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Comment by dmode | Hacker News Reader

I dislike Uber and Lyft's practices as much as the next guy. But I also believe AB5 is a terrible bill and will be voting in November to exempt Uber and Lyft from AB5. AB5 was written to impose a 20th century employment model to a 21st century situation. As such, the bill is distorted that it carve out hundreds of exemptions to musicians, freelancers, journalists, doctors, hair stylists and so on and so forth. A bill that has to rely primarily on exemptions is no bill at all.

A much better bill could have written that could have created a healthcare and unemployment fund of gig economy workers by taxing Gig companies, without trying box everyone into the employment model

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AB5 was an absolute cop-out by the CA Legislature. They should have defined a third class of workers with protections somewhere in between Contractors and Employees.

But when it comes to the vote in November, a vote to exempt Uber/Lyft from AB5 is a vote to strip drivers of all protections. Uber and Lyft will be free to go back to exploiting drivers for <$10/hr [1]. I don't think I can tell someone else they don't deserve to earn minimum wage.

Maybe you are hoping the legislature will eventually come up with that third way once forced to, but there's a lot of momentum behind a popular vote. No US legislature has proven themselves particularly effective in the last few years. Let's not leave people out to dry while hoping some politicians will do their jobs.

[1] https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hou...

> I don't think I can tell someone else they don't deserve to earn minimum wage.

On the wage issue are you talking about the specifics of how prop 22 defines the earnings floor for drivers [0]? It definitely sets a standard even. It pays some for expenses ($0.30/mile) and the 120% minimum wage while on a ride covers a bit of time spent driving between rides. I could see though how if you have high expenses and don't get many rides you will not earn the minimum wage.

0 - https://ballotpedia.org/California_Proposition_22,_App-Based...

I didn't realize that Prop 22 added some additional protections for drivers, thank you for bringing those up! I thought it was just send drivers straight back to the basic independent contractor rules.

I don't love that Uber/Lyft basically drafted Prop 22. There are features like only paying Engaged Time and not pinning the extra per-mile rate to the IRS standard (which is $0.57 per mile in 2020) which you can tell benefit them. That being said, my argument about removing wage protections is certainly dampened by the new earnings floors.

Is there anything on the ballot to create a third way ? I believe Prop 22 is to simply exempt some companies from AB5, right ?

> Uber and Lyft will be free to go back to exploiting drivers for <$10/hr

Exploiting? Can you please cite another industry that has the capacity to employ millions of unskilled labor people at $10/hr and ALSO allow them the freedom to set their own schedule?

It's clear you've never worked a minimum wage job before. Flexibility on hours is next-to-impossible at these jobs. If people are willing to make a few bucks an hour less for that flexibility, who are you to call it exploitation?

It's not like these companies are minting profits. The alternative is these people go back to work at McDonald's and also get no benefits while being scheduled at such bizarre hours they can't even go to school and educate themselves.

Shrinking the pool of employment choices for these people does nothing to help them actually get healthcare. My mind is still blown at how the American solution to workers not having healthcare is to attack individual businesses instead of looking across the Atlantic at how the rest of the world solved this problem.

> It's not like these companies are minting profits.

Possibly because they're dramatically undercharging, loss leading, to get "market share"?

Undercharging, and drivers being paid "not very much" seems like two issues that are ... very much related.

So you're suggesting...the solution is to raise prices, and then transfer the added cost to drivers to give them benefits?

I actually know of a system by which you could do that on a grand scale...for every single worker in America. Not just rideshare drivers!

It's a concept commonly found in a far away continent most Americans have only dreamed of one day traveling to, called "Europe." How it works is simple. You raise prices throughout the entire economy via taxation, and then redistribute that money back to the less fortunate via a government provided healthcare program.

...And here's the best part, studies show it ends up lowering the price of healthcare for everybody. I wonder if something like that might be a better use of our time than trying to put Lyft out of business?

This may be poe's law at work, but it's pretty disingenuous to have the conversation in this fashion. Of _course_ it would be better to raise taxes and have a universal basic income and free healthcare. That's because the ultimate problem here isn't taxes or taxis or lyft or uber, it's capitalism.

However, given the system under analysis, because corporations have a history of making it very difficult for labor to be paid a fair and living wage, it falls to the government to use the tools at its disposal to ensure (as much as possible) that employees are paid fairly and have an opportunity to spend that pay on health insurance, because corporations won't be volunteering to do that, especially if they're already burning in excess of a billion dollars a year.

Healthcare I agree with, universal basic income I don't agree with. Healthcare should be a human right but giving everyone $X a month doesn't make much sense as it doesn't promote self reliance. I have no problem helping those who can't help themselves but healthy adults really should take on some responsibility.

And why do you believe that it's important to force self-reliance onto a society that is already ultraproductive by any comparison through history? Why does it have to be punitive instead of inspirational to be self-reliant?

Because it sounds very unnatural for a social animal such as us humans to try to be completely self-reliant... We depend on others, we always have been and we probably always will, so leverage that instead of striving for some weird artificial sense of independence.

The American system is equal opportunity not equal outcomes. The latter is the euro model. Both parts of the world often underperform the stated value/goal and we American's have some work to do here. Without throwing capitalism out it would not kill to restore the pendulum back to the middle. US corporations under the rubric of maximizing shareholder value + DC support for tax accounting + liberal accommodation for globalism has given the powerful too much of a structural bias. And def not talking solutions ala Trump here. In this way universal or basic income is a no go here.

As someone who was born in the UK and lived until the age of nearly 30 in Australia, I'd be entirely inclined to agree with you.

I agree with this position. Let workers decide for themselves how best to use their time.

Here's what I don't understand about uber/Lyft and finance people who invest in them:

- they are loss makers bleeding serious money.

- Fedex tried the independent contractor routed and was required to make them employees too.

Where is the business sense here?

I think that this would have been the right idea. We need similar for union protection (white collar/digital salaried) and for digital monopolies for big corps that don't quite fit the old Standard Oil mold

> AB5 was written to impose a 20th century employment model to a 21st century situation.

