California has the curve ball of the proposition system. Its not that hard to make it to the ballot with anything. It can be a little silly but it is what it is.
How is this a term limits issue? What would you like to have seen?
That is where special interest is most heavily felt. This court ruling is mostly meaningless. There is a proposition on the ballot that directly addresses this employment/independent contractor issue. It would supersede the legislature and make it nearly impossible for the legislature to repeal or amend the law. The prop also happens to have the most expensive campaign in history behind it. Something like 90-95% of the money came in on the Yes side and it is almost exclusively coming from Uber, Lyft, and similar companies.
Basically these companies didn't get what they wanted in the legislature. They didn't get what they wanted in court. So they are trying to buy it from the public. They are hoping we aren't motivated enough to educate ourselves on the issue and will instead just vote Yes because all the campaigning is telling us to do so.
Uber and Lyft will no doubt relocate and cease operations in California altogether if they can’t get around this. I guess the pandemic is a good time to do that since so many workers are remote, but there is no doubt in my mind that’s going to happen. The bill that was passed is an existential crises for them. The business model was intended for people to make some part time money. Like selling stuff on Etsy. It cant support paying drivers like they are salaried workers. Not many of them at least. It’s all around bad.
When states and the feds start regulating companies like this, it’s a prime example of the failures of our governments to provide for the people.
There are certainly some folks who drive just a few hours a week and the companies like to highlight that by releasing stats like “% of drivers drive less then 5 hours”. I think “% of driver time by drivers over 35h/week” would paint a different picture and show just how much they rely on full time drivers.
I'd actually say though that what you identified (gig worker for Amazon warehouses) might be desirable if we had many "benefits" divorced from your employer, like the 401k, health care, etc. What if I could work my salaried job, and then sign up to go work a shift at the warehouse?
It's not just benefits that employees receive, it's also taxes paid on employees. Moving benefits out of employment is a good idea, but if that happened, the taxes to fund these services would come from employers again. So Uber would still be more or less leeching off of society by not paying its share of social funds
Secondly, the discussion of hours, while potentially having some philosophical merit, isn't especially material in the scheme of things. Uber can't survive with everyone driving fewer than x hours. A lot of their comp structure tries to incentive people to drive as much as possible, with nonlinear increasing rewards for those who drive the most. Their business is built on network effects. If there's fewer drivers, then it costs more, so fewer people ride, so fewer people want to drive, and the more expensive it is the keep the driver population thriving. The idea behind surge pricing is that you create flash incentives to get drivers out there when demand is high. If there's a cap on hours, you've now got a competing interest which says there's an incentive to NOT work while the market isn't surging- because you might cost yourself greater earnings down the line.
It's a lot easier to get a driver doing 5 hours to do 8 hours instead, than it is to get two drivers to do 4 hours. Labor has switching costs for the drivers.
> If there's a cap on hours, you've now got a competing interest which says there's an incentive to NOT work while the market isn't surging- because you might cost yourself greater earnings down the line.
Ok so then is the cap 8 hours? 10? Is it 7? It seems to me that you're inventing more problems to solve a different problem than is worthwhile. You can have more drivers doing less hours, if the economics of it work (and neither of us know whether or not it does, and ironically enough I doubt the State of California does either). The point isn't to move goal posts around a set number of hours, the point is to illustrate that is exactly what you're advocating for.
Odds are good that if health insurance benefits are pushed out of employers, you're going to see it funded by a tax on top of wages, not a corporate income tax, because the former is directly tied to the number of people the org is supporting in the United States and the latter is not. The classification of employee vs. contractor is still salient. It's still a good idea nonetheless.
> Ok so then is the cap 8 hours? 10? Is it 7? It seems to me that you're inventing more problems to solve a different problem than is worthwhile. You can have more drivers doing less hours, if the economics of it work (and neither of us know whether or not it does, and ironically enough I doubt the State of California does either).
I don't think there's any philosophical merit to claiming someone working 7+ hours a day is not a full time worker. We may not know the exact economics, but we do know they're not great. Uber loses billions per year, and pays substantial money to deal with high driver turnover. A mixed system makes it worse.
Sure, but there are ways to fix that. I'm not really a big fan of corporate taxes just because they seem to always either find a way around it, or they just raise prices. It's hard to escape.
> I don't think there's any philosophical merit to claiming someone working 7+ hours a day is not a full time worker. We may not know the exact economics, but we do know they're not great. Uber loses billions per year, and pays substantial money to deal with high driver turnover. A mixed system makes it worse.
I think the issue here is the definition of full-time work is not enough. It has to include other things, like having to physically go to a place of employment, work hours that you're told to work, etc. Should AirBnB have to employee hosts? Why is it different? You can't make the hours argument, because there are plenty of Uber drivers that don't drive "full time" and plenty of AirBnB hosts that run AirBnB full time. It also messes with any other sort of gig work, hence why the state had to go back and carve out all these exceptions - which is in my opinion usually an indicator of a bad or poorly thought out law.
Here's the actual issue. These gig workers, or contractors, or whatever you want to call them need benefits (healthcare etc.) that the government isn't paying for. The government needs to pay for that by raising taxes and/or lowering costs, etc. The way to do that isn't to make Uber and Lyft leave California and leave those workers without any sort of income. Even if it was right to do so morally (and I doubt that it is), it's wrong to do so practically. To me as I've stated previously, this looks like a government failure, not a failure of Uber and Lyft.
This entirely depends on how the tax is written. Independent contractors already pay "more" for social security to cover the taxes that the employer would normally pay. I suspect that the law would be written such that the total healthcare tax placed on an individual is the same regardless of if they are W4 or 1099.
> Sure, but there are ways to fix that. I'm not really a big fan of corporate taxes just because they seem to always either find a way around it, or they just raise prices. It's hard to escape.
There's no way around payroll taxes for employees. The ones they elude are corporate income taxes. If they have to raise prices to cover the cost of insuring drivers, or paying their share of social funds, then good. Because if they don't, its the public that bears the costs.
> I think the issue here is the definition of full-time work is not enough. It has to include other things, like having to physically go to a place of employment, work hours that you're told to work, etc.
There is more to it. What you're arguing for is an escape rule if hours are too low, that supercedes all of the other logic.
> Here's the actual issue. These gig workers, or contractors, or whatever you want to call them need benefits (healthcare etc.) that the government isn't paying for.
No, the government (the public) is paying for it, because Uber and Lyft aren't.
> The government needs to pay for that by raising taxes and/or lowering costs, etc. The way to do that isn't to make Uber and Lyft leave California and leave those workers without any sort of income.
The government needs to do that by raising taxes on Uber and Lyft, which is largely the point of making these people of employees. Is there a middle of the road version where uber just pays the proportion costs that drivers earn pro rated to the hours they work? Yeah, maybe, but that's likely not viable either. Uber is already in the red because their business model is bad.
If we imagined them paying their fair share, would you support an explicit subsidy to help keep them in business in CA? God I hope not.
And it's not like California just decided to target those two companies for fun. Labor unions lobbied Lorena Gonzalez to get AB5 passed so that they could have more dues paying members. So there's a clear special interest responsible for AB5.
No, it didn't.
AB5 codified a court decision with much broader impact than to those two companies, and in doing so exempted a few other impacted industries from it, leaving more than those two companies, and more than the industry they are in, still affected (whether you count the bill and the court case together, such that the impact is those not exempted, or separately, so that it is those exempted.)
Almost no one liked it, least of all those supposedly benefitting from it.