Wow. This decision might upend the whole gig and sharing economy. Now every company needs to tread carefully in UK. Uber is struggling to achieve proper profitability even with "gig" and "sharing" economy and now this.
No one is being exploited. People choose to work through these platforms because it's the best option available to them. You don't raise employment standards by making low standards illegal. Low paying jobs work for some people because their circumstances don't give them the opportunity to get anything better.
>>It's the best option available to them because Uber's driven out the competition. Like, people choose to work at Walmart because it's the only employer in a fifty mile radius - for example. They can't work for a local store or start their own anymore because everyone's going to Walmart.
We're not talking about a small town here. These are large cities with diverse economies that contain thousands of employers. Uber drivers can do other jobs besides driving.
There is absolutely no evidence at all that Uber has a employer monopoly in the areas it operates, and that this is why people choose to drive for it.
Anecdotally I've heard that a lot of Uber drivers are very happy about being able to drive for Uber. And by anecdotally I don't mean a survey funded by Uber. I mean from internet comments where somebody claims to know someone who drives for Uber and really likes it. Take that for what it's worth.
>>Yes, in fact, we do. A whole lot of practices have ended predominantly due to legal changes
The vast majority of practices ended because the market value of labour increased as a result of growth in per capita productivity.
Any mandatory standard that gets ahead of the prevailing market value of low-skilled labour just creates unemployment, meaning it doesn't raise the standard of employment for the less skilled.
There's no free lunch in economics.
>>Allowing these jobs to undercut competitors that pay properly propagates low paid situations where society end up having to subsidize the behavior of the companies in question because they don't pay livable wages.
It's exactly the opposite. A mandatory minimum wage, like any price floor, leads to unutilized supply, which in the case of labour means greater unemployment. So you're increasing welfare costs by instituting a minimum wage.
The market value of labour doesn't increase because low-paying jobs were made illegal. That's not how supply and demand work.
I at least provide reasoning for my position. It's basic economic theory that wages are set by supply and demand. Demand only increases in the aggregate from increase in productivity. Creating a mandatory price floor simply leads to less than all of the supply being consumed (which means higher unemployment). That's what price floors do. What they don't do is raise aggregate demand (meaning they don't increase total wages paid out).
>>This has nothing to do with price floors.
The quintessential labour standard is a minimum wage, which is a price floor. This has everything to do with price floors. In fact all labour standards can be assigned a monetary value and the combined value can be considered a price-including-benefits floor.
>>you're assuming that workers have a choice regarding where to work. That is simply wrong.
I don't understand. Why do you believe they don't have a choice?
>>So wrong that I understood your comment was a joke.
This has nothing to do with price floors. In your first message, you're assuming that workers have a choice regarding where to work. That is simply wrong. So wrong that I understood your comment was a joke.
FWIW, it's exactly what I've heard when talking to Uber drivers in London. One guy used to work as a minicab driver; he prefers Uber because he can choose his hours, doesn't get cut out of lucrative jobs to the benefit of the company owner's nephew, and feels safer at night due to the rating system.
There will clearly be fewer driving opportunities if a minimum wage is instituted. There's an economic cost to be paid for price floors. They invariably increase the amount of supply left unutilized. If they didn't you could increase aggregate-demand/GDP simply by raising the minimum wage.
There is a substantial cost to society in subsidizing low paying companies by making it possible for people to survive well enough on these low salaries that they are willing to take these jobs too, in harming companies that innovate in other ways in favor of companies that exploit the opportunity to offer low pay.
We're incentivising companies to squeeze salaries instead of innovating. To me that is the exact opposite of what we should do. If anything, minimum wage should be pushed higher and higher at above inflation, as an incentive to invest in labor saving measures.
There's no reason why we should encourage wasting human capacity by making it easy to exploit people for low wages.
(Yes, this would mean dealing with unemployment by e.g. reducing working time and/or basic income variations or similar)
It's the best option available to them because Uber's driven out the competition. Like, people choose to work at Walmart because it's the only employer in a fifty mile radius - for example. They can't work for a local store or start their own anymore because everyone's going to Walmart.
> You don't raise employment standards by making low standards illegal.
Yes, in fact, we do. A whole lot of practices have ended predominantly due to legal changes.
A major historical example from the US being the infamous Triangle Shirtwaist Factory fire [1] where 146 workers died in part because the owners locked the factory doors to prevent unauthorized breaks.
The outcome was both an increase in unionization and legal changes.
Employment standards are the way they are today not in general because companies have decided to act nice, but because they've been forced, through law and union action, over a very long time, to adhere to minimum levels.
> Low paying jobs work for some people because their circumstances don't give them the opportunity to get anything better.
Allowing these jobs to undercut competitors that pay properly propagates low paid situations where society end up having to subsidize the behavior of the companies in question because they don't pay livable wages. I for one would much rather have a proper welfare system than a system that rewards companies like that.
Yeah, I've heard that argument from an employer who didn't offer any paid time off(even though the law requires 25 paid days off a year) and defended the decision by saying that no one is forced to work at his company and if people sign the contract they know what they agree to.
Ending the "gig and sharing economy" is a good thing for society.
The sharing economy always was about exploiting workers (and externalizing costs), and this has created an additional cost for society.
For example, DHL’s drivers are "self-employed", as result, in most countries their healthcare is funded by themselves, or by society (instead of the employer), and this means you (and your company) pay more taxes, just so that Uber, DHL, Amazon and co can save money.
Um, what exactly is the difference between self-employed person paying their healthcare insurance, and someone being employed and the company paying their insurance?
As long as the self-employed person doesn't pay tax on their insurance (which AFAIK they don't), it is exactly the same thing.
If the self-employed person can’t afford their own insurance, but their employer doesn’t fund it for them, they often end up without insurance – and if they need to get something done anyway, society has to pick up the bill.
Self-employed people pay their NHS contributions the same way that companies pay for them. It's not a question of can/can't afford, it's a % of your earnings.
It's the closest there is to 'medical insurance paid by employer'. OR what do you think grandparent means when they say 'if the self-employed person can’t afford their own insurance, but their employer doesn’t fund it for them'?
The gig economy isn’t just an issue in the UK – the example I had used was Germany (which I had literally mentioned in my original comment), where exactly that is happening.
What is also relevant is driver liability insurance - normally if you take paying passengers it invalidates your insurance, so commercial drivers either need to be insured by their company or pay more for correct insurance.
OK, but the idea is the same. You could have the big corporation pay the employed person X and the car insurance company Y. Or you could have the big company pay the self-employed person X+Y, and self-employed person pays the car insurance company Y.
If the big company is not willing to pay X+Y to the self-employed guy, they won't be willing to spend X+Y on an employee.
The only difference is if the big company can get better rates on the relevant goods than a self-employed guy.
Exactly, I am so happy that there still a good amount of "reason" within the EU block to oppose this sort of pseudo capitalism. Which in essence is just exploitation in that it feeds a tiny amount of shareholders while letting the Gov/populace pay the bill in terms of infrastructure.
Same reason tax evasion by corporations should be ended since it not only devalues society but actively feeds on it while undermining the positive potential that a managed free market actually allows ALL players, not just the few that have gotten too big to fail.
The society has agreed upon a certain set of rights that all employers should grant to all their workers, and a certain minimal set of "benefits" that every working person should get - in this particular case, "holiday pay, paid rest breaks and the minimum wage". Going below that level is considered exploitative.
I'm in the opinion of if the government really care of it's citizen, they should do it directly, by providing low cost/free basic necessity or basic income, etc. This way their citizen is not "forced" to work with these company you deemed "exploitative"
> This way their citizen is not "forced" to work with these company you deemed "exploitative"
Yes. When the basic income comes, it will redefine all the parameters by which we judge the qualities of jobs. But that doesn't mean that such jobs are not exploitative now, according to current standards. Your snarky quotes are unwarranted.
The share economy allows people to use their invested capital (vehicle, home, etc) to generate income - the platforms like Airbnb and Uber provide high quality alternatives and came about due to a void in the market.
I have 3 personal anecdotes, you can ignore them if you'd like, but I'm a proponent of the sharing economy.
1. I'm from Austin, Texas where prior to Uber it was impossible to get a ride unless you were directly downtown. I've called cab companies and they no-showed, leaving me stranded in the middle of no where. There isn't enough density for public transit and when Uber and Lyft entered the market, it changed our lives. Prior to the existence of these companies, there was rampant drinking and driving. I went to school here, and every party was essentially binge drinking followed by a harrowing 30 minute drive where everyone on the roads at 2am is a drunk driver.
2. My sister is a teacher, single mother, and low income. She uses Uber on the weekends to make extra income and help support her child. For her, the flexibility of being able to drive whenever for a quick buck is key to closing the gap that Texas politics hasn't quite solved. I'm going to preempt the argument and say I agree that UBI may be the solution more generally to workers needing to rely on their employers.
3. My mother is retired and generates ~1000/month in income from social security payments. She did not plan for retirement, has no savings, and has moved in with my sister to help out. Her day job is managing Airbnb rentals in Austin and she rents out a room in their house for extra income (~700/mo). Her quality of life is much higher than it would be without Airbnb, and her ability to schedule, find and vet potential tenants without Airbnb would be pretty much nil.
I recognize these are not the same 'workers' whom are being pathologically disadvantaged by the rules of these platforms - I think they're the ideal users that product people pin on the whiteboard. I come from a low income background and only see positives, had Uber been around when I was in school I wouldn't have worked for $5.15 washing dishes in a rat infested kitchen, done tech support for wireless hotspots in trailer parks or been a valet on 6th street dealing with intoxicated people. I've had about ~20 low skilled, hourly jobs that essentially dominated my life at the time and I had very little mobility or earning power, having the opportunity to leverage my vehicle and time flexibly would've been enormous.
You do realize there's no actual _sharing_ in the "sharing" economy? It's just profit-seeking by professional, if part-time, drivers, "gig" economy describes it much better.
No, a lot of gig economy companies employ their people either directly or through third party. It's not problem. It's just that Uber has this fix idea of never hiring anyone. It's stupid.
If Uber can't make enough money to have and pay employees like all the other taxi companies have been able to for decades, they have failed as a company and need to move aside. Simple economics.
Besides I doubt Uber is struggling financially, it's one of the largest companies in the world and did so by paying their drivers only a fraction of what they'd earn as regular taxi drivers. Mind you the cost for customers was similarly lower, but apparently, too low.
Uber is one of those companies that lives off of investment money, using that to be able to dive under the price of their competition and putting them out of business. I'll shed no tears for them.
Hardly a surprise a contractor in the UK, I need to be careful I'm not suddenly a "disguised employee". Uber do genuine independent contractors no favours. I don't blame Uber. I blame successive UK govts. who won't make the law clear and just let the courts decide on a case-by-case basis. My biggest fear is that they'll come done hard on all contractors IT Consultants through to taxi drivers.
This is definitely a very legitimate fear and one which I share. I believe that given the changes made in the UK public sector for the 2016/2017 tax year this threat is ever increasing.
You are absolutely correct in laying the blame at successive governments that refuse to make the law clear. Companies such as Uber and Deliveroo do not help the case as they are seen as the examples of how the term freelancer can be abused. Unfortunately I doubt that those in government care to make the distinction between this abuse of the system and genuine IT contractors.
IR35 guidelines for contractors are clear enough I feel. A lot of longer-term contractors are in fact effectively employees and and benefit from the security and structure of that yet want the tax benefits as well.
