It seems pretty clear that the Governor is going to sign the bill, so this is going to be a pretty big deal.
The law wouldn't take effect until the beginning of next year, and in that time Uber, Lyft, and Doordash will have collectively spent $90 million on a ballot prop campaign to exempt them from the law.
Not looking forward to all the ads, but I will be curious where the money comes from on the other side.
That seems exceedingly unlikely to occur, regardless of ad spend, in a state as progressive politically as California (similar to AirBnB’s tone deaf failed ad campaign in San Francisco).
This assumes gig companies haven’t exhausted their runway by then. Humorously, Uber and Lyft thought they might extinguish taxis if they waited them out long enough, and then the California government did the same to them.
You’d be surprised. Californians love their ability to Uber, if this gets rid of that (or severely curtails it), they would have no problem overriding the legislature at the ballot box.
Maybe! In the interim, burn rates of already unprofitable companies are going to increase drastically. Does it matter if you overturn the law if you’ve already ceased operations?
Uber ride share is actually profitable in California (and most of the USA), they are burning lots of cash on UberEats however.
If this law is applied fairly, it affects taxi and limo operators as well, so everyone will be in the same boat at least, fares will surge but they will still be in business.
I'm curious, do you have a source for the claim that uber is profitable in most of the USA? That goes against their disclosed info of huge annual losses.
Where? I don't see any mention of profitability in CA in your link or in their actual report [1]. You might be referring to the "Results by Offering and Segment" where they report growth in the US and $1.8B in revenue, but they go pretty far to hide where their losses are actually coming from in relation to rideshare. It's not at all clear to me that they are profitable in any rideshare market.
California voted against gay marriage AND legalization of marijuana. So it's not nearly as progressive as you think. It took a court case to bring gay marriage to California and a second attempt for pot.
California was once the stronghold of conservativism, recall GOP God-head
Reagan had his political epicenter of Orange County. Now, California is majority minority and much more liberal. Could the same happen to Texas, Georgia, Arizona?
Being profoundly unqualified to evaluate legislation, the electorate is highly susceptible to well-crafted advertising on ballot measures and can easily end up voting for something that they don't philosophically agree with.
This is why direct democracy is generally considered a failed concept and why California's state administration is generally considered a failure, propped up only by the nearly incomprehensible amount of wealth generated in the state.
When I lived in San Francisco, there were several ballot propositions roughly along these lines: various corporations or special interests advocating for some measure that was designed to sound reasonable, but whose explicit purpose was to benefit whoever wrote it and was paying to promote it.
At least while I was there, these never passed.
I remember that the San Francisco Bay Guardian (then an alt-weekly newspaper) used to absolutely howl about these propositions. My memory is that the SFBG hated them even more than, say, the anti-gay marriage proposition which passed in 2008. They were quite unequivocal in labeling them as crony capitalism.
Unfortunately, the SFBG has ceased publication; although they still have a website, they appear to basically be dead.
The money comes from lobbyists for previous incumbents in those industries, like legacy taxi, hotel, restaurant... businesses. Those legacy businesses also tend to have stronger Union bases
In broad strokes, I support this because it's helping the driver who used to get great money but then has been getting the squeeze lately.
While it seems like "big corporations complaining", I admit this does threaten certain companies, especially the ones that are not profitable. Charging more per ride or gig doesn't pan out well as ridership and usage drop in step. So far all our Uber rides have been subsidized by Softbank and other investors. Similar story for lots of other gig based apps.
I'm not sure what the real answer is here, but overly simplifying the problem, better pay/benefits for the individual person is better.
I haven’t closely followed this but it definitely seems like something that could have serious second order effects that (surprise, surprise) politicians who optimize for optics never think about.
For example I think the bar will immediately be higher for drivers who want to remain drivers, meaning less tolerance for drivers that have below median ratings. Maybe that’s a good thing for riders but it could make driving more stressful than it already is.
This is why it's good to have states be the test beds for policy experiments.
It's not all bad for everyone. If this turns out to be a giant net negative, the rest of the world can learn from California's experience. Worst case it will be a boon for other states who will be able to offer better taxi availability for all the business people they are trying to attract away from California, putting pressure on CA to update it's laws (although let’s be honest this is pretty rare even in the face of changing marketplaces).
This could also accelerate the adoption of AI and the subsequent loss of the driver's jobs in favour of automation as the human capital costs increases and/or driver availability issues could help tilt the cost efficiency scales.
Plus a lot of people are predicting truck drivers are going first and I wouldn’t be surprised if there will be an influx of people looking for urban Taxi jobs soon.
1. Although it's not always the case other states actually look at data and studies first before copying other state's policy.
It will be an interesting case study for sure. I think we can expect fewer drivers, mandatory time slots, and capped 40 hour weeks. Prices should go up to cover all of it, and both Uber/Lyft are cheeky enough to separate that line item as a “CA Tax Recovery Fee” or some such.
Probably will be better off for those making it their living, worse for those looking for extra income.
It’s going to be harder on all the other businesses getting hit suddenly with this, newspapers threw a fit and got a 1 year reprieve but the rest didn’t have a bully pulpit.
30 hours is the threshold for “full time” worker if you’re determining eligibility for health insurance. No way Uber will offer health insurance to drivers, so guessing hours would be capped at 30 max per week.
I would think the exact opposite...in this scenario drivers who do this part time anyway are fine but anyone driving more than 30 hours a week will be hosed.
Perhaps this will encourage tech companies to recognize access to health services as a basic human right.
I look forward to day when corporations support universal health care from purely selfish grounds: if government takes care of employee's health, companies won't have to deal with it, or worry whether driver crosses the threshold of working over 30 hours a week.
You have a right to health (as in nobody can stop you from being healthy). Healthcare is a service that others provide and can't really be a human right.
A better healthcare system requires the government to do something rather than an individual corporation. In fact it's the tight coupling of healthcare to employment that makes it such a nightmare already, and companies are not against a more universal system because it would greatly reduce costs and overhead.
I don’t think it’s that simple. What is considered “work hours”? I assume it’s whenever the app is turned on and you are looking for fares, not just when you have someone in your car.
I think a lot of drivers who use both have both apps turned on simultaneously? This would probably mean that you’d only be able turn on one at a time, which might mean fewer trips per hour.
Another interesting consequence is potential to introduce stricter employment contracts that might say you can’t drive for a competitor...
If they have to be paid minimum wage I think uber will be playing a much more direct role in setting their work hours, not just whenever the app is turned on. They probably can't prevent them from taking a second job but they can prevent them from doing their second job when they're on the clock of the first. This actually solves a common complaint lately of drivers cancelling one ride while they pick up someone on another service.
> Another interesting consequence is potential to introduce stricter employment contracts that might say you can’t drive for a competitor...
This aspect is good for uber, there are many ride sharing apps now and drivers will flick between them and uber has zero competitive advantage. As private contractors they're free to recommend others to clients and this will go away. Bootstrapping competitors will be much harder.
> They probably can't prevent them from taking a second job
They absolutely can and they probably will. You can put almost anything you want in an employment contract, and agreeing not to work for a competitor is an extremely common clause.
You can bet your bottom dollar that as employees drivers will be afforded no freedom to double dip. The only reason they are able to at the moment is because companies held back on initiatives that they feared would classify drivers into employees. Now they will have no such fear and gig work will be strictly controlled. Prices will go up simply due to the loss of efficiency from multiplexing gain that gig work provided the economy. California never fails to take every opportunity to reduce market efficiency.
Mmm I think you get the best of all worlds (as the hiring company) with part timers.
- <30 hours/week so no benefits
- you can only work in these hours
- take it or leave it cause we now can remove your ability to work for any other times
No marginal costs outside the min wage (no benefits) and honestly you don’t want more hours unless they are explicitly in the time and place you want them.
not only will they cap it as you have said, but generally you aren't allowed to be employed by multiple employers. almost every driver drives for both companies. the drivers are going to get shafted here in total earnings. they will work fewer hours and make more per hour, but won't be able to drive crazy hours on both apps any more.
> but generally you aren't allowed to be employed by multiple employers
This is a standard condition of many employment contracts that the employee not also work for a competitor. Uber and Lyft previously had no such condition because drivers driving for both companies helped their case that drivers should be considered independent contractors. But now that drivers are employees by fiat, Uber will obviously ban driving for Lyft (or anyone else) and Lyft will obviously ban driving for Uber (or anyone else).
It's an auction - they used to make great money because there were fewer drivers. If drivers walked away when pay got too low, the pay would rise to equalize with rider demand.
“Today, our state’s political leadership missed an important opportunity to support the overwhelming majority of rideshare drivers who want a thoughtful solution that balances flexibility with an earnings standard and benefits,”
Full statement: Today, our state’s political leadership missed an important opportunity to support the overwhelming majority of rideshare drivers who want a thoughtful solution that balances flexibility with an earnings standard and benefits. The fact that there were more than 50 industries carved out of AB5 is very telling. We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need.
So basically they want to carve out an exception for their industry as well, wait 10 years until competing taxi services are dead, and then pass some token legislation based on the outcome of AB5 in other industries. Standard corporate-speak.
is this supposed to be an unintended consequence? We all know that the cheap rides of Uber are (partially) the result of them dodging around employer obligations.
I disagree with this. What other job on the planet allows me to work when I want to work, bring my own tools, have no boss, and never even talk to the company I am working for?
To me, this is a lot like someone a hundred years ago asking, "what other job on the planet allows children to work around heavy machinery for half an adult wage?".
No one here is saying that people shouldn't be able to drive for a rideshare company. We're saying that people who choose to do that should at least be paid a minimum wage for their time and given basic worker protections. If you oppose this kind of thing, you should probably also oppose minimum wage laws in general (which is a valid opinion).
Even if it means that fewer people get the opportunity to to do it at all? I know people who drive for a little extra money while they work other jobs. This kind of flexibility is what might be at risk, excluding many people who need that extra income from ever getting the opportunity.
So the trade off is always "more jobs" vs "better jobs". A company can hire 10 people at 10 dollars an hour or 20 people at 5 dollars an hour.
Which situation is you believe is "better" depends on your end goal: Are you trying to make more small jobs, or are you trying to make jobs meaningful in their earning ability?
Framed another way, the people you know driving for "a little extra cash" are chipping away at opportunities for someone to be consolidating those jobs into a single, better job.
Not going to debate which is actually "better", because that's just personal opinions/economic model preferences.
> A company can hire 10 people at 10 dollars an hour or 20 people at 5 dollars an hour.
No, it will probably exclude people who just want to work 2 hours some evenings whenever they have time to make some extra money, who'd make the full 10 dollars an hour like other drivers do in the time that they do work.
Frame it another way: You have 120 hours of shifts that you need covered at your job in a given week. You can hire 12 people who each work 10 hours, or 3 full-time employees.
The "better" choice again comes down to your goal: More jobs or "better", full time jobs.
There are more considerations than just "number of jobs" vs "quality of jobs" in evaluating what is better.
Consumers should also be considered. If casual drivers are excluded, the smaller pool of drivers will cause prices to rise. Some consumers who previously used ride sharing will go back to driving their own cars.
