co/
It costs members/drivers $100 to join. They are trying to undercut Uber and excerpt of verbiage from their webpage: "Riders save up to 20% versus competition -- Enjoy unbeatable rates, guaranteeing your money supports the drivers and their families."
Some questions of morals and decency:
- Should a judge (or new legislation) force LDC to treat drivers as employees with minimum hourly wage and unpaid time off? Since LDC contractors are trying to undercut Uber, a proposal to force LDC re-classification to "employees" would cause some drivers to protest this. So bottom line is... should drivers even be allowed to declare themselves as independent contractors and form a platform to chase after passengers?
- If LDC drivers don't get decent pay -- and we can predict they won't because history shows that taxi drivers and rideshare drivers in every country don't get enough dignified pay to put kids through college and save for retirement and cover the wear&tear on their car -- who is to blame for "abusing* them? LDC? (That would mean the drivers are abusing themselves.) Or the customers/passengers?
- Should LDC be completely shut down and that business "should not exist" (as some commenters put it) because it pays too poorly?
Let's talk in concrete terms of how "driver protection" laws would realistically affect outcomes. Let's talk about game theory of economics where customers may not willingly play along with the intentions of well-meaning laws and will just avoid paying higher prices. Some drivers themselves may not want to play along with "drivers must be employees with minimum wage". These are the aspects we don't discuss enough.
I don't think it would be much of a stretch to assume that in this situation you would have sleek, more expensive "luxury" services competing against more humble, but cheaper, community run services. Sounds like a much more equitable arrangement that provides greater choice for both riders and drivers.
But that's not quite it, I believe. The point isn't that customers choose the cheaper of two options, it's that non-users don't become users of a service until there's a super cheap option. Taxis/Yellow cabs were a thing before Uber, but they're more expensive than what lots of people were willing to pay.
It's not "do I want to buy X for $5 or $2?", it's "I won't buy X unless it's $2 max".
If you increase Uber's prices to those of Taxis, few people will use them. That's not necessarily a bad thing, but it's a thing.
This doesn't always result in an optimal outcome. Market power, externalities, information asymmetry, etc.
This is why we have regulations. Forcing the society and Uber to pay for drivers to be treated as employees seems like a very reasonable outcome. If they don't like it they can hire less drivers, but the ones that remain will at least have some minimum standard of living that developed countries pride themselves for.
tl;dr - "employees" enjoy a lot of benefits & protections, both legally required and provided by their employer, that non-employees (like contractors) simply don't have.
From what I understand, that would be unamerican.
Even before the gig economy became a big deal, businesses like yoga studios would attempt to classify their skilled teachers as independent contractors so they could pay them well below minimum wage, but take away their ability to teach at the location if they taught somewhere else as well. Hair salons and yoga studios sometimes go so far as to charge their independent contractors rent, which would make sense if these people were truly renting the space and could freely take their clients elsewhere, but these businesses also frequently limit the contractors' ability to collect personal contact information.
When I volunteered to help people with their taxes, a large number of Uber/Lyft/DoorDash/etc. drivers were surprised to learn that not only did they have to pay large amounts of income tax that would usually be automatically deducted from their pay check, but they also had to pay double the social security and medicare taxes because they had to pay the employer and the employee portions. Companies that classify their workers as independent contractors in this way are taking advantage of the fact it can take people up to a year to realize that taxes and car maintenance will take what little income they have made.
When I drove pizza delivery, I discovered car maintenance took what little income I made. I was a W2 employee, paid less than minimum wage, because I earned tips. Independent contractor status isn't the only method for surprising people.
I take issue with the paternalistic idea that an employee is more deserving than other types of people. The commenter above said, "This is why we have regulations." I interpreted that as beginning a discussion of what regulations we should have. If that was incorrect, I'm sorry for causing confusion. If that was the intent, then I'll reassert that focusing myopically on the distinction between an employee and a contractor is ignoring much better solutions.
If you hire a company to fix your car or build you a shack, they are not your employee, they are your contractor. You are not responsible for their healthcare or minimum wage or sick days. They are a business, they provide healthcare and all that stuff to their own employees who actually do the work. And this is perfectly fine, everyone ends up happy.
The problem is when individuals try to be a business, working as independent contractors. There is no "minimum profit" similar to "minimum wage", and you are essentially your own employer. Government can't force you to pay yourself minimum wage as a business owner because you'll be able to fudge it easily if you wanted to, being both the employer and employee.
What the government can do however is disallow corporations from hiring contractors for roles and in situations where in reality the contractors are businesses only on paper, where they actually are functionally just employees, like in Uber's case.
Would it be great if healthcare was paid by income taxes rather than employer? Yes, but since we don't have it yet, and since there are other issues differentiating employees from contractors / businesses, this seems like a decent approach.
I have trouble being upset that fewer people will want to afford higher Uber prices. People managed before Uber and it's mostly a luxury good anyway. To be honest, when Uber's management changed, the sensible thing--VC money notwithstanding--would have been to start pricing the service at what it cost.
What's the problem with that?
It is the duty of the strong to fight for better treatment of those who can't fight for themselves because they lack financial security or for other practical reasons. Law is exactly doing that.
Please don't paint my intention to describe the underlying economics for higher quality focused discussion as me being against humanity's improvement and you being the one with the moral high ground.
I was emphasizing that there's a dynamic interplay between what drivers (whether Uber or non-profit driver co-op) can charge and what customers will willingly pay. Your comment left the dynamics of out of it which can lead to a naive assumption of what law can realistically accomplish. Consider your next statement:
>It is the duty of the strong to fight for better treatment of those who can't fight for themselves because they lack financial security or for other practical reasons. Law is exactly doing that.
The law isn't just exactly that. A law that attempts to add economic advantage to one group will inevitably make another group worse. The other disadvantaged group often becomes the "unseen"[1] group. Instead of talking in feel-good sentiments that nobody can debate (e.g. "duty of strong to fight for the weak")... let's try to discuss via math/probabilities:
Uber has about ~150,000 drivers in California. A law that forces all drivers to become employees does not automatically mean 150000 get minimum hourly wage of $15 and 2 weeks of paid time off. No, what happens is that many (I'm guessing more than 50%) Uber drivers would be removed from the system to comply with the "drivers-must-be-employees" law. The drivers that remain in Uber would be the ones on profitable routes in more affluent regions of the cities than can pay higher prices. The unemployed drivers that lost income from Uber now become the "unseen". Do the unseen who get $0 because Uber can't afford them as employees get also get attention in our moral framework?
[1] Bastiat's essay on "that which is seen and unseen": https://en.wikisource.org/wiki/Essays_on_Political_Economy/T...
The question is how much would this be per ride(a few cents?) and do they really? Uber and Lyft are raking in cash.
* I am glad to be forced to pay more to have Uber/Lyft drivers treated well. I think we should have worker's right protections.
* I am unwilling to pay more myself as a one-off (e.g. through tipping). It's a Prisoner's Dilemma. That's what regulations are for.
If everyone were like me, we'd end up exactly where we are. Do I think everyone is exactly like me? No. But I think it's a similar model.
That said, the concept of treating gig workers as employees is dumb as rocks. It's reusing in 1920 mechanism to accomplish a 2020 goal. My goal is for gig workers to have health care, vacations, and so on, not that they be employees; they're not. The gig workers I know appreciate being able to jump from Uber to Instacart to other life constraints. A half-dozen 1/12th time jobs is just a bad system.
And the medallion cab system was far more abusive of drivers than Uber/Lyft ever was. The power there sits with the medallion investors. The drivers were getting shafted.
I don't see this argument made enough, especially on HN.
Between that and renting out a room on airbnb, It kept us from going homeless while I recovered enough to work again.
Turns out Disability insurance is nearly worthless for any complicated injuries.
If I am doing 8 hours Instacart, 8 hours Uber, 16 hours part-time work, and 16 hours part-time study towards my BS, doing a bit of Amazon Turk while waiting for gigs, who pays for my health insurance? And if I'm injured on the job, while having three ride sharing apps and one delivery app open, what happens to my worker's comp?
Once you dive into detail, employment law just doesn't work here. It's not a question of more right or less rights (I'm all for worker protections). It's a question of how we get there.
The world is a big place. I'm sure there are others.
Are you responding to the actual constraints in this discussion of _employees_ with _benefits_?
As far as I can tell, Union Cab PDX does not provide employee benefits such as:
- minimum hourly wage
- paid time off (e.g. funding 2 weeks vacation)
- unemployment payments if laid off
I don't know if it's related but Unioncabpdx recently left the CWA Local 7901 union as they weren't paying membership dues: https://nwlaborpress.org/2018/12/union-cab-quietly-goes-non-...
I don't know anything about them pulling out of the CWA local.
But Union Cab Portland does not provide a guaranteed minimum hourly wage (a benefit that real employees are entitled to) and they are exempt like every other taxi company in Portland from the minimum wage law because taxi drivers are treated as contractors.
> RideAustin is a community driven nonprofit ridesharing company founded by local entrepreneurs. The RideAustin launch team is led by Joe Liemandt, a longtime Austin tech entrepreneur, and Andy Tryba, CEO of Crossover. It is powered by donations, with paid and volunteer hours from both the Austin tech community and the broader Austin community working together.
So it's a non-profit, with volunteers ("volunteers"), who can get a stipend.
Sounds like a legal fiction, but I'd need to know more about how much they pay, how much money the founders make, etc. The cynic in me says it's the same shit but marketed better and not publicly traded, but there may be some genuine benefits.
To think that if only the Confederate states would have made that iron-clad argument back then, the civil war would have been avoided. Imagine how low the prices could be if we still had slaves.
If your business is unsustainable without taking advantage of the workers then it ought not to exist.
Don't be so shallow minded...
Debt slavery for example, relies on debts being permanent and the state jailing people who do not pay.
If a debt can be discharged in an easy bankruptcy, you can simply do that instead of becoming a slave to someone.
from dictionary:
slavery - the state of being a slave.
slave - a person who is _the legal property of another_ and is forced to obey them.
The fact that you use "slavery" as a synonim to hard work and/or high dependance, doesn't make "doesn't come only through the form of physical subjugation" true.
slavery, n. (ˈsleɪvərɪ)Forms: 6-7 slauerie, 6-8 slaverie, 7 slauery, 7- slavery.[f. slave n. 1 + -ery. Cf. MDu. slaverie (Du. slavernij), LG. slaverei (Da. slaveri, Sw. slafveri), G. scl-, sklaverei (skl-, schlaverey).]
slavery, n.
1. Severe toil like that of a slave; heavy labour, hard work, drudgery.
1551: Robinson More's Utopia ii. v. (1895) 161 “In this hal, all vyle seruice, all slauerie,..is done by bondemen.”
1603: Owen Pembrokeshire (1891) 43 “Digginge of Coles, and other slaueryes and extreame toyles.”
1698: Fryer Acc. E. India & P. 34 “Asses which they use..to carry Packs,..and any other Slavery.”
1712: J. James tr. Le Blond's Gardening 65 “To give them continual Waterings..is a very great Slavery and Expence.”
1897: Daily News 13 Sept. 6/7 “Such people..ought never to keep servants, but do their own slavery.”
slavery noun
slav· ery | \ ˈslā-v(ə-)rē \
Definition of slavery
1a: the practice of slaveholding
b: the state of a person who is a chattel of another
2: submission to a dominating influence
3: drudgery, toil
slavery
in British English
(ˈsleɪvərɪ )
NOUN
1. the state or condition of being a slave; a civil relationship whereby one person has absolute power over another and controls his or her life, liberty, and fortune
2. the subjection of a person to another person, esp in being forced into work
3. the condition of being subject to some influence or habit
4. work done in harsh conditions for low pay
slavery
Pronunciation /ˈslāv(ə)rē/ /ˈsleɪv(ə)ri/
NOUN
1. The state of being a slave.
1.1 The practice or system of owning slaves.
1.2 A condition compared to that of a slave in respect of exhausting labor or restricted freedom.
1.3 Excessive dependence on or devotion to something.
[0] https://www.merriam-webster.com/dictionary/slavery (Merriam-Webster)
[1] https://www.collinsdictionary.com/dictionary/english/slavery (Collins)
[2] https://www.lexico.com/en/definition/slavery (Oxford)
Sorry about the downvotes you received. I’ve been on HN a long time. It is sad to see the great decline of HN. Check out reddit.com/r/TheMotte if you want something a bit more representative and more similar to the HN of old, with its attendant high level of discourse as opposed to the shit-flinging and downvote brigading you see on HN today.
I mean, they (unqualified workers) can always go to work to MacDonalds or something like that but they stick with Uber.
But for the vast majority of Uber's drivers, I think you're correct.
You mean like respecting their decision to engage in gig work despite every other available option? That kind of dignity?
The whole issue is pretty rich coming from California. If people are struggling the answer is never that the cost of living is too high due to rediculous zoning and environmental regulations, clearly it's the greedy companies that are the problem. The whole living wage issue in California reeks of doing every gymnastic available to avoid political introspection that might lead to admitting a lot of well intentioned things aren't working.
Never mind that the state suddenly becomes mute about living wages when discussing its many illegal immigrants who work for /below/ the minimum wage. We apparently don't talk about that because leeching off desperate individuals "is complicated" and something that only companies do. If a large number of workers prefer gig work the problem isn't that they aren't making enough money the problem is that catering to them would undermine all of the previous "benefits" that they obviously don't view as a priority in their current situation. Heaven forbid that we let the actual workers decide how they want to associate.
Just because people choose or are forced to do a job doesn’t mean they do not deserve respect
https://www.teepublic.com/onesie/328209-what-do-you-want-to-...
I tend to think a work-as-you-want service like Uber or Lyft that pay above minimum wage couldn’t be more fitting to a self-employed / contractor description.
Removing labor options by force weakens the position of low skill workers because it limits how many interests are competing for their attention (labor demand). There is nothing inherently disrespectful about independent contractor work, it's simply another option in a wider pool of choices. What is disrespectful is suggesting that these people are just to dim to see that they're being exploited rather than acknowledging that perhaps the reason they don't care about the benefits of regular work is because a job that fits into their current life situation is more valuable than the other options they looked at.