Why should employees give up rights just because it's the 21st century? Make no mistake, that's Uber/Lyft's entire advantage over traditional taxis: skirting hard-won employment regulation to lower costs at the expense of workers.

They're not employees. What rights are missing? Do you have an issue with contractors in other industries? Why or why not?

> They're not employees.

Why does this keep getting repeated? They're not contractors. They have little-to-no control over who their "clients" are. They don't develop relationships for repeat service with those clients; don't set their rates (I'd gladly pay some drivers more than others); are forced to jump through hoops to maintain 4.X ratings or they're booted. The only thing they do have control over is when to start and stop working. That's just a much more flexible part-time job as far as I can tell.

Their client is Uber. They have complete control to work for them or not. No different than tech support hired on contract. They don't develop relationships with customers, they work for the company that contracted them.

Nobody is guaranteed a contract either. If you don't perform satisfactorily then the contract is terminated. No different than tech support that are rated poorly in communications.

Drivers control their rates [1], when they work, where they work, how long they work, and which rides they accept (with user, time and direction shown first). Only thing missing is destination upfront, however that can change anyway. No different than tech support dealing customer requests regardless of effort.

1. https://www.uber.com/blog/california/set-your-fares/

Everyone keeps saying the substitute for Uber/Lyft is taxis. Maybe this is HN bay-area bias but it is just wrong. The substitute for Uber/Lyft in 95% of the US is driving your own car! Driving your own car has significant externalities, eg. More need for parking, more emissions, more drunk driving.

I don't live in CA but used to do a fair amount of work travel out there. If they don't have Uber/Lyft in the future, I'll just make work get me a rental car.

I think OP's argument is the reason why it's "driving your own car" in those markets outside of denser cities is because operating a taxi fleet is not profitable at those densities, in part because of employee protections and other regulatory hurdles, and that removing those protections (and shifting additional costs to the state) is what allows uber/lyft to create an alternative to "driving your own car" in a place where taxis have not been able to profitably operate.

I think I follow that. My main point is that outside of NYC and SF, Uber/lyft worked by creating new utility not by taking it from taxis. Now the state is steeping in and killing that utility without providing an alternative.

It could also be good public transportation. Much more efficient.

I'll believe in public transportation in CA whenever Marin county gets a BART station. Trust me if that happens we'll be able to ride our flying pigs everywhere.

What a dishonest, cherry-picked example to justify your pessimism.

The Bay area is finally electrifying Caltrain, which has the potential to connect the South bay in more ways then the current commuter connection. BART is also being expanded both in the East bay and the South Bay. And the only reason you are not getting a high speed rail to South California is because politics got in the way. But this high speed train will go between Bakersfield and Merced, making it the first true high speed train in the USA. All this while the Metro in LA is expanding and adding much needed connections in South California.

This all said, Marin County is an incredibly affluent part of the Bay area, it could really easily fix their connectivity issues to the rest of the Bay area with better and more frequent buses (I wonder why they don’t).

Is it really cherry-picked? Or if it is, is it really that difficult to pick out the "cherries"?

https://en.wikipedia.org/wiki/Atherton_station

What do you mean? Redwood City is not that far away which has a proper Caltrain stop. And—just like Marin—Atherton in an incredibly affluent community.

Sure, I will admit, California has some problems when it comes to their public transit projects. But pointing to the richest communities and how they are not getting trains is not a good example of those problems.

EDIT: Previously wrongly stated that there was a BART station close by.

Caltrain runs once an hour for half of the day. You're screwed if you don't know exactly when you'll get to the station and find a parking spot.

Thats why I mentioned the electrification of Caltrain as a good public transit project in California. With electrification, it becomes far cheaper and easier to run the trains more frequently. Currently it is just commuter service making the South bay kind of disconnected from San Francisco for anybody but commuters. With electrification, this train has the potential to become much more then that.

I know it's quicker off the mark at peak times, but is the cost difference enough to run dramatically more trains?

Yes, electrified trains require far less crew and other workers, which means the current size staff size can operate on a wider timespan for practically the same cost.

Also the acceleration and deceleration will clear the tracks far easier and quicker for the next train to arrive, leaving less congestion during peak hours and less load on the system overall.

Well then something is broken with PT in your neck of the woods. Too bad for you.

Most traditional taxis are independent contractors as well. It's the ridematching versus dispatch system that is the advantage, not the employment model.

It's easy to see all the folks here who don't remember having to wait an hour for a taxi to show after calling, if it ever did. Pushing a button on your phone and getting a ride five minutes later is magic in comparison.

And if the ride is subsidized by VC, all the better!

Why is a quickly arriving taxi more important than workers rights? Yes it's more comfortable, for you. But this model is just not sustainable for most people.

Don't forget that this thing is subsidized. It never proved to be profitable. These companies invested huge amounts of money in lobbying all over the world, fermenting social unrest and subverting democracy for a failed business model.

They try and play a long game where we both lose workers rights, and have only bad monopolistic transportation available.

Who says it is? I'm questioning whether the taxi drivers actually have any more rights. The parent comment here said that the disruption that caused ridesharing to rapidly grow this mobility segment was because the drivers were independent contractors instead of being employees. My point is that taxi drivers were never employees, either, and that the success of the ridesharing companies had more to do with user experience and reliability than their business model.

Or maybe it's because they give cheap subsidized service. What's the long game? How can they keep it cheap and make profit? They can't. Because it's an extremely inefficient endeavour.

I understand your point but I'm not sure it's relevant. Taxis managed to survive for a long time without any artificial money injection, it's probably at a stable equalibrium. Allowing this artificial market to keep growing is just a endorsing a bubble. The bigger it gets the worst the collateral will be when it'll finally collapse.

Ridesharing is profitable today. The reason these companies lose money is because of investments in other areas. Whether that's wise or not is up for debate, but both Lyft and Uber are public companies. Neither is seeking VC money at this point for further injections.

Both Lyft and Uber are public companies. If you know this is a bubble for sure, there are plenty of opportunities for you to cash in on that. In fact, if you have solid research that proves it's a bubble, plenty of people will pay you for that research.

fomenting not fermenting.