I'm not intimately familiar with UK labor laws, but isn't they key difference between contractor and a "disguised employee" is that who gets the payment money? If you get all the payment (excluding tax etc.) for a work done then you are contractor, if the third entity takes a payment for your work and pays you percentage of it, then you must be employee and that third party - employer - is responsible for taxes, insurance and other duties mandated by labor laws. The latter part is what Uber tries to avoid at all cost. For the same reason employment agencies are also not allowed to take fees for finding a job and required to pay no less than minimum wage[0].
I think roughly, you come out right if you think the way you're doing.
But it's a bit more subtle in that they're going after two different types of abuses:
1. Agencies that want to rent out contractors rather than contract out employees even when they treat these people as employees.
2. Relationships where one or both sides want an employee to be a contractor to benefit from tax savings.
Uber seems to fall largely in 1, while e.g. IT contractors sometimes fall in 2, or is at risk of falling in 2.
In our case the consideration tends to be that tightening the rules means there's a whole checklist of things that makes it more or less likely that HMRC will deem us to be de facto employed or subject to IR35 (making us pay taxes similar to if we are in employment).
For #2 and to avoid IR35 there are a whole lot of considerations such as what costs we incur, whether or not we use our own equipment, whether or not we have sales and marketing costs; whether we employ someone; how many clients we have; if we have our own office for the company etc. that centre around whether or not the company has an existence independent from any given client.
The reason this is important for us too, is that one avenue for a business like Uber to avoid problems with #1 is to try to restructure around not pretending that drivers clients are the people they drive, but that their client is Uber but that they're still independent. If they try stunts like that, it may result in rule changes detrimental to other, genuine contractors too.
It's determined based on several factors like whether you set your own schedule, whether you use your own equipment, whether you have a manager, whether you have autonomy to complete your work how you see fit. There are no hard-and-fast rules though, and from my experiences, people completely ignore it (in software contracting). See https://www.gov.uk/employment-status/selfemployed-contractor
If drivers can decide how long they are willing to work, even if there aren't many/any passengers around, then Uber has no way to control costs.
Unless they already have something in place to manage how many drivers are on the road in an area at any time? I thought that was just controlled by supply/demand, but that gets skewed by Uber needing to still pay minimum page when there is an over-supply.
And food producers are skewered by having to meet safety requirements when they could save money by ignoring them. Sucks for Uber that their business model doesn't win 100% of the time, but you don't allow individual entities to just ignore laws that set minimums whenever it's not the best for them.
Yeah then it's up to Uber to build that in if it's a problem. That when demand is low it tells them there isn't enough demand currently and they won't get paid. The problem there is if it happens often it's going to take Drivers away from the platform.
How does this work for commission based jobs? Or project jobs? Let's say I get £500 for translating something. No hours involved. Or if you get paid to wear a t-shirt with a company's logo for 2 weeks.
As far as I know the commission divided by hours worked on the translation must be over 7.50. So if it takes you 100 hours for the translation you would be under minimum wage and entitled to £750.
However as an employee commission based jobs are not really the norm. You usually get paid by the hour or a salary as an employee. Contractors / outside companies get paid a flat fee.
A sales representative might get paid in commission but then it would also be based on hours worked and if it comes under the minimum wage you need to be bumped up to at least that amount.
Not sure what your confusion is. Their gross-income divided by hours worked (doing a job or waiting for a job)? I guess they would become zero-hour contract employees, and so have the same statutory protections and benefits as perm employees except with no guaranteed hours? They would be entitled paid holidays for example, and would have a floor on their income proportionate to their hours worked.
I have a US perspective so I'm interested in why this ruling was made. If the driver doesn't want to drive on a given day, there's no one he has to call. There's no approval of the time off. He just won't get paid because he isn't doing work.
In the US, one central tenant of being an employee vs a contractor is that your employer has power over your schedule, working location, and your work methods, which I see none of in Uber (which I did drive for back in 2016.) Uber drivers are allowed to drive for other groups and have other jobs.
So what basis was this decision made, if not "they are complaining and the right thing to do is something, plus Uber=bad?"
My (limited) understanding, and quoting from the article is that is is around: "holiday pay, paid rest breaks and the minimum wage".
The first essentially boils down to extra money - if you work X days you get another days pay to simulate a paid holiday day. I'd imagine the second two would combine - if Uber accepts your app connecting and being "for hire" they guarantee you at least the minimum wage, and after a set period of working you get a paid break.
The other side of the coin is that of exploitation - no Uber rides, no income. Sick? No income. Accident while driving for Uber? Your problem, you pay for everything.
If they're employees, they get a lot of rights and protections that maybe aren't common at all in the US. Companies like Uber (and e.g. construction companies, marketing agencies, etc) will push people to become self-employed so that the employer has no obligations or responsibilities whatsoever to the employee. This will allow them to out-compete the companies (like Black Cab in London) heavily, at the cost of the workers.
If it's truly at the cost of the workers, why do the workers put up with it? If it's so easy to go and work for Black Cab in London, wouldn't they just do that instead?
Or perhaps Uber are actually providing a useful source of work to drivers who otherwise wouldn't be working at all?
If it's so easy to go and work for Black Cab in London, wouldn't they just do that instead?
It is not easy to go and work as a traditional taxi driver in London. There are various regulations on taxis and taxi drivers in the UK anyway, and in addition, in London taxi drivers are required to pass an infamously difficult test known as The Knowledge proving that they can navigate effectively around London streets.
One of the big objections to Uber and the like is that they attempt to bypass some of those regulations and that training, and the regulations and training are there for a reason. To the extent that this confers a competitive advantage to Uber drivers over black-cabbies, it's a rather unfair one.
If the rules "are there for a reason" then black cabs would be obviously superior and wouldn't be at a competitive disadvantage.
In some ways, black cabs are obviously superior. To pick a few examples, their pricing is regulated by local authorities, they are required to be wheelchair accessible, and their drivers are required to have The Knowledge along with various other qualifications before being licensed.
To the extent that black cabs may be at a competitive disadvantage compared to Uber's standard (non-surge) pricing, that is in part because Uber's current financial model seems to be subsidising every journey using the vast amounts of funding they have accepted. That is not sustainable. It is also in part because of exactly the sort of issues we're talking about today, where they've been cutting their costs at the expense of their drivers in legally questionable ways, which again is hardly playing on a level field.
* Will demand payment in cash, and only when you threaten them with non-payment repeatedly will allow you to pay with credit cards, DESPITE agreeing to it beforehand.
* Unwilling to stop where the customer wants them to
* Don't get out of the car to put luggage in the trunk
I hate Uber's labour practices, but there are major issues with black cabs.
It's famously difficult to become a black cab driver in London. You need to know every road in the city to pass "The Knowledge" test. Well beside public safety health tests.
And I'm glad of it! There's little more frustrating in a taxi than finding out the driver's stupidly and witlessly following whatever Map application they have suction-cupped to their windscreen, rather than using actual knowledge to go smarter, quicker routes.
Especially when they start off the wrong way or take a wrong turn and their map app dutifully encourages them around some longer path.
A lot of Europeans (including me) are of the opinion that a job without protection (minimum wage, sick pay, health insurance, unemployment insurance/benefits, cover for accidents) shouldn't exist. Someone should rather be unemployed and receive benefits while looking for employment or while retraining than being exploited by a company. Not saying that this is the case with all Uber drivers but there's a decent amount of people who work hours that would be illegal in any employment while earning just enough to survive. The reasons why people still accept these jobs are diverse but Uber's promises of good wages (>£10/hr) played a role getting many to drive. And once you have your car and license you need to drive to pay off loans.
Being self employed can have its benefits but Uber drivers enjoy very few of those.
I think a lot of Americans have a different view of how labor and markets should work. Especially on this forum, which is very much pro-laissez faire capitalism (I see a lot of Randian themes being repeated).
Labor can be exploited only when a corporation can sidestep the organized labor pool and tap into the pool of labor that demands no protections. If most Americans thought as you did, I don't think American corporations could get away with paying their employees such pitiful wages and benefits.
This is forgetting that most craftsmanship small shops or other individual profession are self-employed and don't have minimum wage, maximum hours, unemployment benefits, etc. Think about bakers, nurses (outside of clinics/hospital), etc. It is not clear why "taxi drivers" shouldn't be allowed for people to be self-employed and managed their time themselves.
Because truly self employed people can decide who they work for and how they structure their business. With Uber, you're very restricted in how you're set up (rules on cars) and who you work for (forced to accept jobs). Taxi drivers can be self employed and have been for a long time in most countries but Uber has more power over the drivers than is usual for self employed people.
I was addressing the part of your comment that mentioned "a job without protection (minimum wage, sick pay, health insurance, unemployment insurance/benefits, cover for accidents) shouldn't exist".
I don't think Europeans consistently adhere to that, since they allow small business proprietors and (legit) contractors to work for low effective wages. To the extent that such workers receive benefits, they're paid directly by the state rather than, "Hey client/customer, you need to stop exploiting that contractor/business; give them some health insurance!"
> If it's truly at the cost of the workers, why do the workers put up with it? If it's so easy to go and work for Black Cab in London, wouldn't they just do that instead?
The majority of minicab companies operate as an agency.. which keeps the operating company below the VAT threshold. Uber reduces their liability in the same way.
Mini cab drivers have private hire licence (not a Hackney carriage licence, that a taxi which trawls the street looking for a fare)... Uber drivers have he same license as Minicab drivers.
A mini cab is usually ordered by phoning up the agency, and the driver picks up at your location... Uber you use an app, but the process is the same. Neither are allowed to be hailed from the road.
With minicabs, the car and fuel is often provided by the agency.. which makes it more of an employer than uber (where the car and fuel is provided by the self-employed contractor)!
I think what most people expect to be compared is taxis (hailed from the road) vs Uber.
Uber is simply a better version of private hire, I don't think that's in dispute by anyone. But how does it compare against taxis seems to be what the discussion is about.
“92. ... The drivers provide the skilled labour through which the organisation delivers its services and earns its profits. We base our assessment ... in particular on the following considerations.
(1) The contradiction in the Rider Terms between the fact that ULL purports to be the drivers’ agent and its assertion of “sole and absolute discretion” to accept or decline bookings.
(2) The fact that Uber interviews and recruits drivers.
(3) The fact that Uber controls the key information (in particular the passenger’s surname, contact details and intended destination) and excludes the driver from it.
(4) The fact that Uber requires drivers to accept trips and/or not to cancel trips, and enforces the requirement by logging off drivers who breach those requirements.
(5) The fact that Uber sets the (default) route and the driver departs from it at his peril.
(6) The fact that UBV fixes the fare and the driver cannot agree a higher sum with the passenger. (The supposed freedom to agree a lower fare is obviously nugatory.)
(7) The fact that Uber imposes numerous conditions on drivers (such as the limited choice of acceptable vehicles), instructs drivers as to how to do their work and, in numerous ways, controls them in the performance of their duties.
(8) The fact that Uber subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure.
(9) The fact that Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected.
(10) The guaranteed earnings scheme (albeit now discontinued).
(11) The fact that Uber accepts the risk of loss which, if the drivers were genuinely in business on their own account, would fall upon them.
(12) The fact that Uber handles complaints by passengers, including complaints about the driver.
(13) The fact that Uber reserves the power to amend the drivers’ terms unilaterally.”