This is why so many scientists work for peanuts. This is why most game developers work 60-80 hour weeks for a salary 30+% lower than what they'd make working that boring Java job at corporation X.
Should we also respect and have no guardrails for people who destroy their lives via cults, MLMs, scam artists, addiction, etc?
Are people engaging in gig work because it has several advantages over "every other available option"? What other options do people who drive for Lyft/Uber as a day job have? And what are the advantages Uber/Lyft & working as a contractor offer?
Maybe zoning effects should be part of a discussion on the cost of living in California, exploitation of immigrants is deplorable and awareness should be raised and actions taken, but does that make Uber/Lyft exploiting workers a non-issue?
I'm not from the US and am not aware of the specifics in California, but being from a country which has faced severe economic crises I've seen people "choosing" a shitty option despite every other shitty option.
I can't say I understand where you're going with most of what you're saying, or how informed you are of gig workers situation.
I saw a pretty good movie by Ken Loach: _Sorry We Missed You_, that thought was really spot on on the issues of gig work:
It makes sense if it’s better than your next best option.
If the value you are able to bring to an employer is under what minimum wage requires, an employer faces the decision to employ you at a loss to them or to not employ you. Many choose the latter.
It's a willful misrepresentation to characterize these merely as anecdotes. Polls/surveys show that drivers overwhelmingly share this sentiment[1].
> This is utter nonsense. Being a contractor means being self employed. You don't get paid leave or sick pay. It's a risk taking and doesn't make any sense in the gig economy where the wages are close to minimum rates.
This is not a prerequisite for being a "contractor". That the rates are "close to minimum rates" is a reflection of the market demand for the labor.
> If you are truly self employed then you have a skill which you can market, you can charge fees which allows one to put money aside for things like unpaid leave or sick days.
Again, this is nice in theory, but not necessarily true for all self employed contractors.
> If you are truly self employed then part of your job is building customer relationship, building up recurring customers, increasing your business through marketing, word of mouth, etc.
Again, this is nice in theory, but not necessarily true for all self employed contractors.
> Uber drivers are NONE of this.
Correct, but that doesn't change the fact that they are not employees.
> They clock into an app which belongs to someone else and they have no share in.
This was true before Uber/Lyft, where taxi drivers had to pay for the privilege of driving a car with a medallion that belonged to someone else. They were independent contractors under that arrangement.
Today, Uber/Lyft drivers report to no boss and can decide to drive whenever they want on a whim. They can drive 20 hours one week, 2 hours the next, and then take a vacation indefinitely with no repercussions. When Uber/Lyft announce layoffs for cost cutting, drivers are notably not affected. Insofar as drivers have experienced less work during COVID, it’s because there are fewer riders requesting rides, which suggests a rather direct rider-to-driver relationship.
> They can't even negotiate their own fees. That itself is fucked up.
Yes, Uber drivers can’t really set their own rates (this is changing soon), but that’s also not really a prerequisite for independence. There are loads of platforms where the intermediary only buys services by providers at set rates and sells them to a buyer, where the providers are not literally employees of the platform provider, eg: health insurance. This was also true of taxi drivers before Uber/Lyft came around.
> It's complete nonsense in extremely disingenuous by anyone here to suggest that an Uber driver is a self employed contractor and that this is good for them.
This is a borderline rule breaking content on its face, but just to engage with it, how do you know what's good for them? Maybe get off your high horse and speak for yourself.
Jason Snell, a long time editor of Macworld, was let go years ago and decided to do podcasting and blogging full time, but he still wanted to do freelance writing. The new laws passed in California made it more difficult.
The only reason the gig economy is bad is because we have an ass backwards system where your health insurance, unemployment insurance, etc is tied to your employer.
I used to tutor for Chegg tutors on the side--outside my main job. They paid ~$20/hr and for 5-10 hours I week I could bring in some extra money for food and rent.
They shut it down in my state because they reclassified them as employees, and Chegg was not going to do all that leg work to bring people on as part-time employees.
I didn't need benefits like sick days or unpaid leave since it was just a gig I did online for extra money. I didn't need health insurance, since my main job provided that. I didn't need job security that was provided by the inability to fire people.
I was just trying to make some extra money online.
And now I can't because Big Government decided I can't.
You know who it really hurts? The kids I was tutoring. Now there is a huge tutor shortage and kids that need help aren't getting it. There was ALREADY a tutor shortage before they cut off several states from being tutors.
If it's the law, then it's a stupid law and needs to be changed.
It's telling that Uber/Lyft drivers weren't the ones asking for this. They were fine the way they are. No Uber/Lyft driver was saying "Wouldn't it be nice if we were REAL employees??".
It's the bloody taxi companies trying to get back at Uber because taxi drivers ARE real jobs that require real benefits, and they can't compete with a better business model.
Fuck California.
What am I supposed to do? start cold calling college students asking if they need help? lol
Yeah, I could start my own tutoring business, but imagine the costs: I'd have to start a website, take payments, advertise, advertise, advertise.
It'd be great if someone did all that for me and I just could log in to tutor when I wanted.
Ah, yes, Big Taxi conspiracy.
I can't imagine thinking a company losing billions while subsidizing chauffeurs for rich people while skirting laws is a "better business model".
>Fuck California.
Have you considered living in a place that doesn't require you to do "gig work" on top of your regular job in order eat? Isn't that the world we want?
I have plenty of money because I don't live if a shitty place like California.
I love this line because raising uber prices to meet the demands of Big Government will be cost prohibitive for most people. That means, a) uber drives get less than before, and b) fewer people will take uber, and c) the people that do will have to pay more for it.
So... you've just increased the cost of living for everyone, making it harder to live on a regular job.
If gig workers are slaves, then we must conclude that slavery isn't that bad. Nobody is forcing people to sign up to drive for these companies, and if they don't like it, then they can choose to drop out by tapping on their screen to indicate that they're out of service.
No single person, sure. But the inceasing lack of secure, reliable income sources remove most other choices.
"gig" work should not be the norm. It should (and always used to) be the job that the teenager does (delivering newspapers, etc) or someone does for a bit of extra cash.
But they're becoming pervasive, normalized and this should be rejected.
But isn't the definition of contractor vs employee.
Can they still reject if they are converted to an employee, because then it would be weird.
For example, “Accept wage X as an employee, work these set hours, and you have to bring in some multiple of X to justify your employment. Or stay a contractor, work when you want, get the benefit of surge pricing and keep a fixed % of your revenue”
As a consumer of Uber and Lyft, what differentiates them from Taxis is the ability for them to react to changes in demand. (Try finding a taxi in the rain) I can’t see them pulling this off without some portion of the workforce being contingent.
This is repulsive. You denigrate all people who have suffered in actual slavery. Follow your "bloody duty as a decent human being" and learn what slavery is actually like.
Most Uber/Lyft drivers say they don't want to be considered employees because, for most of them, this isn't actually their job. It's just a side gig. I can't really speak to larger urban areas because I tend to prefer public transit when it's a viable option, but, in the smaller cities where I take most my rideshare rides, a pretty large percentage of the drivers I chat with end up mentioning their day job somewhere in the course of the conversation. I agree that these folks, by virtue of lacking any viable way to independently contract work, cannot reasonably be described as independent contractors. But they don't quite fit the mold of "employee", either.
Then there is another portion of drivers who really are doing this full time. I am guessing that they are a small minority of individual drivers, but that, in larger cities, they may account for a majority of rideshare capacity.
Anyway, if this is how it shakes out, then, regardless of the ratios, it doesn't really make sense to speak about "ridehsare drivers" as if they're a homogeneous unit whose needs can reasonably be met with a one-size-fits-all classification. Perhaps there needs to be a tiered designation, comparable to the various employee sub-designations such as "full time", "part time", "exempt", "non-exempt", etc., that states codify.
For some, sure. Most of my rides have been with Indian/African/East European drivers who do it basically full time. Easily 90% or more.
A small number have been part-timers, mostly stay-at-home moms and retired people. One was a retired bartender and he did Uber mostly because his joints gave out which made standing hard, and Uber allowed him to make some petty cash while talking to people. But hands-down, these were the exceptions, not the rule.
1. They tend to be from less-online demographics
2. If 90% of rides come from drivers working 50 hours a week, and 10% come from drivers working 5 hours a week, then more than half of the drivers work 5 hours a week. Those 5-hour drivers also probably have a lot more time and energy to discuss things on the internet.
Long story short, I'm inclined to say that any source of opinion that isn't breaking drivers' views down by quartiles, is a highly selective version of the story.
What Uber and Lyft have essentially done here is to make their employees pay a substantial portion of what would otherwise be corporate taxes, and pocket that difference as profits while their drivers actually meet the legal criteria to require classification as employees. They shouldn't just be getting ordered to begin complying with the law, this should have resulted in a class action law suite for damages and a felony tax evasion case brought against them.
Sure - some (non-insignificant) portion of Uber and Lyft drivers would like to be employees. But surely some (also non-insignificant) portion would prefer to be contractors for Uber and Lyft and keep the legal protections that come with that.
These articles always make it seem like it's a no-brainer win for all drivers no matter what, but it's never seemed so clear cut to me.
The most marginalized and desperate gain more from employment structure.
I'd love to see the US government actually step up to the healthcare plate though - especially after so many years of terrible FDA & Dept. of Edu. policies have led to widespread obesity. Personal responsibility doesn't really work as an excuse when your entire country is an outrageous outlier compared to the rest of the world - that seems more systemic.
[1] https://www.smh.com.au/national/australians-are-fat-and-gett...
This is simply closing a loophole gig platforms were built on (misclassifying workers in violation of labor law).
Pretty sure drivers have to "accept" a ride, isn't that agreeing to a rate?
I think the real issue here can't be resolved by an examination of terms - it involves a power dynamic where Uber contractors are extremely at disadvantage when it comes to being able to set your own rates. I don't know if Uber even has someone on staff that's qualified or expected to negotiate with independent drives that are interested - they have a posted rate that you either accept or they walk away. And, the worst part, they change that posted rate for BS reasons constantly in a way that people can't predict, it makes for an unreliable and misleading income.
They don't just let you go in demanding whatever you want. There's a limit to what they want to pay. Just like Uber.
You can absolutely go in and demand whatever you want. If you ask for 3x, you probably won't get the job. But 5% or 10% over x? It's possible. I don't see how contracting is 'locked in'. You are certainly free to negotiate, unlike on Uber or Lyft's platform.
I think it's reasonable to argue that because the contractor had no input into the rate, and if they decline too many rides they might be removed from the service, that they do not have the power to set rates.
What would make this a lot easier is if the apps would just allow you to set a rate below which you're not willing to accept work. The reason they punish you for declining too often is that they don't want the rider to have to wait for multiple drivers who regularly decline all offers before finding one willing to accept it, so that would solve that because you wouldn't even get the offer.
I'm curious to see how this shakes out in the end, because we keep getting these decisions where they say they're employees because X, but then won't they just change X to make them contractors again?
Are drivers removed from the platform if they refuse too many rides?
It seems like the drivers actually have very little power to enact any effective bargaining over rates in practice.
It is clearly not equivalent since uber literally determines the rate. Yes, they can refuse to work below a certain threshold but they aren't in-fact "setting the rate".
Not true. Uber's algorithm sets the rate within certain profitability margins which are determined by uber, "the market" is very artificial since customers only ever see the rates that uber decides they should see rather than what some drivers would actually offer.
> Uber won't find drivers if the rate is too low, for example because it's lower than the costs, lower than the risk, or lower that the competition. Uber (and the driver too) won't find customers if the rate is too high.
Right... uber deliberately structures the market through their explicit control of the price. The price is only "too low" or "too high" with respect to uber's business goals not with respect to what the actual market would do.
True, but not relevant to my point which is that uber explicitly sets the rates, not drivers, and not the market. I understand why they do this, but it's simply false to say that drivers having the option to sometimes pass up on rides is the equivalent of setting their own rate.
A software contract offers $50 an hour. I can either take it or leave it.
Uber offers $x an hour (or mile, or however it works.) Drivers can either take it or leave it.
What do you think is the essential difference here?
Do you think software contractors can somehow force clients to accept any rate they want? No. If they client doesn't want to pay above $x then there's nothing you can do but decline the job. Just like Uber driver can do nothing but decline the job, surely?
The essential difference is that the role of uber is absent from your analogy.
> Do you think software contractors can somehow force clients to accept any rate they want
I'll just assume that's a sarcastic quip in rhetorical question form rather than what you actually think I believe. Obviously, a software contract is negotiated between two parties, unlike in the case of Uber where all possibility of negotiation is eschewed for a price explicitly set by uber. If a driver wants to offer their services for more or less than uber decides, they cannot, and are forced to lower or raise their price in order to gain access to the market.
The drivers can ask for any price they want from Uber. Uber can either accept it or not. That’s a negotiation. What more do you think it needs to be a negotiation? That’s just like a normal contract. I may want my fence painted but I’m not paying over £500. If I won’t go below that is it no longer contracting?
Like any contractor!
If I offer to pay $500 for get my fence painted, a contractor can either accept that or not.
If you want to hire a web developer for $500 a day, a contractor can either accept that or not.
The fence painter, the web developer and the Uber driver, can all set their own rates by either accepting the job or not, can't they? I don't understand what you think is the difference between the first two and the last one?
Second, Uber is running the supply/demand auction system behind the scenes already. Prices are not fixed but dynamic and change in real-time based directly on supply and demand.
I’ve often brought up the app to check prices and decided not to ride for a while. Drivers do something similar.
> thus "the market rate" cannot escape a threshold that is contrary to uber's business prerogatives.
I’m not sure what this means. I’m sure Uber sets some reasonable floor on the price, but it’s more in the driver’s interest than their own. There are absolutely drivers who would drive for below operating cost of the vehicle because either they aren’t bothering to calculate it or they aren’t the ones actually paying for it (e.g. a car that is late on payments and soon to be repo’d).
https://help.doordash.com/dashers/s/article/Dasher-Ratings-E...
https://driver-support.grubhub.com/hc/en-us/articles/3600298...
https://taskers.taskrabbit.com/2018/06/01/acceptance-rate-wh...
