We’re legally unequipped to deal well with gig workers.
They’re arguably neither contractors nor employees, and shoe horning them into either category will inevitably lead to some absurdities.
They’re arguably neither contractors nor employees, and shoe horning them into either category will inevitably lead to some absurdities.
There is a very obvious solution that gives them the best of both worlds, and also helps millions of other unemployed, part-time employed, and entrepreneurial Americans. Let's make it easier for people to get by and meet their basic needs without tying their well being to long-term full-time employment at a large corporation.
None of those are linked to being an employee or contractor.
I believe for employees paid by the hour, the employer can also dictate the number of hours per week and even the specific schedule.
Employers have much more control over their employees -- that's at the heart of the contractor-employee distinction.
So it is disingenuous, when the company talks about additional benefits of being a contractor because those are all self imposed.
Yes, companies could always choose to give employees better perks out of the goodness of their heart. That's not really relevant, what's relevant is what they're actually doing. And if a company like Uber were to pay all the extra overhead to bring on all drivers as full-time employees, it would be crazy for them not to set their hours much more tightly so they would absolutely do that.
If you work for an employer who sets your hours, pay, etc., you'd still be designated as an employee.
If you sell your labor to multiple entities, and/or you set your own pay rate, you're an independent contractor.
If you do not set your pay rate, you'd be a "dependent contractor", and entitled to at least some basic worker protections, but not necessarily things like mandatory paid 15-minute breaks. Those should continue to be required for employees whose hours are set by the company for them, but it feels silly to regulate a thing like this when an Uber driver is completely free to just turn the app off if they need a break.
Employees have contracts, too.
Everything you have described as supposed features of dependent contractors are features of independent contractors. Indeed, that last point is one of the biggest historical factors (in the US, and most of Europe) for determining whether a worker is an employee or a contractor. Historically what made a worker an independent contractor instead of an employee was that a worker was economically independent from an employer for their livelihood because they had other clients paying them for the same work. The work independence factors are an outgrowth of that analysis.
As to your other points:
Many employees can set their own hours. Most white collar employees can (and now do, as a result of COVID). It is hourly workers that can't chose when they work, because they are paid on the basis of time work rather than labor performed. Generally, whether a contractor can set their own hours is determined by the contract.
I'm not aware of any contractors that can simply start and stop working during a contracted job without violating their contract, so in that respect your point isn't valid for any worker, employee or otherwise.
And regardless, I don't know of any hourly employees who can choose to stop working for several weeks without notice, and then start working again whenever they want. That is a major difference between something like Uber, and a normal hourly job. Also hourly people are paid by the hour, while with Uber you are paid by the job.
Worse, it creates distinctions that are based on factors that are largely irrelevant to the employee-contractor classification.
Today, employees are free to choose to stop working whenever they want (the US has at-will employment) and can work for multiple companies (indeed, most American workers work for multiple companies, especially those who work multiple part-time jobs to make ends meet).
I don't know of any contractor that can choose to stop working for several weeks without notice during a contract and get rehired by the client they walked out on. They'd have to find a new client. This is no different from an employee getting terminated for not showing up for several weeks.
And with respect to getting paid by the job: while this is one of the big factors for independent contractors, it is not exclusive to them. Employees in the entertainment industry get paid per job (game programmers get paid per game, members of the Hollywood guilds and unions get paid per project, union musicians get paid per recording or tour, etc.)
Also the restaurant worker is guaranteed minimum wage, while the dependent contractor is not, since they are not paid hourly.
True, they're not nearly as empowered as a traditional independent contractor like a plumber who can set his own prices, but they're not as powerless as a traditional employee who has no control over their hours either. They're something in between, and their work should be regulated as such.
They are basically a contractor but are not required to register as a company.
They are still forced to have a accident, health and pension insurance but not a unemplyoment insurance(like employees have).
Doesn't apply to uber though afaik.
