I can tell you for a fact that a big reason SuperShuttle failed is because the drivers were independent. They would consistently reject low cost trips and wait it out until they got one "mega" trip so that they only need to actually work for about 3 hours/day. Some days they wouldn't take any trips, just hang out in the van playing Flappy Bird.
This was a main issue for the SuperShuttle because they couldn't get their drivers to do adapt when Uber came around, including accepting work that more resembled Uber pool workloads.
Such a simple concept yet many ignore it. Nowadays it's trendy to call such concepts "mental models".
A fully independent contractor like a SuperShuttle driver can treat each fare as a separate contract, pick only the best offers, and generally not provide the company an adequate service level to ensure a reliable stream of customers. Each driver prioritizing their short-term interests keeps that model from being a viable profession in many cases.
On the other hand, an employer is required to provide certain benefits to employees, especially if they exceed certain thresholds of hours worked. To make the fixed cost of some of those benefits viable, the employer will usually want to require the employee to work specific hours, and often limits those hours to stay within legal thresholds.
It's the flexibility of scheduling I that I think attracts people to gig work. They'll take the ability to cherry-pick the most profitable gigs if given the chance, but it isn't a core requirement.
It's probably desirable to add a third category to provide gig workers some protections without shoehorning them into the employee classification, which many of them actively wish to avoid.
1. them complaining about short fair or straight up driving off before I could get in because I wasn't going far enough (lesson learned in Vegas: get in before answering questions) 2. The constant, relentless dance about their "credit card machine being broken" "you can pay cash!" "there's an ATM machine inside"
Uber and Lyft were god sends when I was traveling a lot for work. click button, get in car, arrive at place. None of the adversarial nonsense.
At the expense of the security of the drivers serving you. You get convenience, they get a subsistence lifestyle.
Most low-paying jobs aren't known for having lots of angry/rude people working them. Probably because in most jobs you have to work with other people or interact with customers within view of your co-workers/manager.
But that never stopped drivers from playing that game anyway.
Then you are lucky. I can't count the times the drivers called me before picking me up, asking me where I want to go and then cancelling if it was nearby (or no answer at all).
I never cancel, but they do.
And when they don't do that, they are extremly annoyed when it's something close to the airport.
This is to keep drivers from cancelling based on an out of the way pick-up location.
When they call, it's almost always to get information that the app won't give them.
I've gotten burned by both.
It seems like allowing a proper market, where both riders and drivers could bid on rides, would solve both this problem and the SuperShuttle problem.
For me to have real choice as a rider, I need at least a few different offers from drivers on the table, at which point I can pick the cheapest/fastest/highest rated/whatever.
Likewise, for the driver to have a true choice, he has to have multiple ride offers in front of him to pick the best.
The reality is that in most local markets, most drivers spend the majority of their time sitting around because there are no riders (and therefore would never turn down any work), and riders are frequently so far from drivers that there is only one driver to choose from within 10 minutes waiting time, so they would be forced to accept the ride, whatever the price.
They're also unsafe, my brother was robbed at gunpoint by a fake taxi. I've heard multiple women who had to jump from a moving taxi to escape a potential rape.
Uber is more expensive in Panama, but I use it nearly exclusively.
Yeah, $20 and about 1 in 3 were visibly angry and not shy about letting me know it.
Context: I took this route almost weekly for a few years.
I suppose the only thing preventing the adversarial behavior is that the driver needs your five-star review.
[1] in the context of why women Uber drivers make less.
Because these companies are VC and investor subsidized, and apparently breaking labour laws. It isn't a functioning market. If they had to cover the full costs they would face the same issues as taxis.
I'm seeing Supershuttle availability right now (not in California but in the U.S.)
It was more profitable for everybody with this way.
Most were longtime drivers and knew historical fare. We just couldn’t get them to change their mindset.