"Rating" is generally accepted as the "star rating" or some other statistics that users will see. Yes your "acceptance rate" will be affected, but this is a vanity metric that is secret to the driver => It is irrelevant.
There is no mention of deplatforming in any of these articles.
The equivalent here would be something like, "Okay candidate, I offer you a job as a contractor and the contract says you get paid based off of this algorithm. Accept or decline?"
Even when I was starting out, years ago, the palette of contract work offered was vast. I was never obliged to follow a cab-rank rule.
If you were to set up an agreement with the software company yourself, then it'd be conventional contracting.
https://farm8.staticflickr.com/7512/15985103560_ed7985fc2a_o...
I suppose the great-grandparent is more an 'appeal to emotion' fallacy rather than ad hominem.
Edit - Or allow customers to set the rate, and again take a cut of whatever that was.
It just feels like forcing everyone to be an employee will box out a large number of happy part-time drivers who weren't too concerned with setting their own rates.
We, the readers of Hacker News, are going to fix the gig economy! Everyone, download a copy of your local laws and send a pull request to your country's highest Court.
But seriously, I think having a discussion, working out a perfect system where we'll all be better off is more than a bit hopeful.
So who's the resistant party? Right -- Uber. Why? Because they can't make their unit economics work either way.
"But if the drivers want this intermediate arrangement, and Uber wants it, why should Calif stand in the way?" States make a lot of contracts, especially labor contracts, illegal because they go against public policy (including externalizing too many costs on state & local govts themselves). Still, Uber would be welcome to restrict its activities to states and countries that have labor laws more to its liking. Chemical & manufacturing & agricultural firms have been doing this for years. But Uber can't turn a profit without being in dense cities in liberal states (where labor laws are usually stronger)
One more argument is often advanced, which is "there is no scenario under which Uber could use contractors." This is also untrue. For instance, instead of working directly with individual drivers, Uber could pursue a franchise-style model, where it might, say, solicit bids among companies representing groups of drivers to handle all the rides in a certain zip code. Variations of this model are already used in a lot of industries, of course. But Uber's margins are already too thin, and it would have to give up too much control. Uber prefers the current model precisely because the balance of negotiating power is permanently asymmetric.
If you accept, you just set your own rate.
Obviously you may stop working with a person if their prices are too high or because quality of their work is shit.
However if you use this as a pretence for firing contractors, but the real reason you are firing them is because of their sex / gender / race - that would be illegal.
In the same vein, if you fire contractors for doing things that are none of your business, and it is common knowledge that you do that and exercise control you should not have over them, then a court may decide that in fact the relationship is not that of a contractor. That in fact this is nothing more than a legal fiction created for the purpose of tax avoidance or similar.
Like what?
I'm pretty sure you can put all the terms you want in a contractual relationship. Even things that are none of your business (as long as not protected class).
An employee is just a contractor with additional rules.
(While dropping drivers from the platform if they refuse too many rides doesn't make such collusion impossible in theory, it introduces enough individual risk to make such coordination unlikely in practice.)
> Drivers then could, over their local "$city Uber drivers" FB/WhatsApp group, agree to not take any ride below $X,
This is, of course, illegal.
>This is, of course, illegal.
What law does this break?
In general, price fixing of the cost of labour is only found to be illegal price fixing when the people fixing the price are not (or not only) employees/workers. Which isn't the case here.
Firstly, if you consider that Uber is only an intermediary and nothing else, then the consumer is the employer. Making this collective bargaining, Employers are consumers in the labour market. Price fixing is always against the interests of a pure consumer, including collective bargaining. Unions are beneficial because (and only if) the vast majority are workers much moreso than consumers.
Secondly, as we have seen, since the money is paid to Uber, and Uber decides how much the rides cost and to who they are assigned when, as well as the fact as Uber pays drivers, and in combination with the fact that drivers are the core business of Uber, they are indeed employees, and this is collective bargaining.
In both cases, it is collective bargaining. If the consumer is the rider, and they directly pay with a cut to Uber the fare, as well as decide the price they are offering and control how the ride goes, then the driver is the employee. In the real world and according to California statute, the driver is the employee (of Uber).
Therefore, it is collective bargaining.
The price of rides is determined by the market. Uber arguably has the least say of the three stakeholders – their goal is to merely "make the market". Riders demand low-prices, drivers demand high ones. Uber doesn't really "choose" a price, they just find the happy medium that the market demands.
Uber pays drivers in the same way that Stripe "pays" me when I make a sale of my app – that is to say, not at all. Stripe pays me, but they are clearly not my employer. Uber is collecting payments and then disbursing them, as literally any marketplace does. Does Steam "employ" all the game developers that sell on their platform? Does Etsy employ all the independent makers? Apple's App Store? Twitch? Amazon? Patreon?
The core business of Uber is an app/marketplace for transport, not drivers. This is obvious when you consider the fact that Uber also provides things like scooters and e-bikes through their app (and in London, now boat services!), which obviously don't involve mostly independent driver-contractors.
To compare this to Steam again – the core business of Steam is not "game developers", even though their core business would not exist without game developers. Their business is a marketplace. I actually really like the Steam comparison because it literally ticks all the same boxes you are ticking for Uber: they set prices, accept/disburse payments, and wouldn't exist without 3rd parties and their labor. But nobody is claiming that Steam should start paying health/holidy/etc benefits for all the indie game developers that sell games on their platform.
There is a huge difference between this and an Uber driver. All Uber drivers are commodified, there is no distinction between them outside what Uber itself does. Uber's drivers have no control over how they do their job. Uber's drivers have no control over the fares they charge outside accept/refuse. If the three welders were indistinguishable from each other, and all had the same entity decide vast amounts of how they do their job and for how much, then yes, it would be simply collective bargaining.
Once again, there is massive strawman going on here that you are perpetuating. I'm not saying that it isn't price-fixing. All collective bargaining is price fixing. All of it, without exception. As a society, we allow workers to engage in price fixing because workers have very low individual power and it is in our collective interest for workers to negotiate together. That is the point I'm trying to get across. All square are rectangles, not all rectangles are squares. All collective bargaining is price-fixing, not all price-fixing is collective bargaining.
>The price of rides is determined by the market. Uber arguably has the least say of the three stakeholders – their goal is to merely "make the market". Riders demand low-prices, drivers demand high ones. Uber doesn't really "choose" a price, they just find the happy medium that the market demands.
This is ridiculous on its face. Unless there is a mechanism on Uber for drivers to bid on rides, then fare prices are not fair market prices negotiated between drivers and riders, but instead prices decided between Uber and riders. Uber very certainly chooses a price, and the riders don't. They do not participate in market pricing any more than a factory worker threatening to quit their job contributes to increasing the price of a widget. Most importantly, Uber does not allow the drivers to even know the actual price the riders pay, so this is just ridiculous.
>Uber pays drivers in the same way that Stripe "pays" me when I make a sale of my app – that is to say, not at all. Stripe pays me, but they are clearly not my employer. Uber is collecting payments and then disbursing them, as literally any marketplace does. Does Steam "employ" all the game developers that sell on their platform? Does Etsy employ all the independent makers? Apple's App Store? Twitch? Amazon? Patreon?
If Stripe told you exactly which app to make and how, and did not let you explicitly state which price you would sell the app for, and did not even let you know which price consumers were paying, had a variable cut that is obscure to you, did not let you market your apps individually, and only gave you the option to either make the app or not, then you would be an employee of Stripe, yes. If Steam told you which app to make and how, which price it would give you, didn't tell you how much they would charge customers, and didn't differentiate you from other gamedevs then yes, you would be an employee of Steam. Rinse and repeat.
The core business of Uber, in revenue and valuation, is 100% to provide rides for people. Scooters and bikes are a drop in the bucket, and technically come from an acquisition and thus are not a core business. This is like saying that the core business of Apple isn't to make iPhones, it's connect consumers with engineers and factory workers that make phones. Except the consumers don't choose which engineers make them, how much they are paid, or even really differentiate them before paying at all.
>To compare this to Steam again – the core business of Steam is not "game developers", even though their core business would not exist without game developers. Their business is a marketplace. I actually really like the Steam comparison because it literally ticks all the same boxes you are ticking for Uber: they set prices, accept/disburse payments, and wouldn't exist without 3rd parties and their labor. But nobody is claiming that Steam should start paying health/holidy/etc benefits for all the indie game developers that sell games on their platform.
Steam does not set prices. Steam lets the gamedevs/publishers decide of they price they want. Steam lets you market yourself. Steam does not tell you what game you should make (what route you should take), they do not tell you which programming languages you can use (which cars you can use), and does not rely on contractors for its core business (Steam does not rely on one-person indie game developers for their core business). Steam is incomparable to Uber. The idea of why Uber doesn't let you use any car, by the way, is in order not to damage their brand. Because you, as a driver, represent Uber, and they know it. In a way, your most important asset, Uber's brand, is not owned by you but by Uber - you then generate profit from someone else's capital for a wage - an employee.
2. I am not perpetuating a straw man that "all collective bargaining is price-fixing". I am arguing that in this particular case, this is the bad one (price fixing), not the good one (collective bargaining). This is because the drivers (not Uber) have monopoly power in the market. The disagreement is stemming from the fact that you believe that any action taken by "labor" cannot be price-fixing, which I disagree with.
3. "This is ridiculous on its face." It is not ridiculous. This is called supply-and-demand and it actually works quite well for pricing things. If Uber "sets" the price too high, riders will not use the service. If they "set" the price too low, drivers will not want to participate and then you don't have a market. Again, the price is "set" at whatever value riders are willing to pay and drivers are willing to accept. Anything else and the system fundamentally doesn't work.
4. At least in California:
a. you choose which rides you want. you are not forced to take certain rides ("make a certain app").
b. drivers can set prices
c. the Uber cut is not obscure (pretty sure it's always been 30%). The time this doesn't apply is when Uber gives both counterparties a great deal by paying the driver more and charging the rider less and using VC money to split the difference.
d. you can ride for Lyft as well, or be a private car for hire without a ride-sharing app ("market yourself")
e. my option with Stripe is "sell my app using them or not", ditto for Steam. Can I sell it without them? Sure. Just like a driver can sell private car-for-hire services without Uber.
5. You might want to break it to a number of companies that some of their core businesses don't actually exist because they came out of acquisitions. Regardless, that wasn't my point. Investors invested in a ride-sharing app. Uber makes money because they have an app. Without the app (but 1000s of drivers) they would not have a business. They would literally be a cab company. But actually they wouldn't be because they don't have any medallions, which you need if you're not connecting riders directly to drivers with... your app. The core business is definitely the app. That's how Lyft can also exist in the same space with the same drivers. Because their business is in making an app that enables a marketplace for ride-sharing, just like Uber. But it's a different app. But the same drivers. Given your assertions, I guess they're pretty lucky to exist in an industry where you could have 100 competing ride-sharing apps, but because "the drivers are their core business", they will all do just fine because they all have drivers!
6. Most of this is addressed in 4. For the rest of it, you're just tacking on more and more made-up criteria that obviously don't apply. If I hire a guy to mow my lawn, I can stipulate that he uses an electric mower. Maybe this is because I care about the environment, don't like gas fumes, or want to look fancy in front of my neighbors. My reasons are my own and he is still an independent contractor. Likewise, Apple forces you to develop in a certain way for the App Store – still a marketplace. They require you to adhere to certain standards of app design/development – ya know, so you don't hurt their brand. Steam could (does?) do that too, and it wouldn't make them not a marketplace. I also notice you ignored Etsy/Twitch, which most certainly do rely on one-person delivery for their core business.
This rating is given by Uber only. It is a single number, with nothing else. This is literal commodification, the exact same way that housing or vegetables are com modified following a grade or a rating. When drivers will be able to market themselves and make a case for themselves it will be something else. A synthetic, numerical rating is literally a hallmark of commodification.
>2. I am not perpetuating a straw man that "all collective bargaining is price-fixing". I am arguing that in this particular case, this is the bad one (price fixing), not the good one (collective bargaining). This is because the drivers (not Uber) have monopoly power in the market. The disagreement is stemming from the fact that you believe that any action taken by "labor" cannot be price-fixing, which I disagree with.
I've written about a dozen times. All collective bargaining is price fixing. Your argument that I am saying that it's not or that I am applying an inconsistent standard is literally a strawman.
>3. "This is ridiculous on its face." It is not ridiculous. This is called supply-and-demand and it actually works quite well for pricing things. If Uber "sets" the price too high, riders will not use the service. If they "set" the price too low, drivers will not want to participate and then you don't have a market. Again, the price is "set" at whatever value riders are willing to pay and drivers are willing to accept. Anything else and the system fundamentally doesn't work.
It is indeed ridiculous. It isn't the drivers negotiating with the riders, it is Uber negotiating with the riders. This is absolutely crucial. The driver has only the option to refuse work. This is, quite literally, how being an employee works. You have no input over the price of the good, you can only refuse or accept the job at the price and in a perfect frictionless vacuum your refusal or acceptance is perfectly mirrored in the end price. Which it isn't in practice for endless reasons, and certainly not in Uber where the margin Uber takes is a secret that no one knows and that varies instantly.
>a. you choose which rides you want. you are not forced to take certain rides ("make a certain app").
If you are an employee, you also aren't forced to make a certain app. You can refuse and either be assigned something else (that you didn't decide), or be fired. If you were a developer on Steam for example, you would be able to make any software, in any way you like, and charge exactly how much you like. All things you can't do on Uber. The right of refusal is also key to being an employee. Contractors, in general, have more than the right of refusal - they decide how the job is done.
>drivers can set prices
Only in California, in a transparent attempt to skirt the letter of the law, and only very, very indirectly through a multiplier.
>the Uber cut is not obscure (pretty sure it's always been 30%). The time this doesn't apply is when Uber gives both counterparties a great deal by paying the driver more and charging the rider less and using VC money to split the difference.
Not always! Uber claims that their cut is around 25-30%. You have to trust them, and independent analysis shows that the cut can exceed 50% in some cases : https://arstechnica.com/tech-policy/2019/08/uber-and-lyfts-c.... In any case, the algorithm used to calculate the fare charged to the rider and credited to the driver is different, so there can never be a fixed cut. It is obscure, and you can never know.