Laws written in the past often are deeply tied to the assumption of one american lifestyle and dream, which is no longer the reality, and thus is very inefficient for many many people. Laws written to instead capture the concepts and algorithmically scale them would be much more effective. Something like $EMPLOYER must pay N/40ths of the healthcare cost where N is the number of hours worked. People with 2 jobs could get full healthcare premiums covered.
People who want to scale back to 1/2 time would know what to expect and it wouldnt be a binary decision factor.
Gig economy was designed to circumvent overburdening regulation and supply restrictions, making the service cheaper, more available and more effective for users. The benefits of this are very obvious in the case of taxis versus uber.
Yes we are equipped to deal well with gig workers, it's just that Uber doesn't want to play by the rules and want to have it both ways. Let drivers set their own fare, for starter. "Gig workers" aren't a new category of workers just because you use some corporate newspeak to describe these workers.
Uber has allowed this since June [1].
1) Part A of the test requires that 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
2) Part B of the test requires that the worker performs work that is outside the usual course of the hiring entity’s business; and
3) Part C of the test requires that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
4) The contractor must actually be in business for themselves.
[0] - https://www.californiaemploymentlawreport.com/2019/03/unders...
[1] - https://www.dir.ca.gov/dlse/faq_independentcontractor.htm
2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service.
3) Drivers are independent workers, in business for themselves.
4) Same as above.
With these criteria it unambiguously seems to be the case that ride share drivers are independent contractors. I struggle to see how one could make the case that they are employees.
That is some serious mental gymnastic.
Trying to claim that a software service to run a marketplace to sell X is the same thing as actually running a business of building or doing X takes some mental gymnastics.
Even more importantly, with an actual marketplace, you don't transact with the marketplace--you transact with the stores.
And with respect to your Apple analogy: Apple doesn't claim to be in the business of making music, just selling it. Uber/Lyft do claim to be in the transportation/food delivery businesses, and it's literally all over their legally binding SEC filings that the provide to investors every few weeks.
If it quacks like a duck, and it walks like a duck, and it swims like a duck, you can call it a digital platform all you like but it's still a duck.
Uber is in the personal transportation business, at a broader high level. It's in the business of operating a market for rides. Just like how a record store doesn't actually compose and record the music it sells, Uber isn't in the business of actually driving people around. That task is fulfilled by independent workers, who use the platform Uber and Lyft operate to find customers.
Can you point out in said SEC filings where Uber says, "our company's primary business is operating motor vehicles to transport customers"? As in, actually driving their own cars? Because from what I've read they're very careful about describing their business as operating a marketplace for drivers to conduct their own businesses.
On its 10K, Uber identifies "gross bookings" as its primary revenue stream. Not "net bookings" or "commissions" or "marketplace fees." Gross bookings. Meaning that it treats all of the income from a ride as its own income, meaning that it's primary business activity is providing transportation services. The same is true for Lyft.
If they want to claim to be technology companies that only make their money from marketplace fees/commissions, they're free to do so but they'll need to change their financial and legal filings to match (and possibly their fare structures as well, since there's a mismatch between what riders pay and what drivers actually get). The reason they haven't done so is because that amount would be a lot smaller than the gross bookings number, but they can't have it both ways.
Yes, Uber and Lyft are involved in providing transportation services but their involvement is in connecting customers with transportation providers. Calling Uber and Lyft taxi companies makes about as much sense as calling an Expedia an airline. Expedia provides air transport, but through reselling the services of airline companies like Delta or Alaska. Uber and Lyft provide transport by reselling the services of independent contractors. Uber and Lyft are taxi companies as much as Expedia is an airline: they're not.