If a business was paying their workers minimum wage and couldn't compete on price with another business that came in and didn't respect minimum wage laws, you wouldn't say the main issue was paying minimum wage. You would say it was the business that didn't respect minimum wage laws.
It seems like if all companies treat drivers as independent contractors, then the market will naturally work itself out. Drivers will compete amongst themselves and determine what they are willing to work for, and prices will adapt as needed to support that. However, if some companies don't, then obviously it isn't a level playing field. That will only be exacerbated if the company that doesn't then also further depresses ride prices to the point of operating at a loss.
Whether the current legislation actually achieves the goal remains to be seen, but the whole point is to level the playing field. I don't think anyone actually thinks that the way forward is to treat drivers as employees. Instead, I think having to treat drivers as employees is a deterrent to the current way contractor laws are being skirted, with the intent of pushing all companies to treat their drivers as independent contractors in order to level the playing field.
How is this irrational? You offer me $X for Y hours of work. If X/Y gets too small I say "no" and do something with higher utility, even if that's playing flappy bird. I don't really care that my actions destroy the source of this opportunity because I've already rejected it.
You are right that this is simple, just not in the way you're interpreting it.
It's obvious to the drivers that if they don't take trips, then they don't make money. Clearly then, they've decided that below a certain dollar amount, it make more sense to them to play computer games than take a fare. How they arrived at that conclusion, I don't know. But I have faith that it made sense to them.
I do very small software projects for people I find online. I have a minimum fee. If I take on projects below that minimum, I'd have more work, but I have determined that it's in my best interest to hold out for that minimum rate. If this means that I don't make money on that side gig a particular day or week, so be it. I have my reasons for doing that and they won't necessarily make sense to anyone looking in from the outside.
There's a minimum time cost to them for each ride or delivery. There's the time you spend finding out exactly where the person is, there can be a delay between jobs, there's delays when picking up an order.
Someone who drives 10 miles for one job will spend much less time than someone who drives 1 mile for 10 jobs. And since they have X units of time to spend in the app, they'll start making less and less per mile driven.
They also don't get paid for the time spent going to a pickup unless it exceeds a certain length: https://www.theverge.com/2017/10/24/16533940/uber-long-picku...
It's easy enough to see how, at some point, they start to get paid so little that it's in their best interest to just not drive and spend the gas and their effort
__
Here's a severe case showing someone go through that exact experience:
> I accepted the pick-up and app informed me that the customer was 13 miles away I drove there[...] pressed my App for the drop-off Destination [...] and saw that drop-off was 1 mile away
> Total time of trip, back and forth, 45 to 50 minutes and 29 miles , and I earned $8 dollars
> So, after thinking about it, I have decided to ‘decline’ all trips that are more than 10 miles away from me and do not say that it is gonna be a ‘long trip’
https://ride.guru/lounge/p/uber-drivers-how-far-will-you-dri...
Wouldn't most companies keep performance stats for their contractors, and if one started refusing lots of jobs, stop giving them work? Seems like Uber is just automating what is a normal part of working with a contractor.
With regards to unemployment insurance, this is really a hole in our safety net. Regardless of whether Uber drivers should be considered independent contractors, we should have a solution for independent contractors being put out of work.
The easiest way to allow drivers to set rates, and I'm not sure if there is some reason they haven't already done this, is to just let the driver tell the app their rate, so that they wouldn't even be offered rides below it (which naturally might mean they don't get as many), and the service would just give the ride to the driver in the area with the best rate. Obviously that would mean that if you set a lower rate you'd get more rides.
> we should have a solution for independent contractors being put out of work.
It's kind of non-applicable to the situation though, because when you have market pricing like this, you never really get put out of work, it's just that the amount you get paid may vary (and fall below the point where you seek other employment). Does Uber even do layoffs of contractors?
We have one age old solution for this problem. It's called savings.
There is a power imbalance here, and that's the root issue. The employee and the employer are not on the same level in terms of negotiating power. Hard for tech people like the HN crowd to realize, but in most areas outside overpaid overdemanded software engineering that's reality.