>my option with Stripe is "sell my app using them or not", ditto for Steam. Can I sell it without them? Sure. Just like a driver can sell private car-for-hire services without Uber.
On Stripe, you can sell almost anything. On Steam, you can sell any software at all. On Uber, you can only do the specific trip that Uber wants you to do at the price that Uber decided to offer you, and only in the specific route that is calculated, only in the specific allowed vehicles.
>You might want to break it to a number of companies that some of their core businesses don't actually exist because they came out of acquisitions. Regardless, that wasn't my point. Investors invested in a ride-sharing app. Uber makes money because they have an app. Without the app (but 1000s of drivers) they would not have a business. They would literally be a cab company. But actually they wouldn't be because they don't have any medallions, which you need if you're not connecting riders directly to drivers with... your app. The core business is definitely the app. That's how Lyft can also exist in the same space with the same drivers. Because their business is in making an app that enables a marketplace for ride-sharing, just like Uber. But it's a different app. But the same drivers. Given your assertions, I guess they're pretty lucky to exist in an industry where you could have 100 competing ride-sharing apps, but because "the drivers are their core business", they will all do just fine because they all have drivers!
Does Uber not have a contractual relationship with Uber drivers in which they must complete a ride? Does Uber not spend the vast majority of their revenue in this contractual relationship? Then it is core to their business. If Uber's job was only to connect riders to drivers, then the contractual obligation would be between drivers and riders, and not between drivers and Uber. This is as absurd as claiming that the core business of Microsoft is to connect users of operating systems with programmers. It isn't, it's to sell software, because the engineers have an obligation towards Microsoft.
>If I hire a guy to mow my lawn, I can stipulate that he uses an electric mower. Maybe this is because I care about the environment, don't like gas fumes, or want to look fancy in front of my neighbors. My reasons are my own and he is still an independent contractor.
If you hire a guy to mow your lawn, tell him exactly how to do it, specify the equipment with which you do so, and if he has no lawn-mowing practice, then yes he is your employee. Furthermore, you seem to be missing the fact that Uber drivers are contractors of Uber, not contractors to the riders.
This is, of course, illegal."
Although I am not 100% certain on this, I think that these kinds of anti-trust laws only apply when certain companies have huge amounts of market power. I believe that certain "anti-competitive" behavior would not be illegal, if done by a whole bunch of small contractors.
The obvious example would be unions that do this. But it is possible that this is a special exception to the law.
drivers already have those groups btw. they use to coordinate a LOT of stuff. i've seen a driver on a huge whatsapp group where they basically tried to set some areas to surge so they could earn more money.
I took a flyaway to Union Station and then got an Uber from there for $15.
Oh the humanity, how will they manage? They only have like the entire dataset of all rides ever taken plus a world class data science team plus a ton of market power. Will they be able to negotiate on equal footing rate with cab-drivers?
Being a contractor doesn't mean you get to pick where you work, it means you get to pick where you work out of the people willing to hire you for contract work. Many companies have different criteria for what they require out of contractors. I don't see this as all that different.
Okay, but none of this is about people who wanted to do work for Uber but didn't. This issue is about people who did in fact do work for Uber. If you never submit any bids and never do any work, you're neither a contractor nor an employee.
>>> except uber/lyft will remove you from the platform if you decline too many rides, thereby only giving the illusion of choice.
I don't see any real difference to that than to someone who was is contractor and maybe did some work, but hasn't responded in a while and the company removes them from the list of people they notify (and fast-track) for bids. If I'm at a company and I have a couple preferred contractors and one hasn't even bothered to reply to my the last few times I contacted them, maybe I'll lose faith in them being responsive while they're on the job.
Any contractor relationship is a two way street. If either side doesn't maintain the relationship, the other side may choose to alter it or cut if off entirely.
(The point is moot though because apparently Uber rolled out a feature that allows drivers in California to set their rates).
A fourth contractor thinks the price is too little and rejects it outright.
The fourth contractor has "submitted a lower bid"?
But no, the fourth contractor did not submit a bid at a higher price. They did not submit a bid at all.
I see your point too. Essentially, rather than contractors proposing prices and then clients accepting or moving on, if clients propose prices and then contractors accept or move on, it's still a market with negotiated rates.
Contract work is all about trust. If you show any behavior that makes you look less reliable, are they going to trust you with work? Flipped around, if the company doesn't respond to requests for payment, are you going to want to do work for them? It works both ways.
Factually incorrect for Uber drivers in CA, the platform no longer penalizes drivers for declining trips and now allows them to pick and choose trips without any impact on driver rating. (I worked in Uber Eng up until the 5/18 layoffs)
At least in Europe all competitors still work with the % of fare calculations.
This is a fuzzy line.
However, because the drivers choose to participate in the Uber/Lyft marketplace and benefit from the network affects that they have created, it follows that Uber/Lyft would have a say in the cost of goods sold in that marketplace. Just because the drivers can't set their own rates doesn't mean they aren't independent contractors.
If I hire you to mow my lawn, we mutually come to an agreement of what time and price you would perform the service. Just because you want to work for $100 / hour doesn't mean I'm willing to pay that. And because I'm only willing to pay a certain price only for your services doesn't make you an employee.
I think it's that simple. Uber/Lyft have a price they are willing to pay for services. They even allow their drivers to pick their own schedule (unlike my lawn service example). Drivers are not setting the price directly with the customers, they are getting paid by Uber/Lyft, but that doesn't make them employees.
Maybe if Lyft/Uber allowed drivers to bid on rides drivers would become more contractor-esque? But then the latency would be much higher for users. The system would likely also regress to the proposed price, as well, since drivers would likely just accept the price proposed by the platform to save time.
- drive on their own schedule - drive for competing ride share services (concurrently even) - drive for themselves - not drive at all
Seems very independent contractor. Uber/Lyft created a marketplace; drivers are agreeing to drive within the constraints of that marketplace. They can also create their own customer relationships and ride share marketplace if they choose.
If Uber/Lyft imposed restrictions on things like who a driver could give rides to or restricted concurrent ride share engagements, then that starts to feel like an employee. Rates have very little to do with it, in my humble opinion.
https://www.irs.gov/businesses/small-businesses-self-employe...
As far as I understand one of the problems is that the drivers' market is so saturated that both Uber and Lyft can act as if they where monopolies (or maybe monopsonies). They can technically move to a competitor but that applies no pressure on the market.
Again, what makes this situation tricky is that it is essentially creating a new kind of employement-like relationship that current laws and regulation do not really account for.
So: "moving to a competitor definitely applies pressure" -> true; "keep both companies in check" -> false
You are thinking too much about just workers, when actually the smalelst divisible unit is hours. There is portion of drivers that barely ever switch, and then there is another portion that are constantly looking for the better deal, switching through outh the day. Its a scale.
So to keep drivers happy and on your paltform, you need to implement bonus schemes or have certain base pays.
Im not sure why so many people feel that they can comment on how the ridehailing platforms work without having any real experience in driving for them or working for them.
In California, gardeners are considered employees. The only reason most people don't have to deal with employment taxes, payroll, insurance, etc., is because they typically hire gardening companies that actually employ the workers.
Thanks for the link, that's interesting.
By a similar reasoning one could claim that waiters/factory workers should also be independent contractors. If they don't like the pay in one business they can go work in another marketplace.
By this contrived example I mean to say that your analysis applies only to the superficial structure of the concept of employment. Ultimately social structures are not axiomatic field and should be treated accordingly.
Uber in CA launched a feature allowing drivers to set their own fares https://www.uber.com/blog/california/set-your-fares/ so there is inbuilt flexibility.
I can participate in Ebay / Amazon marketplace, and I can set any price I want if I decide to sell my TV there. They take their commission, and provide some conflict mediation.
I guess uber could put the jobs up for bid.. to address that.
Uber and Lyft employees are paid on commission. Uber and Lyft don't call it commission, but that's exactly what it is. You get X% of your sales, with bonuses, etc.
For me, price was never the primary motivator of using Uber or Lyft. It's the convenience and having a well known brand that will more likely than not actually come pick me up.
Honestly, I think objectively I'd look at this as very much sympathetic to the employers, if I had to assign bias (though honestly it's fairly neutral).
As far as the law goes: this result was coming for sure, the only surprise here is the fact that it happened via injuction. The California "AB5" law under which the suit was filed is a new law from last year, and it was very much written with the intent to make gig economy positions into "employee" relationships. There's a link in the article to this explainer, which is pretty good:
https://www.californiaemploymentlawreport.com/2019/03/unders...
I work as a 1099 contractor under my own LLC consulting business. This is valid under CA law. The law is meant to protect people who are unfairly classified as contractors outside of a trade.
While that may be, we all know that laws aren't interpreted based on their intended meaning. They are interpreted as one or more judges sees fit.
Those legal protections can be enforced by those who have the means to hire a lawyer. Yes, white collar contractors often get to enjoy the legally enshrined protections to decide how, when and where their work is done. They are often paid twice as much or more than their salaried peers to make up for the increased costs of self-employment and lack of employer provided benefits.
Blue collar workers working as contractors are almost always doing so not for their own benefit, but for the economic benefit of their employers. The workers get little say in how, when or where their work is done. Their pay does not reflect the increased cost of self-employment, and they are not offered benefits.
Uber drivers can't even set their own rates.
As an aside, there are plenty of people employed as employees with flexible hours and schedules in the US.
0 - https://www.npr.org/2020/01/28/800437791/due-to-new-californ...
I suspect that you're implying some sort of objective universal metaphysical state of "being an employee" or "being a contractor", but that's pretty clearly false.
They don't. The distinction between a contractor[1] and employee[2] has a broad rule at the federal level[3]. Contractors decide their rates and how they're paid, and they determine how, when and where their work is done.
People who work for Uber outside of a part of a single state can't set their rates or how they're paid, nor can they determine how or where their work is done because Uber only allows drivers to use certain vehicles.
[1] https://www.irs.gov/businesses/small-businesses-self-employe...
[2] https://www.irs.gov/businesses/small-businesses-self-employe...
[3] https://www.irs.gov/businesses/small-businesses-self-employe...
People who work for Uber as contractors can accept or decline rides, and only accept rides at a rate they want, so yes they are setting their rates. Just as a software contractor can accept or decline a job based on the rate offered. You're entitled to accept work at a rate you want, but you are not entitled to be guaranteed work at the rate you want.
“States will vary on exactly what parts of the test they apply and when they apply the test to workers. In September 2019, California put into place Assembly Bill 5, which found that a worker could only be an independent contractor if they met each of these three factors...”
https://www.thebalancesmb.com/what-is-the-abc-test-for-indep...
1) The worker is free from the control and direction of the hiring entity in connection with the work's performance, both under the contract for the performance of the work and in fact.
2) The worker performs work that is outside the usual course of the hiring entity's business.
3) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
IANAL but this ABC test reads to me as markedly different from the typical IRS “balance of factors” tests and significantly narrows the scope of “independent contractor”.
What "legal protections" are you talking about? Uber can put out a notification right now that if you don't take 1 ride in the next hour that you are banned from the platform and there's nothing your friends could do about it.
A contractor gets to work w/e hours they want because they are their own boss and collect their own contracted work. Uber basically forms a new contract with a driver per-ride. There's no promise of future rides, and Uber has every right to withhold new rides for whatever reason, including that they do not like your schedule.
I work as a 1099 contractor doing software engineering under my own LLC consulting business. This is valid under CA law. The law is meant to protect people who are unfairly classified as contractors outside of a trade, not restrict choice of those of us already working in this capacity.
How much do your contracting friends invest? What's their compensation?
The sharing economy, gig economy, concessionaire model, MLM ponzi, franchise system, value-added reseller channel are minor variations of a time proven wealth transfer scheme.
The mark provides the capital and labor, and carries most of the risk.
The landlord, platform, broker, aggregator extracts all of the profit, value, wealth.
Any time a serf prospers is accidental. And quickly remedied.
By any other name, right?
It's be nice if the critics would reject the frame. Instead of phrases like late stage capitalism, just speak plainly.
It's feudalism. Repackaged and rebranded. But still just plain old feudalism.
One irony, all the gig economy workers do make a car a LOT less necessary if you are in an area well served by them.
That is possible for employees as well. Part time employment is also possible. What is different is ability to set rates etc.
It's not a decision if they have no choice in the matter (one way or another).
Large companies can use their massive leverage to force sub-optimal conditions which are in their favour.
Though there are definitely arguments to be made for 'prefer contractor' - there is no doubt, that on the aggregate, there are huge, systematic problems with the new 'gig economy' that need to be sorted out.
Free markets work when people have skills and at least some leverage, but at the bottom end, where people are less skilled, it doesn't work well, which is why we need to have minimum wage, possibly unions in some cases etc..
New economy, new rules.
I've worked many years as a contractor billing at a daily rate.
The difference being that I can choose to enter permanent employment any time I wanted, due to the field we work in.
It's not the same as contracting for Uber or Lyft. Not even close.
Just some perspective here, not discounting what you said.
Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold.
The problem is that Uber currently exerts so much control over its "independent contractor" relationships that they have become, as a matter of law, employment relationships.
Moreover, in practical terms drivers don't end up with the choice they ought to. If they want any working relationship with Uber, they have to accept a mash-up of all the burdens of employment minus many of the benefits of being a contractor.
Sure, this could be true.
But people should recognize that a possible solution to this, is for companies to provide more flexibility and control to these people, such that they stay contractor but also get the additional contractor benefits, as opposed to forcing the employee relationship.
To be fair, given that a judge has ruled on it, it now is true as a matter of law until repealed or otherwise changed by a higher court...
The real decision will be made many months, or years, from now once everything had made its way through the appeal process.
The current one doesn't really mean much.
True, but that does not mean rdgthree's argument has no merit.
> Nobody disputes that Uber can have employees or contractors
What about the California judge?
Maybe address that instead of hand wringing the conversational communication style used on every forum ever?
So no, they cannot have independent contractors, unless you mean for the operations side of their business, which nobody is talking about so I hope not.