I think uber and lyft should pay more to their employees and raise their rates to reflect that. We don't need to go back to taxis, I agree with you on that, but the fare should reflect the real cost of the ride for a fair wage for the service.

It's also forcing me into an $800 a year LLC I don't want for software contracts. :-/

The LLC won't protect the company you're working with from AB5. You would need to form an S-Corp and put yourself on payroll with benefits, or work through a staffing agency on W2, or become the company's employee, or move out of CA. In other words, your only options are to become an employee of a company or leave CA.

Of course, its probably not in your best interest to mention this to the company you want to work with since they'll probably just choose to work with someone outside of CA instead. Just be glad their legal counsel (if they have any) doesn't know enough about this law to cause you more headaches.

I don't know enough either to be honest. They are a US govt contracting company on the east coast. A… staffing company as you put it. They are small and not prepared for CA employees, I'm the only one.

> A bill that has to rely primarily on exemptions is no bill at all.

Exemptions are a leading indicator of ineptness or corruption.

Can we get a list of the AB5 legislative backers?

'Ridesharing' (Which is a hilarious term for the simple fact that the ride is not being shared, the driver is not intending to go to your favorite bar. ) isn't a 21st century situation or solution.

It's not a profitable or a good force in an economy, it does not pay a reasonable wage for anyone to live on, it is not environmentally friendly unless done in large quantities of people,(which is called a bus).

Ridesharing exists to profit Uber/Lyft investors and management and is successful due to lower pricing than is sustainable. It is built on the back of loopholes in the law to use and abuse working class people and to lie about the true costs and profits.

The bill's exceptions exist to split apart reality from this subsidized artificial market (There are exemptions in most laws, purely due tot he idea that things are complex, by nature)

I see this as an attempt to make the Gig Economy pay all workers fairly in addition to healthcare costs and to put the onus on the company rather than their taxes. This would force Uber and Lyft to limit the number of drivers in an area by cost and profits, to deny those they cannot pay fairly. Uber currently may give you 100 rides a day or 1, you don't know which and you cant depend on it nor if you cant drive can get unemployment.

The hard problem is contracting work is not a known reality for most, they don't understand the costs. Dressing it up in pretty fonts and Ads makes it much like the alcohol or tobacco industries, you don't know the danger until you are very invested and nobody is there to save you.

> 'Ridesharing' (Which is a hilarious term for the simple fact that the ride is not being shared, the driver is not intending to go to your favorite bar. ) isn't a 21st century situation or solution.

Great summary for this scary situation.

> I see this as an attempt to make the Gig Economy pay all workers fairly in addition to healthcare costs and to put the onus on the company rather than their taxes.

There is a new word for this class of gig workers doing precarious labor that I've started using: the Precariat.

"In sociology and economics, the precariat (/prɪˈkɛəriət/) is a neologism for a social class formed by people suffering from precarity, which is a condition of existence without predictability or security, affecting material or psychological welfare. The term is a portmanteau obtained by merging precarious with proletariat.[1] Unlike the proletariat class of industrial workers in the 20th century who lacked their own means of production and hence sold their labour to live, members of the precariat are only partially involved in labour and must undertake extensive "unremunerated activities that are essential if they are to retain access to jobs and to decent earnings".

Classic examples of such unpaid activities include continually having to search for work (including preparing for and attending job interviews), as well as being expected to be perpetually responsive to calls for "gig" work (yet without being paid an actual wage for being "on call"). The hallmark of the precariat class is the condition of lack of job security, including intermittent employment or underemployment and the resultant precarious existence.[2] The emergence of this class has been ascribed to the entrenchment of neoliberal capitalism.[3][4]"

[..]

"The British economist Guy Standing has analysed the precariat as a new emerging social class in work done for the think tank Policy Network and the World Economic Forum.[6] In his 2014 book entitled A Precariat Charter he argued that all citizens have a right to socially inherited wealth.[8][9] The latest in the series is titled The Precariat: The New Dangerous Class[2][10] where he proposed basic income as a solution for addressing the problem.

The analysis of the results of the Great British Class Survey of 2013, a collaboration between the BBC and researchers from several UK universities, contended there is a new model of class structure consisting of seven classes, ranging from the Elite at the top to the Precariat at the bottom.[11] The Precariat class was envisaged as "the most deprived British class of all with low levels of economic, cultural and social capital." This was contrasted with "the Technical Middle Class" in Great Britain in that instead of having disposable income but no interests, people of the new Precariat Class have all sorts of potential activities they like to engage in but cannot do any of them because they have no money, insecure lives, and are usually trapped in old industrial parts of the country.

The precariat class has been emerging in societies such as Japan, where it includes over 2 million so-called "freeters".[12]"

Source: https://en.wikipedia.org/wiki/Precariat

Why do you get to decide what a fair wage is, or what a positive force in the economy is?

Taxis are an obsolete service, Lyft and Uber are overwhelmingly favored by customers and businesses.

Lyft and Uber are favored due to convenience and price. Nothing stops a regulated Uber that pays fair wages from convenience...but the price paid will have to become higher to support people.

This is like McDonald's paying workers $3 an hour, charging $2 for a value menu meal, and then people saying 'wow, McDonald's has made Burger King obsolete!'. Of course customers will prefer the cheaper service that screws workers and does not pay fairly, but (some) workers will work it because it's their only choice.

Before Uber/Lyft existed, the taxi experience sucked. Uber/Lyft provided:

- A way to pre-pay

- A way to communicate current location and destination clearly to driver

- All from an intuitive app on your phone

I'm guessing you never went to NYC, tried in vain to find a taxi when you needed one, then got a taxi driver who barely spoke English, tried to communicate where to go, ended up paying way more than you intended?

I agree, but imagine that this Uber/Lyft experience was not subsidized by VC money. Would you be willing to pay 2x of a typical taxi to get this enhanced experience? Probably most people would stick with the street taxi in that case...

> subsidized by VC money

Wait, so I get a comfortable ride, I get it fast, I get it cheap, somebody else pays for the majority of it, that somebody else has tons of their own money, not coming from my taxes, which they spend willingly on giving me a good cheap ride - and somehow this is a bad thing?