Wow. If this ruling holds, it could also suggest that App Store developers are employees of Apple / Google in the UK. Several of those points apply just as much there, just replace driver with 'developer' and passenger with 'customer':
* "controls the key information (in particular the passenger’s surname, contact details and intended destination) and excludes the driver from it"
* "determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected"
* "handles complaints by passengers, including complaints about the driver"
* "subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure"
The difference is that apps are in competition with each other and the app store is more like a marketplace for developers. There is no physical interaction between developer and buyer.
Uber could never call itself a "marketplace" for drivers. It operates much more like a driver agency.
Edit: there are genuine online booking agencies for drivers in London, like http://www.kabbee.com, which act as a front-end for independent minicab drivers. I think this is much more that way it should operate if the drivers weren't employees, as Uber argues.
The tests for where someone is a self-employed contractor vs an ("disquised") employee are Control (how much control does the person have over how they do task), Substitution (do they personally have to do the task) and Mutuality of obligation (how tied are they together).
I think the ruling makes it clear that Uber has a huge amount of control over the driver, how they do their job and how many fares they take (with penalties). Since Uber is interviewing the drivers and requiring that that driver show up for the fare, it's not clear that a driver can substitute someone else for their fare). You can argue that there is an obligation on the specific driver to complete fares for Uber and the driver depends on Uber to supply fares. The ruling makes sense that they are employees as UK law defines the term.
I don't think you can argue that an App Store developer is a disguised employee in the same way, Apple/Google have very little control over how I write my app, they don't care if I write it or I subcontract and I don't think Apple have any expectation that I will write the app.
>I have a US perspective so I'm interested in why this ruling was made.
Your "USA perspective" reminded me of a concept called "court rulings as informal tariffs". Basically, when a foreign company is tried in the courts, the rulings will often favor the side that's aligned with the country's own court. (In this case, it's the UK drivers.)
The idea is, we can't objectively analyze rulings purely on its legal merits. Instead, there's always a country's (unstated) self-interest that's entangled in the judgement. (E.g. our home-grown London drivers deserve more money instead of USA's Uber executives.)
The USA would have the same bias. If a Korean company like Samsung is being sued by American company like Apple in a USA court, it's likely that Apple will win. Likewise, an American company like Google will lose more rulings by the EU than EU companies.
Again, it doesn't mean Uber is innocent. It's an observation that we didn't see the same government scrutiny about UK ride-sharing services like Hailo (subsequently absorbed by Mytaxi) about classifying contractors as workers. UK taxi drivers are generally contractors[1] but Uber attracted the ire that other ride-sharing apps didn't.
Hailo provided an ability for people who are largely already contractors an additional channel for bookings. The fact that these people are already operating a business and Hailo just provided an additional marketing and booking channel for them makes for a very different situation.
But why were they "already contractors"? Doesn't that beg the question?[1]
Take a look at section 2.1 of the link I cited. Just based on the text alone, it's not obvious why that "self-employed" criteria doesn't apply to Uber. Yes, the courts are free to interpret beyond the literal text but there doesn't seem to be objective consistency to it. The traditional UK taxi companies and the other ride sharing apps all seem to be misclassifying workers.
I'm not familiar with Hailo. Are you saying that a person who didn't drive a taxi before can't sign up on the Hailo platform and immediately offer their services? Did they have to be associated with a traditional taxi company first as prerequisite?
In what situations would drivers prefer Hailo over Uber and vice versa?
Hailo only works (in London at least, no idea if it operates elsewhere), with Tfl licensed "Black cab" drivers. You can't just decided to become one of those - you need to do years of training to pass the test (known as The Knowledge) in order to obtain your license.
It is a distinction largely because you won't study to become a licensed taxi driver to only drive for Uber (or Hailo or whatever). You are right that it does not automatically make it difference, but in practice it means you're almost always dealing with drivers that are genuinely going to be taking jobs from more than one source (if nothing else by picking up clients kerb-side) because that is the main advantage of their license.
Part of the argument in the judgement is that Uber in effect acts as the client, since their rules prevent the driver from interacting with the rider in a way a independent contractor would normally be ble to. That makes it all the more significant when Uber is often the only client. For someone like Hailo this would be less risky as the driver also works for many others most of the time, so even if Hailo was found to be the client rather than the individual riders, they could make the argument that to most their drivers they were just one of many clients.
That Uber in "ideal" circumstances could have only signed up drivers that drive for many others too, or that Hailo in theory could have only signed up drivers that were only driving for them, isn't relevant when that's not how things have been in practice.
EDIT: I'd very much like to hear arguments instead of downvotes, given that my comment is entirely factual. Downvoting doesn't change any of it.
> But why were they "already contractors"? Doesn't that beg the question?[1]
No it doesn't. The point is that Hailo was an additional supplier of leads to people who operated businesses independently of Hailo, and that in itself strengthened the claim that they were genuinely independent businesses substantially. These companies didn't "spring into existence" when a driver decided to sign up with Hailo exclusively to deal with Hailo, and pretty much nobody would work only for Hailo. While not everyone only works for Uber, a lot do.
If that was the only difference between the two, Uber would probably have been ok, but in Uber's case there are many additional factors.
> Take a look at section 2.1 of the link I cited. Just based on the text alone, it's not obvious why that "self-employed" criteria doesn't apply to Uber.
HMRC does not define or have any legal powers to define whether or not you are self-employed (the furthest their powers go is to determine if your relationship is one that can be deemed employment for tax purposes, but that does not say anything about whether it is employment for other purposes).
They define how to interpret the tax rules. In this case specifically VAT rules. The only point that section make is that if you are operating it as self employed then VAT is ultimately your responsibility (though you may contract it away). In this case the tribunal found that Uber drivers are not, and so this section does not apply.
> Yes, the courts are free to interpret beyond the literal text but there doesn't seem to be objective consistency to it. The traditional UK taxi companies and the other ride sharing apps all seem to be misclassifying workers.
Read the actual judgement. The list of restrictions placed on drivers by Uber is very extensive. If any other minicab companies (and I don't know why we try to invent a different name for what Uber does - in UK parlance they are nothing but another minicab company; we have many of them, most of them with apps) place the same extensive restrictions on drivers, then I agree they too should be considered to be employers.
> I'm not familiar with Hailo. Are you saying that a person who didn't drive a taxi before can't sign up on the Hailo platform and immediately offer their services? Did they have to be associated with a traditional taxi company first as prerequisite?
A person needed to operate a licensed taxi, which passengers can hail (hence the name), as opposed to a minicab (which can only take bookings), which means they'd need to have been licensed by the appropriate authority (the Public Carriage Office in the case of London) as a taxi and have the appropriate training etc. Given the cost of taking the appropriate training and the cost of the car required etc., pretty much no drivers would do that to work exclusively for Hailo - the major benefit of being a licensed taxi is the ability to pick up passengers directly.
If Hailo signed up such drivers and placed them under the same restrictions as Uber and most of those drivers never operated independently to any extent, then Hailo would probably have gotten in trouble too, but there are many other differences as well.
I get the impression they are enforced, when they exist. But are less likely to exist in the first place. IE, much of the US is right-to-work with little employee protection.
Labor laws aren't rigorously enforced. Especially at low end jobs. People aren't necessarily aware of their rights and can't afford the potential disruption from filing complaints.
What you've described is basically a zero hours employment contract, except that Uber conveniently sidesteps minimum wage by using the 'contractor' designation.
I wonder if you've been sold the bill of goods reading your Uber=bad comment.
At least in the U.S., it's a multi-factor test, with schedule being only one part of it. Uber doesn't control when and where you work, but it definitely controls the customer relationship and quality of service. For example, it doesn't merely allow customers to rate drivers, it kicks out anyone who doesn't achieve a relatively high rating. It imposes pretty specific requirements on what kind of car you can drive.
Uber's business needs are somewhat at odds with its legal case here. From a branding standpoint, Uber wants you to think of yourself as interfacing with Uber, not individual drivers. They want you to believe that if you call an Uber, you're going to get a certain level and quality of service.
Contrast something like HomeAdvisor, which is undoubtedly an aggregator for contractors. Home Advisor doesn't tell its contractors what kind of equipment to use, it doesn't kick off contractors who don't achieve a 4-star rating, etc. It's explicitly marketed as a service for finding contractors, not a company that performs the service directly.
> from a branding standpoint, Uber wants you to think of yourself as interfacing with Uber, not individual drivers.
That doesn't really matter. Nor is it really true, since you inevitably interact with the driver. And it's understood that drivers are humans, and they are different.
McDonalds operates a franchise, you got the same thing, but still, different companies.
Yes, Uber had not structured itself as a franchise, but the use of [sub]contractors to provide a service with a controlled and sort of guaranteed (and well marketed and branded) quality - in itself - doesn't make the drivers employees.
I think the line between contracting and employment is up to the host society to draw.
Usually tax authorities have a few simple rules and if you are in compliance of at least half of them (or if you break at least X of them), then you are a contractor (or disguised employee). For example exclusivity is important here, the rule states that if a contractor gets more than 50% of its income from one entity, then that's one strike (and there are 5 other rules).
Of course it seems in UK law the drivers have standing, so it means there must be some statute about when a contractor is to be treated like employees. (For example, let's say you can't use temp workers, contractors like regular full time employees and not give them free cafeteria, if your regular employees have that perk.)
There are legal tests for contractor/client vs employer/employee relationships because companies are incentivized to misclassify employees to avoid tax and benefit obligations. The same problems don't exist with franchises and parent corporations (others do, though, and are litigated; for instance, McDonalds Corporate's obligations under the NLRA to franchise employees).
And the new proposed standard would be pretty meaningful, yet hard to determine: "the putative joint employer wields sufficient influence over the working conditions of the other entity’s employees such that meaningful bargaining could not occur in its absence", that is, the franchise owner is considered a joint employer if the employee and the direct employer cannot bargin meaningfully on their own.
But of course this is meaningless in case of a 2 party problem, because it doesn't help determining "employmentship" vs "contractorship".
So what'd be a clear and fair way to test for the quality of work relationship?
I wonder if simply having riders set the rating threshold and a maximum fare would allow drivers more power to choose the fares they want as an independent contractor. Consider that if a driver sets a minimum fare as well, has a given rating, then riders will be selecting against many competitors based on the tuple of ratings/cost.
I don't think relaxing vehicle standards or driver background checks is good for anyone - and requiring your contractors to have certain equipment sounds perfectly reasonable to me.
> Since it is essential to that case that there is no contract for the provision of transportation services between the driver and any Uber entity, the Partner Terms and the New Terms require the driver to agree that a contract for such services (whether a ‘worker’ contract or otherwise) exists between him and the passenger, and the Rider Terms contain a corresponding provision.
> Uber’s case is that the driver enters into a binding agreement with a person whose identity he does not know (and will never know) and who does not know and will never know his identity, to undertake a journey to a destination not told to him until the journey begins, by a route prescribed by a stranger to the contract (UBV) from which he is not free to depart (at least not without risk), for a fee which
(a) is set by the stranger, and
(b) is not known by the passenger (who is only told the total to be paid),
(c) is calculated by the stranger (as a percentage of the total sum) and
(d) is paid to the stranger.
Uber’s case has to be that if the organisation became insolvent, the drivers would have enforceable rights directly against the passengers. And if the contracts were ‘worker’ contracts, the passengers would be exposed to potential liability as the driver’s employer … The absurdity of these propositions speaks for itself.
The flip side of this is that if Uber considers drivers as employees they could also prevent them from driving for their rivals.