A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
B) the worker performs work that is outside the usual course of the hiring entity’s business; and
C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Of course you can argue about the minutia of each test (that's what lawyers are for) but there's nothing stopping the hiring of drivers as contractors per se. It's just that the judge thinks the current relationship as it is does not pass this test.
Said another way, what could Uber change from their current policies that would pass ABC if they don't at the minute?
This seems to be the insurmountable point; the judge seems to be inclined to see drivers as within the usual course of business, which means nothing changing on A and/or C would matter, and, assuming the strong statements in the injunction reflect the eventual ruling on the merits, Uber would have no means other than radically changing the business they are in to have drivers-as-contractors.
It's not (as a matter of what the law generally mandates), because it's a preliminary injunction, not summary judgement.
Nothing about the ruling prevents Uber from having contractors. It prevents them from having employees (as determined by California law) that they label as contractors in order to skirt around legal requirements for employees.
For the record, I am not saying the ruling is incorrect, but it does make me feel uneasy because:
1) I think that Uber does provide a public good (increased efficiency compared to a taxi) 2) If all drivers are employees, the business does not seem sustainable
I think that new laws are needed rather than using pre-sharing-economy labels like employee, but that the ruling by the judge may be correct given the current laws.
This write-up from today sums up some of the story so far. https://www.nakedcapitalism.com/2020/08/hubert-horan-can-ube...
> Uber was always less efficient than the traditional taxis it drove out of business
This is patent nonsense. I suspect he never rode taxis often before Uber appeared.
Also Uber’s core ride business was profitable before corona hit. Lots of businesses are hemorrhaging money right now, especially ones in travel.
The problem with taxis was the medallion system and other crazy regulations.
There is a middle ground. No medallions or other protectionist measures, but you have to treat your employees like employees.
The old system with medallions also had the drivers as independent contractors.
Your suggestion would be something different from both existing approaches.
Edit: no opinion implied on whether your suggestion is any good or not.
Uber lost $19,000,000,000 in 2019. It lost money last quarter. Uber is already unsustainable. Despite its labor practices, Uber has been unsustainable since its founding. And it’s not like Amazon’s early days where lack of profits was offset by acquisition of physical infrastructure. Uber loses money on via unit economics.
I don't think it is sensible to justify exploitation with "but the public benefits from it' and 'without it the business might go under'. By that logic we'd still have Victorian workhouses, 12-hour workdays, and there'd be no health & safety.
It's absurd to compare providing a service that hooks drivers up with clients to child labour.
Maybe they’re not losing their fingers in factory machines like child laborers are but I think they deserve employer provided healthcare at the very least.
What makes you think so? There's more than one reason for the demise of child labour. Society has gotten richer over time, and so families place a comparatively higher value on not having their children work.
I have a friend that drives approximately 8 hours pw for Uber.
How are drivers not choosing their own hours, exactly? That seems to be exactly what they are doing.
And when I say "Uber", I actually mean Uber/Lyft. And obviously in some parts of the US there are other apps and drivers use those too.
I also don't know any employee who gets paid money by the customer to do a job, of which a small portion is taken by the company. For every "employee" I know, it works in exactly the opposite way.
Independence goes much further - can the driver assign someone else to do the job?
As with any other marketplace/platform: Amazon, Patreon, App Stores, Twitch, Steam, etc.
Stripe collects payments for me when I sell my app. The money does not drop directly into my bank account.
And I don't think Uber has any problem with drivers hiring other people to drive their car and do Uber for them. The people that take an issue with that are the municipalities that want to require background checks, etc. for drivers.
Part B is similarly challenging, because it requires that the contractor & the work they are doing not be in the same line of business as hiring entity
1. https://www.californiaemploymentlawreport.com/2019/03/unders...
I am in the group that says if you want to be a contractor and the employer agrees so be it. I have a good number of friends doing uber after hours aimed at specific purchases and the flexibility is what sold them. Not the life for me but for some it is a good alternative.
Plus the biggest benefit was the kick in the pants traditional taxi services got so they now how to treat their "drivers" better. How they get off with how that business is run and Uber and Lyft get called out should tell you the priorities here.
1. If Uber and Lyft allow their drivers to choose, would it be reasonable for them to make "having the other app on at the same time" cause for dismissal? I know of no other employee that is allowed to simultaneously bill time on a competitor. Contractors, absolutely. Employees, no.
2. What if Uber, instead, charged $1.00/mo for the drivers to use the app, thereby making them customers instead of contractors?
2. Interesting idea, but then all companies could just do this and make the same claim that their employees/contractors/vendors are just customers too! Not gonna fly.
In practical terms, this is trivial for uber to dodge. All they need to do is transform from a company offering rides, to a company connecting riders to drivers. It sounds like a big difference but I susoect very little about the user experience would change.
For instance they could allow riders to offer different rates, but heavily favour (through ui and other soft incentives) the suggested rate.
In the end the drivers would be driving the same car at the same price with the same benefits.
There's typically an agenda behind these laws in terms of trying to increase the benefits and power of workers at the expense of the company. So I'm not sure Uber will be allowed to sidestep that goal by simply changing the way things are handled and presented. The govt could simply argue that giving users the option to choose a ride from Bob or Sally is meaningless since customers have no idea who these people are and just choose the first or cheapest on the list. Especially considering the amount of gray area already crossed to classify uber drivers as employees in this ruling.
Wrong in what sense? In a moral sense I might agree with you. In a legal sense, governments around the world do that all the time, and get away with it.
CA is wrong to outlaw voluntary working relationships between two parties.
If the existing laws can be interpreted to punish them, they will be used. If not, the coalition against Uber will look into getting new laws passed. (As they already have.)
Thus rendering any discussion about whether existing laws can justify punishment somewhat moot.
(Of course, even a moot discussion can be interesting. Just like people can have fun arguing whether the Stark Trek Enterprise would beat a Star Wars Destroyer.
The legal discussion is also very important to Uber lawyers. Even if they lose in the end, any delay is worthwhile.)
Is that an opinion on the legal situation, or meant as a suggestion for how to build a better business?
Of course, one wouldn't be actively working for two employers at the same instant, but neither would one be simultaneously driving an Uber ride and a Lyft ride.
I don't know California law on this specifically, but any state would definitely include time when actively serving as a driver for a ride, many would include time driving to pick up an accepted passenger, some might include time when logged in as a driver.
Until someone figures out how to multiplex the cabshare part of the two apps :p
Just as a ride hailing driver can't simultaneously have an Uber and a Lyft passenger in his car. What's your point?
I certainly know it is true of journalist freelancers.
You can be an employee of multiple companies at once. Many people are.
You just generally don't get paid by multiple companies for the same period of time if you are paid hourly wages.
[0] I did this once, uber had a really stupid and un-thought-out halloween weekend bonus on a weekend where halloween fell on a friday night (people don't party hard on saturday night of a halloween weekend like that), and pink mustache copied with their own equally asinine bonus. So I went out to a place within the service area where I knew I would not get very many uber or lyft rides, and left both apps on for hours while reading inside a Denny's. I did happen to get ONE ride, and I left the other service on to rack up bonus time on it. I was definitely nervous as hell though, which in retrospect, was unnecessary.
I'm well aware of this. If you look in my comment history, you'll see that I drove for Uber and Lyft, too.
But the point stands — You can't earn money from both at the same time, just like someone can't earn money from waiting tables at two different restaurants at the same time.
uber had a really stupid and un-thought-out halloween weekend bonus
Ick. Don't get me started about Uber's promotional games. Like making everyone sign up for a big promotion during a big event, and then there are no qualifying rides.
2) irrelevant to the employee/contractor determination. It is possible for an employee to also be a contractor, see for example restaurants...
#1, If you pick to be in a contractor relationship you can do whatever with regards to having both apps on simultaneously.
#2 If you pick to be in an employee relationship, uber and lyft have a right to exclusivity during all phases of the ride. Of course a driver can choose to work for both, but lyft can terminate a driver if they find that a driver is online for uber, and vice versa.
Or #3, the state can decide that the "employees" are "not working" unless they are in the phases where they are going towards an accepted ride or have a passenger in the car.
The state will almost certainly not go with #3. Between #1 and #2, I can tell you which option 90% of drivers will take. It's not #2. So we will be back to square one.
The fact that this question is practically speaking unilaterally up to Uber and not the result of any meaningful negotiation between the parties makes the relationship even more employment-like, as there's usually much less negotiation around terms of employment (certainly some still happens) than in true independent contracting.
What's more, it's not clear to me that courts would enforce the duty of loyalty (and maybe not even an express contractual provision depending on the state) against a part-time rank-and-file provider of comparatively unskilled labor, just as they wouldn't prevent a 20-hour-per-month sandwich shop employee from spending an additional 20 hours per month at a different sandwich shop in parallel. Maybe a guarantee from Uber of full-time pay would change that. I believe a federal trial court has even ruled that non-fiduciary employees in California have no duty of loyalty, though I don't know if that was overturned on appeal or whether state courts have agreed.
If rideshare drivers are employees, then there's going to be fixed overhead costs of hiring employees and drivers will not be able to set their own hours. The rideshare company would not recoup the costs of benefits for drivers that drive less than a certain number of hours per month, and so drivers would have to be required to work at least that many hours.
Can you elaborate on what you mean by, "in practical terms drivers don't end up with the choice they ought to"? I know people who drive for Uber and Lyft less than 10 hours per week, and some do it nearly full time.
It's up to the employer what freedoms they allow. Generally, like with existing businesses, it would probably utilize a shift assignment system, where employees get assigned shifts but can swap them with other employees.
The way I see it, as employees, their employers will either give them benefits for 10 hour work, or force them to work 40 hours.
Most benefit mandates apply to full-time workers, usually triggered at somewhere between 30-35 hours/week; those that apply to part time workers at all tend to be scaled down for them based on working hours.
There will be less flexibility about hours, but less risk that an hour reserved for work will be unpaid. Within the need not to overbook available business, and laws requiring payment for scheduled time even if cancelled at the lat minute, there's no inherent reason rideshare companies couldn't provide scheduling flexibility, including a notice-of-availability system for immediate call-ups.
(Optimizing decision algorithms for when to bring on additional staff becomes is a challenge that this opens up, also similar with when to accept the cost of short-noticd cancelling scheduled shifts.)
> The rideshare company would not recoup the costs of benefits for drivers that drive less than a certain number of hours per month
Nor would they be required to provide benefits for them; most benefit mandates apply only to full-time employees, not part-time employees.
I wonder how this decision will play out to other businesses
"I'm afraid you're repeating Uber's favorite talking point, which is that everyone should respect the worker's decision to be an employee or contractor."
I've never seen Uber argue that everyone should "respect the worker's decision to be an employee or contractor." I have seen them argue that drivers are contractors based on the flexibility in the job, but not that it should be "the worker's decision".
"Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold."
Actually, pretty much all US employment law disputes that drivers should be able to choose what status they hold. Employee vs. contractor is not determined by what an employer says someone is, or what an employee says they are. Instead, it is determined by some key factors about the nature of the job, which (as you do point out) mainly centers around control of important aspects of the job.
But it is important to understand that you never really get to "choose" whether you're a contractor or an employee, it's determined solely as a function of the type or work you do and the nature of your relationship to the employer.
You've effectively spend a few paragraphs adding nothing of value to the conversation.
You've effectively restated the grandparent's points, but tried to do so in an adversarial manner.
You might want to check what you consider "adversarial" when it comes to a discussion forum.
The issue is that the comment I responded to seems to be under the false notion that workers (or employers, for that matter) get to "choose" how they want to be classified, and that's what this debate is about. My point is that, when it comes to employment law, a worker or employer's preference about how they are classified does not factor in at all about how the law classifies the job.
If I owned slaves and called them unpaid indefinite interns the law would rightly disagree. You can call the relationship whatever you like, but the law is there to keep the playing field level for everyone. That it's taken Uber so long to play by the same rules as everyone else is a travesty and should take a billion dollar law suit or two for damages to sort out.
They are independent contractors in the sense that they can choose how much and when to work.
They are employees in that they cannot negotiate rates.
I don't think it's so clear cut.
Hmm... How is an Uber driver different from a plumber here?
Let's say Google needs some pipes fixed at one of its offices and they tell me how much they'll pay, refusing to budge from that figure. That doesn't make me Google's employee. I can choose to do the work for that price, or I can go fix Apple's pipes instead. What am I missing?
The driver doesn't have the ability to turn up a dial and say "I'm going to charge more now".
(This isn't the only distinction between an employee and contractor though of course)
A licenced taxi driver cannot do that, either.
If instead, my analogy were that I was a general contractor who built water slides and a water park put out a bid on construction of a water slide and refused to negotiate, my only option is to take that bid or leave it. Why does it matter what the water park is going to charge the people to ride the slide?
Now that the app driving companies turned over the apple cart by essentially cyber-squatting on the legal system while backed by high power lawyers paid by VC cash, the driving companies themselves want to cry foul when they don’t get the way they bought and paid for. I guess what they didn’t foresee is the long view of judgeship, and their concomitant dim view of cheaters, no matter the problem domain.
It’s too ironic to be believed. The judges apparently agree with me.
What makes you think so?
I don't understand what you're trying to say here. In my experience, on both sides of this, a good deal of thought is put into what kind of position to seek / offer. I think employers and workers think a lot about which legal arrangement would work better and there is a great deal of choice involved.
For instance, I can imagine Uber offering jobs v.s. contractor positions with differing levels of support, remuneration, and expectations. That they don't do so seems like a choice to me?
Legally, in California, they can't do that. As outlined in the article, the 'ABC test' is the legal test for determining whether someone is an employee or a contractor. The 'B' part of that test is "The worker performs work that is outside the usual course of the hiring entity's business." If you are an employer, you could not have one group of drivers that you classify as employees and the other you classify as contractors, not if they're basically doing the same work.
Note this is common in a lot of different businesses, and there have been many lawsuits where contractors who DID want to be classified as employees argued that they were basically doing the same work as employees. There was a fairly famous case involving Microsoft 2 decades ago: https://www.computerworld.com/article/2589538/it-personnel-m...
So, for instance, you might hire initially a contractor to create the encrypted part of your product, but once you had hired someone to do that work full time you would be legally barred from hiring additional contractors to do that?
