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Discounting the tripe "You go girl" tone of the article, there is no divine law asserting that there ought to be only two forms of (W2/1099) employees. The labor laws should change in tune with evolution in technology. However given the current dysfunctional congress, and from experience with other Patent/Immigration laws this won't happen any time soon. Had it been about Patent/IP litigation and any other lawyer the tone of the article would be different.

This is parasitic legal rent seeking at its worst, let's call a spade a spade.

Here is an WSJ article that calls for change in labor laws.[1]

[1] http://www.wsj.com/articles/what-if-there-were-a-new-type-of...

This is parasitic legal rent seeking at its worst, let's call a spade a spade.

Or, its someone fighting organizations profiting illegally by flouting labour laws that have protected workers from corporate exploitation for decades.

But potato, potahto, right?

"Fighting organizations" is a rhetorical device used by lawyers to fool general public and people like you.

The reality today is that there is a large lobby of litigators actively trying to keep any change in labour/Patent laws from happening. [1]

I own no shares of Uber Inc. and any other companies involved in these litigations. But the reality is that by framing this incorrectly as David (The attorney) vs Goliath (Uber et. al.) fight the article is just pushing your emotional buttons. At end of the day litigation is not going to magically create jobs out of thin air. Uber will eventually shift to autonomous cars or will go bankrupt or might end having chinese drive the cars via video conference. It's easy to blame Uber for the mess that is the employer provided insurance.

Its not the Uber which created that problem, its the legislative gridlock which is at fault. But its cooler these days to hate Uber for all that ills the hapless middle class in USA.

[1] http://www.usnews.com/news/articles/2014/09/16/how-the-tech-...

Employer provided insurance is a mess. Ideally, we would have only the most basic labor laws, but a guaranteed income or similar safety net to make up for it.

But we don't have that. What we have is an awkward balance where employer provided benefits are a big part of the safety net. While that remains the case, it's really important to make sure that companies follow the rules.

The fact that the core problem is more systemic than a specific company and set of grievances doesn't mean there isn't value in litigation.

Would forcing Uber to pay into state disability and worker's comp fix all of the problems our country has with labor / insurance / etc? Absolutely not. But at an absolute minimum, would it improve life somewhat in the short term for current Uber drivers? Probably.

The way that inappropriate laws get fixed in the US is that new laws get passed, not that people violate the laws that seem irrelevant to them. I have no objection to Uber lobbying for laws to introduce a new class of employees (and I have absolutely no objection to Uber or anyone else making life hard for the taxi lobby). I do have a strong objection to Uber deciding to treat employees in a way prohibited by law because they, on their own, think it makes more sense.

"Legislative gridlock" is a weak excuse. Plenty of legislation gets through, from PPACA (which had, and continues to have, widespread objection) to USA FREEDOM (even if you claim PATRIOT's expiration was the result of "deadlock", the replacement came a day later) to JOBS (specifically legalizing things that startups wanted to do!) to allowing people to unlock their cell phones (not really a Big Foo priority). If the people really want Uber and Airbnb -- which they seem to -- why can't they just get a law passed? And why can't all these innovative, well-funded startups figure out how to disrupt and fix something as obviously dysfunctional as our political system?

My worry is not so much with these particular ways they're breaking the law; it seems like this is probably reasonable (though I'd still like someone other than Uber to consider it). My worry is with the loss of the rule of law, and the precedent that we're not going to care about whether the law is followed. It's certainly true that Uber et al. aren't the first companies to break laws, but this seems like a qualitative change in what laws are being broken and what the impact on society is, and a democratic society should be able to have an opinion on it.

>The way that inappropriate laws get fixed in the US is that new laws get passed,

Fixed a lot of inappropriate laws, have you?

... It was a statement of fact.

I know how a plane flies without being a pilot.

Obvious troll is obvious.

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Let's call a spade a spade. Can anyone point to Uber showcasing their love for their employees? All I see is the opposite. I mean they are actively looking to replace them with self driving cars. They could care less about their 'contractors'.
Which is kind of the point, they aren't warm fuzzy come work for us, we're a family, you're a valued employee.

If you work as a driver for Uber you're a contractor, they could give a fuck whether you drive for them lyft, whatever, they don't care. Want to only work from 2am to 3am on Saturday nights? Knock yourself out. Didn't show up on time at 9am? Don't care. Oh, you're in South Africa this week and aren't taking any shifts? That's fine too. If there's work, work if not, fuck you.