I think the shift toward the "gig economy" is going to see the creation of a third classification of worker that sits between employee and contractor, likely with the negatives of both. The financial services sector has a version of this by employing large numbers of contractors indirectly through body shops. I wouldn't be surprised if we go that route here too with Uber/Lyft owning the platform yet deferring employment costs to a separate company. Their providers would be businesses, not people, and to sign up to be a driver one would apply at one of those businesses.
Had to look that up[1] as I've never heard of it before (I'm from the USA and it's a primarily UK concept). Based on my skimming of it, I think you'd still have the platform dealing with businesses, but the businesses would likely hire workers with this type of arrangement.
In certain areas Uber strongly incentivizes drivers to only drive for Uber. This is done by making driving only cost-effective at 40+ hours a week.
I understand this doesn't happen (or doesn't work) in some areas, New York comes to mind, but I've never met an Uber driver in the UK for whom it a) isn't a full time job, and b) who drives for other companies as well.
The values for x and y may be too low to be economical so a driver would need to work more units (hours, miles, whatever) to get the higher z rate. That would preclude them from working for a competitor as there a finite number of hours per week.
I'm not asking how they could do that. danpalmer says Uber is already making driving only cost-effective at 40+ hours a week, I'm asking how they are doing so.
I’ve seen bonuses for driving at least X hours or Y rides per week. You can only achieve them by being active as a driver for an extended period of time.
As far as I can tell in the UK there aren’t really alternatives. Maybe in parts of London? Outside options seem to be mini cabs, traditional black cabs, and Uber. Lyft for example doesn’t run here.
Most big cities in the UK have at least one and often multiple private hire firms, who you can call to book a vehicle to take you somewhere. Usually there are also taxis that you can pick up without booking in advance, which are providing a different kind of service and normally regulated by the local authorities. In practice, the private hire firms often charge on a meter the same as local taxis for local journeys even if they're not technically required to, so a lot of people don't realise there's a difference. There are plenty of alternatives to Uber in most major residential areas of the UK.
I listed all of those. My point was that you don't have the situation like in San Francisco where a driver drives for Uber+Lyft+RandomOtherStartup at the same time.
A minicab is a minicab, an uber is an uber, and a black cab is a black cab.
The law here in England already recognises other types of employment status, including a possibility of someone being a "worker" but not an "employee". The rights and protections that apply are somewhat different.
In addition, we have a variety of rules around contracting/freelancing, "gig" jobs, "zero-hours contracts", and other variations. In some of these cases there are genuine advantages to all parties of working in a certain way, but in other cases a similar-seeming arrangement may be exploitative. Successive governments have tried to deal with these issues, but unfortunately with very little achieved in terms of protecting the vulnerable while in some cases causing significant damage even if the arrangement was all above board and everyone involved was happy with it.
> they could also prevent them from driving for their rivals
They'd have a really hard time having such a clause stand up in court, especially in California where non-competes traditionally don't stand.
Many courts have determined that non-competes only stand if your company is actively paying you(and expecting you to work - in the case of moonlighters working a job after their 8 hour job) unless exclusive knowledge/power exists - which must be compensated for accordingly. Knowledge/power might exist in terms of surging locations; but uber drivers are currently only paid for their time after they accept a ride.
What is it going to take to let people offer to work for whatever wage they want? A ride sharing dApp on a blockchain? Or is the British government going to ban peer-to-peer networks too?
>>When are we going to let companies pay their employees Slave wages, you mean.
So it's okay if they offer to work for a "slave wage" as a self-employed small business owner, but if they work through a third party, then it's not okay? How it taking away an option in their interest? You're reducing the avenues through which they can sell their labour, which cannot possibly be to their advantage.
>>It's not going to happen - we tried that before, and it didn't work. Remember the industrial revolution? Real good working conditions and pay in those factories, eh?
It worked incredibly well. Wages grew rapidly throughout the industrial revolution. What do you expect would have happened if a $15/hr minimum wage were instituted in 1875, when per capita GDP was $1,000?
>>The universal basic income.
It doesn't make sense that people should be denied the freedom to offer to work for whatever wage they want until universal welfare is implemented.
It's not going to happen - we tried that before, and it didn't work. Remember the industrial revolution? Real good working conditions and pay in those factories, eh?
The law as it stands allows an employer to pay zero, or >£7.50 per hour, but nothing in between.
Lots of industries circumvent that by requiring 2/3 years experience to get a job. That experience can be as an unpaid volunteer. Now, over your career, you are forced to do 3 years unpaid, then the rest of your career paid, and guess what, on average you got under minimum wage. Live with your parents for the unpaid bit.
> A ride sharing dApp on a blockchain? Or is the British government going to ban peer-to-peer networks too?
There'd be no need to ban peer-to-peer networks - the payment method does not change anything. If there is an employer-employee relationship it'd break the law if they don't follow the regulations for such a relationship. If the drivers are genuinely small businesses, it wouldn't.
> So it's okay if they offer to work for a "slave wage" as a self-employed small business owner, but if they work through a third party, then it's not okay?
The implication is in part that the paperwork necessary to operate as a small business acts as a deterrent for people to enter into it without at least some degree of understanding of what they're entering into.
It is providing what you're arguing for (the ability to set whatever salary you want), but at the same time protecting society against some of the worst exploitation by providing some hoops you have to jump through.
> How it taking away an option in their interest? You're reducing the avenues through which they can sell their labour, which cannot possibly be to their advantage.
This is nonsensical. If I offer to pay you to work in conditions that are guaranteed to be lethal, according to your arguments it can't possibly be to their advantage, because I'm reducing the avenues through which they can sell their labour. Clearly reducing the avenues alone is insufficient to determine whether or not the decision is to their advantage.
> It worked incredibly well. Wages grew rapidly throughout the industrial revolution.
And through most of the period, worker activism grew rapidly as well. In a great many cases, workers died during actions taken to improve working conditions and salaries. The fantasy that those improvements are purely down to lack of regulation is just that. It took repeated bloodshed to bring about those improvements, and a lot of regulations that were often also paid for in blood.
If there is any takeaway from the growth in wages during the industrial revolution, it is that aggressive direct action by workers provides results.
A DAO on the blockchain can be indistinguishable from a platform run by a company from the point of view of the driver.
>>This is nonsensical. If I offer to pay you to work in conditions that are guaranteed to be lethal, according to your arguments it can't possibly be to their advantage, because I'm reducing the avenues through which they can sell their labour.
There are no jobs that are guaranteed to be lethal. If there were, there are only two conditions under which someone would work them:
1. They are mentally incapable of making decisions for their own life, and thus should be placed under conservatorship where they are not free to make their own decisions.
2. The jobs is fraudulently advertised.
In either case you don't need to resort to creating mandatory minimum employment standards like minimum wage. What you're effectively endorsing is conservatorship for the entire population.
>>And through most of the period, worker activism grew rapidly as well. In a great many cases, workers died during actions taken to improve working conditions and salaries.
I'm dubious about this claim. It sounds like another pop-history claim that is baseless. Do you have a source?
I remember reading that workplace injuries were decreasing throughout the industrial revolution era. From what I understand regulations had no positive impact on this upward trajectory in safety.
What did definitely happen during the industrial revolution is that life expectancy rapidly rose. The famines and starvation that frequently occurred prior to to the 16th century became increasingly uncommon as the economy of the West industrialized.
>>If there is any takeaway from the growth in wages during the industrial revolution, it is that aggressive direct action by workers provides results.
The opposite is true. There were very few labour regulations and no minimum wages instituted during the Industrial Revolution (thanks largely to legal doctrines of substantive due process guaranteeing the freedom to contract in place since the Supreme Court Lochner ruling). After the propaganda victory of the socialist parties and labour unions, extensive labour regulations were introduced.
This has accelerated since the creation of the OSHA in 1970. The last 40 years have seen wage growth stagnate and life expectancy to even decline for some demographics.
The Nirvana fallacy has cost generations improvements in their quality of life.
> A DAO on the blockchain can be indistinguishable from a platform run by a company from the point of view of the driver.
And it's entirely irrelevant. If the driver is genuinely acting as an independent company, then it's not a problem. If the driver is being treated as an employee, then some entity is the employer and that entity is on the hook for the legal requirements, and it'll be down to courts to figure out who to hold responsible.
> There are no jobs that are guaranteed to be lethal. If there were, there are only two conditions under which someone would work them:
You're evading the question by being pedantic. Reduce "guaranteed to be lethal" to whatever threshold you prefer and it stands.
> I'm dubious about this claim. It sounds like another pop-history claim that is baseless. Do you have a source?
Each and every history book that covers the labour movement and workers rights. I'm not going to fill in gaps in what is high school level history for you. Go read some wikipedia pages for that matter.
> The opposite is true. There were very few labour regulations and no minimum wages instituted during the Industrial Revolution (thanks largely to legal doctrines of substantive due process guaranteeing the freedom to contract in place since the Supreme Court Lochner ruling).
Lochner post-dates the most significant gains in US labor history by decades.
> After the propaganda victory of the socialist parties and labour unions, extensive labour regulations were introduced.
... and so did this. By the 1920's the support for socialism in the US was rapidly headed for collapse.
> This has accelerated since the creation of the OSHA in 1970. The last 40 years have seen wage growth stagnate and life expectancy to even decline for some demographics.
Nonsense. Ca. 1920 or so the US lost it's leadership in labour rights improvements, and especially so after World War II when the social democrats had gained massive influence in Western Europe, and most European countries built universal healthcare systems and expanded unemployment rights and other welfare dramatically while the US mostly stood still.
If you want to blame US stagnation in the last 40 years on something, consider that the US is lagging further behind Europe in workers rights and welfare than it ever has, so whatever the cause is, you'll have to look elsewhere.
>So it's okay if they offer to work for a "slave wage" as a self-employed small business owner, but if they work through a third party, then it's not okay? How it taking away an option in their interest? You're reducing the avenues through which they can sell their labour, which cannot possibly be to their advantage.
To rephrase: when DAOs are created, drivers will be able to offer their services without meeting these arbitrary employment standards, without going through a company, and just as easily as going through a company. How is making it illegal for a company to hire them under terms that don't meet employment standards in their interest, when doing so won't prevent them from working for terms that don't meet these standards, and when all it will do is reduce the avenues through which they can work for terms that don't meet the standards (translation: all it will do is reduce their market power)?
Maybe I'm still not clearly communicating my point. If it's not clear what I'm asking please let me know and I'll try to rephrase it.
Either way, could you please address my argument?
>>You're evading the question by being pedantic. Reduce "guaranteed to be lethal" to whatever threshold you prefer and it stands.
The pedantry is in you making this a point about how I worded the beginning of my argument and ignoring the bulk of my argument, and its substance, that applies to any threshold. Here it is again:
--
If there were, there are only two conditions under which someone would work them:
1. They are mentally incapable of making decisions for their own life, and thus should be placed under conservatorship where they are not free to make their own decisions.
2. The jobs is fraudulently advertised.
In either case you don't need to resort to creating mandatory minimum employment standards like minimum wage. What you're effectively endorsing is conservatorship for the entire population.
--
I really don't have the patience to deal with bad faith debating. Just know that if you win the public relations campaign through rhetoric and sophistry, but you're advancing the wrong cause, you're hurting yourself too. So there is no sense in debating disingenuously about public policy using these tactics. Western Europe and the US have seen wage growth stagnate over the last 40 years due to the kind of behaviour you're exhibiting now.