How long do you think that this will stay like this?

After competition dies out prices will skyrocket.

> How long do you think that this will stay like this?

If I knew how to answer questions like that, you'd see me on TV giving interviews about my trillion-dollar hedge fund.

> After competition dies out prices will skyrocket.

I have yet to see a single scenario where this actually happened without being a product of government-granted monopoly (e.g. patents in pharma). But if Uber is going to charge me 3x for the same ride (just as taxis do now) I'll stop using them (just as I stopped using taxis). In the meantime, I've been saving money for a decade. I think it's a good deal.

Well, yes, typically subsidizing goods/services below the cost of production (or below the market-determined "fair value") is considered anticompetitive because it drives the fair competitors out of the market (as without the subsidies they can't compete) and then once achieve monopoly control of the market, the subsidies stop and the quality of service plummets and/or the price skyrockets.

https://en.wikipedia.org/wiki/Dumping_(pricing_policy)

Except the prices didn't skyrocket and the quality of service didn't plummet for the last 10 years. I think if VCs are willing to give me 10 years of cheap quality rides, I'm in.

It would never be more expensive. And price is not the main factor (it already gets expensive quickly), the service and user experience is why people pick Uber.

Then it should be no problem for Uber to up their fares so they can hire drivers as employees

As stated, the service and user experience would change. That means less riders. That means even less drivers. It doesn’t work the same.

Anyone remember calling a taxi dispatch over and over? I used to have to call both taxi dispatches in my area (there were only two!) just to guarantee I'd have a cab get me to the airport in time. And you had to pay cash.

I think we can all agree that taxis sucked before Uber/Lyft forced them to update. But that doesn't mean we can't have a better taxi experience using the tech stack Uber/Lyft created.

This is true, but a better comparison would be to the current taxi market. As much I dislike the realities of the medallions, it's important to acknowledge that taxis have generally upped their game too.

All of this exists in the Curb app, which btw is competing just fine in NYC.

>Taxis are an obsolete service

How do you think about taxis v.s. Lyft / Uber (which I would call "taxi services")?

Ok - so we can't afford to pay people for their work any more. We can't afford benefits. We can't afford unemployment. We can't afford to create an economy where people reliably earn enough to buy housing and pay for essentials.

And this in one of the most prosperous economies in the world.

Do you not understand that this is what you're arguing for?

Do you also not understand that if you don't already have a huge pile of fuck-you money as a buffer, your privileged steady middle class job will be next to be "disrupted" - likely by the end of the decade?

Because why would your employer's customers pay more than they feel like paying when they can the same service from an automation-aided gig economy developer who has been beaten down to the point where they're two weeks of savings away from being homeless?

> Ok - so we can't afford to pay people for their work any more

We can afford to pay people, but the problem here is that it's not just me paying you a bit of money to cover your gas, insurance, mechanics, and time; it's also me paying for tens of thousands of employees and cloud datacenters and all the rest to connect me to you. That's a lot of overhead, and it's duplicated by virtue of multiple companies being in the mix doing the same thing.

Also, it was never really supposed to be a career - it was supposed to be something you could do on your way to work to help subsidize your own commute. Making a career out of a side job is certainly one's own choice, and I don't want to get in the way of that, but... are people getting benefits and guaranteed hours for busking, or being a living statue? Are people guaranteed a certain minimum pay for their lemonade stand?

>We can afford to pay people, but the problem here is that it's not just me paying you a bit of money to cover your gas, insurance, mechanics, and time; it's also me paying for tens of thousands of employees and cloud datacenters and all the rest to connect me to you. That's a lot of overhead, and it's duplicated by virtue of multiple companies being in the mix doing the same thing.

Having a high overhead and not charging customers enough to recoup it sounds like a flawed business model to me.

>Also, it was never really supposed to be a career - it was supposed to be something you could do on your way to work to help subsidize your own commute. Making a career out of a side job is certainly one's own choice, and I don't want to get in the way of that, but... are people getting benefits and guaranteed hours for busking, or being a living statue? Are people guaranteed a certain minimum pay for their lemonade stand?

No, but they're also not told that they can make a living, get benefits, etc. for busking, being a living statue or running a lemonade stand. They understand from the outset that none of that will be happening. The difference here is that Uber/Lyft imply - if not state explicitly - to their drivers that it can be their sole source of income.

If it's supposed to be a method of subsidizing your own commute, shouldn't Uber/Lyft be restricting who drivers can pick up to only those customers who are heading in the same direction/on the same route that the driver has told the app they're going?

If it's supposed to be a method of subsidizing your own commute, why do Uber/Lyft assist car-less folk with obtaining rentals?

Democratic elected leaders get to decide a fair wage because they are democratically elected leaders.

In terms of motivation a democratically elected leader motivated by the interests of their constituents is a better Stewart of the minimum wage than an un-elected boardroom whose primary motivation is investor value not the quality of life of the citizenry.

When most of the people they're legislating don't agree with the law, then it's not so democratic. AB5 is not for the people.

Um, try the Curb app. Here in NYC, it competes just fine with Lyft and Uber, but uses licensed taxis. There's hailing, pickup, walk-away payment ("pair to pay"), etc etc

Are the rates similar?

>Taxis are an obsolete service, Lyft and Uber are overwhelmingly favored by customers and businesses.

As a customer, I might favor the Uber/Lyft experience over a taxi, but I sure as hell don't favor the way that Uber/Lyft treat and pay their drivers. There's a difference.

Via the democratic process, of course. People voted for representatives who implemented a law. If you dislike that, there is an election coming up in a couple months (and one where you will be able to directly vote on this issue, at that!).

Ridesharing created a more or less competitive market for this slice of the transportation sector. Competitive markets are the best way to allocate resources. If you don't agree with that, it will be hard to have a productive discussion.

But if you do agree with that, shouldn't we resolve inequalities by directly supporting the least fortunate (with cash) rather than force parties into arbitrary economic relationships?

I agree, but there are base rules in most markets, which is why AB5 exists.