Pretty much, though even then it is determined by what the courts decide is the company's "normal course of business." Obviously there are big gray areas here. And, also obviously, there are many cases where both the worker and the employer would prefer to treat the relationship as a contractor relationship, and if they both agree there is nobody to file a lawsuit contesting it (unless, of course, there are lots of people in the exact same role who could challenge the classification, as is the case with Uber).
Also, note while there are federal rules that determine IRS classification, California has stricter laws when it comes to employee vs contractor.
I think that's case by case though. Contractors usually do finite focused projects and don't want to be employees. I myself was self-employed for 5 years doing specific contracts as a software engineer. I was "writing code" which is "the same work" as employees. Were all those companies breaking the law?
> Legally, in California, they can't do that.
Definitely wrong.
There is no advantage to the individuals from that decision, nor is there any intended.
So people spending 5 years working for the same company doing the same commute and same work as employees, subject to the same kind of control over their work etc., cannot maintain a claim to be self-employeed for the tax flexibility that goes with that.
However. You "writing code" as a contractor is not the same work as an employee if the manner in which you are doing it differs.
For example, if you have to purchase your own equipment, set your own hours, work on a "statement of work" basis instead of set hours, can substitute a subcontractor to do your work for you, and can and sometimes do work for multiple companies at the same time, and often switch the site at which you are working, those sorts of things signify that you are not operating as an employee would, and that it would be correct to classify you as running your own business and therefore subject to business taxation instead.
Of course every contractor wanted to claim that status for the tax benefits, which are basically less income tax and the ability to deduct more expenses. The government saw this and decided, although the law was what it was all along, people weren't applying it adequately. So they changed who does the assesment, and the tax liability if they get it wrong, from the contractor to the company hiring them. This is called the IR35 reform; IR35 is the name of the legislation that sets out what kind of working patterns must be treated as employment for tax purposes.
Although the reform will change who is liable for making the assessment, in principle it is still possible for a contractor to be retroactively assessed for their past as having been an employee all along, and have to pay back-tax. That's because you are supposed to have done the right assessment for yourself already, or perhaps your accountant should. This seems unlikely for most people now as long as the changes are followed through, but some people have been caught out by it.
> Definitely wrong.
Based on what? Were you a contractor while AB5 was in place? Everything I have seen suggests that Uber and Lyft will be legally prevented from having drivers that are classified as contractors.
The AB5 law has only been in effect since Jan 1.
The federal rules are already very strict. Generally contractors violate them a lot. The law was pushed by IBM to eliminate competition, and the feds incorrectly thought they would get more tax money by making the software contractor industry into employees. It's a sordid tale ending in domestic terrorism and murder: https://www.nytimes.com/2010/02/19/us/19tax.html
I’m not convinced you have adequately eliminated other potential reasons he may have done the uncharacteristic thing he did. Even if he was in his right mind, I’m not convinced he had anyone’s interest at heart but his own personal one, as jobs are a form of social control. He desired to be free of this control. Even if individual liberty is worth fighting for, the Constitution doesn’t grant you the right to the job you want on the terms you want. That’s what the courts are for.
This guy was wrong to do what he did in every way but for the right reasons in a very minor way that is more a matter of principle rather than tax law. No matter his beef, it was just his own, and as such, it doesn’t justify so much as slapping someone’s hand, let alone the stunt he pulled.
I do see your point, though I disagree.
I'm not clear what point you are referring to. It's possible for all sides in a story to be wrong in their actions.
AB5 essentially codified the test the California Supreme Court adopted in Dynamex (April 30, 2018), though.
This is actually a really good thread, because most people are surprised to discover that yes, those companies probably were "breaking the law".
As other posters pointed out, AB5 is relatively new, so the test is relatively stricter now, and only relevant in California.
More importantly though, employment classification is only challenged when a plaintiff files a lawsuit. Thus, even if someone is technically misclassified, if the relationship is mutually beneficial, nobody is going to complain. This goes on all the time, which is why most people are surprised to find out they were technically misclassified.
Case in point: I worked at a company (in a state much more permissible regarding employment law than CA, and pre AB5) that forbid using the term "contract-to-hire", even though that happened pretty frequently. Reason being that technically contract-to-hire is not legal unless there is a substantial difference in the work and relationship when the person is a contractor. Now, many times there is, but that phrase alone can make it seem like the work contractors do is too similar to the work employees do, which is why our legal department banned the phrase.
I'll give a Dutch perspective (which perhaps applies to some degree to other parts of Europe):
Until 2016, clients had to proactively ask for a 'Verklaring Arbeidsrelatie (VAR)'. An 'explanation of the work relationship'. If I understand correctly, the contractor/freelancer had to prove that they had more clients than just that one, and it had to be reasonable. So no having five clients of which one accounted for 99% of all income.
If a client didn't ask for this 'VAR', it could cause problems down the road.
From 2016 on they changed this, but apparently the result has been a confusing mess, so in 2021 they'll try to clear up some of it.
Practically speaking, as a contractor, I've found that only the big clients (with legal teams, I imagine) would ask for a VAR, if at all.
Most of the time, whether working in Holland or Germany, I usually did the exact same work that their employees did. In some cases there seemed to be vague distinction where I worked on shorter projects and they did support and the like, but in practice that distinction was very blurry.
I suppose with some of these clients I could've caused trouble, but because I got paid well, often better than the full-timers (even with insurance and all that deducted), I didn't see any reason to.
My general impression is that NL is a bit more 'liberal' in these matters than many other parts of Europe, so I'd be curious to hear how this works in France/Germany/Italy, etc.
In Sweden, if you want to become contractor, you have two options - start a limited liability company of which you owns all shares (Aktiebolag). Or you can start a business in your own name (Enskild firma), which legally is not separate from your own liabilities.
In the first case, you are making yourself employed by the corporation you own. I do not know if there is any legislation that prevents that business from having just a single customer. But I know that in my own case, my business have had a single customer the entire time it has existed.
But I strongly suspect that this is one of those 'spirit of the law' situations. So I suspect that a company that doesn't want, well, liability, would avoid hiring an LLC that really is just one person working only for said company.
AB5 is looser than preexisting law, since it adopted the preexisting ABC test from the Dynamex decision, but added new exceptions.
I don't know about Uber in US, but in Russia this is how it typically works. Drivers are hired by local taxi companies, which partner with large-scale Uber-like aggregators. This way, user-facing (aggregator) companies don't have drivers as employers, but contract other companies (or individual drivers, shall they want to act as sole proprietors) for the actual transportation services.
That is exactly how software development contract jobs are handled in the US. They are called contract companies (and many other names) but essentially find talent, place them at a contract position, then bill the company for that contractor. They pay the contractor directly, with or without benefits (W-2 vs 1099). And in most cases, the contractor gets to choose contract or employee status with the contract company, although at different pay.
Being a contractor is not fundamentally bad if US hadn’t tied medical insurance and companies hadn’t tied stock bonuses with employment. Technically there is no such need for “employment”. You go work for the time and you get paid equitably without an artificial status called “employment”. Unfortunately this status has became part of many arcane laws and difficult to get rid of.
Edit: Good article and video about how AB5 affects technology consultants: https://www.viodi.tv/2019/11/15/will-ab5-drive-software-engi...
That's not the fundamental difference in either federal law or the California ABC test. It's not a factor in the ABC test, [0] and it's one of several factors in the “relationship” prong of the federal test. [1]
[0] https://www.californiaemploymentlawreport.com/2019/03/unders...
[1] https://www.irs.gov/newsroom/understanding-employee-vs-contr...
Here is an example of Postmates doing it, I wouldn’t be surprised to see Uber doing the same.
I'm sure the flexibility is nice when you are making $100+ per hour but drivers make a tenth of that and struggle to get health insurance
There is nothing in this ruling that prevents Uber from allowing people to chose rides _exactly_ as they are doing it now.
The changes are:
1. Uber needs to pay into unemployment insurance.
2. Uber needs to pay into workers compensation.
3. Uber needs to pay into social security.
4. Uber needs to collect payroll taxes in advance.
5. Uber cannot discriminate based on protected classes such as race or gender.
6. Uber must comply with the WARN if large scale layoffs occur.
7. Uber has to provide for heath insurance depending in accordance with local and federal laws.
8. Uber needs to verify the legal working status of their drivers
9. And many other things all other businesses pay into and rules they have to follow.
We make businesses pay into this because the general public is ends up footing the bill anyway. Like right now where we’re providing Uber drivers with unemployment benefits even though Uber cheated their responsibility. And when a driver gets in an accident and we have to pick up the bill of unpaid hospital bills and disability payments.
Flexibility has nothing to do with it. Paying into the system everyone else has to and following the rules everyone else needs to follow is.
It would take much less effort
However, they are extremely unpopular politically. Especially in California, where they seem to hate all kinds of real estate taxation.
I agree with some other posters, I think a new categorization for "gig" workers is necessary, as I think a lot of your other points (e.g. paying workers comp) make sense.
Workers can choose platforms that maximize the worker's wages while platforms would need to minimize costs for customers. The more efficient the platform gets, the better position they would be in vs competitors.
Possible in what sense? Legally possible, or do you mean economically feasible?
There are plenty of people working more than one job in the US where they're classified as an employee at all of them.
As we've seen with the pandemic, unemployment can mean withdrawal of healthcare and eviction.
Really the question here is risk. Who takes the risk that employees can get sick? Who takes the risk that levels of work coming in can vary?
Should it be the individual employees, who generally have a couple month's income saved or less, or should it $50 billion market cap company? Which is better able to absorb risk? Or should the risk instead be handled by the state or federal government?
Hilariously, you are so far off that you don’t realize that the only legal way Uber could prevent their drivers from working for Lyft in California was if they were contractors and not employees
Where did you get this information?
1. Work for the competitors
2. work as much or as little as they want
3. Take as much vacation time as they want
4. Leave with zero advance notice
Also, should Twitch streamers and Youtube creators also become employees? What about Etsy/Ebay sellers or AirBnB hosts?
Absolutely they can. California, like almost all states in the US, is an “at-will” employment state.
None of these things are required under employment law at all. Can I ask where you found this wildly false information? Do you happen to live outside the US?
Nowhere in California labor law does it prevent people from taking vacations or anything else you mentioned if they are an employee.
I worked in California for a few years but I'm not longer there. And those were questions, they weren't meant to be stated as facts.
> Nowhere in California labor law does it prevent people from taking vacations
Hmm, maybe I understood my rights wrong, but from my understanding I wasn't free to take an arbitrary number of vacation days without getting fired. I know Netflix allows that but other than them, wouldn't most employers let you go if you just decided to not show up on random days?
Also, again I'm not expert, but are you sure that someone can simultaneously work for Apple and Google? That doesn't sound right but again, these are mostly discussion questions, let me know if I'm missing something here.
You are correct that they can limit vacation time, but Uber could also limit vacation time for contractors. There is nothing specific in California employment law that does not allow employers and employees to mutually agree to open vacation time.
I think we agree about vacation time.
I’m guessing many would rather see Uber drivers all be forced to be employees even if 99% don’t want to, than a spreading erosion of workers rights.
Technology has decreased the lead time needed to let someone know that you're available to work to 0. There's absolutely no reason why that should mean that you can't be an employee.
This ruling is a reclassification - the work that they have been doing in the manner they've been doing it is already employment. Or, in other words: the current relationship doesn't have to change a single bit, they just get additional benefits.
...not going to make it.
The only thing that is being lost here is the inability of Uber/Lyft to pay less than a minimum wage and otherwise deprive the drivers of the benefits that employees are entitled to.
Anyway, it's not like Uber/Lyft were giving drivers the choice whether to be contractors or employees so that the drivers could pick the status they prefer - nor does the law ever truly allow that except when the genuine nature of the services relationship is adjusted based on the answer to legitimately conform to the desired status. They're forcing everyone to pick the status that's generally more expensive and precarious for the worker.
In my city, which fortunately is not in California, being classified as an Uber employee would destroy my 10-20 hour weeks at $20-$30/hour. The key is to work during busy times and for $30+/hour you generally have to be entertaining to get tips (which I have tons of fun doing). If you work during slow times, then it's $10/hour or less.
Busy times are too nuanced for a manager to determine when the best time to work is.
And I don't want to subsidize other drivers with my hard work because they don't want to do the market research to know when to drive.
Maybe Uber can keep all the incentives the same (like surge) and classify drivers as employees, but I doubt it.
Not sure why you think you know what my limitations are. Or where you get the idea that employers actually hire disabled people. Look at the unemployment rate for disabled people.
IRS Common Law Rules for Determining Status:
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee type benefits? Will the relationship continue and is the work performed a key aspect of the business?
Source: https://www.irs.gov/businesses/small-businesses-self-employe...
CA ABC Test:
Autonomy. The worker must be free from the control and direction of the hiring entity with regard to how the work is performed.
Business Dissimilarity. The worker’s labor or services must fall outside the usual course of the hiring entity’s business.
Custom of the Worker. The worker must be customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Source: https://leginfo.legislature.ca.gov/faces/codes_displaySectio...
This pandemic has proven that EVERYONE needs unemployment insurance, and it is already well-known that everyone needs income and healthcare in retirement.
Sp sure, let people do gig work on their own time, but don't let them opt out of the basic social safety nets we all need to survive.
Various companies forced people to become fake contractors. They didn't pay them enough that these fake contractors actually could still have the same social benefits/security.
This resulted in the government bailing out loads of contractors. Basically the "profit for the company, losses for the government" way of working.
It’s quite a different story being a specialist contractor compared to a easily replacable minimum-wage earner.
Uber is not a profitable company with fat margins like Google, Facebook, Amazon, Apple or Netflix. I don't see any way for Uber to absorb the increased costs that come with full employment without reducing the number of drivers and increasing the cost of rides in California.
The change in employment classification means that drivers will no longer be able to choose when they work. Uber will choose when they work, and for how long. The barrier to becoming an Uber driver will increase. Currently, in most cities it's possible to sign up to drive entirely online and basically just requires a license and a completed background check. Going forward people who want to drive for Uber will have to interview like any other job, probably in-person with a resume, and jump through the many hoops which that process entails.