The first industrial revolution showed this pretty dramatically. The solution was workers rights, unions etc. Those things that others here call bureaucrats with a those-people-just-want-to-destroy-the-free-market negative subtone.
Maybe that's an acceptable trade-off, but we should be clear about it, not pretend we can just pump money from an empty well.
Maybe it’s not a viable business model.
However, don't forget that it's usually the same for a business and its customers: Ride-hailing itself is a buyer's market. Lyft and Uber are unprofitable. The only way for them to stay "in business" is to constantly burn money.
Supply and demand is not a free market ideal, it's a law of nature. Worker's rights or unions can't raise market prices above demand by fiat, all they can do is limit supply so that prices naturally rise. That means more people are out of a job, but those that are in the job might make a little bit more, if the overhead of running the union doesn't eat up the difference.
You can make the argument that limiting supply is justified, just like forcing people into pension or health care systems may be justified because people are fundamentally irrational. You just have to be able to phrase it that way and acknowledge the trade-off, otherwise you're just fooling yourself.
In which nature? Not this one...
Cost of living found to render savings unrealistic for many. Single accident, equipment failure, medical emergency or other such unforseeable found to wipe out meagre savings without warning. Precarious nature of employment market and inadequacy of social protections found to eradicate savings at horrific rate upon losing job, such that they become a countdown to destitution rather than a bridge.
Solution rejected; cannot be broadly implemented without other changes to the system. What else you got?
Preventing people from becoming destitute is a public good. People not having money to provide for their basic needs leads to increases in crime, which is bad for everyone. It leads to increases in disease, which is bad for everyone. It leads to decreases in economic activity, which is bad for everyone.
Arguing against the basic social safety net is just plain foolish and short sighted.
[0]: https://www.fool.com/retirement/2019/12/18/the-percentage-of...
My understanding is that the rider is presented with a range of possible fares before searching (e.g. $9-10). If they are matched with a driver asking for a higher fare than that range they have the option to decline.
...yet!
https://www.sfchronicle.com/business/article/Uber-to-Lyft-Yo...
I'm not convinced that having price and ride quality standards invalidates the contractor relationship.
As a kid I refereed soccer games. There was a set cost structure for each game depending on age group and whether I was assistant referee or center referee.
There was a system where I could sign up in advance if I wanted the work or not. Uber drivers know exactly what they are getting into and they are free to quit at any time.
I was not an employee of the soccer leagues, I was an independent contractor who was able to work for multiple leagues if I wanted to and who was able to quit at any time.
There is a fundamental role in society for temporary work.
The employer will always set the price in any kind of business relationship. If I hire a contractor to remodel my house for 4 weeks does this mean he is a full time employee of mine and I need to provide him benefits. If he doesn't want the work, he doesn't need to be there.
New Uber drivers don’t know what their pay will be. They can eventually keep a running average to get some idea, but that’s only meaningful as part of an ongoing relationship.
Surge pricing seems like a benefit to the drivers, but as they can’t simply decline endless non surge prices that’s not an individual price negotiation. Essentially, their options are quit the platform or accept the vast majority of whatever is being handed to them.
Actually you were an employee, just misclassified. If you took them to court you would likely win.
Being able to set your own hours, working part time, working for other employers, quitting at any time - these are all possible in an employee relationship.
In general, flexibility in classification of workers almost always plays out poorly for the majority of workers.
Also, length of relationship is judged on how renewable it is not how long it lasted. You can fire anyone on their first day.
It’s really a question of how open ended the work is not how long someone spends doing it. A restaurant always needs people to cook food and a league always needs a referee as an inherent part of it’s business model. On the other hand a company might only need an architect when designing their new office, aka it’s inherently a finite business need. That architect can largely work at a location and time of their choosing, the referee needs to be where and when the games are taking place. Similarly, an Uber driver needs to be picking someone up at a specific location and specific time going somewhere else or waiting 1 hour doesn’t work.