To Uber you are the 'self' in the self driving car a machine to be replaced by a slightly cheaper model. That smells an awful lot like contractor and not a lot like employee. The only reason developers are employees is because contract developers are more expensive than employees who don't realize sodas aren't actually that expensive for adults with real skills.

> The only reason developers are employees is because contract developers are more expensive than employees who don't realize sodas aren't actually that expensive for adults with real skills.

Uh, no. Being an employee has a lot of rights that a 1099 person doesn't have, like the right to unionize, the ability to collect unemployment insurance if the company you're working for goes under, being a part of a health insurance pool for lower medical costs, access to the Family and Medical Leave Act rights, etc. There are a lot of things that employees get that aren't just "free sodas".

I've contracted and had access to all those things, though I don't see the point of unionizing as the sole employee in my own business... Nor would I see any point in rights under the 'Family and Medical Leave Act' when I could take as much time off as I liked and pay myself whatever I wanted to during said leave.
Maybe labor laws should change, but they haven't changed. "Regulation is for other people" as a business model is a bad way to effect that change.
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Rentseeking refers to trying to get compensation for economic activity that would happen without you. What this lady is doing is not rent seeking, because the economic transactions at issue (treating workers as employees), would not happen without her lawsuits.

More generally, just because new technology exists doesn't mean that the law needs to change. Technology in this case has made engaging in certain work relationships easier, but hasn't created new work relationships. People have been freelancing as maids or drivers long before you could use an app to hire them to do those jobs. And the factors that fact typically used to figure out the treatment of workers still make perfect sense in the Uber context. E.g., Uber's drivers do have a lot of schedule flexibility. On the other hand, they impose tight service standards and tie them to their brand. How Uber's employees should be treated can thus be decided by applying the existing principles and factors.

The labor protection versus employment freedom debate is much older than Silicon Valley, and the debate today doesn't really involve any new concepts. The WSJ was pushing for weaker labor laws decades ago, for the same reasons as it is now. Of course they're donning the mantle of disruption now--that's standard procedure when you're trying to relitigate a settled debate. But that's just a rhetorical device.

I agree that the labor laws have an "impedance mismatch" with the on-the-ground reality and I tried to spell out what that was in another comment [1]. Basically, laws shouldn't be discontinuous like this -- where all the rules sharply change when you just 50.001% look like a contractor (or the opposite). It should be more like "as you start to look more like an employee, you must adhere to more of a certain requirement".

Don't know why you're getting voted down so hard.

[1] https://news.ycombinator.com/item?id=10717768

It would have been nice if this article addressed the negative consequences of these companies skirting labor laws. The only mention of this is here:

"she alleges that these firms exert the kind of control that employers would have over employees — without providing any of the benefits employees, by law, are entitled to."

But it doesn't explain what specific benefits are being withheld from employees, so I don't know what bad thing she is trying to prevent, or the magnitude of the problem, if there really is one.

State Disability and Unemployment Insurance
W2 employees have all kinds of protections that 1099 contractors don't. Paid sick time, FMLA leave, retirement plan contributions...A big difference is that 1099 contractors must pay their own self-employment taxes (15%) to cover Social Security and Medicare whereas W2 employees have half of that paid for by their company. (Economists would say that comes out of wages, but it still means $15/hour W2 is not directly comparable to $15/hour 1099.)
>still means $15/hour W2 is not directly comparable to $15/hour 1099

of course not that is why contractors get paid more than salary employees. If contractors dont ask for more money per hour then its their own fault.

Can you show me how "independent contractor" Uber employees can ask more per hour?
Which is, incidentally, one of the points this case will hinge on. Being able to set your own rates is one of the key differentiators between contract and employee labour, and Uber drivers clearly do not have that ability.
They can't (currently) and this is why they are being suckered. 1099 has always been different than being a W2 employee. They should be being paid more to cover the differences of being an independent contractor for the same work, but they choose to forego out of their own volition and are now complaining about it.
The most recent issue of Mother Jones also has an article about Liss-Riordan and her employment law lawsuits. According to the article, she got her start suing restaurants that were skimming tips from employees -- which Uber is also accused of.

http://www.motherjones.com/politics/2015/12/uber-lawsuit-dri...

Oy gevalt! That again? It's the modern version of counting angels on a pin.

Uber said, "drivers get this percent from the fee, Uber gets this much". Uber claimed "tip's included". Modern philosophers claimed this makes a difference because the law prohibits taking a cut of tips.

But there is no difference! Any allocation of the fee can be rephrased as being "with" or "without' a tip in such a way that the money flows are all the same. There is no "fact of the matter" as to what part of the fee is a tip! Any phrasing can be correct!