There's also the removal of a smooth transition driving as a career. If you can do it casually for a few hours you can discover if you enjoy it and want to quit your job and do it full time. If the only option is to be a full time employee, you have to go through the hiring process and take a risk of quitting your current job just to see if it's for you.
>>There are more considerations than just "number of jobs" vs "quality of jobs" in evaluating what is better.
And this is why I'm specifically and repeatedly not getting into the discussion of "which is better". Because that's a whole other discussion.
I'm just pointing out that when it comes to job creation, there's 2 axis. Both have pros, both have cons. You say X is better, I say Y is better, objectively there's data on either side, subjectively there's opinions on both sides, frankly I'm not interested in all that. Just pointing out that there's a rational opponent to your points. Not trying to be him.
No, the trade off is being employed vs being unemployed. You can demand people pay you more for a service but you can't force them to hire you in the first place.
>>No, the trade off is being employed vs being unemployed.
For some people, yes. But we're looking at the laborers as a whole, not the individuals (and my specific example was more from the perspective of the managers at a company with a limited budget for employees).
Some people will go from "contractor job" to no job. Other people will go from "contractor job" to "employee job".
Uber still needs drivers. They're not going to not have drivers because of this. Some people currently working for Uber will keep doing that. Some people currently working for Uber will not keep doing that. In the future, some people will apply to work for Uber and be both rejected and accepted as employees.
People wouldn't take $5 per jobs if someone else was offering them $6 or $7... so better to have 15 people learning skills that hopefully let them move up in their profession & career to higher earning occupations.
There's a lot of assumptions here, biggest among them being
>>People wouldn't take $5 per jobs if someone else was offering them $6 or $7
Sure they would. Because a job isn't only wages, there's always some other factors involved in employment decisions. Someone might have med-school and limited free time. There's a ton of reasons why "job with lower pay and factor X" seems more appealing to someone than "job with higher pay only".
Look at game developers. They work horrible hours and often get paid less than similarly skilled devs in other fields. Why? Because demand for these jobs are extremely high relative to supply which provides management with greater bargaining positioning to lower wages.
Some of these people aren't trying to move to a career with higher earning, and see this as their end goal or "a tangential job I'm doing today". This allows them to drive down market rates on the job for people who are in a different circumstance and have higher financial needs.
We can get into a whole discussion about labor vs management and labor rights and best practices and all that. TL;dr- That's an opinion, and it's a lot more nuanced than you're making it out to be.
No, workers lose their jobs. 2-3x increase in prices is not sustainable for such services except for a minority of rides. UberX will disappear and it will become only UberBlack.
No one in hacker news is a senior or retirée knowing how uber changed their austere lives, for the better.
Or riders for that matter. To my 80yr old mother, using uber has been a godsend. Its the only app she uses in her mobile. I dont even have uber on my phone. Somehow she figured out how to instal it and run it.
She does not drive due to her age and she cant wait outside due to the cold at bus stops.
Now thanks to this, either pricing will skyrocket, or availability will fall.
No one in HN is a senior, so they are oblivious to it all.
And this is 1 example. I'm sure there are others of families not having to do transportation juggling to move kids around, all of which is helped by ubers.
But to the wage justice warriors of HN, it matters little that less people are earning, and less customers benefit. Or that elderly people that qualify for Medicaid like my mother , can free themselves from the chain of lack of transport... What matters to the wage warrior is that they can show "liveable wages" for the limited few.
no, uber can just do what the taxi companies do, which is to charge the drivers for the service. That way, the drivers are customers and not employees.
Everyone here's talking about Uber, I would guess most of the unintended consequences will be less visible. Smaller companies, freelancers, independent contractors, consultants, that whole ecosystem might undergo a chilling effect.
One thing that I find disappointing in this legislation is that I wish it did essentially the reverse: instead of forcing the drivers to be employees, I wish it loosened the control Uber/Lyft had to bring it down to the level of what should be expected for independent contractors.
The biggest issue for me is pricing - the fact that drivers have 0 input to rates always made the IC designation fiction. But if the apps worked eventually like a reverse auction, where drivers got to set their own rates and you could then choose based on distance and cost, that would be much more of a true marketplace model with independent sellers.
> But if the apps worked eventually like a reverse auction, where drivers got to set their own rates and you could then choose based on distance and cost, that would be much more of a true marketplace model with independent sellers.
It's interesting to think what kind of efficiencies could be unlocked with a more versatile and robust driver-client interaction. Could clients order a ride at X time to Y location and have drivers bid down to fulfill the ride? Could the bid-down process be performed automatically based on the driver's personal settings on pricing and location?
Ultimately these efficiencies would make the driver's life better. The UI for the rider may be similar and the price may be similar (or higher!) as well.
Uber and Lyft had their chance to show leadership and empower their drivers if they truly believed their drivers were contractors, rather than leaving them in some gray zone of partially contractor and partially employee.
These "gig" companies are all unprofitable. Their current business models are consumer-friendly as they try to capture market share, so people mostly love them. But they are not sustainable, the prices will eventually have to go up or become a worse deal in some other way. They are just hoping to use all that cash to stumble into some kind of monopoly or lock-in that eventually removes customer choice. They are not good for society overall, we might get a lot of cheap convenient transportation in the short term but eventually we'll all be worse off as they kill off competition. It's basically price dumping, and the sooner they are stopped the better.
The funny thing is that the incumbents have largely enjoyed the monopoly and “lock-in” you described because their position was legislated. Services like Lyft and Uber were just so much better they couldn’t be stopped. Now this is just an attempt to legislate back the status quo.
Killing Uber and Lyft outright means bringing back the taxi industry, which isn't better for anyone except the cab companies. The biggest benefit of ride sharing for me isn't that it's cheap: it's that I don't have to awkwardly assert my legal right to use a credit card every single time I ride. I'm fine with paying more to ensure drivers are earning a living wage.
I'm not saying that they are not convenient, I'm saying they're unsustainable. Eventually they either will be more expensive or less convenient. The question is how much they can reconfigure society to their advantage in the meantime. For example, their price dumping is causing some governments to cut mass transit funding which will have long term consequences.
What this means: much more expensive Uber/Lyft rides which in turn means fewer riders, and thus, fewer drivers out on the road and longer wait times.
The labor market is a complicated thing, much more complicated than just supply and demand. But these types of controls are often not the right tool for the problem.
>>But these types of controls are often not the right tool for the problem.
1- Do you believe Uber/Lyft/etc exploit any part their labor for corporate gain?
2-What do you believe is the correct control to prevent labor exploitation by Uber/Lyft/ect, assuming your answer to 1 is true?
Most Google contractors are already employees, just employees of some vendor or contracting firm instead of Google itself. I don't think the ABC test prohibits that kind of arrangement.
So that just means Uber won’t allow people to sign up to drive directly. Uber will contract with companies, who allow people to signup. Those companies will “employ” people at the same terrible rates Google contractors get with no medical or benefit of any kind.
It's the same at Microsoft and Amazon. In order to work as a contractor, we need to be represented by a managed service, or a preferred vendor. Some vendors offer benefits, others will give you more money for less of their "service". There is some benefit to having it run like this (E&O insurance, quarterly taxes, group health care).
If you are a contractor, make sure you shop around for managed services. There are transparent vendors out there and some willing to show you their cut (although not many).
For Uber, drivers are not employed and treated as contractors.
For Google, chefs are employed by another company (food services), which has contracts with Google. And also treated as contractors.
I think these two types of contractors are different. Let's say if contractors are already employed and offered insurance and minimum wage, is it ok for them to work as contractors for other companies like Uber or Google?
Even though California is much more lax on immigration, undocumented immigrants that work here still work "illegally". And I-9 Audits are conducted by ICE, not California.
Like SpicyLemonZest said, it sounds extremely unlikely that Uber and Lyft, being public, would risk filing fraudulent I-9s.
They're calling that "Remaking the Gig Economy"? Making Uber and Lyft drivers into employees? What a sham.
For 10 years I ran my own consultancy. Every new engagement was a new "job" where I could negotiate the rules of engagement however I deemed fit. Usually lasting no more than 5 days each. Every new month for 10 years I'd think: "this is it, it's over; I have no work scheduled for next month, I'm going to have to give up and get a real job." But somehow the work always rolled in, and I did really well. By the end I was billing over $300/hr, and I worked when and where I saw fit. As far as "gig workers" go, I was about as successful as you can possibly be.
And yet my wife had to work a Real Job at a Real Company because I couldn't buy reasonable health insurance for any price. Any price at all. So I spun down my company and got a real job. The Gig Economy is an utter poopshow; not even at the very top is it sustainable.
Making Uber's bottom-of-the-barrel jobs slightly less abysmal doesn't do crap for the Gig Economy. Driving for Uber isn't a Gig. You're not negotiating your rate on each pickup. It's a carefully managed relationship with the same company each time, who pays for your service on a recurring and predictable fee-for-work basis. It's a job.
Fixing the Gig Economy means making it possible for people to make a living without the shelter of an employer. And making Uber and Lift into real employers doesn't fix it. It's not even related.
Your post makes it sound like the gig economy is actually unworkable right now, so the right solution, at least in the short term while we don't have an answer to problem of how to make it workable, would be to make those 'jobs' actual jobs with real benefits.
California loves making bandaid state fixes to federal problems, I think this is the wrong way to go.
Problem: You need a full-time job at a company to get benefits such as healthcare.
Californian solution: Reclassify as many as possible as full-time workers.
Problem: USA immigration laws are horribly inflexible.
Californian solution: Make it illegal to go after illegal immigrants.
I don't think that these passive-aggressive fixes are good for USA's democracy. Either we need to split up the country into more manageable chunks and make moving between states as hard as moving between EU countries or we need to accept the intent of federal laws. Otherwise we will just end up in an ever escalating war of dumb bills to counteract the other sides dumb bills.
> California loves making bandaid state fixes to federal problems, I think this is the wrong way to go.
You just hit the nail on the head. The real problem is that California is grossly under-represented in government, thanks to the founding fathers and gerrymandering. We have to slap together these hacks because otherwise we would wait centuries to get any real change out of the Fed.
As for "USA's democracy", screw the USA and its' democracy. As a Californian, I care about California's democracy, not the GOP's federalist plutocracy.
Republikans look at California as a rich man to mug who won't fight back. These laws are how we fight back. The USA needs us, we don't need them.
If you really don't understand how gerrymandering screws over our democracy, then you're not worth responding to.
The fact is a state with 38 million people and a GDP equivalent to 20% of the nation should have more representation than moscow mitch's welfare state of kentucky.
Forgive my wording, gerrymandering is the primary tool used by the GOP to control the USA. It's their strongest tool to cheat their way into elections, we've seen that clearly in North Carolina, Ohio, Pennsylvania, and Georgia.
If we actually followed the spirit and intentions of the founding fathers, then California would already be grossly under-represented. Add to that the way the GOP rigs the elections via gerry-mandering and . voter suppression, and Californians are treated like slaves, not citizens.
They have all forgotten the battle cry of the republic, "NO TAXATION WITHOUT REPRESENTATION".