A contractor is someone you hire to perform a particular piece of work. An employee is someone you hire for their skill who is then expected to do many (sometimes varied) pieces of work.
https://www.axios.com/amazon-price-practice-antitrust-elizab...
Of note the way it’s implemented is actively designed not to be used. Effectively Uber lets those drivers multiply their existing calculation by some number but not for example simply set a minimum charge or actually negotiate individual trips. Further, regularly declining trips is not accepted.
I get the design. And of course uber wants to encourage lowering prices. However, the point remains: driver set prices, even if the design makes it less obvious. Eventually, if a driver has a number in mind, the driver flips a button to get that number.
As for negotiate individual trips, I don’t understand the point here. You set the prices for dollars per mile / per minute. The trip price is reflective of what the driver set already.
Why negotiation is important is overhead. Dollars per mile / per minute doesn’t cover time to pick someone up. If someone wants to go 1 miles and it’s going to take you X minutes to pick them up that’s much worse than a trip that’s 10 miles long and takes the same X minutes to pick them up. Uber really doesn’t want drivers to be able to decide such trips or people left for hours end up going to other platforms. However, Uber is pushing these losses to their drivers.
Now, if Uber is pushing people to take such unprofitable trips that’s fine if drivers are employees. But, it clearly breaks the model of drivers as independent contractors with each trip being independent.
PS: in term of breaking the law that’s not an automatic prosecution. Enforcement tends to be extremely lax on such issues.
As a contractor I can set my rate, but the company can also simply not hire me. As a contractor I can act as I wish, but the company can terminate my contract. As a contractor, I pay for my unemployment insurance if I want it.
So... What's the practical difference? How is this any different than someone who decides to make a living by selling goods on eBay?
How interesting. That inverts expectations: you need a reason to fire a contractor but no reason to fire an employee.
Ah, I see it:
> Whether the employer has a right to fire at will or whether a termination gives rise to an action for breach of contract; and...
You can't fire a contractor when you haven't written in end-of-contract terms in there. i.e. when you contract with someone and you say "I hire this person from time X to time Y for money Z for delivery of A" you can't just abort sometime in the middle and be like "welp! off you go then".
However, it is perfectly reasonable for you to have exit clauses in your contracts to say that you pay per ride and that either party can exit the contract at any time.
i.e. it determines whether the 'firing' is a breach-of-contract situation
Okay, that makes sense, but it's not a factor in this case. Only a naïve reading makes it work that way but that won't work if you have the exit stipulations.
When I sell you my Smurfs collection on EBay, I set the terms of sale and you bid. You and I come to agreement on the terms of the transaction, within some limits that EBay, as the platform, sets.
When I sell a ride to you on Uber, Uber sets the price, tells me where to pick you up, and even dictates the route I should take. I don’t even get to see where I’m taking you until after I accept the ride.
On EBay, you and I are negotiating with each other. On Uber, the driver has no say in what the offer to the passenger is.
"Uber sets the price"
In California, the driver sets their own price.
"tells me where to pick you up"
Given that this is a taxi service. The driver has to know where to pick up. In fact, how is this different from EBay? Does the seller become an employee because ebay tells the seller where to ship the goods?
"even dictates the route I should take"
No it doesn't. Most drivers use google maps.
"I don’t even get to see where I’m taking you until after I accept the ride"
That's also categorically untrue in California. The driver gets to see the trip before accepting.
Of course, all of these rolled out because of AB5. The question is: can you tell me why the driver is an employee?
The independent contractor model works both ways. Uber has the right to avoid working with contractors who continually refuse work. You can't be picky about your work but also demand the company keep contracting you like you weren't.
The independent contractor model doesn't map perfectly to gig work but it's much closer than traditional employees.