Our human society only functions at all due to the extraordinary efforts of numerous people to cooperate and honestly debate issues to reach a consensus on the right way forward.
Even a small portion of the population acting in bad faith to push their own narrow interests at the expense of society at large is enough to cause the whole thing to break down, because it's nearly impossible for society at large to arrive at a consensus on the truth about complex topics when there is a significant amount of misinformation being injected into the debate. Please be part of the solution.
I don't understand why Uber doesn't let drivers choose if they want to be employed or contractors?
Those who choose employed would have strict working hours, performance requirements, etc. and if they miss any target even once would be fired. They would be free to reapply immediately with no penalty.
> I don't understand why Uber doesn't let drivers choose if they want to be employed or contractors?
I do. Employees are a cost and a liability. They have to be paid weekly/monthly instead of per gig. They would have to be paid even when there's no rides. They have to be paid for if they end up sick, unable to work, on pregnancy leave. They need to have payments in their retirement fund. In the UK's case, they need to pay for the NHS. They need to buy them a car, and pay for upkeep, maintenance, damages and fuel.
And they would fall under normal worker protection, so no, they wouldn't be fired if they missed any target even only once, there's procedures and legal requirements and such before formally firing someone.
So it's completely in Uber's interests to only do contractors, no obligations or extra costs except for whenever they do a ride, and I'm fairly sure the compensation per ride is much lower than is necessary to operate a business.
Where is the employee's benefits in this? Does Uber pay much more than they would earn working for a regular taxi company? I mean sure it's a job that people can do whenever they choose, but not doing it is a luxury. Assume most people need a 40 hour work week, or the income of one. Can't get that with Uber without working 80+ hours a week, and even then it depends on luck, supply, demand.
And employees have to be given paid holiday. And you have to pay them PAYE (so ~18% employer's side National Insurance Contributions). And if they're self-employed below the VAT threshold, they don't have to charge 20% VAT.
Your answer implies that no one would ever higher an employee and would only use contractors. I don't think you've completely modeled the dynamics of the situation.
Because there are plenty of other companies that do offer driving jobs and Uber is focused on matchmaking between drivers and riders. Uber Black is often serviced by full time professional drivers working for a separate company.
It’s interesting how Uber takes two very contradictory moral stands.
”We offer the ability for drivers to meet passengers, they should be glad they have this opportunity in the first place to make money.”
”The UK says that we have the ability to start a business, register a trademark and use the public infrastructure but they just don’t get that we’re way too cool and special for these ”labor law-thingies”. Doesn’t anyone care about how we feel about all of this?!”
I personally don't care for the frame of "Uber vs drivers' 'rights'". I wold say that "Uber loses appeal against mandatory employment conditions" is more accurate, i.e. that employing drivers is now conditional on providing them paid holidays and such.
FWIW paid holidays in particular make little sense for this kind of employment given that labor input is so variable.
Another case of a small vocal minority creating unwanted regulation for the rest. Over several years and 1000s of rides in the US, 100% of the drivers I've asked liked being independent and did not want to be employees. Many of them already had other jobs or were students or retirees that liked making money on the side.
For some reason, people keep forgetting that being a professional driver is easily available through Uber Black or any number of other transportation companies. Anyone who wants a full-time driving job can already get one.
Rulings like these will end up hurting the vast majority of drivers who will now have to show up for full-time shifts at locations and times that Uber determines, while earning less money. Good luck to them.
One issue is that in the UK, there is a tax called "National Insurance" or NI, which was originally intended to fund unempoyment benefits. As an employee, you have to pay a certain % of your wages. But the employer also has to pay a percentage of your salary, and they can't just deduct it from your wage. So, for Uber drivers on a minimum wage (£7.50 an hour), the 13.8% that Uber will pay will bump that up to approx £9 an hour that Uber has to pay. Then they will also require Employer's Liability Insurance (as the drivers are employees), will have to offer pension provision (legally required for all full-time employees in the UK), etc.
Is it an absolute must to go to work everyday if you are formally employed? Isn't it possible have the same flexibility if you put it on your employment contract?
Of course FT employment comes with vacation and sick time, but why would you get the same flexibility? Uber is 100% in charge of determining where and when you work, and you get paid the same hourly/salary regardless of how much work there is, so they'll optimize for riders as much as possible.
In the long run it might be better for Uber, more tightly controlled supply will mean cheaper and better rides while drivers make less. I can see surge pricing becoming pure profit when you can just order drivers to be at a certain place instead.
What about 0 hour contracts? What about literally writing down the flexibility you want in the contract?
If you think about it, it's kind of ridiculous to pretend that drivers are running businesses and employing themselves while all they do is ride a car just like an employee. If there's a reason for employees to have certain right, the same reasons should apply to the Uber drivers, therefore they should receive the same benefits.
Why would Uber accept those contracts? There are plenty of drivers, they're not going to hire you if you stipulate all these conditions, especially if they're paying a flat wage.
> it's kind of ridiculous
Why? Many people are individual contractors, what is different about providing transportation as a service?
Well, there could be other cases where a business may have disproportional power and use it to exploit the elements of the society. That's when the regulations kick in and in this case this is the way the British prefers their society be regulated and protected.
Also, there being many people is not an argument, there are many people doing all kind of things and they stop when measures are taken.
I'm not sure what your comment is about. What other cases? There are plenty of issues with monopolies but in this case there was a small group that sued and now the ruling affects all drivers. When 99% of a group does not want measures, then it is absolutely a valid argument.
Can I see the source of the "99% of a group does not want measures" argument?
Anyway, even if that was the case(source please) you can't go against the law. If you ask heroine addicts they would probably want more heroine but if the society decides that it's not O.K. to use heroine, you shouldn't expect your drug business to operate just because the heroine users are happy with it. If you have a problem with the society's choice you can follow the regular democratic routes.
It's in the article: 68 drivers in the lawsuit compared to all drivers affected.
Nothing was against the law, the drivers were contractors. Whether that classification is correct is what the case was about, and now that the court ruled against, the drivers are must now be treated as employees.
This isn't society's choice. Full-time driver employment already exists, but is not something that Uber provided. These few people chose to drive for Uber anyway and demand full-time employment, and then sued for it. They won their case and now all drivers are affected by it. The democratic route would mean majority voting, which is the opposite of what happened with this case.
You're conflating many things throughout this thread. What does "based on the rule of the law" or "libertarian" have to do with anything?
There was nothing illegal happening with drivers classified as contractors. Whether that classification should change is what was being reviewed by this tribunal and they've decided on a change. No rule of law was ever broken, the situation has changed, just like many rules and regulations are updated and companies adapt from before the change to after.
In this case, a very small group create change that affects 100% of the drivers. The fact that only 68 total drivers joined this suit, started by only 2 originally, is a clear signal that it was at the very least not the full intent of the entire driving workforce. Perhaps they should've taken a vote before passing this ruling, especially since these people demanded something from Uber that was already easily attainable elsewhere (eg: a fulltime driving job).
So you think that it was equally possible that they could have been classified as au pairs? These things have a legal framework.
And the low number could have easily be do to the disproportionate power of the company over the drivers. You can't claim that if 68 people are taking action those who don't take action are against those 68.
And "Libertarian" has to do with the way the relationship between the businesses, the workers and the clients is regulated. Your argument about demand and supply is invalid because UK doesn't function purely on libertarian principles so the state has the right to say if these people are contractors or employees.
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[ 6.1 ms ] story [ 233 ms ] thread>>It's the best option available to them because Uber's driven out the competition. Like, people choose to work at Walmart because it's the only employer in a fifty mile radius - for example. They can't work for a local store or start their own anymore because everyone's going to Walmart.
We're not talking about a small town here. These are large cities with diverse economies that contain thousands of employers. Uber drivers can do other jobs besides driving.
There is absolutely no evidence at all that Uber has a employer monopoly in the areas it operates, and that this is why people choose to drive for it.
Anecdotally I've heard that a lot of Uber drivers are very happy about being able to drive for Uber. And by anecdotally I don't mean a survey funded by Uber. I mean from internet comments where somebody claims to know someone who drives for Uber and really likes it. Take that for what it's worth.
>>Yes, in fact, we do. A whole lot of practices have ended predominantly due to legal changes
The vast majority of practices ended because the market value of labour increased as a result of growth in per capita productivity.
Any mandatory standard that gets ahead of the prevailing market value of low-skilled labour just creates unemployment, meaning it doesn't raise the standard of employment for the less skilled.
There's no free lunch in economics.
>>Allowing these jobs to undercut competitors that pay properly propagates low paid situations where society end up having to subsidize the behavior of the companies in question because they don't pay livable wages.
It's exactly the opposite. A mandatory minimum wage, like any price floor, leads to unutilized supply, which in the case of labour means greater unemployment. So you're increasing welfare costs by instituting a minimum wage.
The market value of labour doesn't increase because low-paying jobs were made illegal. That's not how supply and demand work.
EDIT: Parent comments have been heavily edited.
>>This has nothing to do with price floors.
The quintessential labour standard is a minimum wage, which is a price floor. This has everything to do with price floors. In fact all labour standards can be assigned a monetary value and the combined value can be considered a price-including-benefits floor.
>>you're assuming that workers have a choice regarding where to work. That is simply wrong.
I don't understand. Why do you believe they don't have a choice?
>>So wrong that I understood your comment was a joke.
I'm certain you were trying to mock me.
The issue is that they're not treating them as contractors when it benefits Uber, but are treating them as contractors when it benefits Uber.
They need to pick on or the other. If one of those options does not work with the features Uber wants to provide, then they have to make a choice.
We're incentivising companies to squeeze salaries instead of innovating. To me that is the exact opposite of what we should do. If anything, minimum wage should be pushed higher and higher at above inflation, as an incentive to invest in labor saving measures.
There's no reason why we should encourage wasting human capacity by making it easy to exploit people for low wages.
(Yes, this would mean dealing with unemployment by e.g. reducing working time and/or basic income variations or similar)
Actually you do, in almost every case from the length of the working week to health and safety to the right to paid time off.
Yes, in fact, we do. A whole lot of practices have ended predominantly due to legal changes.
A major historical example from the US being the infamous Triangle Shirtwaist Factory fire [1] where 146 workers died in part because the owners locked the factory doors to prevent unauthorized breaks.
The outcome was both an increase in unionization and legal changes.
Employment standards are the way they are today not in general because companies have decided to act nice, but because they've been forced, through law and union action, over a very long time, to adhere to minimum levels.
> Low paying jobs work for some people because their circumstances don't give them the opportunity to get anything better.
Allowing these jobs to undercut competitors that pay properly propagates low paid situations where society end up having to subsidize the behavior of the companies in question because they don't pay livable wages. I for one would much rather have a proper welfare system than a system that rewards companies like that.
[1] https://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fi...
The sharing economy always was about exploiting workers (and externalizing costs), and this has created an additional cost for society.
For example, DHL’s drivers are "self-employed", as result, in most countries their healthcare is funded by themselves, or by society (instead of the employer), and this means you (and your company) pay more taxes, just so that Uber, DHL, Amazon and co can save money.
As long as the self-employed person doesn't pay tax on their insurance (which AFAIK they don't), it is exactly the same thing.
https://www.gov.uk/self-employed-national-insurance-rates
What is relevant is NI ("national insurance"), which pays for a bunch of unemployment and similar benefits: https://www.turn2us.org.uk/Benefit-guides/National-insurance...