Because Gerrymandering is how the GOP maintains control of the country. Republican, Democrat, Libertarian, or other, we should see that as the biggest attack on our democracy.
When the GOP owns the senate, as they do, they attack California's sovereignty at every opportunity. We are net-givers to the federal budget, whereas moscow mitch is a welfare queen whose state is the biggest net-begger.
Our wealth, our culture, our environment are all under attack by a nation of right-wing christian terrorists who resent that us Californian libtards have created the wealthiest, most successful and productive society the world has ever known .. while all they do is shoot guns.
"the Fed" almost always refers to the US Federal Reserve. I think you meant we would wait centuries to get any real change out of the US Federal government, AKA "the Feds".
I disagree with your assertions as healthcare is not the sole motivation, since massive Medicaid expansion has already taken care of that problem. The bigger issue really is that companies are not paying into unemployment, medicare, SSN and skirting around minimum wage by claiming everyone is a contractor.
As for immigration, the main issue that is that many California families are a mix of American citizens and illegal aliens that have lived here for decades
The government gets the exact same amount of payrolls taxes regardless of classification. The only difference is that employees split the cost 50/50 with their employer while contractors pay the whole amount out of their own pocket.
Contractors don't pay into unemployment, but they're also not eligible to receive unemployment benefits.
Making laws is very similar to writing code - you can't just jump straight to the final, feature-complete, scalable solution (and, just like code, that probably isn't even a thing anyway). It's an iterative process. This is very much the v0.1.1 of the law around gig economy jobs.
We'll, I'd say v.1.99. There is ample law out there that could make gig workers full employees in certain circumstances. What the gig platforms did was not new, it was simply big enough, bold enough, and arguably legally reckless enough that law enforcement either lost the will or ability to enforce existing laws to force gig platforms to act like mature, adult, law-abiding enterprises. California isn't legislating in an absence of law, it's clarifying that no one really likes guttersnipe employment practices, never did, and the fact that they have become prevalent in large, well-funded enterprises is a public policy problem that needs to be solved.
> moving between states as hard as moving between EU countries
It depends on the country of origin, but for many, moving between EU countries is about as moving between states is now. There's some bureaucracy to deal with, but it's not like moving between states in the US is hassle free. Most US states require immigrants from other states get a local drivers license and local car registration, which requires multiple proofs of residence. Don't forget the nightmare of having to deal with two states' taxes (where applicable).
Can you move to another EU country without a job and receive benefits? If I recall correctly you need a job to be allowed to stay in another country even in EU. I think free movement even without employment is the main reason states can't enact too many benefits in US.
> Can you move to another EU country without a job and receive benefits?
Europeans generally refer to "being on benefits" as unemployment allowance, and no, you cannot move from a poor European country to a rich one to get a higher standard of living unless you can work, or can be supported by someone who works. Certain kinds of social programs in the US have this property as well.
Americans often refer to medical care/insurance as a "benefit", which might be confusing here, but yes you absolutely can (as a European) move to another country without a job and still get medical care in the area you have just moved to.
> For those of us lucky enough to be in good health
It's a common refrain that only people with health problems need health care, but that's just not true. Risk has a price. That's why health care and life insurance for healthy people is not free. Good health just makes it easier to pretend that risk isn't there.
Tying health care to employment is a historical accident long overdue for change.
> Tying health care to employment is a historical accident long overdue for change.
Ironically, it came about because of wage freezes imposed by the government during WW2. Employers had to find something to offer to attract workers, and employer-paid insurance did the trick.
The trap, though, was that employer paid insurance was paid with pre-tax dollars, while if you bought it yourself you'd pay in post-tax dollars, making it far more expensive.
Also adverse selection. Healthy people are tempted to only pay for catastrophic or no coverage, so a lot of individual policy buyers are sicker than the average employee in a group policy (because large companies cover everyone).
And good drivers can save lots of cash and worries by simply not getting car insurance.
Health insurance’s main alleged draw is that shit happens when you least expect it, and you can avoid the massive costs when the unexpected happens (accidents, cancer, botulism, whatever). Unfortunately, someone in America found out you can charge monthly fees for health insurance while still making the person pay massive amounts themselves. Just promise they’ll pay a slightly less massive amount.
Good health is a temporary condition. Everyone eventually craps out. If you only buy health insurance when you are old and or sick then you wont be able to afford it when you need it.
Your health is of very little significance if you get in a traffic accident, for instance. Or you fall and break something. Or get hurt in training. Or get bitten by lyme disease carrying tick. Etc...
As well as laws like this that recognize the reality of the employment relationship, making these jobs decent requires:
- unionization and industry bargaining to get decent wages and conditions
- quality social welfare systems (including universal healthcare) so that people aren't afraid of poverty if they get fired/quit/change jobs
I've always wondered why there isn't more of an appetite for Medicare for All and universal healthcare on this site. How many people would like to do a startup but don't because they'd have no health insurance?
The USA did such a startup. It’s called healthcare.gov, AKA Obamacare. It allows you to get health insurance, without consideration for pre-existing conditions and provides you with significant tax credits to offset the premiums, based on your income.
Most of the policies are high-deductible, which means you’ll end up paying for the “scratches and sniffles” yourself but have a per-year maximum-out-of-pocket that can be planned for.
It’s not perfect but it at least provides an option whereas before if you had any non-trivial pre-existing condition you couldn’t find any insurance at all.
Maybe it is wrong to ask insurances to insure people with pre-existing conditions. Perhaps such cases should be considered charity or social help, and convered by the state? Just wondering if reframing the problem as such could help. I'm not from the US, so not sure what exactly the issues are.
It seems healthcare.gov is not good enough yet? I don't think classifying government institutions as startups is really correct, though. They have infinite money supply and no requirement to be profitable.
> How many people would like to do a startup but don't because they'd have no health insurance?
How many people would like to do a startup but don't because they have no food or shelter? We don't really care because the costs of those things are manageable.
The problem isn't that the government isn't paying for it. The problem is that it costs way too much.
> We don't really care because the costs of those things are manageable.
You can't be serious. There is a housing affordability crisis throughout the first world.
Housing and food are rights. They should indeed be funded by government, through comprehensive social welfare, and in the case of housing, publicly owned housing.
> There is a housing affordability crisis throughout the first world.
Only in the most dense urban areas. Not "throughout the first world."
> Housing and food are rights. They should indeed be funded by government, through comprehensive social welfare, and in the case of housing, publicly owned housing.
We do provide public housing and food for those who can't afford it, but the people who utilize it often aren't the ones creating startups.
The lesson here is for Uber drivers to realize it can't be a career, and quit, just like you did. I don't believe they're being compelled or misled into driving for Uber/Lyft.
Additionally, mass exodus of drivers from Uber/Lyft will compel those companies to increase rates
As an American living in Ontario, Canada for a time, I literally COULD NOT BELIEVE the gig economy there. It is what the US aspires to: a guy owns a snow plow business, employs 30 other gig workers 6mos a year. A woman does city/house hunting tours. Contractors are consistently self-employed. On and on. These folks, earning enough to live, and (to another commentor’s point) without fear of medical bills/issues. That really is it: that’s the difference. And it makes all the difference.
I often wonder about this cost to the US economy due to a lack of universal health care: how much productivity is lost due to people staying in jobs just for health care, how many businesses not started, etc.
Here in the US I'm personally forgoing health insurance to pursue my craft while developing software on the side for extra income. One medical emergency will end it all. I've often wondered myself if, in a country with universal healthcare, people would be more willing to take risks and start businesses, pursue their art, develop inventions, etc. Would love to see an analysis of the economic cost of not having universal healthcare in terms of startups not pursued, inventions not made, etc.
One medical emergency and your credit will be ruined. Wait a seven years without contracting the debt collector and the debt becomes uncollectible. After three years roughly three quarters of the effect on your credit will evaporate. That's what actually happens beyond the hyperbolic political grandstanding.
Remember kids, if you get a bill that you can't possibly pay. Don't pay it. Let it go to collections and pay it for pennies on the dollar (another trick, tell them the most you can pay is $10 a month or something else low. Pay off that debt in 2075) or just wait for it to become uncollectible.
Don't the debt collectors start with taking everything you own (money in bank, house, car etc.) first? And after that, they'll take most of your salary, leaving you only enough to physically survive. That's how it works in Poland, by law. The only available loophole is to work illegally till the end your life, so that the collectors can't get their hands on that money.
It would totally depend on where you live. In Canada after 7 years the debt goes away on most debt. But you have to not pay it for 7 years. If you make one payment in that time it starts over. And they will try and beg you even to make a very small payment. Because it starts the clock again. Once you reach the 7 year mark the debt is wiped from your credit and can not be used against you.
Source: Canadian, walked away from my student loan debt after injury, provincial loan was wiped clean federal loan had to be paid off. Student Visa wiped clean. To be clear I could not work and the bills kept getting harder and harder to pay. I was dying with stress and anxiety about bills. So I stopped paying them and bought food instead. I was young and not prepared for emergencies but it was clear I was sinking. I would like to also add this is NOT a great solution if you can avoid it. Responsible spending is. With the debt, for 7 years I could not get a credit card or take out a loan. If my car died I had to buy a new one right now out of pocket for work. It is not good. So though I had about 20000$ in provincial loans wiped it took me over a decade to pay off the rest of my debt. Today I am 100% debt free and even have a few dollars. The difference in stress levels I live day to day are huge I can not understate how much responsible spending with in your means can do for a person.
That depends on who you owe the debt too, do you owe the debt to the IRS or another government agency? Yes, they can take your stuff and garnish your wages.
Do you owe the debt to American Express? It depends on the state in the US, they can sue you, and try to garnish wages and take assets that way. But some states have laws against things like wage garnishing, it also costs money to sue some one. So if $costToSue > $expectedDebtRecovery they aren't going to sue. They usually just sell the debt to a collections agency who just calls you relentlessly trying to get you to pay, and since the collection agency bought the debt so cheap, they aren't going to throw more costs to collect the money by suing. If they can get any money out of you just by calling, it's a win for them.
Are you serious? You know that hospitals have taken people to court and gotten their wages garnished over not paying? You can't just let it "go to collections" because you don't feel like paying a $100k bill for having your appendix removed.
This advice is extremely glib and more of a headache than you're is making it out to be. Sure, there's techniques for deal with this shit. It doesn't change the fact that that it's still a giant pile of shit to deal with, and it would just be much better if we as a collective society didn't allow one medical emergency to cause problems for you of this magnitude.
Also, if you're trying to be your own business and your credit is ruined, what do you think happens to that business? My guess? OP was right, and he has to end it all.
Generally nothing, the hospitals don't actually expect you to pay the bill they just want the tax write off they get when they send it to collections. Jeff Bezos might have to pay but if you are just some guy with a business that doesn't even generate enough money to pay for your own health insurance you will most likely be fine.
Where will you live? In my area you need good credit to get an apartment...
Credit affects your life in many ways, I’m not advocating a specific action, just pointing out that the advice above can have negative effects on your life.
I doubt you are thinking of that “cost” properly … no one seems to accurately as far as I have been able to tell over several decades now. The whole debate over healthcare is dominated by one of two different mindsets; either based in utter ignorance and wishful thinking, or nefarious and malicious manipulation and conning.
