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Comment by JMTQp8lwXL | Hacker News Reader

Who forced Lyft to shut down? Was it the state, or did they freely choose to cease operations? Obviously, spin will characterize this in any way that's advantageous. But nobody 'forced' Lyft to close.

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Their business model is on-demand transportation. The business model doesn't work if the workforce is not also on-demand. I don't think that's spin, but maybe society decides that we don't like on-demand businesses.

The state doesn't need to allow a business to continue just because they invented a business model that requires exploitative labor practices. Whether Lyft can exist is not an aspect that enters into labor law.

The business model doesn't require exploitative business practices; Lyft has chosen their prices, and chosen what they'll pay their drivers.

If prices were to go up, sure, Lyft would have less business, but presumably there is some price point that pays drivers enough and also makes the economics work for Lyft.

The statement was "The business model doesn't work if ..." and I'm saying that doesn't matter. Whether it's true or false doesn't enter in to the debate.

> Whether it's true or false doesn't enter in to the debate.

Yes it does matter in the debate.

Because when we are passing laws, we should care about both the pros and the cons of a particular policy.

You can feel free to say that the pros outweight the cons for these laws, but you still need to recognize that shutting down ride sharing is a con of these laws.

Those are the drawbacks of these laws, and it is OK for people to care about these drawbacks, and bring them up into the debate.

Uber operates in other countries which require them to use employees and not contractors (e.g. Germany), and it works fine. So it certainly isn't impossible.

That's their rationale for shutting down, which is still a choice they've chosen to make. Basically, they're going on strike as a corporation.

Not saying Lyft is without fault, but this argument excludes all possibility of provocation, which is reductionist.

McDonalds provides on-demand fast food and its employees are not independent contractors.

There are peculiarities to Lyft and Uber’s business model, being on demand is not one.

To be equivalent, you'd have to say that McDonalds is able to provide food anywhere at any time. My house at 6am, downtown at lunch, late night at 2am. In fact, the only way to do this is to use Uber Eats or something similar. And no, delivery drivers have never been that ubiquitous.

Your definition of on-demand is more like a bus or train, not lyft or uber. i.e. you have to actually go to a bus stop or train stop, which could be out of the way, and you have to deal with their schedule. That's hardly on-demand.

Uber and lyft's business model is absolutely based on being on-demand. I would take a bus or train if it was even close to as convenient.

They also work a schedule and do not get to work at BK and Mcds at the same time waiting for the next order.

> The business model doesn't work if the workforce is not also on-demand.

Have they tried it to confirm it 'doesn't work'? Maybe rideshare companies need to reduce their cut, and start putting more of that money into the driver's pocket. Doesn't mean it can't be a profitable business, though possibly low-margin. Have they tried paring back development costs, marketing costs, etc?

Converting someone to an employee means a lot more than just paying them more. There is entirely new infrastructure that has to exist now.

Lyft already has the infrastructure in place, as they already have employees.

Are you implying that Lyft is going to give every driver a salary, or are you intentionally being obtuse? This is like saying "you should be able to make dinner for a restaurant, as you already have a kitchen"

They're already losing money as is...

Uber and Lyft aren't profitable, never have been and may never be. The idea is that if only you build a strong enough brand and network, somehow there will be money in it.

In the meantime, they'll operate at a loss. If they leave the California market, they'll simple lose money slower.

I never understood the way Uber wanted to win. There is essentially zero moat, especially because the drivers are not employees in their model. So even a small competitor can just slightly pay more to the drivers, and cost slightly less to the riders, to grow. The only way out is replacing the driver, and protecting that technology. I don't see either of that happening. If technology gets good enough, Tesla/GM/VW will have it too. And they have a cheaper access to cars.

There is no evidence that the business model doesn't work, otherwise traditional cab companies would've never survived. Rideshare companies undercut traditional cabs by operating illegally, but that doesn't mean a regulated model can't work.

Does the cab model not work?

Taxis are either independent contractors driving their own or company cars and getting most or part of the fare, or employees paid by the hour who are pushed to get a particular revenue per hour. Yes, the contractors will now have to be employees in California, so that model is gone there.

The former tends to adapt okay to predictable demand, the latter tends to not at all.

Before Lyft and Uber, my usual wait time for a Taxis in the Seattle area was on the order of 45 minutes to an hour. Since the rideshare companies became common, the wait time for taxis has gone down, but its still longer than the wait for Lyft.

There's actually jurisprudence that taxi drivers can be employees, not independent contractors, even when they are working for fares and lease the vehicle. See Linton v. DeSoto Cab.

The state made their business model illegal. Yes, technically that’s not the same thing as shutting them down, since they could have switched to a different business model, but it’s a distinction without a difference.

They can still run the same business model, they will just have to increase employee compensation (and fares).

This is like saying that raising the minimum wage will drive McDonald's out of business. At the current prices, sure, but McDonald's will raise prices 10% to compensate (wages are not 100% of the cost of a burger) and keep on trucking.

Their business model was illegal before they formed the business.

I don't know whether that's true or not, but I don't think it changes my point.

The Dynamex Decision [0] has held that the State of California has always considered drivers to be employees.

[0]: https://en.wikipedia.org/wiki/Dynamex_Operations_West,_Inc._...

It was made illegal by the law that was just passed. You can't try to claim it was illegal beforehand in good faith

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