For example, an upstart McDonalds-like chain that uses App-ordering could charge much less for a burger if they paid $3 an hour. Consumers would obviously choose this chain if tyhe product is still good as it is much much cheaper. (Capitalism obviously doesn't have a conscience.) For this reason, we have minimum wage laws and (somewhat as a hack, I don't agree with the rules) health care mandates for employers, to create fair and legal playing fields to ensure that businesses' are taking action to better the economy and the American people.

I suppose a universal point I am trying to state here is: Corporations exist to better the people. Wouldn't it be overall more efficient if the the company paid fairly and the people who work for that company don't have to then request funds from the government? This ensures competition is possible by setting a floor on the race to the bottom costs.

Competitive markets are the best way for capital to extract value from workers, because without collective bargaining they pit individuals against huge corporate operations with wildly disproportionate access to legal and financial power.

They are not the best way to allocate resources - not least because they have huge social and political opportunity costs which are rarely understood by their fervent devotees.

Cash is not a solution to this, although it can be a productive first step in some limited circumstances.

The "arbitrary economic relationships" here are the ones being peddled by Uber and Lyft.

The point is neither Uber nor Lyft are viable businesses. Even with its advantages Uber is somehow managing to lose $3bn a year on its ride sharing service.

It only exists at all because investors hope it will somehow be able to throw its beta-drivers under the proverbial bus when self-driving cars finally become a thing, and too many of its drivers aren't aware of this and are expecting it to act like a long-term employer.

> the best way to allocate resources

i think the word that jumps out at me here is "best". what does this mean? is there an absolute agreed-upon best, or is best relative?

in this situation (re: ride-share companies), i think it's entirely possible that there are overall market wins -- more money ends up circulating -- but that there are local losers, specifically the employees of these companies, and local winners -- the management, investors, and employees of these companies -- and that the group of losers actually outnumbers the winners.

some folks put the rideshare-using public into the group of winners, which i think is debatable.

either way, i think it should be permissible to defend the group that's least able to defend itself -- rideshare drivers who are doing gig work to make ends meet -- even if that results in "suboptimal" global outcomes.

i think this debate broadly parallels the overall debate in neoliberal economics. for instance, yes, trade makes everyone better off on average, but in practice it makes some folks (the 1%) much, much better off, and impoverishes broad groups of other people.

i think i heard from this podcast: https://www.vox.com/2020/7/17/21327166/american-compass-the-...

the term "economic piety" -- the naive idea that by growing the pie, everyone becomes better off. this hasn't proved to be true in practice, and some economists are beginning to regard the idea with a bit of embarrassment.

I meant "best" in the sense of achieving some sort of maximum total utility, mean utility, median utility, etc.

My point is that instead of inspecting every economic relationship for "winners" and "losers", we should tax the winners and support the losers at a global level.

Competitive markets combined with regulation are the way we allocate resources in virtually every country. Unchecked competition can lead to exploitative races to the bottom, concentration of capital in the hands of people who cannot use it efficiently, and wanton externalising of costs (pollution, insurance, congestion). Ridesharing did create a competitive market and now its negative aspects should be curtailed.

I'm not in favour of a return to the 40 hour workweek which seems arbitrary and archaic and smacks of throwing the baby out with the bathwater. I would prefer an equivalent to the 40 hour workweek for contractors, we have price controls for farm workers, but for some reason act as though it's normal for Uber drivers to work for effectively well under minimum wage. We need to ensure the drivers are getting a bigger share of the proceeds at the time the profits are being generated, not afterwards after labour has lost all of its negotiating leverage and granted a massive warchest of money to capital. States like California should be competitive and fight for a share of profits, not passively roll over.

It's not really a "competitive market" if the new entrants are massively subsidized by investors and therefore never had to compete on equal economic footing.

> it does not pay a reasonable wage for anyone to live on,

Why is the purpose of a wage to live on? Many uber drivers drive part time for fun or extra pocket change. The existence of thousands of uber drivers -- who in my experience, have all been quite reasonable, nice people -- seem to directly contradict your claim that it does not pay a 'reasonable wage'. Clearly, it does for those invested parties.

What about this example? 'Driving For Uber, Sleeping In Her Car' (VICE News): https://www.youtube.com/watch?v=9abrZwnPThE

> The existence of thousands of uber drivers -- who in my experience, have all been quite reasonable, nice people -- seem to directly contradict your claim that it does not pay a 'reasonable wage'. Clearly, it does for those invested parties.

Maybe we can leave it up to the academic researchers and labor rights organizations? Why do you make a claim and link to no sources, please could you provide your sources?

Here are some sources I found:

https://www.weforum.org/agenda/2016/11/precariat-global-clas...

https://www.yesmagazine.org/issue/gig-economy/2016/08/25/for...

https://www.theguardian.com/business/2020/jan/29/gig-economy...

https://www.theguardian.com/books/2019/aug/31/the-new-resist...

https://www.theguardian.com/business/2018/nov/20/high-score-...

> Why is the purpose of a wage to live on?

This isn't a serious question is it?

Many Uber drivers are great people! I know a bunch, I know how they have been screwed. The costs are never upfront. The Driving rarely lasts as people eventually get taken out by upkeep expenses, waiting for fares, and lost values in vehicles.

Also, Uber requires cars to be relatively new, which means drivers have to make substantial payments on the car itself.

The argument X "does not pay a reasonable wage for anyone to live on true" may be true for many definitions of "live on", how is no job better? Does Uber pay more than an alternate world with no job? Surely that is the question.

Exactly. Uber and Lyft are a 19th century labor situation which masks itself by using 21st century technology

Exactly. As Professor Guy Standing says:

"The Precariat is the first class in history to be losing acquired rights – cultural, civil, social, economic and political. This is documented in A Precariat Charter. It leads to the most crucial feature. Those in it are reduced to being supplicants. The Latin root of precariousness is “to obtain by prayer”. The precariat must ask for favours, for charity, to show obsequiousness, to plead with figures of authority. It is degrading and stigmatizing." [1]

[1] https://www.weforum.org/agenda/2016/11/precariat-global-clas...

by giving drivers the right to turn the app off at any time?

when did that happen in the 19th century?