The people lauding the wonderful beautified “universal healthcare” (which, btw, they lied to you about never wanting to implement during pre-Obama care con job that made the Health sector rich and the middle class poorer) do t ever actually account all the costs when discussing it, and I will just assume you are doing the same from a point of ignorance, and not intentional deception.
Here is a representative example of a wonderful splendrous worker with universal healthcare in Europe.
1), as surveys here too show, for the same job, you’ll be making about 50-75% the salary of an American equivalent (see following points).
2) Your tax burden on that immensely lower income will be approaching 30% effective income tax (FYI, e.g., the 42% tax rat starts applying at €55,000, just for a reference point … and no, that is not a typo)
3) on that lower income and higher taxes amount, you then get to pay huge retirement taxes too, on the order of effectively approaching 20%, with heart wrenching and soul sucking outcomes when you see the “pension” people are given after a life of paying into an utterly incompetent and failed retirement system. For reference, think of paying into a retirement system at going on 20% of your income and then getting about 1/4 of your salary to live off in “retirement”. It’s sad and sick and immoral. If people had been able to simply invest their own money in a global fund, they would probably be swimming in money in retirement, but instead they were pillaged and plundered in order to give them a pittance in “retirement”. It’s really a morally bankrupted and depraved system.
4) so now that we’ve reduced your already lower income by around 50% from taxes and a con job retirement system, let’s talk about the health care system cost that will run you about €300 per month in employee costs every month just for a single person, not counting the employer contribution of another ~€900; again, for a single individual. And on top of that, you are also going to have copays to see the doctor (albeit about 1/2 to 1/3 of the cost in the USA, so you get to save $5-15), but you also get to go to a doctor for a prescription and a pharmacy to buy things like basic over the counter medications like ibuprofen .… that comes in blister packs of 20 you get “for free”(see tax burden and health insurance costs above for reference of level of “freeness”). Again, no, those are not typos or errors, they are very much representative examples.
4) gasoline is taxed at 100%, in most European countries or more, with talk of increasing it. And no, again, that is not a typo. For reference, in the USA gasoline is taxed at around the 20-25% range. The reason I mention that, is because it’s not only a taxation on mobility, it again sucks the disposable income of the lower income people dry.
And none of that even goes into the fact that medical care is determined by the insurance that pulls typical insurance things where when it’s time to pay out all the sudden the medical care is deemed not necessary.
The saddest thing about the health care cost debate is that it seems to be driven by a con job to trick people into a trap that will enslave them to authoritarian control even more without any benefits from it, if not only more detrimental effects like Obamacare that only served to drive up costs and then peg them at new levels that made health insurance companies and the medical sector richer, while Medicare fraud and pull pushing has run amok.
I actually find it curious that especially this community would not realize that the ideal system is not a centralized monolith running on a con job and no backups, but a highly competitive d...
Australia has a comparable tax burden to the USA and also has universal public healthcare with the option to purchase additional private coverage. The public system guarantees that all conditions will be treated, but you may have to wait. The private system gives you considerable flexibility and, because patients who would normally cause adverse selection fall more heavily onto the public system, is much cheaper than equivalent insurance in the USA.
Since we're ticking off items, Australia has both a public pension scheme and compulsory private retirement savings (superannuation). Taxes on petrol are higher than the US but lower than Europe.
I think you've been sucked in by the talking points, mate.
Thanks for the reply, even if you are seemingly being snarky about it. Yes, Australia has a similar tax burden overall, even though it is still higher, especially since it is way more heavily weighted towards the middle class with $37,001 AUD already breaking into the 32.5% tax bracket (for reference; in the USA you move from 12% to 22% tax bracket at $39,000 USD/ $57,000 AUD ... which would add up to a massive difference in take home pay difference ... and that on lower AUS salaries)
You may claim "is much cheaper", but reality is that you just don't know and are not being told the full cost of what you are being forced to pay for.
I don't know what you think you are explaining to me, the USA also has a public and private retirement planning system, and again, AUS is not exactly as bad off as Europe; but reality is that you don't see the freight train that is barreling down on you. The thing that makes the USA, AUS, and EU very very difficult to compare for even the supposed experts, is that there are so many modulating variables. Not only are they variables, but they qualitatively modulate things. For an example, you think your system works great in AUS and you have lower taxes and a public health care system that works ... what you don't consider, intentionally ignore, or are propagandized not to even be able to take in; are things like the fact that you don't have huge populations that drain the life, energy, focus, and money out of the USA by the billions. For example an estimate of the cost of various existing welfare programs in the USA ... not ones where you even get something at overpriced and inefficient rates like universal healthcare ... costs the American tax payer approaching the amount of the whole GDP of all of Australia. Think about that, the money equivalent of work, energy, and focus of the whole Australian economy, what every single man, woman, and child does in the economy; goes towards welfare programs to support people that are drains on society. They are even largely not only not contributors to society, spending a whole life of being a net overwhelming negative contributor, but increasingly they are not even American citizens that are draining the country.
The point is, you can sit there and chide big mean America for not providing health care, while also not having any idea what you pay for that, nor the overwhelming cost it would be to take care of everyone in the USA, in addition to the fact that you take for granted that the US tax payer funds the protection that keeps China from a full on invasion and even allows you to engage in free trade at the American tax payer's expense. And all that while you spit in American's face. Reality is that none of this math makes any sense or adds up in any manner when all the full accounting is done. Do you want to pay for the health care pampering of someone that chose to get morbidly obese while you lives healthy and saved your money instead of buying food with it? Reality is that if the USA were to adopt some universal healthcare system, it would bankrupt the USA and trigger a global economic collapse as all the fools don't realize just how dependent they are on the USA, and then they would also find themselves without the massive military that keeps them safe from others more than willing to conquer them when given the chance. Choices have consequences, my friend, and I do not think you have the ability to recognize the precarious situation the world is in as types like you keep sawing at the branch you are sitting on.
Why is the US the only developed country where private vs public healthcare has been a consistent point of debate? Why are the brainwashed masses of the other developed nations (of which I am a citizen) not outraged by this 'con job' that we have fallen victim to?
Of course this exact same thought process can be applied to other american 'quirks'. e.g. mass shootings and gun control.
That is partially because they are skilled workers. The guys who mow lawns in my bay area neighborhood can command hefty rates too. Of course health insurance remains an issue.
The same payroll taxes are paid whether you’re self employed or employed. Including Uber drivers. You just pay both sides of the CPP and EI if you’re filing as self employed.
It is misleading to lump people billing at $100s/hr with drivers, shoppers, dog walkers, etc. But what's the median billing rate for the "gig economy"? Given my experience with consulting, it seems odd to use the "gig" label.
But whatever, it did suck to pay ~$1K per month for health insurance.
My thought too. I also did not get the sense that someone who “ended up billing at $300/hr and was still struggling with month to month work is someone who really realized the full cost of self-employment, because that is what he was really doing, employing himself … not “just like you guys” gigs.
If you’re billing at $300/hr and working when and how you want, it actually seems immensely disingenuous to try to associate with the sympathies for people stuck in the gig economy con job the tech tyrants have been imposing on society as a kind of excuse why you couldn’t manage to fill your consultancy pipeline.
I also guarantee he could have gotten health insurance, he just did not feel comfortable paying the roughly $1,000 to $2,000 per month it would have cost because his business pipeline was not full of work consistently.
People don’t realize just how much health care costs, regardless of whether it’s American employees who don’t realize the employers contribution is about 4-5 time what they pay monthly, or the worshiped and beatified “universal healthcare” that is “free” in Europe where massive taxes are paid to augment the also massive individual monthly cost taken out of people’s paychecks.
> People don’t realize just how much health care costs
The American system costs way more for comparable care, precisely because of our insane system. Every single dollar or hour spent on medical billing issues and dealing with insurance and arguing over who pays is total deadweight loss.
> I also guarantee he could have gotten health insurance, he just did not feel comfortable paying the roughly $1,000 to $2,000 per month it would have cost because his business pipeline was not full of work consistently.
I don't think it's abnormal not to want to pay those rates.
$1,000+ a month is absolutely insane for health insurance and at $2,000 a month you're now beyond the cost of most rent for something that you'll hopefully never need to use for decades, but more importantly you have no options. It's either pay massive fees (+ copays, etc.) due to no real competition or go without insurance. For the last few years no insurance also came with paying thousands upon thousands of dollars a year in fines too.
I am an uninsured freelance worker too for reference. But that plan definitely wouldn't work out if I had a family to insure, and then the costs are astronomical to the point where you would be in debt and have no savings unless you were absolutely crushing it.
Imposing? Nobody is forcing you to work in a "Gig economy" job. Many people like the freedom and flexibility and now seem to want all the benefits of a full time job too.
> the worshiped and beatified “universal healthcare” that is “free” in Europe where massive taxes are paid to augment the also massive individual monthly cost taken out of people’s paychecks
Worth noting that American per capita spending on healthcare is much higher compared to European countries despite a lower life expectancy.
Aye. I said by the end I was charging that much. I started out at $65/hr billing maybe 20hrs per wk. 10 years is a long time.
Before Obamacare and without the ability to bargain as a large scale employer, my insurance options were limited to "defined benefit" plans where the maximum they'd pay out in an emergency was limited to about what you paid in in about a year or so. Effectively no emergency coverage, just incidental stuff.
Another fun feature: preexisting conditions. For which insurers will pay $0. It's pretty horrible, and one state where I lived passed a law so the pregnancy could not be considered a preexisting condition for insurance purposes. Which meant that if you were pregnant you were denied coverage at all. By everyone. Without exception.
I don't think so; my point was that regardless of your billing rate and even in the extreme, the absence of an employer is always a crippling factor. Telling people they can make their way to the top by working harder is a fantasy. There's no freedom at the top.
Perhaps your state had a $1k/mo option for insurance, mine did not. Even at $5k/mo (if I had it) plans would not cover an emergency. None of the plans available to the self-employed would.
Sorry that I wasn't clear about that. And I should have noted that my experience dates from the 00s.
I do agree without reservation that linking healthcare to employment is crippling for independent contractors. As I understand it, the setup allows employers to deduct substantial costs from taxable income. So basically governments are subsidizing the obscene profitability of health insurers, the pharmaceutical industry, and some provider sectors.
Back in the late 90s, I was able to get ~affordable health insurance through AFL-CIO SBWA Local 125. But that service went down in flames, so I ended up paying ~$1K per person. As I recall, I could deduct 50% of medical expenses, but it was still the largest expense after mortgage and taxes.
And if it had been $5K per month, I couldn't have managed it.
> I couldn't buy reasonable health insurance for any price. Any price at all.
What?
Can't you buy personal health insurance with decent coverage for on the order of $500/month? And that's for plans with low deductables. $6000/yr for personal health insurance for an individual seems perfectly reasonable.
I'm concerned because I'm planning on eventually pursuing my own startup. If I can't get health insurance, this becomes extremely risky and untenable. If your post is correct, how does self-employment even work?
My understanding is that individuals can buy affordable personal health insurance. Am I wrong?