Let's say Uber took 25%. You can say that the fee breaks down as:

1) 25% to Uber, 50% driver payment, 25% driver tip

2) 25% to Uber, 75% driver payment, no tip

3) 25% driver payment, 75% tip to driver, which Uber takes a 1/3 cut off (illegal).

If the law treats observationally equivalent situations differently because of how they're labeled, that law is meaningless, and basically just taxing you on angel pinheads. (I call the property of passing this test "nominal invariance".)

(The exception of course is when a customer gives a cash tip on top of the fee directly to the driver. But Uber definitely doesn't take a cut of that!

And when it is all over I can see each driver getting a check for $2.37 and Liss-Riordon getting a check for $60,000,000.00. (OK, this maybe a slight exaggeration, but only a slight one.)
In the Fed Ex settlement she won $223m for 2,600 class members. Even if she gets a 1/3 cut that's, $60,000 on average per class member for mis-classification over a seven-year period.
I assume that doesn't include back taxes and fines due to the IRS.
Yeah, that's just the fund for claims from employees.
Without much research on my part as to accuracy, Google said Uber has 167,000 employees. So in a $200M payout she gets her $60,000,000 and Uber employees average $838.
So, making her money on the backs of the little guy, then?

It's how class-action lawsuits usually work. I wonder if they do for her lawsuits as well.

It's not about the money but change if she settles out of court without making companies change how they treat their workers then you can complain about how much she made.
But, from that point going forward they aren't screwed. This is usually omitted from cynical analyses.
I don't think they will win. Every single uber driver I talk to loves it. They love that they can work whenever they want, that they can choose to work for Lyft or uber, etc. I don't know how you can say they are anything like an employee. There is no negative consequences for not working except less money.
> I don't think they will win. Every single uber driver I talk to loves it.

That's not quite how the law works. Whether you enjoy being subjugated or not doesn't effect if the law can be enforced against the entity violating the law.

How are drivers being subjugated and what law is being violated. What evidence is there that they are actually employees besides the fact that lawyers and union activists want them to be?
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Well, yes, that's the whole point of this article. My point is that I don't believe there is enough evidence for the judge to make this ruling.
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You are watching a classic 21st century robbery in action, where lawyers are robbing corporations and employees under some pretense of magical justice.

Counting the downvotes on comments, HN has sharply taken a socialist turn and lawyers are the new superheroes saving people from Evil startups. In other news Bernie Sanders hates Uber despite using it nearly 100% of time.[1]

[1] http://thehill.com/policy/technology/250480-bernie-sanders-s...

> You are watching a classic 21st century robbery in action, where lawyers are robbing corporations and employees under some pretense of magical justice.

You misspelled "labor regulations" at the end of you sentence. Labor rights > corporate rights.

You could have at least used "startups" instead of "corporations" if you wanted to appeal to emotion. Socialist or capitalist, who would cry over a "corporation"?
> Socialist or capitalist, who would cry over a "corporation"?

Industrialists or Libertarians.

> How are drivers being subjugated and what law is being violated.

Drivers are being paid as independent contractors. Under the current Uber model, they are not independent contractors as defined by labor law (nor the IRS). Ergo, Uber is in violation of both labor law and tax regulations; if they are found to have violated IRS employee classification rules, they'll be liable for back taxes, penalties, and officers of the company can be held personally liable.

> What evidence is there that they are actually employees besides the fact that lawyers and union activists want them to be?

You must be blinded by some sort of belief that Uber is the victim here; my apologies. Employee vs independent contractor classifications can sometimes be difficult, but the gist of it is:

If you tell someone how to do the work, and you set the price, they're an employee; if you give someone the work, they set their prices, and they have control over how the work is performed, they're a contractor.

Guess which model Uber uses?

You are wrong. They are independent contractors. They are not employees as defined by current labor laws.

I think it is you that are blinded by your beliefs. They are not told how to do the work. Each driver chooses when they want to work and how long they work. They are free to work with whomever else they want, including other ride sharing companies at the same time.

Uber is a marketplace that brings drivers and riders together. It's not an employer because drivers have complete freedom.

although i think most people would agree with this the local laws apparently say everyone who does something central to the core business of a company and gets paid for it by the company is an employee. it's in the article.
Uber uses the model where you offer someone the work, you set the price, but they have control whether they do the work, and how the work gets done.

I suspect Uber does not conform to either employee or contractor arrangements under current law. The employee/contractor line is blurry enough as it is.