A driver does not know how much a passenger is paying for the ride. The passenger does not know how much the driver is receiving for the ride. Ergo, they cannot have formed a valid contract with each other. On the other hand, the passenger knows how much they are paying Uber, and the driver knows how much Uber is paying them. This indicates that the common relationship is Uber, and that the driver is acting as Uber's agent with respect to the driving services. This is supported by Uber/Lyft treating gross booking as their revenue. It is a long-standing principle of GAAP that if you are collecting money on someone else's behalf as their agent, it's not your revenue. If you are treating the money as your revenue, and their services as an expense, that indicates they are acting as an agent on your behalf with respect to the services/whatever that gave rise to the revenue. Because the driver is acting as Uber's agent, AB5 comes into play to determine whether they are an employee or independent contractor.
I don't know why you're fixated on Expedia. Expedia is a reseller, which is a thing that has existed as a legal construct for over a century and has an actual meaning and requirements defined by law. Expedia doesn't resell services, it sells reservations/tickets/etc provided by third parties that represent a right to a specific performance of a specified service at a specified time and place by that third party. Importantly, once a transaction is completed on Expedia, the customer must generally seek customer service from the third party, not Expedia, because Expedia's role in the transaction is completed, and Expedia only provides relief if the third party will not, and that relief is limited to refunding the customer for the amount they paid Expedia.
UberLyft don't sell services provided by third parties, they sell a service (transportation or food delivery), and it happens to be performed by third parties on UberLyft's behalf. In contrast to Expedia, none of the participants in the transportation or food delivery service get to select their putative counterpart to the transaction, or the financial terms of the transaction, and after the driver's part is concluded they usually have no further interaction with the passenger as customer service service issues are provided by UberLyft, not the driver. IOW, there are no hallmarks of a business relationship between the driver and customer.
> UberLyft don't sell services provided by third parties, they sell a service (transportation or food delivery), and it happens to be performed by third parties on UberLyft's behalf.
Which is exactly why the drivers are contractors. You seem to understand that the drivers are third parties, yet are fixated on irrelevant things like revenue from bookings to try and distract from this fact. That Uber treats all of the money paid by the passengers as revenue does not alter the fact that it's drivers are contractors that set their own hours and can drive for competing services.
But has Uber done the same? Can you charter a car actually driven by Uber employees? As far as I am aware, Uber exclusively builds a platform to link passengers with independent drivers - who can and often do drive for competing services. Akin to what iTunes was before Apple started publishing its own music.
Uber buys cars and leases them to drivers, it offers full-time professional drivers through Black, it invests billions of dollars into self-driving cars, it offers delivery as a B2B service. Look at the Uber Eats advertising[1] - they aren't claiming to connect you to drivers, they are claiming to connect you to your customers.
Uber's core business is clearly driving.
You say that I Uber offers full time drivers through black. Do you mean that Uber assign drivers to work at a specific time frame for a significant duration? All I can tell about Uber Black is that it offers drivers with more stringent requirements (more licensing, more permits), I don't see any advertisement of having someone chauefer you around for a week. If Uber does offer that kind of service, then drivers rendering that service should be employed.
> Look at the Uber Eats advertising[1] - they aren't claiming to connect you to drivers, they are claiming to connect you to your customers.
Yes! This is entirely the point. The driver is a fairly minimal component of an Uber Eats order. Deliver usually amounts to less than a third of a delivery at least where I live and easily under a fifth. And for that reason Uber contract out this part of delivering an Uber Eats order. Simply asking the public "who wants to take this order to the delivery address?" and creating a market for labor is a more effective solution than making hiring decisions, trying to schedule people fairly across the day.
If object to the contractor model as a whole that's its own criticism. But it is exceedingly hard to claim that Uber's relationship with drivers who participate in the market it runs is that of an employer to employee.
This seems like _quite_ a stretch. With that logic you can make any modern company a "technology business" or a "logistics business", and suddenly everything a company does is outside of their core business.
2) I laughed so hard I scared my neighbor's dog. Uber is a transportation service that happens to use technology (in the form of software) to provide it's service. Have you read their SEC filings or any of their other legal documents? In their own legally binding filings, they describe their primary business as providing transportation and food delivery services, not as a "platform" for whatever.