Workers have no choice but to get W2 status to get health care insurance, retirement compensation, etc.
And they fix it by simply moving them as FT employees, because to the State of California that's the easiest thing they can do. Single-payer free healthcare for all - which is the right thing to do is too much for the State.
This is just how bad the State of California is being run.
California already has among the most generous state-level medical benefits in the country. Here, it's hard to be in a situation in which one simultaneously can't afford insurance and doesn't qualify for Medicare or Medi-Cal (California Medicaid).
Singling out California for not taking the unprecedented step of rolling out single-payer alone--which is a difficult proposition to say the least in a country that guarantees freedom of movement--is bizarre.
I agree with you, but I have to correct myself as well. I mean compare US to other countries where national free health care is available. These are basic human rights which simply ignord by the government in the US.
Workers need benefits which is understandable because they can't even go to doctors when they are sick.
Well, I would assume they offer healthcare to people who are working or are disabled and not able to work. It's not like you get healthcare in Europe for not putting anything back in the system. Freedom of movement is not a problem in this case.
You are full of it. Germany, for instance, (and other European nations are similar) puts so many barriers in the way of a disabled immigrant that they'll never end up a resident.
You're telling me if I were disabled and could not work I could just move to Europe and live on the healthcare system? That's not at all true.
Several countries in the EU (e.g. Nordic countries) offer single-payer healthcare services and the EU does have freedom of movement, so such a step wouldn't really be "unprecedented".
First of all, many more EU/EEA countries have comprehensive healthcare if not single-payer healthcare, so there is less of a divergence in policy in most places.
Secondly, EU freedom of movement isn't as strong. See Directive 2004/38/EC, such as the points reproduced below which AFAIK some countries already take advantage of:
"Union citizens should have the right of residence in the host Member State for a period not exceeding three months without being subject to any conditions or any formalities other than the requirement to hold a valid identity card or passport, without prejudice to a more favourable treatment applicable to job-seekers as recognised by the case-law of the Court of Justice."
"Persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions."
> Singling out California for not taking the unprecedented step of rolling out single-payer alone--which is a difficult proposition to say the least in a country that guarantees freedom of movement--is bizarre.
Given their political support of illegal immigration, I don't think it's bizarre at all.
They're among the richest, left-wing states in the country. Relative to other states, there's absolutely no shortage of political support or money. If they can't handle implementing their own utopian health care system, I don't know why any of us should trust that it can be done well at a federal level.
Med-cal is basically poverty level coverage (138% FPL - $29k for a family of 3)
The main issues with can't afford (or more honestly can afford but it is very painful) healthcare are at the higher numbers as subsidies fade out. $83k for a family of 3 has no subsidies, but even high deductible insurance is going to go for $10k/year (meaning expected costs are realistically hitting above $13k). That's over 20% of take-home income.
Honestly, I can't see why California is unable to roll out a single-payer plan. It's certainly larger than many of the countries that have one. In a single-party state, it should be a relatively straightforward thing to do.
My guess is that no one is serious about healthcare and that it's simply a get-out-the-vote scheme like abortion and gun rights.
"a difficult proposition to say the least in a country that guarantees freedom of movement"
Levels of benefits already differ considerably, no? If freedom of movement is a deal killer, than it seems to me that strict, highly enforced immigration laws would also be a precondition.
It will cost California $400bn to run a Universal Healthcare system, which is double the entire general fund budget. You have to essentially declare private insurance void, and corral that employee and employer contribution to the healthcare system. It is a huge risk. And best be done at the Federal level
Gig economy workers are neither contractors nor employees. They're something in-between. They are neither a square peg nor a round peg. They're a triangle. Forcing a triangular peg through either a round hole or a square hole is wrong.
I have to agree. The rideshare companies have given a lot of self-serving commentary, but they made one very good point: if the legislature believes on principle that everyone deserves the benefits and protections of being an employee, how come they wrote so many carveouts? It really seems like an implicit admission that the ABC test isn't quite right.
2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Of course, there's a bunch of exceptions for various professions toward the end.
The burden of proof would be on Uber and Lyft to show: (B) The person performs work that is outside the usual course of the hiring entity’s business.
This would be a hard sell because Uber and Lyft are in the business of providing transportation to people. They may argue that they're only providing the platform that enables drivers to provide rides, but considering the amount of evidence that says otherwise, I'd like to see their lawyer making that argument with a straight face.
Also (A) would probably be a big issue, since Uber, Lyft etc. actually do interfere fairly directly with exactly how a driver provides service, even giving them a constantly-updating rating from detailed feedback collected from riders, and manipulating rides sent to drivers to influence what time of day / parts of town they end up working in to satisfy macro level shifts in demand that the larger organization observes.
It takes serious mental gymnastics to say a driver is not simply an employee of the company, in terms of operational workflow. Drivers aren’t going off and figuring out everything (or even hardly anything) about giving rides at their own discretion, or even just with minor intervention from a central dispatch. The whole thing is constantly controlled in lock step by the central dispatch, and Uber, Lyft, etc., employ data scientists and other experts specifically to make it more centrally coordinated based on data.
Frankly the only thing the driver controls is the financial risk of the car itself and clocking in / clocking out overall (though this is also manipulated with incentives).
You seem to imagine what you want to see. Drivers choose whether to work, when to work, where to work, whether to accept jobs, whether to complete a job or cancel it, whether to take the route suggested or not, whether to take jobs from other gig companies at the same time, whether to run personal errands in between, whether to take breaks, whether to heed feedback given by their own customers, whether to be in areas where demand will be high and jobs are likely, whether to be influenced by incentives or other payments dictated by market conditions, etc. What is the interference?
Au contraire, it is the various governments over the years that have re-regulated drivers (cannot drive in certain areas at certain times, must display decal, must carry license, must pay ransom fees, cannot stop in places, etc.) in ways that have taken away their control over work. We're headed back to capped and regulated taxis, unfortunately. New York City already has a black market trading TNC plates, just like medallions, and prices are back to taxi levels. Hope you like that.
Drivers do choose whether to work, just like employees do. They also choose when to be on the clock, which is the single item from your comment that can even loosely be used to argue they could be contractors. Drivers definitely don’t choose where to work, that’s dictated by the apps’ central scheduling algorithms, and only might be related to the driver’s current location, and not in any way chosen by the driver.
Choosing the route, for example, is a service the ride hailing companies rely on the driver to perform. Like an employee.
Choosing to run an errand, give me a break? You can’t be serious? Employees do that stuff all the time. That type of thing is not related to the distinction between contractor or employee.
> Choosing to run an errand, give me a break? You can’t be serious? Employees do that stuff all the time. That type of thing is not related to the distinction between contractor or employee.
If you work, say, in a restaurant and decide you want to go pick up your laundry, expect the shift supervisor to tell you no.
Certainly some employees enjoy that flexibility, but that is entirely at the discretion of your employer.
My sister who works as a waitress in a restaurant routinely checks in with her boss to leave for brief periods related to child care, usually around pickup/dropoff from the bus at the end of the school day. This type of arrangement is very common, even in chain stores or big retailers.
I’d have to side with Uber and I don’t think their lawyers will have a hard time arguing it. Uber doesn’t own, lease or maintain the vehicles. If the argument is that Uber is a transportation company than how can a transportation company operate if they don’t have any vehicles?
The employees have to buy and maintain the vehicles themselves, doesn't really absolve Uber from being a transportation company, after all, they make transportation happen on their platform as their main business effort.
Sellers are neither contractors nor employees for eBay, they're customers, just like those who sell something at Christie's aren't an employee or contractor of Christie's but another type of customer.
There is a crucial difference; ebay Sellers can pick their customers. They can perform the same sale outside ebay. Customers can pick who to buy an item from. Ebay doesn't take a cut of the sale either, they take a charge for displaying the item on their store page, which the vendor also has to advertise and design on their own.
Have you even used eBay? It is against the TOS to solicit or conduct a sale on eBay offline, to bypass eBay, and eBay absolutely takes a 10%+ cut off sales called the Final Value Fee. eBay also enforces how sellers use their platform including using incentives, rules, and feedback scores to show or not show listings or even kick them off. Similarly, Uber riders can reject a driver as can drivers reject a rider for any reason so they choose. Try again.
Atleast where i live, ebay offers the option to complete the sale of a product offline, and you're free to contact the seller and make a different deal on the product whichever way you like. Well, and sellers on ebay can still run their own store and advertise it on the product page (for which they are still fully responsible).
If Uber riders were able to pick the driver they wanted and drivers were able to design their own advertisement page the riders see as well as being able to negotiate with the rider directly without loosing the Uber's platform protection, I would agree.
The relationship between customer-seller is just much different than rider-ridee.
eBay is marketplace where sellers and buyers transact on their own terms - sellers set their own prices and buyers choose from multiple options to purchase things. Uber is not a marketplace - drivers do not set their own prices and riders cannot choose from multiple options when selecting a driver.
If Uber wants to be treated as a marketplace and sidestep this new law, it needs to make significant changes - if drivers are truly independent contractors they should be able to set their own prices at a minimum.
They don't own, lease or maintain the vehicles because they're trying to claim that the drivers aren't employees.
It's like saying that the drivers aren't employees because Uber doesn't provide health benefits.
Companies routinely get in trouble for forcing their employees to buy their own equipment. But it still happens all the time because of the power imbalance even when they're employees.
This is one of the many thing which makes all this such an existential threat to Lyft/Uber. Even just when it comes to minimum wage there will be a huge fight because so many drivers make less than that when the equipment is taken into account
Then this won't cover them as people seem to think it does, because the actual driving is not uber's business. They run a market-place in which others operate; the actual driving is indeed outside of the hiring entity's usual business. Regardless, there seems to be an obvious loop-hole for uber lawyers to chase.
I guess they just fired 450 people so it'll be hard to find the programmers to implement something that even superficially gives them the argument that it's a two-sided market. e.g. let drivers set their prices (but make it really hard to change their settings) and give passengers "the best deal" (but make it relatively difficult to search for other deals).
> They run a market-place in which others operate;
A marketplace generally allows those who operate in it to set their own pricing. The fact that Uber exclusively determines both cost and pay for the drivers would run counter to your 'marketplace' argument.
As a software contractor... (A) and (B) are terrifying. I think (A) means you really can't do contract work while working under the direction of a manager, or PGM. So you essentially have to be doing work for hire rather than filling in a specialist role for a defined period of time. (B)... Wow... So if the company is a software development company, they can't hire contractors???
I really hope I'm reading that wrong. I might want to do work for a California company one day ;-)
If I read this correctly then if a software house wants to hire software developers as contractors then they can't do that because building software is their main course of business.
However companies like Airbnb (hospitality) and Uber (ride sharing) will be able to hire programmers as contractors because writing software is not main source of income for those firms.
I guess that'd be decided in the courts. But Airbnb and Uber have to develop software in order to carry on their business, so I would come down on the other side of the argument.
I disagree, the apps facilitate their business but Uber and Airbnb aren't in the software development business, as they don't develop software for sale as their primary means of income.