A taxi could simply turn its light off.

Underpaid day laborers could walk off the job site any time they wanted to and go to another site the next day...

I agree with you on one point, "ridesharing" is a silly word. I would call it something like an "Open Car Service".

The main reason I can't get on board with the rest of this line of argument is that it ultimately just comes down to paternalistic protection of the poor disenfranchised gig workers that you clearly view as being less than capable, rational adult humans. The number of gig economy workers has been growing exponentially for years? Somebody must be tricking them into taking this shit work, and confusing them about the real costs.

Gig economy workers have overwhelmingly spoken that they like this work, by continuing to sign up for it in massive numbers. Or at least that they like it more than their alternatives at the time. If it were some massive trap, don't you think the word would have gotten out by now? The ability to entirely set their own schedule and work as much or little as they choose is appealing enough to draw people in in droves, despite all of the downsides of this type of work.

Getting rid of Uber and Lyft completely throws out the baby with the bathwater here. It won't magically create alternative full time jobs that these workers will prefer to their current situation, it'll just make it much harder for many of them to have any work. Surely there are better incremental policies that could limit the downsides for many of these workers without taking away most of the positives for them too.

As with many far-leftist beliefs these days, I can't help but conclude that the driving factor for a law like AB5 is punitive anger towards successful, wealthy organizations. Just like with the NIMBYs using socialist rhetoric to justify blocking needed middle class housing, it's much more important that the organizations they see as the bad guys suffer than it is to maximize the overall, utilitarian good for the parties they claim to care about. I sincerely hope this way of thinking dies out, almost as much as I hope the current far-right way of thinking dies out.

> it ultimately just comes down to paternalistic protection

Isn't this same 'paternalistic protection' the same force Silicon Valley uses to guarantee monopoly rents from 'intellectual property'?

"A globalised intellectual property rights system was immensely strengthened by TRIPS (Trade-Related Aspects of Intellectual Property Rights) passed through the World Trade Organisation in 1994, shaped by a few US multinationals, backed by the US and UK governments. This has facilitated the commercialisation, privatisation and colonisation of ideas. Since 1994, the annual filing of patents has more than tripled, with the global stock of patents close to 12 million, each giving monopolistic control of some idea for 20 years or more.

Many patents result from publicly-funded research, diminishing the risk. But TRIPS allows corporations to receive monopolistic income for two decades, or use the patent to block others from producing something. Those claiming to believe in free markets should have opposed the trend, but reveal their class-based ideology by keeping quiet. There is evidence that the patent system hinders economic growth and innovation. It merely increases inequality and rentier capitalism. George Osborne, as Chancellor, made it even more blatant with his Patent Box tax break that in practice benefits multinationals coming to Britain if they have patented products, particularly Big Tech and Big Pharma. That tax break merely accentuated the plunder of the intellectual commons." [1]

[1] https://www.opendemocracy.net/en/oureconomy/plunder-commons-...

Sure? I'm not particularly familiar with this law, but I generally agree patents should have relatively modest limits.

Not sure how this applies to the current conversation though, of all the things that Uber and Lyft are commonly accused of I don't think protectionist patent enforcement is among them?

> Not sure how this applies to the current conversation though

You mentioned you disagreed with all of the OP's substantial arguments, and then you made a few claims without any sources to back it up. I am using your idea of 'paternalistic protection' to challenge a commonly held idea which posits that the current neoliberal regulations are somehow neutral. Your statement that the big tech gig-worker platforms provide likeable or meaningful jobs is very misguided and naive imo.

To address one of your statements:

> Gig economy workers have overwhelmingly spoken that they like this work, by continuing to sign up for it in massive numbers.

“Uber is lauded as an exemplary ‘platform’. When it arrives in a target city, it launches a packaged recruiting programme for drivers, usually offering incentives. Then it undercuts official taxi fares by operating a flexible, demand-based fare scheme; this lowers fares at times of slack demand and raises them when demand is strong so as to attract more drivers. Once established, Uber uses drivers to offer other services. Just as Google uses search-related advertising to generate income with which it enters other businesses, so Uber’s plan is to offer ‘transportation as reliable as running water, everywhere for everyone’.9

Thus it has branched out into delivery services, providing lunch delivery, cycle courier services and deliveries of household supplies in various US cities. It reaches out to retailers as well, offering same-day deliveries. While others such as Postmates and Shyp are in the same space, Uber has greater scale and financial clout. It can raise cash quickly from new city operations and has been able to tap investors for huge sums – more than $9 billion by the end of 2015 – with which to intimidate competitors.

This has enabled Uber to finance operational losses as it expands into new markets by undercutting actual and potential rivals. According to leaked documents the company prepared for investors, operational losses reached a staggering $1 billion in the first half of 2015.10 Yet Uber more than doubled its cash holdings to over $4 billion, giving it a handy war chest for future expansion.

Private equity financing enables Uber to squash competition through predatory pricing, extracting greater rents as its near-monopoly strengthens. Other start-ups are also gaining near-monopoly positions with the help of venture capital. They are not competing in free markets.

The USA has led the way. Paradoxically, private investors and private companies, as opposed to publicly listed companies, were boosted by the US Jobs Act of 2012 (Jumpstart Our Businesses), which was supposed to encourage firms to go public and list on Wall Street. President Obama said at the time that public companies were desirable because they expanded more quickly, created more jobs and operated with ‘greater oversight and greater transparency’. But, whereas previously private firms were required to publish detailed financial information once they had over 500 shareholders, the Act increased that to 2,000. As a result, many more companies can opt to stay private so as to keep control in the hands of a restricted group and avoid public scrutiny of their dealings.

The capital for digital platforms, even the largest of which have chosen to remain private, comes from a narrow circle of investors from mutual funds, private equity firms, hedge funds and sovereign wealth funds. It is a market reserved for the elite and plutocracy, a sort of closet capitalism. Making it even more so, investors often demand assurances that the company will indemnify them if it goes public at a lower valuation. This ‘ratchet’ arrangement grants them extra shares to compensate for any shortfall. They thereby receive a free insurance against risk, a special form of rent.”