How is this different than a franchising model, where a parent corporation (say, Taco Bell) sets a bunch of conditions on the franchise license, but independent operators actually execute the restaurant business?
There are rules about what makes a worker an employee vs a contractor, and they mostly center around control - if the company controls how the work is done, you are an employee. In Uber's case, while there are a lot of things that point to the worker being a contractor (Uber has no control over their hours, workers provide their own equipment, workers can work for competing companies), some things look more like an employee relationship (Uber sets prices being a big one). See http://www.businessinsider.com/uber-and-lyft-employee-lawsui...
Uber is the world's most highly valued private company? Somebody better tell Saudi Aramco.
If she does win the case then wouldn't Uber and Lyft simply give less of a percentage of earnings per ride to their drivers to compensate for the change of cost? Would Uber and Lyft make more if they had their drivers on a similar model to a pizza delivery driver ($4.50/h + tips)?
> If she does win the case then wouldn't Uber and Lyft simply give less of a percentage of earnings per ride to their drivers to compensate for the change of cost?

Uber and Lyft would need to pay hourly wages, along with all of the associated taxes due.

> Would Uber and Lyft make more if they had their drivers on a similar model to a pizza delivery driver ($4.50/h + tips)?

Uber and Lyft's entire business model is built on the independent contractor model. I don't believe they could reach profitability in any scenario with human drivers if they have to pay them as stipulated by IRS regulations.

>Uber and Lyft would need to pay hourly wages, along with all of the associated taxes due.

Not true. You can be an employee with a non-hourly pay structure. Just one of many misconceptions batted around about the implications of driver reclassification, along with (these aren't all false per se, just not-necessarily-true):

- Drivers would have to get the Uber-paid lavish health care plan that developers there get.

- Driver cash payments would remain the same and not be reduced.

- Drivers would get fixed work schedules.

- Drivers would value the compensation package that includes employee benefits but has lower cash pay, over the compensation they get now.

- Uber would have to provide the vehicles.

- The economic incidence of FICA taxes would shift to Uber (not how economic incidence works[1]).

Again, the employee/contractor distinction depends on a number of factors; you can be classified as an employee without meeting all of criteria.

[1] Good explanation: https://www.reddit.com/r/badeconomics/comments/422av5/some_g...

I agree those are all things that should happen. But can Uber be profitable in that configuration? I would argue not, but maybe they pull it off.
My point was that the reclassification as employees does not imply that any of those would be true (very unlikely for a few, false as a matter of law in at least one).

You can't just assume that the change would achieve this state where workers get strictly more benefits and Uber's profits are sucked out. You need to take into account how much they can cut driver cash payments in that circumstance (i.e. paying them via benefits), where the economic incidence of car costs and FICA taxes currently lies, what the law says about piecework, etc.

Since when is this the pizza delivery model? Granted it's been more than 20 years, but when I delivered pizza I got a hourly wage (which was higher than minimum), commission (called "mileage") on each delivery to compensate for use of my car, plus any tips.

Mileage was paid in cash at the end of each shift, and of course tips were cash. Wages were paid every two weeks.

One thing I never see addressed in these Uber stories is how, precisely, the drivers got classified as employees.

The only test I'm aware of refers to things like set hours, dictated methods of working, company equipment, payment, and so on[1].

Just by that those tests alone, I don't see how an Uber driver is realistically anything other than a contractor.

So either a judge screwed up somewhere, or I'm really missing something. Would anyone have some more information on the particulars?

[1]: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...

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Millenials are unknowingly signing up for slavery and throwing away all the hard earned labour rights in the name of being more agile.
...or simply trading those "rights" for the freedom to be responsible for their own lives. One gives up a lot of freedom to be an employee. That tradeoff might be worth it for some people, and not as much for others.
> One gives up a lot of freedom to be an employee.

As an employee I can walk away from my job any time I want and just get another. If I had my own business that would be way harder.

Because of that I feel actually more free and independent as an employee. You just need to make sure to have a good financial buffer so that losing/switching a job won't hurt very much. Then your employer also can't pressure you too much.

I feel exactly the opposite: I'm independent now, and I can walk away from my current gig without all that much disruption in my life because I don't depend on an employer for benefits or what have you. While I'm not walking away, I've got more flexibility than I might with an employer (depending on the employer).

You're 100% right about having a buffer, though. That's a pretty immovable prerequisite no matter what your professional situation is.

They can trade that right after they change California's labor laws.
Can it really be blamed entirely on millennials?