If that's the case, then Uber has no right to avoid working with contractors simply because they continually refuse work. That indicates a non-independent agency arrangement between Uber and the driver (aka "employee") and that's what they're claiming they don't have.
If I know driver X rejects all rides from a certain area, I'm going to stop showing them rides in that area. That way the user gets their driver faster.
How is that relevant? If you are an agency, you are advertising availability both ways. If you filter on behavior, you are no longer acting as an independent agency but as an agent for one side.
Disclosing pattern behavior (has rejected 12 rides this hour) is the correct way to provide value-add, not silently making decisions for parties.
User experience is incredibly relevant. The entire purpose of the platform is to match drivers and riders. If it can do that more effectively, it has become better as an independent platform.
That's fine, but we're talking about legal relationships here, not the facilitating product. If you are going to assert you are legally acting in an impartial role, turning around and claiming partiality for one party (the riders) invalidates that position.
Clearly agencies do discriminate who they match with each other. I would say that is the entire point of agencies infact.
I expect to be matched with every available role and an attempt to be made to represent me to them (and they to me). The disclaimer that they are looking for X Y or not Z is part of that. There is a practical issue muddying the metaphor which does not apply to the rideshare matching technology.
> Clearly agencies do discriminate who they match with each other.
That needs to be explicitly outlined in your contract with an agency. An employment agency is legally prohibited from doing that. This is the heart of the legal matter, imo.
Agencies don't match based on their own internal criteria. That would recharacterize the relationship between the agency and the contractor, flipping it around so that the contractor becomes their agent.
And if the driver is their agent, it matters whether the driver is classified as an employee or independent contractor.
If Uber wants to be a transportation marketplace, they can be, but they actually have to act like one. (And in fact, in CA they've been run a small trial in the Bay Area to make that shift. The trial will supposedly be expanded to all of CA this year.)
Why? Uber has a right to do whatever they want for whatever reason or without any reason. Just like the other party in the contract, the driver, can stop accepting any rides and drive for lyft if he so wants. No reason required.
The essence of contractor model is that your future offers are based on past work, not past declines. If you as a driver were giving quality ride and decided to take 6 months break, there shall be no impact on your rating.
More so, not accepting to sell your item (labour) at the first price offered becoming a cause for delisting in a marketplace is very shady and stretches the definition of "marketplace" really hard.
Does the model of IC have to imply that every ride is a new, independent contract? Is there no other reasonable model in which multiple rides are part of one contract? Why?
The obvious answer: perhaps more similar to the way it looks like right now? I just don't see why IC implies "let them decline rides without facing penalties by the platform".
This is the indie version of being salaried. Very common among software engineers, for example.
If a contractor had a contract to accept or decline every jira ticket (although I don’t see anyone ever forming that contract), if they declines too many tickets they would no longer have the option to pick.
Most customers will search for a range of rating + price - so the market can regulate itself. I mean we accept amazon displaying user ratings - so I don't know why this won't work.
The state could also pay for it, through tax revenue. Unemployment insurance seems like a great fit for a government, since any kind of massive correlated unemployment, as we're experiencing now, would absolutely wipe out any private insurer.
And I absolutely agree, divorcing healthcare from employment is the single best thing the US could do to help fix several different issues.
But "We could massively restructure the US economy" is only an answer to "how should rideshare employees be classified" if you want to ensure nothing changes.
This would immediately solve half of the problems with healthcare in this country if everyone had to use the health insurance exchanges to buy insurance.
It’s not bad, but no better than my jobs before the last one.
In Germany, neither health insurance nor unemployment insurance are paid through taxes. Both are deducted from your salary.
It is true, however, that the government subsidizes the public health insurance so that low-income households can afford an insurance.
Also, we have similar laws in Germany (and most European) countries like AB5 that prohibit misclassification of employees as independent contractors:
It's seems so obvious to me that we need to create a third kind of worker: not an employee, not a contractor, but a new category that has some of the extra freedom of contracting and some of the benefits of employment.