[...]

“In the first round of this predatory model, the taskers (in this case drivers) may be among the beneficiaries, receiving loyalty premiums. But this is likely to be short-lived once a platform has established monopoly control of the market (or possibly oligopoly control by several platforms that tacitly agree to divvy up the market). The earnings of Uber drivers have already been cut in cities where the company is successfully established.”

- Guy Standing, The Corruption of Capitalism: Why rentiers thrive and work does not pay

MLM companies continue to be popular, despite the fact that the majority of people lose money by participating.

I agree that portions of the left can be paternalistic sometimes, but that doesn't mean Uber and Lyft aren't exploitative.

I think MLM is different. A small number of people might make a lot of money, funded by the losses of most of the rest. In that respect its more like gambling, and people can be more easily fooled to think that they'll be one of the lucky few.

Working as a driver for uber/lyft isn't really like that at all. You know approximately how much you can stand to make per hour. There isn't a small pool of drivers somehow making tons of money at the expense of the rest. Being a driver isn't predicated on mistakenly calculating your odds of winning big.

> A small number of people might make a lot of money, funded by the losses of most of the rest

Sounds like Uber to me.

Not sure what you mean. Are you saying later round investors in Uber are funding profits for early round investors? I could see some tech investment structures as possibly resembling MLM due to winner-take-all effects and outsized profits going to the earliest investors. Though this isn't a property specific to Uber

> Being a driver isn't predicated on mistakenly calculating your odds of winning big

Not exactly, but there are parallels. Most drivers don't take into account the costs of wear and tear on their cars, which can be significant, and Uber isn't transparent about how drivers should anticipate those costs. So part of your wages as a driver are essentially borrowing against the future value of your car. And it can take years before the wear and tear becomes apparent, so many current drivers may not have run up against that reality yet.

> I agree with you on one point, "ridesharing" is a silly word. I would call it something like an "Open Car Service".

Let's not beat around the bush, the appropriate term already exists, it's called a "taxi service". The fact that the taxi operators provide their own vehicles is not novel.

Taxis and real-time ride sharing operate quite differently, for one, I cannot just turn up and hand signal to stop a moving vehicle from the latter.

False, you cannot street-hail all kinds of taxis - for example in New York it's only yellow cabs+green cabs, black car taxis you need to use an app or call.

Uber is a pretty standard black-car taxi service, with an app.

Still different, black cabs usually calculate the fares the same way as yellow cabs, but more expensive due to pre-reservation and luxury vehicles; which are not necessarily the case with RTRS.

Does uber not charge per pickup and per mile? And they certainly do allow you to choose luxury vehicles. Maybe I'm missing the distinction you're trying to draw.

But either way that's irrelevant to the general point of whether Uber's general business model is that of a black-car taxi service.

The feature set doesn't have to match exactly to demonstrate that taxi service will not vanish instantly from California if Uber decides to leave - taxis existed before Uber and they will exist after.

Uber could increase fares and continue operating if they choose. If they decide it's not worth their time, c'est la vie, there will be others who fill this niche instead.

This is just a transparent ploy to use the employees as leverage to reduce their operating costs, they will actually continue operating here even if it passes.

The black cars are called "car service" or limo service or something like that. They are prevented from picking up rides waiving them down precisely because they are not taxis.

In Vancouver, at least, there are three players involved in providing most taxi rides:

* The taxi company, who offers fares to the driver * The driver, who operates the vehicle * The owner, who owns the vehicle

This means that at the end of the night, the taxi driver has to pay out to the taxi company and to the vehicle owner. This makes it very easy for a bad night to be a financial loss for the driver, since they still have to pay out regardless of whether they got good fares and tips or awful fares and tips.

Taxis are a 19th/20th century invention, we can do way better. Uber/Lyft are far superior, we just need to make sure the drivers aren't taken advantage of; probably by making them raise rates a bit and giving that money to drivers as a base pay.

Yeah, there are many reasons that people like driving for Uber and/or Lyft, and it's very closed-minded to say that the market can't exist if it doesn't fully and completely replace a "real job" for all of its drivers, up to and including full-time employment with attached benefit packages.

I've had friends who've done it just because they enjoy meeting people who are coming into town and hearing their stories, telling them about the area, etc. Many of the rides I've taken, upon talking to the driver, they'll say they do it because it gets them out of the house and they can work whenever they want. Very few of the people were trying to use it to replace a conventional employment situation.

We should all be grateful that the state is rescuing all of these people from the exploitative habits of these unprofitable companies, I guess.

Rational adult humans sell themselves into modern day slavery in order to feed their families, see the Qatar World Cup Stadium for example. That doesn't mean we as a society should support or enable that. That's a ridiculously naive line of reasoning. What is rational for an individual in extreme circumstances does not and should not automatically make that valid legally.

Similarly, if a market is saturated with under-paid over-worked labor forces, then you can't end up with humane, fair alternatives. You'll get those when you eliminate the exploitative markets first. Uber & Lyft didn't make new markets. They didn't create new job opportunities. They replaced existing ones - namely, taxis, and they achieved disruption via unsustainable economics & exploitative practices. There's no reason to believe that when that hole is plugged that all "order a ride" services will vanish. We'll just have taxis again. Remove some of the barriers that gave taxi services pseudo-monopolies, and there you go.

> They replaced existing ones - namely, taxis, and they achieved disruption via unsustainable economics & exploitative practices.

Corrupt, exploitative industry gets replaced with less corrupt, equally exploitative industry while also delivering far better value to consumers. Seems like a win to me.

Why are we so up in arms about Uber, when Dominos delivery drivers get about the same paltry compensation, no benefits, and far less freedom? The same could be said for pretty much all minimum wage jobs.

Like the parent insinuated, all these socialist / egalitarian arguments don't explain why we are in such a rush to fix for Uber drivers what has been broken for every low-paying job ever.