What is also relevant is driver liability insurance - normally if you take paying passengers it invalidates your insurance, so commercial drivers either need to be insured by their company or pay more for correct insurance.
If the big company is not willing to pay X+Y to the self-employed guy, they won't be willing to spend X+Y on an employee.
The only difference is if the big company can get better rates on the relevant goods than a self-employed guy.
How does an employee having to buy their own healthcare mean I pay more tax?
How does DHL buying healthcare for employees mean I pay less tax?
How do either of those affect my socialised healthcare charges which would remain fixed even if DHL cease trading?
Same reason tax evasion by corporations should be ended since it not only devalues society but actively feeds on it while undermining the positive potential that a managed free market actually allows ALL players, not just the few that have gotten too big to fail.
That assumes better jobs would exist if these didn't. This is the Nirvana fallacy.
Define "exploit". Depending on the definition, you could argue that all economy is about exploiting workers.
Yes. When the basic income comes, it will redefine all the parameters by which we judge the qualities of jobs. But that doesn't mean that such jobs are not exploitative now, according to current standards. Your snarky quotes are unwarranted.
Ah, so you're familiar with Marx?
I have 3 personal anecdotes, you can ignore them if you'd like, but I'm a proponent of the sharing economy.
1. I'm from Austin, Texas where prior to Uber it was impossible to get a ride unless you were directly downtown. I've called cab companies and they no-showed, leaving me stranded in the middle of no where. There isn't enough density for public transit and when Uber and Lyft entered the market, it changed our lives. Prior to the existence of these companies, there was rampant drinking and driving. I went to school here, and every party was essentially binge drinking followed by a harrowing 30 minute drive where everyone on the roads at 2am is a drunk driver.
2. My sister is a teacher, single mother, and low income. She uses Uber on the weekends to make extra income and help support her child. For her, the flexibility of being able to drive whenever for a quick buck is key to closing the gap that Texas politics hasn't quite solved. I'm going to preempt the argument and say I agree that UBI may be the solution more generally to workers needing to rely on their employers.
3. My mother is retired and generates ~1000/month in income from social security payments. She did not plan for retirement, has no savings, and has moved in with my sister to help out. Her day job is managing Airbnb rentals in Austin and she rents out a room in their house for extra income (~700/mo). Her quality of life is much higher than it would be without Airbnb, and her ability to schedule, find and vet potential tenants without Airbnb would be pretty much nil.
I recognize these are not the same 'workers' whom are being pathologically disadvantaged by the rules of these platforms - I think they're the ideal users that product people pin on the whiteboard. I come from a low income background and only see positives, had Uber been around when I was in school I wouldn't have worked for $5.15 washing dishes in a rat infested kitchen, done tech support for wireless hotspots in trailer parks or been a valet on 6th street dealing with intoxicated people. I've had about ~20 low skilled, hourly jobs that essentially dominated my life at the time and I had very little mobility or earning power, having the opportunity to leverage my vehicle and time flexibly would've been enormous.
For any company actually following the rules it is good news that companies like Uber aren't allowed to flout them.
You can argue about whether or not these regulations should be there, but as long a they are they need to apply equally across the board.
oh no, what a travesty.
Besides I doubt Uber is struggling financially, it's one of the largest companies in the world and did so by paying their drivers only a fraction of what they'd earn as regular taxi drivers. Mind you the cost for customers was similarly lower, but apparently, too low.
Uber is one of those companies that lives off of investment money, using that to be able to dive under the price of their competition and putting them out of business. I'll shed no tears for them.
You are absolutely correct in laying the blame at successive governments that refuse to make the law clear. Companies such as Uber and Deliveroo do not help the case as they are seen as the examples of how the term freelancer can be abused. Unfortunately I doubt that those in government care to make the distinction between this abuse of the system and genuine IT contractors.
0. https://www.citizensadvice.org.uk/work/rights-at-work/agency...
But it's a bit more subtle in that they're going after two different types of abuses:
1. Agencies that want to rent out contractors rather than contract out employees even when they treat these people as employees.
2. Relationships where one or both sides want an employee to be a contractor to benefit from tax savings.
Uber seems to fall largely in 1, while e.g. IT contractors sometimes fall in 2, or is at risk of falling in 2.
In our case the consideration tends to be that tightening the rules means there's a whole checklist of things that makes it more or less likely that HMRC will deem us to be de facto employed or subject to IR35 (making us pay taxes similar to if we are in employment).
For #2 and to avoid IR35 there are a whole lot of considerations such as what costs we incur, whether or not we use our own equipment, whether or not we have sales and marketing costs; whether we employ someone; how many clients we have; if we have our own office for the company etc. that centre around whether or not the company has an existence independent from any given client.
The reason this is important for us too, is that one avenue for a business like Uber to avoid problems with #1 is to try to restructure around not pretending that drivers clients are the people they drive, but that their client is Uber but that they're still independent. If they try stunts like that, it may result in rule changes detrimental to other, genuine contractors too.
The drivers will still be able to set their own hours, just they should be getting a minimum of £7.50 an hour for those they work.
Unless they already have something in place to manage how many drivers are on the road in an area at any time? I thought that was just controlled by supply/demand, but that gets skewed by Uber needing to still pay minimum page when there is an over-supply.
However as an employee commission based jobs are not really the norm. You usually get paid by the hour or a salary as an employee. Contractors / outside companies get paid a flat fee.
A sales representative might get paid in commission but then it would also be based on hours worked and if it comes under the minimum wage you need to be bumped up to at least that amount.
In the US, one central tenant of being an employee vs a contractor is that your employer has power over your schedule, working location, and your work methods, which I see none of in Uber (which I did drive for back in 2016.) Uber drivers are allowed to drive for other groups and have other jobs.
So what basis was this decision made, if not "they are complaining and the right thing to do is something, plus Uber=bad?"
https://www.gov.uk/employment-status/selfemployed-contractor
The first essentially boils down to extra money - if you work X days you get another days pay to simulate a paid holiday day. I'd imagine the second two would combine - if Uber accepts your app connecting and being "for hire" they guarantee you at least the minimum wage, and after a set period of working you get a paid break.
If they're employees, they get a lot of rights and protections that maybe aren't common at all in the US. Companies like Uber (and e.g. construction companies, marketing agencies, etc) will push people to become self-employed so that the employer has no obligations or responsibilities whatsoever to the employee. This will allow them to out-compete the companies (like Black Cab in London) heavily, at the cost of the workers.
Or perhaps Uber are actually providing a useful source of work to drivers who otherwise wouldn't be working at all?
It is not easy to go and work as a traditional taxi driver in London. There are various regulations on taxis and taxi drivers in the UK anyway, and in addition, in London taxi drivers are required to pass an infamously difficult test known as The Knowledge proving that they can navigate effectively around London streets.
One of the big objections to Uber and the like is that they attempt to bypass some of those regulations and that training, and the regulations and training are there for a reason. To the extent that this confers a competitive advantage to Uber drivers over black-cabbies, it's a rather unfair one.
So, obviously those rules don't matter as much to customers as convenience, price and availability do.
In some ways, black cabs are obviously superior. To pick a few examples, their pricing is regulated by local authorities, they are required to be wheelchair accessible, and their drivers are required to have The Knowledge along with various other qualifications before being licensed.
To the extent that black cabs may be at a competitive disadvantage compared to Uber's standard (non-surge) pricing, that is in part because Uber's current financial model seems to be subsidising every journey using the vast amounts of funding they have accepted. That is not sustainable. It is also in part because of exactly the sort of issues we're talking about today, where they've been cutting their costs at the expense of their drivers in legally questionable ways, which again is hardly playing on a level field.
* Rude
* Will demand payment in cash, and only when you threaten them with non-payment repeatedly will allow you to pay with credit cards, DESPITE agreeing to it beforehand.
* Unwilling to stop where the customer wants them to
* Don't get out of the car to put luggage in the trunk
I hate Uber's labour practices, but there are major issues with black cabs.
Especially when they start off the wrong way or take a wrong turn and their map app dutifully encourages them around some longer path.
https://www.youtube.com/watch?v=u7gp8KBP7ak
Being self employed can have its benefits but Uber drivers enjoy very few of those.
Labor can be exploited only when a corporation can sidestep the organized labor pool and tap into the pool of labor that demands no protections. If most Americans thought as you did, I don't think American corporations could get away with paying their employees such pitiful wages and benefits.
To work as as a Black Cab in London you have to do The Knowledge - which can take several years to complete https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing...
It doesn't mean that I can target disadvantaged people for slavery. Uber needs to be held to proper standards.
* several government sanctioned intermediaries get a cut (who, I'm sure, are entirely unrelated to the politicians running the city)
* direct tax is paid on the taxi cab licence to the government
The majority of minicab companies operate as an agency.. which keeps the operating company below the VAT threshold. Uber reduces their liability in the same way.
Mini cab drivers have private hire licence (not a Hackney carriage licence, that a taxi which trawls the street looking for a fare)... Uber drivers have he same license as Minicab drivers.
A mini cab is usually ordered by phoning up the agency, and the driver picks up at your location... Uber you use an app, but the process is the same. Neither are allowed to be hailed from the road.
With minicabs, the car and fuel is often provided by the agency.. which makes it more of an employer than uber (where the car and fuel is provided by the self-employed contractor)!
I agree with these articles: https://www.ft.com/content/7ca2f852-b5b5-11e7-a398-73d59db9e... https://www.theguardian.com/technology/2017/sep/27/uber-says...
Uber is simply a better version of private hire, I don't think that's in dispute by anyone. But how does it compare against taxis seems to be what the discussion is about.
“92. ... The drivers provide the skilled labour through which the organisation delivers its services and earns its profits. We base our assessment ... in particular on the following considerations. (1) The contradiction in the Rider Terms between the fact that ULL purports to be the drivers’ agent and its assertion of “sole and absolute discretion” to accept or decline bookings. (2) The fact that Uber interviews and recruits drivers. (3) The fact that Uber controls the key information (in particular the passenger’s surname, contact details and intended destination) and excludes the driver from it. (4) The fact that Uber requires drivers to accept trips and/or not to cancel trips, and enforces the requirement by logging off drivers who breach those requirements. (5) The fact that Uber sets the (default) route and the driver departs from it at his peril. (6) The fact that UBV fixes the fare and the driver cannot agree a higher sum with the passenger. (The supposed freedom to agree a lower fare is obviously nugatory.) (7) The fact that Uber imposes numerous conditions on drivers (such as the limited choice of acceptable vehicles), instructs drivers as to how to do their work and, in numerous ways, controls them in the performance of their duties. (8) The fact that Uber subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure. (9) The fact that Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected. (10) The guaranteed earnings scheme (albeit now discontinued). (11) The fact that Uber accepts the risk of loss which, if the drivers were genuinely in business on their own account, would fall upon them. (12) The fact that Uber handles complaints by passengers, including complaints about the driver. (13) The fact that Uber reserves the power to amend the drivers’ terms unilaterally.”
* "controls the key information (in particular the passenger’s surname, contact details and intended destination) and excludes the driver from it"
* "determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected"
* "handles complaints by passengers, including complaints about the driver"
* "subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure"
Uber could never call itself a "marketplace" for drivers. It operates much more like a driver agency.
Edit: there are genuine online booking agencies for drivers in London, like http://www.kabbee.com, which act as a front-end for independent minicab drivers. I think this is much more that way it should operate if the drivers weren't employees, as Uber argues.