To paraphrase, they're both software companies who happen to do rentals and cars. There's also nothing in that law which talks about core business. It's to do with work in the normal line of business, in other words - work which is regularly performed by the company, rather than specialist work for which a contractor is required.
No, they're both taxi services that happen to use software.
Core business is understood to mean primary revenue generating activity, which is getting paid for facilitating rides. They don't charge any money for the use of the software.
If you really are a consultant and not just a skilled worker with enough pull to negotiate your own terms, B should not apply, you'll be doing something unique that is not normally part of their business. Also, A would not apply because the manager should not have the expertise to actually directly manage you and instead should be setting objectives out in a statement of work.
My reading is that it's similar to the UK's IR35 regulation? Do any UK contractors here have any additional experience of working in/out of IR35 to give some context?
Well, it's a different law, but IR35 often hinges on whether you're part of the chain of command in the business, and whether you could substitute another qualified person without the agreement of the client.
HMRC provide this tool to determine employment status:
If what you do as a software consultant is outside of the usual activities of the company you work for I suspect you should be fine.
Uber however is a taxi company and the brunt of their primary activities are done (atm) by contractors. Driving people around is their core business - even if they will probably give the defense that they're only a middle man with an app that links independent drivers up with people looking for a ride.
I think they would argue they are an app company that connects drivers to people that need driving. Or food to people that need food. Etc. What about power sellers on ebay? Since they generate all their income from selling stuff on ebay should they be classified as employees of ebay?
Could uber work around this by having everyone form their own LLC to be an uber driver, and making that process painless for people? (or making it painful and not caring about the long term ramifications)
No, because eBay's business model is charging sellers for services. They don't mandate what you sell, how you deliver, or what payment company to use (now that they no longer own PayPal)
In 2019, it's probably not too out of scope for nearly any business to argue software is a core part of their daily activities. The digital transformation is basically done, if in the last 10 years you didn't turn your company into a quasi-tech company your competitors did and you died.
I'd make the guess that one could go into finer detail on what specific type of software development falls in-line with the daily activities, but software development in general might be too broad. An ecommerce company probably could argue php development is part of its daily development, but if it hired a contractor to modify their build system, that might be outside the scope of their core business.
I'm just not convinced that's a straightforward question to answer. I once worked for a hardware company that outsourced new hardware development to a contractor. We had a guy in house for maintenance, and the occasional hardware bug that propped up, but we only designed a new box once every 5 years or so... it just didn't make sense to have the team in house. We did manufacturing in house, and we had a huge software team... but though our money came from selling the hardware, we didn't do that in house.
As the company grew much larger, we did eventually expand our product line, and did build a team. But for several years, we just had 1 dedicated hardware guy.
What a huge drag on people’s livelihoods, making a broad swath of mutually beneficial business relationships illegal until someone goes through a multi year legal battle with the state.
I would imagine most software "contractors" that work for a major company are not 1099 - that carries a bunch of risks. Most "Contractors" are W2 employees of a labor for hire company. That still seems perfectly legal. "Hiring entity" would be Big Staffing Company, your customer would be Big Internet Company.
The bill makes an exception for engineers, among other professions:
> An individual who holds an active license from the State of California and is practicing one of the following recognized professions: lawyer, architect, engineer, private investigator, or accountant.
That would not apply to software developers, even if they call themselves engineers, software developers are not licensed professional engineers (i.e. civil engineers).
For example a Software Developer can't start a professional corporation in California like a lawyer, architect, civil engineer, accountant etc...
The American National Society of Professional Engineers provides a model law and lobbies legislatures to adopt occupational licensing regulations. The model law requires:
1) a four-year degree from a university program accredited by the Engineering Accreditation Committee (EAC) of the Accreditation Board for Engineering and Technology (ABET),
2) an eight-hour examination on the fundamentals of engineering (FE) usually taken in the senior year of college,
3) four years of acceptable experience,
4) a second examination on principles and practice
5) written recommendations from other professional engineers.
It's a shame that doesn't exist. I've always thought you could make an especially strong argument for licensing for embedded software people, for many of the same reasons that a PE is licensed.
It wouldn't be a requirement for a job necessarily, but not a bad thing to have.
I doubt such a certification would have any correlation with ability. Maybe the platonic ideal of training and testing that you're thinking of, but not a certification written by the US government. Even competent parts of the government like NIST take forever to update their standards. It would be worse for a licensing bureau with practically no in-house software expertise.
You can get a computer engineering PE, which would probably be appropriate for the vast majority of embedded software developers. There was a software PE for a few years, but my understanding is that it was dropped for lack of interest.
Is a software engineer really a recognised proffesion in CA?
It's a proffesional level job, but reconisation usually means being a member of some sort of proffesional body - no idea what the software one of those would be?
>I really hope I'm reading that wrong. I might want to do work for a California company one day ;-)
In theory this should be really good for software contractors, because in this should rip out the middlemen (i.e. the firms who get the contract to do the work and turn around and subcontract the work to you for pennys on the dollar). Now in theory these middlemen are gone and you as the software developer should be able to obtain the contract directly directly from the company.
Huh? The sorts of company-to-company contracts where the individual "contractors" are W2 employees of a contracted company are totally unaffected by this legislation. If anything, this legislation is likely to introduce that relationship where it didn't exist before (e.g. Uber might contract with local companies formed solely to employ Uber drivers in that locality, so that Uber doesn't have to deal with all of the complexity of treating all of its drivers as employees.)
>The sorts of company-to-company contracts where the individual "contractors" are W2 employees of a contracted company are totally unaffected by this legislation.
You must have missed the part of my comment that specifies:
"the firms who get the contract to do the work and *turn around and subcontract the work to you for pennys on the dollar"
>(e.g. Uber might contract with local companies formed solely to employ Uber drivers in that locality, so that Uber doesn't have to deal with all of the complexity of treating all of its drivers as employees.)
Then what is to stop this new employment firm Uber has to contract with to obtain drivers from deciding after they have the infrastructure of drivers in place from cutting Uber out and launching their own ride-share app?
At the end of the day Uber isn't claiming drivers as contractors because of complexity, they are doing it to lower their costs.
You might be reading it wrong... everything in law is in a grey area until further defined in court, but legal documents should typically be read with full boolean logic applied to all the words:
"control and direction" - sure, they give you direction. But do they control what tools you use, when and how you do it?
"connection with the performance of the work" - Are they controlling the final deliverable, or the performance, again, as in when and how the work is done?
I suspect that software consultants have a reasonable argument that they control their own work, while their clients have control over the acceptance of the final deliverable, so the above points are not fulfilled.
Edit: And for B, it just seems like having a 2nd client would fulfill that criteria. Your 2nd client is outside usual course of the 1st clients business.
Additionally on (A) this is massively beneficial to contractors. They cannot force you to work in an office or the hours you work which is key for a freelancer/contractor/creator/developer.
The items are already part of California's contract law well before this current gig economy bill.
California classifies 'independent contractor' as [1]:
1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
2. Whether or not the work is a part of the regular business of the principal or alleged employer;
3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
4. The alleged employee's investment in the equipment or materials required by his or her task or his or her employment of helpers;
5. Whether the service rendered requires a special skill;
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
7. The alleged employee's opportunity for profit or loss depending on his or her managerial skill;
8. The length of time for which the services are to be performed;
9. The degree of permanence of the working relationship;
10. The method of payment, whether by time or by the job; and
11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.
The key line for software developers who are independent contractors is "Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;"
Contractors that work in a home office, using their skills to bring to a company for a project, at their own place, time and tools, that is an independent contractor.
It could be argued that drivers that own their cars, that can choose to accept or deny a particular task, without it hurting their competitive rating, could be seen as an 'independent contractor'.
I think the gig economy bill from OP is targeting known companies that are taking advantage of this by wanting 'independent contractors' that they can schedule and dictate their day and use metrics against them when they aren't available at the time. They should pay people as employees if they need people available then have contractors fill in when needed. This will probably lead to some fulltime Uber/Lyft and the rest floaters that can be like the current gig setup.
> I suspect that software consultants have a reasonable argument that they control their own work, while their clients have control over the acceptance of the final deliverable, so the above points are not fulfilled.
What if the consultant is forced to attend every single meeting the client (via PM/other manager) decides to schedule? That seems to violate the spirit of "control over performance" part of it.
That's not really how performance is likely intended to be interpreted here. It's more along the lines of if the client told you "you have to code exactly from X time to Y time using our computer at Z location". At that point you're basically an employee rather than a contractor providing a service/product. Meetings are related to, but not the sole component of performance of work here.
Most of the software contractors I know easily meet (A) and (B). In these cases, they bid on the job based on its requirements, have multiple customers, define how they will implement the software, and sometimes even have employees.
When I personally worked as a contractor, the other contractors I worked with mostly bounced from short gig to short gig. That would probably meet (B). (A) was a bit more subjective.
If you're a long-time contractor for a single customer, and that single customer has a high level of direction over your day-to-day work, you are at risk of being defined a W2 employee by a legal entity like the IRS. (Or the state of CA.) In such a case, it's important that you clearly understand the legal difference between a contractor and an employee; and have some frank discussions with your "customer." It's important to point out that your "customer" bears the risk of you being redefined as an employee, so it's in their best interest to make sure that your contractor relationship follows the law as best as possible.
>When I personally worked as a contractor, the other contractors I worked with mostly bounced from short gig to short gig. That would probably meet (B). (A) was a bit more subjective.
I'm confused. You seem to be applying (B) to the contractor somehow, where my reading is that it applies to the company doing the contracting. It doesn't matter what the contractor is doing; if a company makes widgets, they can't hire a contractor to make widgets. It doesn't matter if the widgets are a different color or if the contractor only ever makes widgets for any given company for a few months at a time.
> You seem to be applying (B) to the contractor somehow, where my reading is that it applies to the company doing the contracting
Yes and no. A company that hires contractors who bounce from gig to gig meets (B) assuming that the software in the other gigs applies to different businesses.
Assume I make websites on contracts. If I make a website for a butcher, a baker, and a candlestick maker; the butcher, the baker, and the candlestick maker clearly meet (B).
In those specific examples they meet (B), irrespective of the contractor's work habits. If you make a website for another web developer, the web developer who hired you might not meet (B), regardless of who else you've made websites for. I admit the analogy is a bit tortured, but the point is that (B) depends entirely on the contractee's business and what they're hiring the contractor to do.
I am also enthusiastic about robots and doubtful about "the market surviving this".
But what happens to people when the robots have all of the jobs?
People think it's not going to affect them because their job is special. It's just a matter of a few years difference, everyone's job will be affected. Even computer programming.
Why am I so sure about this? Because there is a very large research effort going on aimed at AGI and they _are_ making progress. And the potential rewards are enormous. And the hardware capability is available now.
An understanding of rocketry didn't grant us the immediate route to land on the moon without also overcoming substantial obstacles. Given that we don't really understand cognition I would suspect that we don't have enough info to even estimate when we might achieve AGI.
Whats with the obsession with jobs. Like healthcare you can easily figure out ways that more than basic necessity are taken care of. Is it really important that we give drivers arbitrary work?
So what's actually going to happen? I'm still confused.