(That being said, with a rise in independent contractors, we should fix unemployment insurance to include them)

Uber & Lyft are just about as perfect an example as I can think of, of the fact that wealth isn't zero sum. You seem to be implying that it is.

How in the world could you argue that they didn't create markets or job opportunities? There are probably 10x more uber/lyft drivers in almost every city in the US than there ever were taxi drivers. People simply take more trips, or have someone else drive them when they would have previously driven themselves, now that Uber & Lyft are so prevalent. People order delivery food from restaurants more often instead of cooking for themselves. This is new money added into the economy, yes a big slice goes to the corporations, but only ~30%, the rest goes directly to drivers for whom this is a newly available source of income. Apparently 80% of drivers do it part time as an additional source of income, which they wouldn't have a way to generate otherwise.

You seem to fit very cleanly into the category I just mentioned above, you're so angry about some perceived injustice of Uber & Lyft merely existing, that you want them to be punished more than you care about any other part of this outcome. And this is not a slavery ring, nobody is being exploited, so you should take a deep breath about that too. In polls drivers overwhelmingly express a preference to remain independent contractors rather than become full-time.

You're pushing the goal posts there. We're talking about California, not Qatar, no one is taking anyone's passports here. Please move the goalpost back to where it needs to be to have a discussion, per the article of this post.

> Gig economy workers have overwhelmingly spoken that they like this work, by continuing to sign up for it in massive numbers.

This reflects the fact that they like to eat.

So how comes that Uber can operate in Switzerland a country where the state will always feed you and provide a home?

This is not exactly true. It may sort of hold (see below) if you're a Swiss citizen but nearly everyone else who make up 25% of residents is liable to be deported, not be eligible for naturalization down the line, and/or face other consequences if they cannot provide for themselves.

Also, the social services for anyone from what I've heard (as I live here but haven't used them myself) are sufficient but not always comfortable. It's noticeably far from a welfare state model like Sweden is made out to be.

No that's simply not true all long term resident (in CH for more than 15 years) have the same right to apply to it and their permit cannot be revoked. They represent like 18% of the 25% you mentioned. Of course it will create an issue if they want to become a swiss citizen, but most don't give a heck like my wife born in CH and here for 42 years, or like many friends that didn't want to go the army. The social service will depend on the canton, but they will rent a flat for you, provide 1000.- and take care of your health insurance, something that is just inexistant in the US.

I assume you mean people on C permits? Saying my statement is "simply not true" is a little strong when I specifically included an "and/or." I'm aware that permanent residents won't be kicked out for this (and probably should have clarified that it affects residents with residency dependent on financial stability), but my point is that they'll still face some consequences even if it's the effect on future naturalization and the regular chiding to apply for jobs, which I actually agree with.

I'm not trying to argue that Switzerland is a bad place for those who are unemployed, but that there are reasons that many people here wouldn't want to depend on it if a low-commitment job like driving for Uber is available.

I think that we mostly agree, my rebuttal was for the original comment implying that the choice was either Uber or starving. The situation is much more complex.

Another driving factor is intra-elite competition:

http://peterturchin.com/cliodynamica/intra-elite-competition...

> ultimately just comes down to paternalistic protection of the poor disenfranchised gig workers that you clearly view as being less than capable, rational adult humans

That is one way to editorialize what is going on. An alternative explanation is that human organization is inherently a high friction, high cost endevor, and in the case of a company vs workers/contractors, we have a massive assymetry in the degree of organization in incentives; a company is a well defined entity, gathered around the normativity of profit maximization, every stop and turn of its machinery is well oiled and properly encoded, acting as a single agent in every negotiation. Whereas workers/contractors, even though have their individual interests heavily aligned (don’t be stiffed, get a fair wage), this alignment is not by default organized, as the employer-employee relationship is a one-to-many relationship. This asymmetry, not paternalizing non-adult humans, is what drives the unfairness in negotiations in favor of companies.

Unions, legislation etc merely represents an effort in organization of the will of the “many” and to cure this asymmetry. Not saying they are perfect, not even that they work, but there is an asymmetry that gets exploited.

> Gig economy workers have overwhelmingly spoken that they like this work, by continuing to sign up for it in massive numbers

The problem in this model of negotiation is that the gig workers choices of expression are limited to “work or gtfo”. For one, given the fact that people need money to live, their participation doesn’t necessarily mean “they like this work”. Going back to the organization principle, if they were to carry out the combinatorially explosive task of communicating among themselves that they would want $5/hr more payment, or they would not work at all (quite symmetrical to the maneuver lyft&uber pulled today) it is very likely that they would get it. But “work or gtfo” binary doesn’t allow any room for expressing that. In other words, current price point is an artifact of lessened negotiation power of the collective gig workers because it is not as easy for them to negotiate collectively as uber/lyft can set the pricing.

> Getting rid of Uber and Lyft completely throws out the baby with the bathwater here.

No one is suggesting this. Not saying that the legistlation that was proposed is perfect, but the argument is “let’s level the playing field” and if Uber and Lyft can exist under fair conditions, then they do deserve to exist.

There is nothing far-left or vindictive about this. It is catching up with the innovation of exponentially scaling, tech based, loss-leader market captures. It is as far-left as reducing work days to 5 or outlawing child labor was.

In many many uber/lyft rides i have met a very few drivers who actually were doing real ride sharing. A person would get off work and turn on the app to get a fare in the direction of home.

I've yet to hear of an Uber/Lyft rep putting a gun to one of their driver's heads and forcing them to work for them. There are other sources of income out there. However, I wouldn't have a problem with the government stepping in and requiring them to set rates to guarantee a certain amount of pay per hour. Seems ridiculously low right now. It seems like we need another "type" of employee outside of the 20th century definitions of contractor and "employee". Also it seems like healthcare should be in there for those who put in significant amounts of hours.

Shameless plug of my own post

https://news.ycombinator.com/item?id=24226783

What has your posts got to do with anything ? Are you saying that the massive success of LA, SF, and CA economies are due to Democratic politicians ?

Mostly despite Democratic politicians, not thanks to. And degrading fast, as we can see in cases like this, or the more than evident net outflow.

Reply on news.ycombinator.com