I think the ruling makes it clear that Uber has a huge amount of control over the driver, how they do their job and how many fares they take (with penalties). Since Uber is interviewing the drivers and requiring that that driver show up for the fare, it's not clear that a driver can substitute someone else for their fare). You can argue that there is an obligation on the specific driver to complete fares for Uber and the driver depends on Uber to supply fares. The ruling makes sense that they are employees as UK law defines the term.
I don't think you can argue that an App Store developer is a disguised employee in the same way, Apple/Google have very little control over how I write my app, they don't care if I write it or I subcontract and I don't think Apple have any expectation that I will write the app.
Your "USA perspective" reminded me of a concept called "court rulings as informal tariffs". Basically, when a foreign company is tried in the courts, the rulings will often favor the side that's aligned with the country's own court. (In this case, it's the UK drivers.)
The idea is, we can't objectively analyze rulings purely on its legal merits. Instead, there's always a country's (unstated) self-interest that's entangled in the judgement. (E.g. our home-grown London drivers deserve more money instead of USA's Uber executives.)
The USA would have the same bias. If a Korean company like Samsung is being sued by American company like Apple in a USA court, it's likely that Apple will win. Likewise, an American company like Google will lose more rulings by the EU than EU companies.
Again, it doesn't mean Uber is innocent. It's an observation that we didn't see the same government scrutiny about UK ride-sharing services like Hailo (subsequently absorbed by Mytaxi) about classifying contractors as workers. UK taxi drivers are generally contractors[1] but Uber attracted the ire that other ride-sharing apps didn't.
https://www.gov.uk/government/publications/vat-notice-70025-...
(EDIT: thanks for correction kbart. I was reading about Lexus and had Japan on my brain.)
But why were they "already contractors"? Doesn't that beg the question?[1]
Take a look at section 2.1 of the link I cited. Just based on the text alone, it's not obvious why that "self-employed" criteria doesn't apply to Uber. Yes, the courts are free to interpret beyond the literal text but there doesn't seem to be objective consistency to it. The traditional UK taxi companies and the other ride sharing apps all seem to be misclassifying workers.
I'm not familiar with Hailo. Are you saying that a person who didn't drive a taxi before can't sign up on the Hailo platform and immediately offer their services? Did they have to be associated with a traditional taxi company first as prerequisite?
In what situations would drivers prefer Hailo over Uber and vice versa?
[1] https://en.wikipedia.org/wiki/Begging_the_question
Yes, I understand that but aren't those facts orthogonal to the status of "contractor"?
If we try to integrate your facts, we would end up with a nonsensical decision tree:
Choice 1: study for years to pass test and get Tfl license to _not_ earn minimum wage
Choice 2: no test to pass and sign up for Uber to get a minimum wage (because of new ruling)
Since the above makes no sense, that's why I believe it just muddies up the discussion about what truly designates somebody a "contractor".
Part of the argument in the judgement is that Uber in effect acts as the client, since their rules prevent the driver from interacting with the rider in a way a independent contractor would normally be ble to. That makes it all the more significant when Uber is often the only client. For someone like Hailo this would be less risky as the driver also works for many others most of the time, so even if Hailo was found to be the client rather than the individual riders, they could make the argument that to most their drivers they were just one of many clients.
That Uber in "ideal" circumstances could have only signed up drivers that drive for many others too, or that Hailo in theory could have only signed up drivers that were only driving for them, isn't relevant when that's not how things have been in practice.
EDIT: I'd very much like to hear arguments instead of downvotes, given that my comment is entirely factual. Downvoting doesn't change any of it.
No it doesn't. The point is that Hailo was an additional supplier of leads to people who operated businesses independently of Hailo, and that in itself strengthened the claim that they were genuinely independent businesses substantially. These companies didn't "spring into existence" when a driver decided to sign up with Hailo exclusively to deal with Hailo, and pretty much nobody would work only for Hailo. While not everyone only works for Uber, a lot do.
If that was the only difference between the two, Uber would probably have been ok, but in Uber's case there are many additional factors.
> Take a look at section 2.1 of the link I cited. Just based on the text alone, it's not obvious why that "self-employed" criteria doesn't apply to Uber.
HMRC does not define or have any legal powers to define whether or not you are self-employed (the furthest their powers go is to determine if your relationship is one that can be deemed employment for tax purposes, but that does not say anything about whether it is employment for other purposes).
They define how to interpret the tax rules. In this case specifically VAT rules. The only point that section make is that if you are operating it as self employed then VAT is ultimately your responsibility (though you may contract it away). In this case the tribunal found that Uber drivers are not, and so this section does not apply.
> Yes, the courts are free to interpret beyond the literal text but there doesn't seem to be objective consistency to it. The traditional UK taxi companies and the other ride sharing apps all seem to be misclassifying workers.
Read the actual judgement. The list of restrictions placed on drivers by Uber is very extensive. If any other minicab companies (and I don't know why we try to invent a different name for what Uber does - in UK parlance they are nothing but another minicab company; we have many of them, most of them with apps) place the same extensive restrictions on drivers, then I agree they too should be considered to be employers.
> I'm not familiar with Hailo. Are you saying that a person who didn't drive a taxi before can't sign up on the Hailo platform and immediately offer their services? Did they have to be associated with a traditional taxi company first as prerequisite?
A person needed to operate a licensed taxi, which passengers can hail (hence the name), as opposed to a minicab (which can only take bookings), which means they'd need to have been licensed by the appropriate authority (the Public Carriage Office in the case of London) as a taxi and have the appropriate training etc. Given the cost of taking the appropriate training and the cost of the car required etc., pretty much no drivers would do that to work exclusively for Hailo - the major benefit of being a licensed taxi is the ability to pick up passengers directly.
If Hailo signed up such drivers and placed them under the same restrictions as Uber and most of those drivers never operated independently to any extent, then Hailo would probably have gotten in trouble too, but there are many other differences as well.
i.e. perspective of country where labor laws are not actually enforced.
I wonder if you've been sold the bill of goods reading your Uber=bad comment.
Uber's business needs are somewhat at odds with its legal case here. From a branding standpoint, Uber wants you to think of yourself as interfacing with Uber, not individual drivers. They want you to believe that if you call an Uber, you're going to get a certain level and quality of service.
Contrast something like HomeAdvisor, which is undoubtedly an aggregator for contractors. Home Advisor doesn't tell its contractors what kind of equipment to use, it doesn't kick off contractors who don't achieve a 4-star rating, etc. It's explicitly marketed as a service for finding contractors, not a company that performs the service directly.
That doesn't really matter. Nor is it really true, since you inevitably interact with the driver. And it's understood that drivers are humans, and they are different.
McDonalds operates a franchise, you got the same thing, but still, different companies.
Yes, Uber had not structured itself as a franchise, but the use of [sub]contractors to provide a service with a controlled and sort of guaranteed (and well marketed and branded) quality - in itself - doesn't make the drivers employees.
I think the line between contracting and employment is up to the host society to draw.
Usually tax authorities have a few simple rules and if you are in compliance of at least half of them (or if you break at least X of them), then you are a contractor (or disguised employee). For example exclusivity is important here, the rule states that if a contractor gets more than 50% of its income from one entity, then that's one strike (and there are 5 other rules).
Of course it seems in UK law the drivers have standing, so it means there must be some statute about when a contractor is to be treated like employees. (For example, let's say you can't use temp workers, contractors like regular full time employees and not give them free cafeteria, if your regular employees have that perk.)
But of course this is meaningless in case of a 2 party problem, because it doesn't help determining "employmentship" vs "contractorship".
So what'd be a clear and fair way to test for the quality of work relationship?
https://www.forbes.com/sites/robertwood/2013/09/06/32m-domin...
I don't think relaxing vehicle standards or driver background checks is good for anyone - and requiring your contractors to have certain equipment sounds perfectly reasonable to me.
Here's a quote someone on Reddit pulled out
> Since it is essential to that case that there is no contract for the provision of transportation services between the driver and any Uber entity, the Partner Terms and the New Terms require the driver to agree that a contract for such services (whether a ‘worker’ contract or otherwise) exists between him and the passenger, and the Rider Terms contain a corresponding provision.
> Uber’s case is that the driver enters into a binding agreement with a person whose identity he does not know (and will never know) and who does not know and will never know his identity, to undertake a journey to a destination not told to him until the journey begins, by a route prescribed by a stranger to the contract (UBV) from which he is not free to depart (at least not without risk), for a fee which (a) is set by the stranger, and (b) is not known by the passenger (who is only told the total to be paid), (c) is calculated by the stranger (as a percentage of the total sum) and (d) is paid to the stranger. Uber’s case has to be that if the organisation became insolvent, the drivers would have enforceable rights directly against the passengers. And if the contracts were ‘worker’ contracts, the passengers would be exposed to potential liability as the driver’s employer … The absurdity of these propositions speaks for itself.
I think the shift toward the "gig economy" is going to see the creation of a third classification of worker that sits between employee and contractor, likely with the negatives of both. The financial services sector has a version of this by employing large numbers of contractors indirectly through body shops. I wouldn't be surprised if we go that route here too with Uber/Lyft owning the platform yet deferring employment costs to a separate company. Their providers would be businesses, not people, and to sign up to be a driver one would apply at one of those businesses.
[1]: https://en.wikipedia.org/wiki/Zero-hour_contract
I understand this doesn't happen (or doesn't work) in some areas, New York comes to mind, but I've never met an Uber driver in the UK for whom it a) isn't a full time job, and b) who drives for other companies as well.
How do they do that?
Pay $y/unit if between 10 and 40 units.
Pay $z/unit if between 40 and 60 units.
The values for x and y may be too low to be economical so a driver would need to work more units (hours, miles, whatever) to get the higher z rate. That would preclude them from working for a competitor as there a finite number of hours per week.
A minicab is a minicab, an uber is an uber, and a black cab is a black cab.
In addition, we have a variety of rules around contracting/freelancing, "gig" jobs, "zero-hours contracts", and other variations. In some of these cases there are genuine advantages to all parties of working in a certain way, but in other cases a similar-seeming arrangement may be exploitative. Successive governments have tried to deal with these issues, but unfortunately with very little achieved in terms of protecting the vulnerable while in some cases causing significant damage even if the arrangement was all above board and everyone involved was happy with it.
They'd have a really hard time having such a clause stand up in court, especially in California where non-competes traditionally don't stand.
Many courts have determined that non-competes only stand if your company is actively paying you(and expecting you to work - in the case of moonlighters working a job after their 8 hour job) unless exclusive knowledge/power exists - which must be compensated for accordingly. Knowledge/power might exist in terms of surging locations; but uber drivers are currently only paid for their time after they accept a ride.
>>When are we going to let companies pay their employees Slave wages, you mean.
So it's okay if they offer to work for a "slave wage" as a self-employed small business owner, but if they work through a third party, then it's not okay? How it taking away an option in their interest? You're reducing the avenues through which they can sell their labour, which cannot possibly be to their advantage.
>>It's not going to happen - we tried that before, and it didn't work. Remember the industrial revolution? Real good working conditions and pay in those factories, eh?
It worked incredibly well. Wages grew rapidly throughout the industrial revolution. What do you expect would have happened if a $15/hr minimum wage were instituted in 1875, when per capita GDP was $1,000?
>>The universal basic income.
It doesn't make sense that people should be denied the freedom to offer to work for whatever wage they want until universal welfare is implemented.
The universal basic income.