3 and 4) This is false, but it's a tricky point. Under AB5, it's not enough to just drive for multiple companies; a driver must satisfy certain legal formalities related to being in business for themselves, like setting up a legal entity, getting their own insurance, etc., to prove they are "customarily engaged" in the business. (Note that points 3 and 4 were distinct in the case law but were combined in AB5.) Most drivers haven't done this.
Also, you misstate (or rather, only partially state) the description of their business in SEC filings. They describe themselves operating a market for food delivery and personal transportation. They are in the business of transportation and food delivery, but they are a in a different layer than the people actually driving cars. This is akin to saying Expedia is in the airline business. Yes, but they sell airline tickets they don't fly planes. Calling Uber a taxi company makes a out as much sense as saying Expedia is an airline.
And for 3 & 4 this could easily be resolved by having driver set up their own LLCs. But I'm not convinced this is actually a requirement. Plenty of people are contractors and fill out 1099s without operating their own LLC or partnership or some other type of company.
AB5 doesn't apply outside of the worker classification context, so your rambling about Doordash and food safety regulations is just bizarre. You're right that DoorDash is in the food delivery business and so its delivery drivers would be its employees under AB5 (and thats what the underlying case decided). Door Dash is not in the food preparation business, so restaurant workers wouldn't be treated as DoorDash's workers.
Contrary to your insistence otherwise, running a platform that connects buyers and sellers of something is not the same thing as actually providing that good or service yourself. People say that it takes mental gymnastics to arrive at this conclusion. I see the opposite: how do you manage to convince yourself that people writing code at Uber are in the same line of business as getting behind the wheel of a taxi? How do people convince themselves that a PM at DoorDash works at a restaurant?
I agree that running a platform that connects buyers and sellers in a marketplace is not the same as providing that good/service itself, which is why Amazon Marketplace and eBay don't run afoul of AB5. But UBER/LYFT DOES NOT RUN A MARKETPLACE. They would have to make significant changes to their apps to be considered "marketplaces" by any reasonable or historic definition of the term.
This is akin to saying Expedia is in the airline business.
This is not at all like saying Expedia is in the airline business. Expedia operates like a marketplace. It buys inventory from airlines and hotels and resells them to customers. The ultimate commercial relationship is still between the customer and the airline/hotel. That is not the case with Uber/Lyft as they are currently structured: both the rider and the driver have the commercial relationship with Uber and it only exists through Uber.
And for 3 & 4 this could easily be resolved by having driver set up their own LLCs. But I'm not convinced this is actually a requirement. Plenty of people are contractors and fill out 1099s without operating their own LLC or partnership or some other type of company.
AB5 provides a lot of exemptions, so it's not necessary in every context. Rideshare drivers aren't one of the exemptions.
Crucially, your statement that the commercial relationship only exists through Uber is patently false. Drivers can, and do, driver for different ride sharing companies. A passenger could hire a driver through Uber on one day, and hire the same driver through Lyft on the next.
When I book a flight through Expedia I enter a contract of carriage with the airline, not Expedia. This is a contractural matter, not just an abstract concept of "commercial relationship."
(In contrast, with taxis, signage in the vehicle indicates that proceeding with a ride does indicate acquiescence to the standard terms locally governing taxi services.)
Taxi services and medallions specifically allow drivers to be hailed from the street. Uber and Lyft drivers don't get hailed Dr the street and thus don't need taxi medallions. This isn't something new, services like Super Shuttle operate in the same way. Uber drivers don't have such signage because they're not taxis, they're like super shuttle. You didn't hail them from the street you booked a ride through a service.
What good is all that software and technology if a driver doesn't pick me up when I request a ride. Uber very much depends on drivers to perform their core function.
Pointing out that Uber would cease to function without independent contractors is entirely correct, but does nothing to demonstrate that that these workers should be categorized as employees rather than contractors.