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Comment by compycom | Hacker News Reader

Uber and Lyft are voluntarily suspending operations to make a political point; they are the ones kicking the little guy while they're down. The fact that these companies can spend 100 million to dismantle the outcome of the political process shows how little power the California government actually has.

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Tough to call anything done as voluntary with a gun held up to the head. Their entire business model (which has not been super profitable to say the least) was just made illegal in California.

Life goes on though, probably the Taxi industry is very pleased, many of the full-time drivers will go on to work as Taxi drivers, licensed with hours and all. And I'll just lower my expectations for getting a taxi dispatched within 30 mins outside of the main city.

What you call a gun to their head has been there for a year now! The only thing that actually ended was their hopeless legal effort.

So no, it was made illegal a year ago. It was Uber and Lyfts decision to do nothing to prepare.

I mean, if your business model is predicated on violations of the law, maybe you aren't a viable business as currently structured, and should restructure to be in compliance with the law?

>Their entire business model was just made illegal in California.

Their business model has been illegal since at least the 2018 Dynamex decision. The only sudden moves here are from Lyft.

I was under the impression they're planning on suspending operations because it would be illegal for drivers to operate as contractors come tomorrow. Their political stance is manifested in prop 22, but the shutdown is for compliance w/ the law.

From my understanding, the shutdown is to avoid classifying drivers as employees. Nothing has to change except Uber/Lyft having to pay payroll taxes and provide benefits for drivers working full time hours. It has nothing to do with flexibility. It's about a shifting tax burden. This shift may make the business model unprofitable without significantly raising prices.

Well, it's not "nothing". It requires having an HR org that is able to process some 50k extra headcount, among other things.

The companies already stated that hypothetically, they would hire drivers and raise prices if it came down to having to use an employee model in California, but the case they're making is that while that scenario won't be a fatal blow to them, it'll severely suck for riders and drivers.

If the business model can't be made to work when they have to pay payroll taxes and provide benefits, then shutting down is the only reasonable thing to do. I expect it's both: they cannot or do not want to change their business model to account for the new reality, and are also hoping that a full shutdown will make voters angry enough to get AB5 repealed.

(I'm not convinced that's actually the case, though, but I don't know the math around this, so it could be.)

I read that some 41% of people support prop 22 as of today, vs some 26% against (and 34% undecided)[1]

I feel like a shutdown would certainly bring it to the top of mind for people and help convert the undecided, but it already looks like it'll pass, shutdown or not.

[1] https://redfieldandwiltonstrategies.com/california-propositi...

Completely false. If classified as employees, Uber and Lyft are suddenly completely liable for anything their employees do while working. They would have to do things like start taking inventory of their vehicles, start collecting employment verification documents, start setting up payroll, figure out how to not use their surge pricing model and switch to something else, etc. Even if you wanted to classify everyone as employees tomorrow, there is a huge administrative hurdle to overcome.

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