It's important that we maintain integrity in our legal system. Uber drivers are not employees, and saying "we need to classify them as employees so they get insurance" is fundamentally backwards.
Employees can have literally every single freedom that Uber drivers have. Nothing is disqualifying.
I agree that once we reform Healthcare and Unemployment, we can create a third category if we want, but there are actually no inherent disadvantages in freedom of being an employee in this case. The classification as contractor only really benefits Uber and hurts the common man.
Your optimism is inspiring, but there's been "bipartisan support" for meaningful healthcare reform going as far back as Nixon. Probably further. If the people who actually make the rules wanted it done, it would be done.
Also, neither unemployment insurance nor healthcare are paid through taxes here in Germany, for example, yet the system works very well.
If the business models of Uber and Lyft cannot be profitable without misclassifying workers as independent contractors, then the business model is broken.
I don't understand why so many people, in particular from the US, have such problems understanding the reasoning behind laws to prevent the misclassification of employees as independent contractors.
It's actually very simple:
- If you're employed, you don't get to choose how you do your job and when, that's done by management. In return, the company pays your healthcare, pays unemployment and various other benefits. You are also protected through your company's liability insurance in case of an accident.
Your company basically pays you compensation for stealing your time but they are responsible for your well-being and safety during that time.
- If you're contractor, on the other hand, you get to decide how you do your job and when. You are free to decline offers, set your own prices and work with multiple partners at once. You get the maximum business freedom and are your own boss. In return, that also means you are responsible for your health insurance, your unemployment insurance and the liability insurance. You usually also can make more money as compared to being employed for the same job.
Being an employer and a self-employed contractor are fundamentally different work models with both advantages and disadvantages on their own. What Uber, Lyft and similar companies do is that they want both the benefits of an employee (being able to tell workers what to work and when) without the associated disadvantages and costs for them, shifting the risks and costs towards the workers as if they were independent contractors without the workers having the usual benefits of being an independent contractor.
And that's simply neither fair nor ethical. It's just exploitation. And that's why German (and most European law) protects workers against this misclassification.
If you turn down some projects and/or get back feedback most companies will give you less work .
Consultants have to be really niche and highly skilled , hard to replace to be able to meaningfully negotiate their own terms .
Riders can choose their own rates, which leads to users being offered a "closer but more expensive" option. They also got rid of the decline penalty iirc.
https://www.uber.com/blog/california/set-your-fares/ https://www.sfchronicle.com/business/article/Uber-makes-majo...
I think it's a fair regulation for it will casually lead to the discrimination.
Also, in my country, being a taxi driver requires special license and certified car so Uber/Lyft doesn't offer the service. They don't want to pay the cost of checking if the contractor satisfy the requirements of license and car.
https://gothamist.com/news/undercover-taxi-fare-investigatio...
FedEx uses independent contractors with established rates and requirements to carry.
There are many independent contractors who can’t set rates or choose not to do parts of the job.
Even my local barber shop co-op makes independent contractors have price ranges and doesn’t let them refuse walk ins if they are on duty.
When I was an independent contractor I paid into unemployment insurance so all these Uber drivers should have unemployment insurance that they pay themselves.
Part of the market making function is matching prices offered and taken. Theoretically Uber is chopping off all the drivers with too high a price and riders who want too low of a price and “forcing a rate” is really just matching all the compatible rates that fall into a close range (“the algorithm”).
Maybe Uber could do more to show all the incompatible rates. But I think they delist drivers who would ask too high.
Yes, they can. If not, they're not independent.
If you’re a plumber and you’re charging $1,000/hr, you’ll certainly be punished for your high prices and for rejecting work after you’ve already accepted (your public reviews on Yelp, etc will take a hit).
“Real independent contractors” have much less power than you think in a competitive market.
Mandated employment benefits are a completely unjustifiable imposition on private contracts.