My guess is that for new drivers who can pass the interview and existing full-time drivers who don't get laid off this will bring a big improvement in quality of life and provide some much-needed financial security and benefits. The rest will be out of a job.
I think it's unfortunate that some kind of compromise couldn't be reached which would have provided some economic security for these workers while accounting for the real differences between gig work and regular employment.
Why? Uber is still free to let them choose if they choose so.
>Going forward people who want to drive for Uber will have to interview like any other job
Why? Uber would be free to hire without interview.
>this will bring a big improvement in quality of life
That's the point.
>The rest will be out of a job
It was deemed that this kind of a job is not worth having people in, often being below minimum wage and with no protection. In a bit of hyperbole, abolition took jobs from slaves as well.
From a country that has hard fought-for USD16/hour minimum wage, paid 10 sick leave and 20 annual leave days per year, this doesn't appear true at all.
No matter how you want to spin this, it's not going to be a victory for the majority of the drivers. Let us, in our high and mighty chair, obliterate a burgeoning industry filled with people voluntarily making money on their own time. Let the taxi medallions flow back in its stead. Problem solved - slavery is no more.
Uber pays less than minimum wage for many, which can't stand.
Are there employment laws I'm not aware of that require "interviews"? Most fast food works can become employees by just walking in the door, I think.
Furthermore, the assumptions you make regarding future hiring practices are unfounded. Nothing stipulates that resumes or interviews, let alone in person, would be required to extend employment.
>If these companies can’t turn a profit while complying with the law then they don’t have a viable business model. That is entirely their problem.
But let's completely ignore the part where companies lobby for laws that protect their market. Can't wait to go back to the old taxis.
Are you seriously telling me that if people don't interact freely in the way bureaucrats want them to interact, then those people should, by law, not be allowed to interact?
Big Brother knows best, huh.
An employee can't make such decisions; they do as they are told or they are fired.
Uber drivers are private, self-owned businesses that rent out their time and equipment to a corporation on a completely arbitrary basis. The company counts on an oversupply of such drivers to meet demand and does not need to manage the supply other than to continually recruit more people.
I suspect this ruling will be overturned, if not in the Ninth Circuit Court of Appeals, then in the Supreme Court.
As far I know, this is not true. Uber dictates the prices that drivers can charge, they cannot set an arbitrary price for their own labor. Is that not the case?
vs
> At will employment
It’s not as if this information isn’t public. Everyone can see that Uber can’t make money.
I was under the impression that the markets that are mature for Uber were profitable, and they've been plowing capital into growth, hence the losses. Feel free to correct me if you have sources that show otherwise.
https://www.vox.com/recode/2019/8/21/20826405/amazons-profit...
Bezos has been clear from the start that he’s optimizing for FCF instead of profitability, you can read his early shareholder letters to see this.
In summary though, Amazon has been “making money” for ages, they just reinvest it in R&D so it doesn’t make it down to the bottom line.
I place some blame on the companies (and it is their responsibility to list potential risks in their public filings), but also it's somewhat the fault of buyers who scooped up millions/billions dollars worth of shares at sky-high valuations.
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/f0dcd9a...
Page 34 (by PDF count).
> Our business would be adversely affected if Drivers were classified as employees instead of independent contractors.
Also, it's a public market. No one is "holding the bag". This may be true if Uber crashed before the IPO because private investors can't easily sell, but once on the public and liquid market, it is the public investor's own choice to invest or divest in these companies.
That's a pretty bold claim. What of all the reports of a toxic workplace? I've heard first-hand accounts.
So basically the workplace is toxic, but that's not the real reason why he was kicked out (according to the comment you were replying to).
Their labor issues are hardly new. If you did not know about them when you invested in Uber, you didn't even read the news articles, yet alone the filings. You were supposed to price that in to your investment if you purchased.
I don't agree that investors should be protected from this (or from TSLA assertions), if you are investing you should be more sophisticated than buying stocks blindly, there is a risk to any investment and, obviously, that is why it can be so profitable.
If this is the case, I think Lyft will die very quickly because as far as I know, most drivers prefer Uber over Lyft.
[] some exceptions apply, mainly related to IP I think.
If Uber or Lyft are required to legally hire these drivers as employees, they will probably develop a technology to track the drivers so that they won't take a Lyft call when there's an Uber passenger nearby, for example. This effectively means lockin.
Also, Uber (or lyft) may even compensate these behaviors by giving the drivers base salary as long as they don't take their competition's calls. Of course, this is until one becomes the dominant player and the other goes out of business.
Under an employee model, they would do this while on the clock of a particular company (and being paid by it). Sure, Uber could choose to employ a driver for 16 hours a day, but they'd have to pay for that time.
The only reason Uber couldn't dominate was because there was a factor of "choice". Now that the drivers are classified as effectively taxi drivers belonging to a taxi company, there is no choice. And the funny thing is, the drivers will actually prefer this.
This idea that uber / lyft drivers (both phones are always running) can work for BOTH companies at the same time seems ridiculous to me.
Yes, I agree, and I did not mean to imply that. What I meant is that a company has limited ability of restricting employee behavior during the time they are NOT paying them.
But Uber and Lyft are direct competitors. I have a clause in my contract that forbids me working for a direct competitor, but I'm a software engineer and I have knowledge of trade secrets. A driver? Not so much.
So I think that a court would find a restriction that you couldn't work for both to be an unreasonable exclusion... but I don't know.
But let's say it was legal. Uber still might not be able to do it. They need onboarding to be as frictionless as possible. Tying their hands by saying they can't also drive for Lyft might make people think twice.
Sure. But employers can prevent you from working for someone else at the same time as you are working for them.
So if you wanted to do a 6 hour shift for Uber and then after that do another 4 hours for Lyft. That would almost certainly be legal.
But the common practice today is to run both apps at the same time and pick up clients on both networks as requests come in. This is what people are talking about, and will almost certainly be banned.
If Uber wants that kind of exclusivity, they're probably going to have to pay drivers for idle time.
I don't think that's true. There are many sales employees who are compensated almost exclusively on a commission - per sale - basis. None of them can work for multiple companies concurrently.
If this were to happen in practice, you would most certainly see a drop in the number of drivers and an increase in per-mile costs to customers.
[1] https://sbshrs.adpinfo.com/blog/pay-rules-commissioned-tippe...
* Will we see employees (drivers) get a say in their shifts? An employee can be asked to work a 3AM - 9AM shift for example.
* Can not arriving to shifts on time be grounds for dismissal?
* Can refusing a shift be grounds for dismissal?
* Can incurring unapproved overtime be grounds for dismissal?
* If a driver is incurring overtime, is that reflected in the pricing that consumers pay?
* Can Uber/Lyft systemically set employee hours to like 29 per week to avoid FTE status?
* Will multihoming (ie working for multiple "gig" apps) be grounds for dismissal as a conflict of interest?
I see a lot of ways Uber/Lyft could retain significant power over drivers.
If Uber requires someone to work a "Shift", then they have to pay them for that shift regardless of miles driven. Uber doesn't want that. I don't believe the state is requiring Uber to pay hourly and Uber almost certainly doesn't want to pay people hourly either so none of this is relevant.
> Can Uber/Lyft systemically set employee hours to like 29 per week to avoid FTE status?
This is what most low-wage jobs do so why wouldn't they?
> Will multihoming (ie working for multiple "gig" apps) be grounds for dismissal as a conflict of interest?
Maybe. But since a big chunk of the appeal of working for Uber is flexible hours that work around the hours of other jobs or responsibilities, why would they?
If Uber prevents drivers from doing other gig-jobs, they will have a hard time finding drivers.
Pay may be calculated based on metrics other than time, but must be at least the minimum wage, which is based on time at work. For employees, if you want to pay on trips/widgets/sales/whatever, you have to also track hours. So, yes, the state is requiring Uber to pay hourly.
Uber may allow flexibility of when you're on the clock, though they won't have to, but you can bet they'll require a certain amount of productivity.
How different is it compared to now? I want to drive now but there are no customers.
> Can not arriving to shifts on time be grounds for dismissal?
> Can refusing a shift be grounds for dismissal?
Surely they're free to set lax conditions for employees?
What would prevent Uber and Lyft from continuing to let employee drivers set their own hours?
You could use the existing healthcare exchange, and just give people a certain percent of their salary that can only be used to buy healthcare. Then let them buy as they choose.
The problem with switching healthcare in America is that any new system that doesn't allow Americans to think, "I've got mine, you can worry about you" is difficult. Whether that's forced exchanges where everyone pays the same or universal healthcare (where everyone pays the same).
The truly crazy part is that core issues with the system weren’t addressed over the last 70 or so years. Not working should not mean that I’m only able to participate in health-seeking behaviour if I’m wealthy enough to maintain my own health care coverage.
Not to mention conflicts of interest, had a former classmate who’s an ER doctor tweet that he saw a patient who’s chronic condition was causing emergency healthcare needs because insurance was paying for treatment every 4 weeks when the doctor prescribed every 3.
With employee unions being neutered in the past century, and exponential privatized healthcare cost increases, you start to see broad swaths of employees go without insurance in the US, while other countries nationalized their healthcare to keep costs down and continue providing it to their people.
Even if you drove 2 hours a week, there's still 1 reason to prefer being an employee over a contractor: Minimum wage. Uber drivers might only make peanuts once you factor in gas, car payments, and all the time they wait between rides. At least an employee driving 2 hours a week will get a fair paycheck.
Right now they do that for contractors. After the drivers are reclassified as employees, things might change.
Setting and maintaining a new schedule would ADD to operating costs (gotta pay someone to administer the calendar), so there has to be some other reason.
Is there some magical cost per-driver that nobody (even the Uber CEO) seems to be able to articulate? Stuff like withholding for W2s seems to scale really well. The only cost I can think of that doesn't scale basically linearly with hours worked is healthcare (only kicks in at 30hrs/week).
If anything, Uber and Lyft should be threatening to limit drivers to 30hrs/week. That's what I'd bet on actually happening.
Because in no universe does it ever make sense to pay healthcare and numerous other benefits to an "employee" who is working 2 hours a week. Thats why.
> Is there some magical cost per-driver
Yes. It is called fixed costs. Full time employees have a certain level of fixed costs. The obvious example being healthcare.
In other words, the same reason why restaurants don't allow a waiter to show up to work for 2 hours at 4AM.
Some drivers would like that arrangement, especially if that's their full time job. But some drivers who do this for supplemental income may not be able to meet the demand of the new fixed schedule set by Uber/Lyft.
I don't think you understand how a business like this works. For a customer serving business, they need to make sure they are staffed appropriately.
Would it make sense for a restaurant to offer all of their staffs "flexible hours"? Is it ok for the waiter to show up at 3am when he has trouble sleeping and just get paid doing nothing?
It's not about 9-5, but it's about when the customers show up.
Normal businesses with normal benefits that hire for off-normal shifts generally pay higher for those shift slots or find an employee that values that shift higher than mid-day and employers absolutely can have an expectation of business hours and fire people for failing to meet that. They can also choose to allow their employees to work more flexible hours but this choice is entirely disconnected from contractor vs. FTE.
In the service industry in particular (as you noted above) showing up to work outside of core hours isn't likely to result in any productive work - maybe that waiter could run inventory or do some prep (and actually 3 AM isn't insanely early if you get a big breakfast rush) but that's entirely disconnected from uber saying: "Darn - we wanted to give them flexible hours, but now that they're employees I guess we can't let anyone work after 5PM" that's just BS PR from the company.
Uber isn't against this because it would make it impossible to run their business, they're against this because they're being forced to pay into things like unemployment which will make it more difficult for them to be profitable.
They can't guarantee flexibility and full-time employment. That's the point.
>"Americans shalt work from nine until five so sayeth we the founders".
If there is no demand or there is over-supply at some particular time in some particular area, you can't will a job into existence.
>They're just griping that they need to start paying benefits.
Are they griping? The costs are going to be passed down to the consumer. They will still be more competitive than taxis (which are still abysmal with customer service). And by raising regulatory costs and requirements, you're making it harder for any new entrants to come in and compete. Sounds like Uber and Left break-even, and everyone else loses. Alternatively, if this new regulation kills Uber and Lyft, then everyone loses.
Does anyone actually believe these companies at this point? Who actually aren't saying much any longer.
I'd be far less surprised if Google shutdown Waymo in a year or two than if they actually introduced a door-to-door driving service in an urban area without a safety driver present.
And technology is accelerating at a much faster rate today.
I actually do think highway driving can be automated relatively easily but that still assumes a competent licensed driver behind the wheel.
I'm sure a lot of people believed that in 1970 but look where we are now. Technology accelerates at a much faster pace but often times in ways that you don't expect. The people in 1970 probably didn't imagine smartphones with a global 4G network but instead of flying cars we got this.
Deep learning/machine learning have made remarkable advances in recent years--primarily because of both computational (esp. GPU) and storage/data advances.
However, in spite of a lot of money and talent expended on understanding organic brains and human-level cognition over the decades, progress has been slow and there's a general belief among scientists who work in AI spanning CS and neuroscience that there are aspects to human learning and reasoning that we just don't really understand yet.
And that more deep learning, data, and programmed rules won't get you to autonomous vehicles outside of some limited domains. (Which is valuable by itself; it just doesn't get you to robo-taxies.)
Ok?
We already do that when human driven taxis do that, so I don't see the problem.
Do you mean something like peak hours split shift schedules that bus/train/ferry drivers have?
In all seriousness, I’m not sure they will stop operating completely, but I have a hard time imagining this will be good for a large number of drivers who do it part time, or for consumers.
If they have to be employees, then I imagine Uber/Lyft will only want to keep the most productive drivers around. The ones who do already do it full time. They will likely have to enforce real working hours/ actual schedules, based around demand.
This means any of the fringe drivers, who do it part time for supplementary income will be out. They might not have the option anymore of just turning on the app and working a little bit when they decide. This will mean less choice and higher prices for riders.
2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied: (A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. (B) The person performs work that is outside the usual course of the hiring entity’s business. (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
[0] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml...