Ridesharing drivers will now be paid wages, not based on the time that they have a passenger? Will the ridesharing service have to pay for the cars and their maintenance?
From the article, it seem the only effect is that drivers are going to be scheduled in advance, and flexibility is going to be decreased.
> only effect is that drivers are going to be scheduled in advance
That’s a claim the ride-sharing companies are making but the law doesn’t require that. They could do that, but they could also let drivers take a shift at a moment’s notice. In that scenario, though, there may not be a shift available when a driver wants one. The ride sharing company will have to pay at least minimum wage so they probably won’t offer a shift when demand is low. Perhaps that won’t be a huge difference in effect in terms of a driver getting work since the limiting factor is demand, regardless.
There are significant effects besides scheduling, though. Drivers will have to get basic benefits like minimum wage, unemployment benefits, etc. there are a lot of labor laws that make a distinction, so there will be a lot of changes from that perspective.
In terms of vehicles, I would think drivers would be able to continue using their own vehicles, but would need to be paid for that somehow. The typical way to do that is a per mile amount which covers everything, fuel, wear, depreciation, etc.
Can anybody here with proper experience break down the "ABC" test for me? It seems to me like the "C" part (that the work is "part of a company’s regular business") applies to literally any company who would hire a freelancer to work on their product or service.
Can you point out exactly where you think this is exempted? Particularly, my reading is that a software company cannot contract out software development tasks under this bill.
There are exceptions for certain "professional services" providers if certain factors are satisfied. Curiously enough, software developer isn't one of the exceptions.
(c) (1) Subdivision (a) and the holding in Dynamex do not apply to a contract for “professional services” as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:
(A) The individual maintains a business location, which may include the individual’s residence, that is separate from the hiring entity. Nothing in this subdivision prohibits an individual from choosing to perform services at the location of the hiring entity.
(B) If work is performed more than six months after the effective date of this section, the individual has a business license, in addition to any required professional licenses or permits for the individual to practice in their profession.
(C) The individual has the ability to set or negotiate their own rates for the services performed.
(D) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individual’s own hours.
(E) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.
(F) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.
"Professional services" include:
(i) Marketing
(ii) Administrator of human resources
(iii) Travel agent services
(iv) Graphic design
(v) Grant writer
(vi) Fine artist
(vii) [IRS enrolled agent]
(viii) Payment processing agent
(ix) [Certain still photographer or photojournalist ... ]
(x) [Certain freelance writer, editor, or newspaper cartoonist ... ]
I can think of many different ways to interpret your first sentence, so I'm not clear what you're saying, but this does make me wonder if it's going to lead to any sort of licensing or certification for general industry programmers.
If workers in this field want to call themselves "software engineers" and gain the benefits of a professional title, like lawyers and architects, they're going to have to start following the other practices of professional fields. Just because a college dropout makes a popular webpage that sells a lot of advertising, that does not necessarily make him an "engineer".
A CENG is a Charted Engineer like a PE in Canada, the BCS is the British Computer society which works with the IEEE on the certification part.
The other part was at my first Job I was on the Vocation track in mech eng and got to the first rung on the Certification track. "technician engineer" I think it was called
In CA you can be a professional engineer which gives you the power to sign off on a bridge design or other similarly high-stakes projects. There's designations for all kinds of engineers (Civil, Mech, Electrical, etc).
You get a nice little salary bump or something usually, but you also get the risk associated with the bridge falling down. You sign off on the design and can be liable for negligence and malpractice.
You have to take a little test when you graduate college, then work under another professional engineer for 5 years, then take another test.
CA basically has no professional software engineering license yet.
For software engineers? None at all right now. Theoretically, we could get to a point where working on certain safety-critical systems (think self-driving cars, regular vehicle firmware, medical equipment, etc) required that a software PE sign off on all of the work, in the same way that a civil PE has to sign off on a bridge design before it's built.
The NSPE used to have a software engineering PE, but my understanding is that they dropped it for lack of interest. Until we see some legislation somewhere that mandates the kind of sign-offs mentioned above, I don't think we're going to see PE's in the software world.
If it works remotely similar to how fake self-employment works in germany then as a freelancer it's sufficient to show that you work for more than 1 company. If you exclusively work for 1 company, AND ONLY THAT COMPANY, as a freelancer in germany, you and the company you work for are at risk.
> applies to literally any company who would hire a freelancer to work on their product or service.
IANAL but I imagine that's exactly the point. There are always incidentals, like let's say you're a restaurant and you need to hire a plumber to fix your toilet or if you're a real estate agent and you need to hire a programmer to do your website.
No, those examples you give would be taken care of as part of the "B" part of the test. Plumbing and website design is certainly not the main business of restaurants and real estate agents.
The problem becomes if you need to hire a freelance programmer to do some work for your software development company. There the "C" part of the test becomes a lot more of a gray area IMO.
>The problem becomes if you need to hire a freelance programmer to do some work for your software development company.
In that case, C is irrelevant because you've already failed B AFAICT. This law makes it so that it's simply not possible for a software company to contract out software jobs to individuals. It has to either contract the software to another company, or do the job in house with W2 employees.
C, if my reading is correct, means that (ignoring licensing issues) you can't contract a carpenter to fix your plumbing.
This is more about the state collecting more taxes than actually helping workers, especially with ride-sharing drivers used as bait.
People can already be full-time drivers if they wanted. Those jobs have existed for a century. In reality, the vast majority of Uber/lyft drivers already have a FT job and drive for secondary income with the time and location of their choosing. Retirees, students, fixed income, disabled, and many others who are just supporting their families.
Shifting them to employee status will cut many supporting incomes while adding a few more driving jobs with strict conditions, basic benefits and bare minimum hours. Many more will suffer than gain (if any). Another case of California having some of the worst politics in the nation.
For those downvoting, I would like to know what exactly you disagree with here.
Employees cost more for the company in terms of taxes paid, along with all the required benefits, minimum wages and making sure there's enough inelastic supply to meet the demand.
There is no state payroll tax, so California has literally nothing to gain in terms of taxation whether drivers are employees or contractors.
Even at the Federal level, the taxes net out the same. For employees, your employer pays half of your social security contribution, but as a contractor, you have to pay the employers half on your taxes.
The only thing I can come up with is unemployment insurance, which contractors don’t pay, but they also can’t collect unemployment.
Like other states with income taxes, California deducts state income taxes from employee wages just as the Federal government does. Yes, as a contractor, you are supposed to do that yourself, but enforcement is an issue and I assume at least some Uber drivers (like some taxi drivers, bartenders, and others) have been underreporting, so this should bring in more tax revenue to both the state and federal governments. Not sure the drivers are going to benefit from that, but it's a real thing.
There are also immigration issues -- Uber will need to collect documentation so that workers can set their W2, and even though CA bans requiring businesses to use e-verify, Uber does business in many states and this would fall under interstate commerce concerns, and the federal government requires it for some border states and also for any business that sells to the federal government, so there is gonna be a whole host of immigration issues around e-verify, right in time for the election season. (E-verify is one of those things that is wildly popular, supported by both a majority of Democrats and Independents as well as the GOP, but hated by CA legislators and some in the business community, so expect this to set the stage for an e-verify showdown and battles over executive orders in 2020).
Then there are all the issues about whether Uber is going to limit hours, require working hours, or otherwise regulate their workforce a lot more than they currently are. Here by Uber, I mean all the taxi driving apps/companies, of course. Will Uber just "fire" drivers that don't generate enough fares to justify a set minimum wage? Will it no longer be allowed for drivers to come down from Sacramento and work in SF? Will Uber limit lunch breaks to a certain length, and force the app to be turned on during pre-arranged hours? A lot depends on how Uber responds.
Minimum wage requirements alone will raise incomes and thus taxes. Add in bigger salaries, benefits, vehicles, equipment, etc that the company will now have to pay for.
Some people want to do these types of gigs for extra income, but now if your an employee then probably companies will want you to be on a schedule and a minimum number of hours.
I forget where but seen a story where someone was told by one of their clients that they were letting them go because of this new law. Happened to be their biggest client too, but they were doing remote work and lived in California...
So now I guess some companies might want to let go of people from California and contract with residents of Texas or any other state instead.
Kinda reminds me of when states started changing their sales tax nexus laws, I was doing affiliate marketing but didn't have any success as still starting out.
But my state changed their law to try to collect from remote sellers and changed it to count affiliate sales too. So I got a notice kicking me out of the program on a short notice... If I had built up landing pages and traffic, I'd be left holding the bag... or adjust them to aim at another company but would have been a huge setback.
You could go from making a comfy living online to making zero. I know gurus tell people to build up multiple streams of income, but in this case, all companies could do the same. Look at affiliate sales from the state, look at compliance costs... If making enough sales to justify then comply or just ban residents of the said state from the program and move on. So by trying to tax companies, they could have ended up hurting their residents instead. So by trying to get sales tax, they ended up with neither, losing out on both sales tax along with the income tax on the commissions since companies just decided to pull out completely from letting those residents be affiliates, so they were longer eligible to earned any commissions.
"We regret to inform you that Nexus state tax regulations in Ohio were just passed July 1st of this year. Unfortunately, we are unable to work with any Ohio based affiliates, due to the Nexus Tax Laws currently under enforcement in the state."
This was back in 2015. I think more than a few states changed their laws on this, I believe they are referred to as a cookie nexus. and some programs have a minimum threshold to cash out too. So I guess they can kick you out and keep your money... Lucky I didn't have any in my account as was recently dabbling in this area.
So kinda sad that you could lose out on income just because of the state you are domiciled in. Wouldn't surprise me if other companies outside of California is going to end contracts with people just because they live in California. Kinda feels like discrimination in a way.
However maybe setting up a corporation instead of being a sole proprietorship that could be a workaround. Don't deal with California individuals, deal with California companies instead even if it's just only a company size of 1. So ride sharing apps could require drivers to set up an LLC and pay that instead of paying them directly maybe. But then California has high taxes and franchise fees already, so maybe it's just not worth it. There's already a mass exodus from California, so wouldn't surprise me if this makes even more people question if they should leave the state also. Move somewhere cheaper and get to keep your clients too if you are a freelancer.
"Ride-hailing drivers hailed the bill’s passage." - I wonder how happy they will be when their job simply goes away because of that bill.
It's terribly misguided and anti-freedom.
I think it is a problem if companies like Uber are not honest with their employees, like neglecting to mention that their cars may break down and require maintenance, which should be factored into the income. But that is about honest information sharing, not forced employment.
Nevertheless, people should be free to do contract work and negotiate contracts on their own terms.
> "Uber is not Taxi. OP point is still correct. Taxi companies are coming back but Uber drivers get fired"
They can't be "fired", since they were never properly hired in the first place! They were never regarded as employees. That's exactly what this legislation is setting out to change!
It doesn't matter how you call it - they will be unable to earn extra money by driving, that is the issue. If they relied on that money to make ends meet, they may not be happy anymore.
> "It doesn't matter how you call it - they will be unable to earn extra money by driving, that is the issue. If they relied on that money to make ends meet, they may not be happy anymore."