The law as it stands allows an employer to pay zero, or >£7.50 per hour, but nothing in between.
Lots of industries circumvent that by requiring 2/3 years experience to get a job. That experience can be as an unpaid volunteer. Now, over your career, you are forced to do 3 years unpaid, then the rest of your career paid, and guess what, on average you got under minimum wage. Live with your parents for the unpaid bit.
There'd be no need to ban peer-to-peer networks - the payment method does not change anything. If there is an employer-employee relationship it'd break the law if they don't follow the regulations for such a relationship. If the drivers are genuinely small businesses, it wouldn't.
> So it's okay if they offer to work for a "slave wage" as a self-employed small business owner, but if they work through a third party, then it's not okay?
The implication is in part that the paperwork necessary to operate as a small business acts as a deterrent for people to enter into it without at least some degree of understanding of what they're entering into.
It is providing what you're arguing for (the ability to set whatever salary you want), but at the same time protecting society against some of the worst exploitation by providing some hoops you have to jump through.
> How it taking away an option in their interest? You're reducing the avenues through which they can sell their labour, which cannot possibly be to their advantage.
This is nonsensical. If I offer to pay you to work in conditions that are guaranteed to be lethal, according to your arguments it can't possibly be to their advantage, because I'm reducing the avenues through which they can sell their labour. Clearly reducing the avenues alone is insufficient to determine whether or not the decision is to their advantage.
> It worked incredibly well. Wages grew rapidly throughout the industrial revolution.
And through most of the period, worker activism grew rapidly as well. In a great many cases, workers died during actions taken to improve working conditions and salaries. The fantasy that those improvements are purely down to lack of regulation is just that. It took repeated bloodshed to bring about those improvements, and a lot of regulations that were often also paid for in blood.
If there is any takeaway from the growth in wages during the industrial revolution, it is that aggressive direct action by workers provides results.
>>This is nonsensical. If I offer to pay you to work in conditions that are guaranteed to be lethal, according to your arguments it can't possibly be to their advantage, because I'm reducing the avenues through which they can sell their labour.
There are no jobs that are guaranteed to be lethal. If there were, there are only two conditions under which someone would work them:
1. They are mentally incapable of making decisions for their own life, and thus should be placed under conservatorship where they are not free to make their own decisions.
2. The jobs is fraudulently advertised.
In either case you don't need to resort to creating mandatory minimum employment standards like minimum wage. What you're effectively endorsing is conservatorship for the entire population.
>>And through most of the period, worker activism grew rapidly as well. In a great many cases, workers died during actions taken to improve working conditions and salaries.
I'm dubious about this claim. It sounds like another pop-history claim that is baseless. Do you have a source?
I remember reading that workplace injuries were decreasing throughout the industrial revolution era. From what I understand regulations had no positive impact on this upward trajectory in safety.
What did definitely happen during the industrial revolution is that life expectancy rapidly rose. The famines and starvation that frequently occurred prior to to the 16th century became increasingly uncommon as the economy of the West industrialized.
>>If there is any takeaway from the growth in wages during the industrial revolution, it is that aggressive direct action by workers provides results.
The opposite is true. There were very few labour regulations and no minimum wages instituted during the Industrial Revolution (thanks largely to legal doctrines of substantive due process guaranteeing the freedom to contract in place since the Supreme Court Lochner ruling). After the propaganda victory of the socialist parties and labour unions, extensive labour regulations were introduced.
This has accelerated since the creation of the OSHA in 1970. The last 40 years have seen wage growth stagnate and life expectancy to even decline for some demographics.
The Nirvana fallacy has cost generations improvements in their quality of life.
And it's entirely irrelevant. If the driver is genuinely acting as an independent company, then it's not a problem. If the driver is being treated as an employee, then some entity is the employer and that entity is on the hook for the legal requirements, and it'll be down to courts to figure out who to hold responsible.
> There are no jobs that are guaranteed to be lethal. If there were, there are only two conditions under which someone would work them:
You're evading the question by being pedantic. Reduce "guaranteed to be lethal" to whatever threshold you prefer and it stands.
> I'm dubious about this claim. It sounds like another pop-history claim that is baseless. Do you have a source?
Each and every history book that covers the labour movement and workers rights. I'm not going to fill in gaps in what is high school level history for you. Go read some wikipedia pages for that matter.
> The opposite is true. There were very few labour regulations and no minimum wages instituted during the Industrial Revolution (thanks largely to legal doctrines of substantive due process guaranteeing the freedom to contract in place since the Supreme Court Lochner ruling).
Lochner post-dates the most significant gains in US labor history by decades.
> After the propaganda victory of the socialist parties and labour unions, extensive labour regulations were introduced.
... and so did this. By the 1920's the support for socialism in the US was rapidly headed for collapse.
> This has accelerated since the creation of the OSHA in 1970. The last 40 years have seen wage growth stagnate and life expectancy to even decline for some demographics.
Nonsense. Ca. 1920 or so the US lost it's leadership in labour rights improvements, and especially so after World War II when the social democrats had gained massive influence in Western Europe, and most European countries built universal healthcare systems and expanded unemployment rights and other welfare dramatically while the US mostly stood still.
If you want to blame US stagnation in the last 40 years on something, consider that the US is lagging further behind Europe in workers rights and welfare than it ever has, so whatever the cause is, you'll have to look elsewhere.
I explained the relevance:
>So it's okay if they offer to work for a "slave wage" as a self-employed small business owner, but if they work through a third party, then it's not okay? How it taking away an option in their interest? You're reducing the avenues through which they can sell their labour, which cannot possibly be to their advantage.
To rephrase: when DAOs are created, drivers will be able to offer their services without meeting these arbitrary employment standards, without going through a company, and just as easily as going through a company. How is making it illegal for a company to hire them under terms that don't meet employment standards in their interest, when doing so won't prevent them from working for terms that don't meet these standards, and when all it will do is reduce the avenues through which they can work for terms that don't meet the standards (translation: all it will do is reduce their market power)?
Maybe I'm still not clearly communicating my point. If it's not clear what I'm asking please let me know and I'll try to rephrase it.
Either way, could you please address my argument?
>>You're evading the question by being pedantic. Reduce "guaranteed to be lethal" to whatever threshold you prefer and it stands.
The pedantry is in you making this a point about how I worded the beginning of my argument and ignoring the bulk of my argument, and its substance, that applies to any threshold. Here it is again:
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If there were, there are only two conditions under which someone would work them:
1. They are mentally incapable of making decisions for their own life, and thus should be placed under conservatorship where they are not free to make their own decisions.
2. The jobs is fraudulently advertised.
In either case you don't need to resort to creating mandatory minimum employment standards like minimum wage. What you're effectively endorsing is conservatorship for the entire population.
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I really don't have the patience to deal with bad faith debating. Just know that if you win the public relations campaign through rhetoric and sophistry, but you're advancing the wrong cause, you're hurting yourself too. So there is no sense in debating disingenuously about public policy using these tactics. Western Europe and the US have seen wage growth stagnate over the last 40 years due to the kind of behaviour you're exhibiting now.
Our human society only functions at all due to the extraordinary efforts of numerous people to cooperate and honestly debate issues to reach a consensus on the right way forward.
Even a small portion of the population acting in bad faith to push their own narrow interests at the expense of society at large is enough to cause the whole thing to break down, because it's nearly impossible for society at large to arrive at a consensus on the truth about complex topics when there is a significant amount of misinformation being injected into the debate. Please be part of the solution.
Those who choose employed would have strict working hours, performance requirements, etc. and if they miss any target even once would be fired. They would be free to reapply immediately with no penalty.
I do. Employees are a cost and a liability. They have to be paid weekly/monthly instead of per gig. They would have to be paid even when there's no rides. They have to be paid for if they end up sick, unable to work, on pregnancy leave. They need to have payments in their retirement fund. In the UK's case, they need to pay for the NHS. They need to buy them a car, and pay for upkeep, maintenance, damages and fuel.
And they would fall under normal worker protection, so no, they wouldn't be fired if they missed any target even only once, there's procedures and legal requirements and such before formally firing someone.
So it's completely in Uber's interests to only do contractors, no obligations or extra costs except for whenever they do a ride, and I'm fairly sure the compensation per ride is much lower than is necessary to operate a business.
Where is the employee's benefits in this? Does Uber pay much more than they would earn working for a regular taxi company? I mean sure it's a job that people can do whenever they choose, but not doing it is a luxury. Assume most people need a 40 hour work week, or the income of one. Can't get that with Uber without working 80+ hours a week, and even then it depends on luck, supply, demand.
Muuuuuuch cheaper.
”The UK says that we have the ability to start a business, register a trademark and use the public infrastructure but they just don’t get that we’re way too cool and special for these ”labor law-thingies”. Doesn’t anyone care about how we feel about all of this?!”
FWIW paid holidays in particular make little sense for this kind of employment given that labor input is so variable.
For some reason, people keep forgetting that being a professional driver is easily available through Uber Black or any number of other transportation companies. Anyone who wants a full-time driving job can already get one.
Rulings like these will end up hurting the vast majority of drivers who will now have to show up for full-time shifts at locations and times that Uber determines, while earning less money. Good luck to them.
In the long run it might be better for Uber, more tightly controlled supply will mean cheaper and better rides while drivers make less. I can see surge pricing becoming pure profit when you can just order drivers to be at a certain place instead.
If you think about it, it's kind of ridiculous to pretend that drivers are running businesses and employing themselves while all they do is ride a car just like an employee. If there's a reason for employees to have certain right, the same reasons should apply to the Uber drivers, therefore they should receive the same benefits.
> it's kind of ridiculous
Why? Many people are individual contractors, what is different about providing transportation as a service?
Also, there being many people is not an argument, there are many people doing all kind of things and they stop when measures are taken.
Anyway, even if that was the case(source please) you can't go against the law. If you ask heroine addicts they would probably want more heroine but if the society decides that it's not O.K. to use heroine, you shouldn't expect your drug business to operate just because the heroine users are happy with it. If you have a problem with the society's choice you can follow the regular democratic routes.
Nothing was against the law, the drivers were contractors. Whether that classification is correct is what the case was about, and now that the court ruled against, the drivers are must now be treated as employees.
This isn't society's choice. Full-time driver employment already exists, but is not something that Uber provided. These few people chose to drive for Uber anyway and demand full-time employment, and then sued for it. They won their case and now all drivers are affected by it. The democratic route would mean majority voting, which is the opposite of what happened with this case.
You are making too many assumptions. Your motivation looks ideological, apparently the british society choose not to go full libertarian.
There was nothing illegal happening with drivers classified as contractors. Whether that classification should change is what was being reviewed by this tribunal and they've decided on a change. No rule of law was ever broken, the situation has changed, just like many rules and regulations are updated and companies adapt from before the change to after.
In this case, a very small group create change that affects 100% of the drivers. The fact that only 68 total drivers joined this suit, started by only 2 originally, is a clear signal that it was at the very least not the full intent of the entire driving workforce. Perhaps they should've taken a vote before passing this ruling, especially since these people demanded something from Uber that was already easily attainable elsewhere (eg: a fulltime driving job).
And the low number could have easily be do to the disproportionate power of the company over the drivers. You can't claim that if 68 people are taking action those who don't take action are against those 68.
And "Libertarian" has to do with the way the relationship between the businesses, the workers and the clients is regulated. Your argument about demand and supply is invalid because UK doesn't function purely on libertarian principles so the state has the right to say if these people are contractors or employees.