Edit:
I don't see how you think the letter of the law clears Uber, Uber sea to fail every part of the test.
A) Uber does exert control over many aspects of how the work is performed, e.g. acceptable car models, acceptable ride acceptance rates.
B) The rides provided by drivers are central to Uber's business. Uber has no business model without its drivers.
C) Many drivers do drive for other companies and would pass this critiwia but some do completely different work and have not done any driving work independently from Uber. These drivers would not pass this criteria.
The main thing they failed on is that the court thinks that they exert too much control on the drivers. For example, they don’t allow users to choose their own drivers. They also don’t allow drivers to price their ride.
This doesn't stand. If YouTube hired every single YouTuber as a contractor it would be forced to reclassify them as employees. Because Uber doesn't facilitate connections between two third parties, it facilitates connections between clients and their contractors. If drivers on Uber were neither contractors nor clients and if contractual obligations were between drivers and riders then it would make sense.
No, the court didn't address prong A at all because it found that Uber/Lyft could not possibly satisfy prong B of the ABC test.
According to a quick search, they have 900,000 drivers and 27,000 employees. At most 3-ish% of the people that they pay to work for them are tech employees (and we can probably safely assume most of those 27,000 are not tech).
I'd be interested to know how many creators YouTube "employs" or how many retail workers Ebay has and what their percentages are. This is where this whole thing confuses me: If Uber drivers are employees (and maybe they are?) then basically every major tech company has millions on employees they have been misclassifying. Paying them all minimum wage with benefits and taxes deducted etc will be a massive massive change for these companies.
YouTubers are not contractors of YouTube. eBay sellers are not contractors of eBay. Uber drivers are contractors of Uber.
This is why Uber will be affected and not YouTube, nor eBay. Uber would also be free to have a system where drivers are not contractors nor employees of Uber (but it would not fit their business model).
There is no contract between you and YouTube where you do work and in exchange you get money. There is only the option for YouTube to choose ads for your videos and give you a cut in exchange - it's quite literally just like placing ads on your website using AdSense. No guarantee of $ per video or even $ per view, it works almost exactly like AdSense.
Which is crucially different from Uber where the contract is that you do a task in exchange for some money, therefore meaning that you do the work for Uber. On YouTube, you're allowing YouTube to place ads on your IP for money, and you're allowed to do anything else with your work and monetize it however you like, so really YouTube is providing a service for you.
Contractors have certain legal freedoms that employees do not, such as setting their own hours, being able to turn down work, driving for both Uber and Lyft, etc -- that last one seems pretty common.
I wouldn't expect those freedoms to last long after they are reclassified as employees. After all, this is Uber and Lyft we are talking about. We know how they behave. Now the government has both increased their operating costs and given them the ability to exert more control over their drivers.
It’s like they want the medallion taxi system again.
Instead, they had the opposite effect as taxi conglomerates quickly emerged and cornered the medallion market due to economies of scale. Individual drivers could not compete with medallions priced based on 24-hour usage.
Most drivers became low-paid employees of these conglomerates. Users suffer because drivers no longer had much incentive to keep the shared company cars clean. The conglomerates lobbied to reduce the supply of medallions to protect their now sizable investment and eliminate potential competition.
In this Uber/Lyft case we are also adding regulations which make barrier to entry higher for any incumbent companies. The complication of having thousands of salaried employees is more than most startups can handle, so we are basically cementing the established players Uber/Lyft as the only options.
If drivers felt they were getting paid equitably, had fair dispute resolution, had access to benefits, etc., there wouldn't be a need for this.
a) a class A CDL takes a lot more effort to obtain than a regular driver's licence. there's a much more constrained supply, so you don't end up with a race to the bottom on the demand side as much.
b) the quantity of hours truckers can work is set by the federal Department of Transportation. with electronic logging becoming mandatory, that'll cut down even more on people being able to work off the clock.
For taxi drivers:
you absolutely do end up in this situation. there's just no multi-billion dollar company to make headlines about. medallion owners in NYC are all shady characters too.
Nobody is forcing these workers to do ANYTHING.
Regulation would force action.
It's easy to sit from a seat of having a salaried ~40 hour week job with health benefits and safety standards, which were fought for from past generations, and then scoff when similar people are trying to fight for the same.
If by innovation you mean the abuse of people forced to work in the "gig" economy, then sure.
Starvation and rent suggest otherwise. We're not so sufficiently advanced that anyone can choose not to work and expect meals and a roof over their head.
It's a new kind of working relationship, and jurisdictions insisting on one of the old categories can't really have a modern gig economy.
Drivers are voluntarily entering into the current work arrangement. Why does the government need to have an opinion on the matter?
California is basically saying that if you can't provide a good job with benefits, you aren't allowed to provide a job at all. That will result in fewer jobs.
Your proposition that if one person makes more money then other people are worse off has an element of truth to it, since, sure, more demand for a given item (like housing) will tend to increase its price, all else equal. But I think that's the wrong way to think about the situation. Wealth creation is not zero sum.
Uber/Lyft business model has just been deemed illegal. let's see if it now can be both legal and sustainable.
Uber/Lyft only existed up until now because they were violating employment laws.
Poor management of investments on Uber/Lyft’s end is a burden the lower classes should not be forced to take on.
That strikes me as a pretty condescending point of view. Shouldn't adults be allowed to make their own decisions on what is best for their own lives?
i get it, gig jobs are not perfect -- but for a lot of people, it's the only job they have. do california lawmakers think that no job is better than a shitty job?
Uber has spent their entire existence dancing in legal gray areas. It's hard to have a ton of sympathy for them when their over-generous re-interpretations of the law bite them in the ass on occasion.
> Drivers are voluntarily entering into the current work arrangement. Why does the government need to have an opinion on the matter?
This is the argument used against every single labor law ever passed. It's not even an argument.
Our government and current economy is poorly equipped to handle the gig-economy. This decision doesn't really help it, but maybe it will motivate some lawmakers to try and address it longer term.
True. But it's also hard to have sympathy for taxi medallion companies.
> It's not even an argument.
? It is, though. It's an argument that adults should be able to agree to whatever they want to agree to (or not). It's an argument for freedom.
Because constituents voted for that government which gave them the power to vote employment laws that apply to Uber/Lyft. Or are you contesting the legitimacy of the democratic process, and California's constitution?
Uber/Lyft are free to move their business to another state.
> Drivers are voluntarily entering into the current work arrangement
Irrelevant, not all "arrangements" are legal. By that logic slavery should be legal as well, if the slave enters in a slave agreement willingly, to settle a debt for instance.
Their business is providing riders with drivers. The driving is not their business.
Can't you use this excuse to bypass that clause altogether? eg. a pizza restaurant that classifies its delivery drivers as contractors: "their business is making the pizza. delivery is not their business".
Here, a Superior Court judge found that the State of California is likely to prevail on the merits in the end. The reason being that Uber/Lyft failed to satisfy the prong "(B) The person performs work that is outside the usual course of the hiring entity’s business." Basically, the judge thought that Uber/Lyft is in the transportation business, not some "multi-sided platforms" as they claim to be.
Can this injunction be overturned by a higher California court? Absolutely. Does it look bad for Uber/Lyft in the court of public opinion? Yup, very much so. That's why three's an Opinion piece in the Times today by the CEO of Uber.[0] He knew this was coming.
[0] https://www.nytimes.com/2020/08/10/opinion/uber-ceo-dara-kho...
What I don't understand is why Uber/Lyft don't just allow drivers to set their own prices. Whatever their pricing algorithm is it cannot possibly be better than an efficient market of riders and drivers bidding on trips.
I think that discussion is a tangent the real issue.
California’s elected officials already ended that discussion by writing it into law. If you live in California and don’t like the law you can call or write your representative and see if they’ll repeal or change it.
But that law is the law. It seems unlikely that Uber and Lyft will win this appeal.
What we have here are two corporations ignoring the law because they don’t agree with it, and the “hire lawyers to endlessly fight this” number is lower than the “paying payroll tax for all our drivers” number on the spreadsheet.
Just my opinion, it’s frankly disturbing how many people are ready to jump to these companies’ defense. They’re proclaiming imminent disaster, that this business model can’t possibly work with W2 employees, but I doubt that’s true.
Nothing stops Uber and Lyft from allowing their W2 employees to make their own schedules, and nothing stops them from hiring directly from the app with quick approval. They just don’t want to pay their share of the payroll tax, and they don’t want to provide family and medical leave that their upper caste employees enjoy.
...shall be considered an employee unless the hiring entity demonstrates that all of the following conditions are satisfied:
(1) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(2) The person performs work that is outside the usual course of the hiring entity’s business.
(3) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
#2 is the key issue for Uber. Uber claims to be merely a booking agent, not a ride service. This is not believed by their customers, drivers, or the courts. Nor is it the message on Uber's web site, which says "Sign Up to Ride - Reliable rides in minutes". Uber is in the taxi business.
Uber has been trying to get around #1 by allowing drivers a bit more flexibility. A tiny bit. Not too much.
Changing to employee model will result in fewer drivers (better protected), but lose out on the gig workers or even those doing multiple jobs just to make ends meet.
> Under the ABC test, a worker is considered an employee and not an independent contractor, unless the hiring entity satisfies all three of the following conditions:
> The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
> The worker performs work that is outside the usual course of the hiring entity’s business; and
> The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
It's not enough to just say "they feel like they don't work for Uber" you have to put forward a more coherent case than that.
My employer employs people (on a permanent ongoing basis) who meet some of these conditions to be classed as an independent contractor...
This is the real problem that needs to be fixed. Most other developed nations have affordable, if not universal health care that isn't tied to their employment. The status of Lyft/Uber drivers wouldn't be as much of an issue if this was solved.
Edit: spelling.
Even better (if drivers are really treated as contractors) would be to show you the rates from Driver A, Driver B, and Driver C and you can pick one:
Driver A: 23 minutes, $20 Driver B: 35 minutes, $15 Driver C: 30 minutes, $18
The issue for Uber/Lyft is they're focusing on the ride and that's nice - I don't know that drivers rejected me since they're just showing the ride cost from Point A to Point B. But that ignores actual driving time for the drivers, plus that they might end up in an undesirable area.
Uber rides become more expensive.
That money largely will go to the government in the form of various payroll taxes.
No one will remember this in a couple of years.
Because of the forgetting, we will in the future be skeptical that labor compliance was so important to the price. The idea that gig workers could have ever existed without all this compliance will seem alien and barbaric.
If anyone suggests removing all this compliance, they will be called a free market purist.
It’s odd, because I think most people actually think what is going on with gig workers right now isn’t horrible oppression, but rather adults agreeing to working conditions and having a ton of freedom.
I don’t think we will see it that way in the future. And I don’t think we will ever be able to deregulate this after the fact.
Maybe it is time to think about "virtual" citizenship so there is competition between states on may distinct levels
This can’t be true.
Uber replaced a poorly run system that actually covered most places and employed it’s labor force.
If Uber and other car services were forced to recognize their workforce as employees, there would be market incentives to support doing so.
American taxpayers pay for Uber and Lyft driver’s subsidized medical plans and other public benefits they receive because they are not paid as employees with the right to organize. Your ride may seem cheap, but you pay for it in your tax bill.
https://www.sfchronicle.com/business/article/California-s-gi...
Many other places still have working employee systems for taxis. SF could too if they wanted to change this law.
Anyway, it must be due to the recent law passed in California. Ultimately the citizens of California determine its shitty laws, and they can enjoy their rideless future and the bad old days of taxi cab monopolies because they went along with taxi medallion holder propaganda.
Finally, California tends to set trends for the rest of the country. Would we see other states go the California way and change classification of ICs to employees?
The driver is free to work his or her own hours, routes, work or not work etc.
Uber overseas the platform to ensure it operates properly and there won’t be victims.
There are many of these platforms. It makes no sense to force LinkedIn classify job seekers as employees.
"B test requires that the worker performs work that is outside the usual course of the hiring entity’s business"
Isn't this a bad test in the first place. Let's take game studios, they need contract developers for a game, wouldn't that make them fail the test and make them an employee?
This is literally what drivers do today in California.
Drivers can decline rides at will, but if a driver excessively declines rides there is punishment for this. This makes perfect sense as the platform calculates projected rates and surge pricing based on driver availability. Unnecessarily declining rides provides a poor user experience for riders, and riders ultimately can choose to take their business elsewhere. This means drivers need to be disincentivized to decline rides in order to maintain the quality of the platform.
Ultimately the relationship between driver and platform is structured to ensure a consistent driver and rider experience. The benefits arguments are more interesting, and maybe there does need to be a system for driver benefits like health insurance if they are working full time for the company, but ultimately these costs will fall squarely on consumers.
Historically low wage rise. People lining up hoping to be picked for the next piece of work.
It ended up with the labor movement to fight for 40 hr weeks, protections for employees etc.
Uber hasn't done anything new in terms of labor use. Merely communication and organisation.
But society judged the labor use to be a poor outcome in the past so where do we think it will go now?
- 40 hours -> 20 hours or less
- boss -> employee-owned
- office -> remote or shared workspaces
- set schedule -> set our own schedule
- being on call -> tech to free us from obligation
- brands -> anonymity
- benefits -> societal evolution towards public healthcare
- egalitarianism -> shared prosperity
- job security -> a scalable job market in the gig economy
- scraping by to make rent -> substantial cashflow (donating plasma, Uber, Lyft, Grubhub, Airbnb, etc etc etc)
The above points are loosely based on concepts from Burning Man (although I've never attended, sadly). Mostly regarding humanism and decommodification.
Can anyone think of some more points to add, or other sources of cashflow?
https://www.nytimes.com/2020/08/10/opinion/uber-ceo-dara-kho...
CA: "Uber drivers are employees, how bout dat?"
Uber CEO: NOT THAT MUCH BETTER....
Doesn't this lawsuit prove otherwise?
No, you can have a lawsuit for anything and from anyone. All this article suggests is that some Uber/Lyft drivers want to work as full time employees.
In the case of this suit, it was filed by the California government, not drivers.
I mean drivers may or may not prefer freelancing, and certainly Uber will say whatever supports their case, but I don’t think the State suing Uber proves what drivers want in any way.