Your post makes zero sense, so I'll keep it short for you. Uber was the middleman, and without it - both individual drivers as-well as taxi companies have significantly more leverage over the consumers, and can now start charging higher prices.
My post makes zero sense? Are you sure you have thought things through?
So how does a driver get clients without Uber? If they can get clients without Uber, why did they use Uber?
How do clients know they can trust a driver? Taxi, OK - a taxi driver has to shell out serious money to get a license. Sometimes they must show proof of training. That makes them somewhat trustworthy, especially since their license can be revoked after a transgression.
For Uber, I suppose they tried to replace that with a rating system.
Without Uber, how do you propose making it work? I suspect simply becoming taxi drivers is not a viable option for many Uber drivers - because of the time and money commitment.
Even if that would work from a legal perspective, I suspect that it would be enough of a practical hurdle to greatly decrease the number of people willing to drive for Uber/Lyft.
Especially in a state like California, where you have to pay an $800 franchise tax each year to keep an LLC registered, regardless of if it has any income.
For most legal purposes, a SMLLC isn't considered different than an independent contractor. For example, unless you file a Form 2553 to be taxed as an S Corporation or a Form 8832 to be taxed as a C Corporation, you just file a Schedule C on your 1040, the same as if you didn't have an LLC.
755 comments
[ 2.4 ms ] story [ 302 ms ] threadThe law wouldn't take effect until the beginning of next year, and in that time Uber, Lyft, and Doordash will have collectively spent $90 million on a ballot prop campaign to exempt them from the law.
Not looking forward to all the ads, but I will be curious where the money comes from on the other side.
What states use this initiative next as a template is the most interesting question.
This assumes gig companies haven’t exhausted their runway by then. Humorously, Uber and Lyft thought they might extinguish taxis if they waited them out long enough, and then the California government did the same to them.
If this law is applied fairly, it affects taxi and limo operators as well, so everyone will be in the same boat at least, fares will surge but they will still be in business.
[1] https://investor.uber.com/news-events/news/press-release-det...
Many of those people are already employees or owner/operators. That's why Uber, etc. was able to undercut their fare rates.
This is why direct democracy is generally considered a failed concept and why California's state administration is generally considered a failure, propped up only by the nearly incomprehensible amount of wealth generated in the state.
Don’t like voting on the laws that govern you? Then don’t vote.
At least while I was there, these never passed.
I remember that the San Francisco Bay Guardian (then an alt-weekly newspaper) used to absolutely howl about these propositions. My memory is that the SFBG hated them even more than, say, the anti-gay marriage proposition which passed in 2008. They were quite unequivocal in labeling them as crony capitalism.
Unfortunately, the SFBG has ceased publication; although they still have a website, they appear to basically be dead.
While it seems like "big corporations complaining", I admit this does threaten certain companies, especially the ones that are not profitable. Charging more per ride or gig doesn't pan out well as ridership and usage drop in step. So far all our Uber rides have been subsidized by Softbank and other investors. Similar story for lots of other gig based apps.
I'm not sure what the real answer is here, but overly simplifying the problem, better pay/benefits for the individual person is better.
Let's hope it pans out to be exactly that.
For example I think the bar will immediately be higher for drivers who want to remain drivers, meaning less tolerance for drivers that have below median ratings. Maybe that’s a good thing for riders but it could make driving more stressful than it already is.
It's not all bad for everyone. If this turns out to be a giant net negative, the rest of the world can learn from California's experience. Worst case it will be a boon for other states who will be able to offer better taxi availability for all the business people they are trying to attract away from California, putting pressure on CA to update it's laws (although let’s be honest this is pretty rare even in the face of changing marketplaces).
This could also accelerate the adoption of AI and the subsequent loss of the driver's jobs in favour of automation as the human capital costs increases and/or driver availability issues could help tilt the cost efficiency scales.
Plus a lot of people are predicting truck drivers are going first and I wouldn’t be surprised if there will be an influx of people looking for urban Taxi jobs soon.
1. Although it's not always the case other states actually look at data and studies first before copying other state's policy.
So basically all the "gig economy" companies.
Probably will be better off for those making it their living, worse for those looking for extra income.
It’s going to be harder on all the other businesses getting hit suddenly with this, newspapers threw a fit and got a 1 year reprieve but the rest didn’t have a bully pulpit.
I would think the exact opposite...in this scenario drivers who do this part time anyway are fine but anyone driving more than 30 hours a week will be hosed.
I look forward to day when corporations support universal health care from purely selfish grounds: if government takes care of employee's health, companies won't have to deal with it, or worry whether driver crosses the threshold of working over 30 hours a week.
A better healthcare system requires the government to do something rather than an individual corporation. In fact it's the tight coupling of healthcare to employment that makes it such a nightmare already, and companies are not against a more universal system because it would greatly reduce costs and overhead.
I think a lot of drivers who use both have both apps turned on simultaneously? This would probably mean that you’d only be able turn on one at a time, which might mean fewer trips per hour.
Another interesting consequence is potential to introduce stricter employment contracts that might say you can’t drive for a competitor...
> Another interesting consequence is potential to introduce stricter employment contracts that might say you can’t drive for a competitor...
This aspect is good for uber, there are many ride sharing apps now and drivers will flick between them and uber has zero competitive advantage. As private contractors they're free to recommend others to clients and this will go away. Bootstrapping competitors will be much harder.
They absolutely can and they probably will. You can put almost anything you want in an employment contract, and agreeing not to work for a competitor is an extremely common clause.
- <30 hours/week so no benefits - you can only work in these hours - take it or leave it cause we now can remove your ability to work for any other times
No marginal costs outside the min wage (no benefits) and honestly you don’t want more hours unless they are explicitly in the time and place you want them.
Citation needed.
This is a standard condition of many employment contracts that the employee not also work for a competitor. Uber and Lyft previously had no such condition because drivers driving for both companies helped their case that drivers should be considered independent contractors. But now that drivers are employees by fiat, Uber will obviously ban driving for Lyft (or anyone else) and Lyft will obviously ban driving for Uber (or anyone else).
It will reduce the number of aviable drivers on each platform, thus pushing their (drivers) price up.
What is their idea of thoughtful solution?
So basically they want to carve out an exception for their industry as well, wait 10 years until competing taxi services are dead, and then pass some token legislation based on the outcome of AB5 in other industries. Standard corporate-speak.
There just really isn't that much demand for a $20 2-mile ride in the city. Uber has show that there is a HUGE demand for the same trip at $4.
No one here is saying that people shouldn't be able to drive for a rideshare company. We're saying that people who choose to do that should at least be paid a minimum wage for their time and given basic worker protections. If you oppose this kind of thing, you should probably also oppose minimum wage laws in general (which is a valid opinion).
Which situation is you believe is "better" depends on your end goal: Are you trying to make more small jobs, or are you trying to make jobs meaningful in their earning ability?
Framed another way, the people you know driving for "a little extra cash" are chipping away at opportunities for someone to be consolidating those jobs into a single, better job.
Not going to debate which is actually "better", because that's just personal opinions/economic model preferences.
No, it will probably exclude people who just want to work 2 hours some evenings whenever they have time to make some extra money, who'd make the full 10 dollars an hour like other drivers do in the time that they do work.
The "better" choice again comes down to your goal: More jobs or "better", full time jobs.
Consumers should also be considered. If casual drivers are excluded, the smaller pool of drivers will cause prices to rise. Some consumers who previously used ride sharing will go back to driving their own cars.
There's also the removal of a smooth transition driving as a career. If you can do it casually for a few hours you can discover if you enjoy it and want to quit your job and do it full time. If the only option is to be a full time employee, you have to go through the hiring process and take a risk of quitting your current job just to see if it's for you.
And this is why I'm specifically and repeatedly not getting into the discussion of "which is better". Because that's a whole other discussion.
I'm just pointing out that when it comes to job creation, there's 2 axis. Both have pros, both have cons. You say X is better, I say Y is better, objectively there's data on either side, subjectively there's opinions on both sides, frankly I'm not interested in all that. Just pointing out that there's a rational opponent to your points. Not trying to be him.
For some people, yes. But we're looking at the laborers as a whole, not the individuals (and my specific example was more from the perspective of the managers at a company with a limited budget for employees).
Some people will go from "contractor job" to no job. Other people will go from "contractor job" to "employee job".
Uber still needs drivers. They're not going to not have drivers because of this. Some people currently working for Uber will keep doing that. Some people currently working for Uber will not keep doing that. In the future, some people will apply to work for Uber and be both rejected and accepted as employees.
People wouldn't take $5 per jobs if someone else was offering them $6 or $7... so better to have 15 people learning skills that hopefully let them move up in their profession & career to higher earning occupations.
>>People wouldn't take $5 per jobs if someone else was offering them $6 or $7
Sure they would. Because a job isn't only wages, there's always some other factors involved in employment decisions. Someone might have med-school and limited free time. There's a ton of reasons why "job with lower pay and factor X" seems more appealing to someone than "job with higher pay only".
Look at game developers. They work horrible hours and often get paid less than similarly skilled devs in other fields. Why? Because demand for these jobs are extremely high relative to supply which provides management with greater bargaining positioning to lower wages.
Some of these people aren't trying to move to a career with higher earning, and see this as their end goal or "a tangential job I'm doing today". This allows them to drive down market rates on the job for people who are in a different circumstance and have higher financial needs.
We can get into a whole discussion about labor vs management and labor rights and best practices and all that. TL;dr- That's an opinion, and it's a lot more nuanced than you're making it out to be.
It's literally just "regulation bad!" with no argument backing it up
No one in hacker news is a senior or retirée knowing how uber changed their austere lives, for the better.
Or riders for that matter. To my 80yr old mother, using uber has been a godsend. Its the only app she uses in her mobile. I dont even have uber on my phone. Somehow she figured out how to instal it and run it.
She does not drive due to her age and she cant wait outside due to the cold at bus stops.
Now thanks to this, either pricing will skyrocket, or availability will fall.
No one in HN is a senior, so they are oblivious to it all.
And this is 1 example. I'm sure there are others of families not having to do transportation juggling to move kids around, all of which is helped by ubers.
But to the wage justice warriors of HN, it matters little that less people are earning, and less customers benefit. Or that elderly people that qualify for Medicaid like my mother , can free themselves from the chain of lack of transport... What matters to the wage warrior is that they can show "liveable wages" for the limited few.
Disgusting
The biggest issue for me is pricing - the fact that drivers have 0 input to rates always made the IC designation fiction. But if the apps worked eventually like a reverse auction, where drivers got to set their own rates and you could then choose based on distance and cost, that would be much more of a true marketplace model with independent sellers.
It's interesting to think what kind of efficiencies could be unlocked with a more versatile and robust driver-client interaction. Could clients order a ride at X time to Y location and have drivers bid down to fulfill the ride? Could the bid-down process be performed automatically based on the driver's personal settings on pricing and location?
Ultimately these efficiencies would make the driver's life better. The UI for the rider may be similar and the price may be similar (or higher!) as well.
Uber and Lyft had their chance to show leadership and empower their drivers if they truly believed their drivers were contractors, rather than leaving them in some gray zone of partially contractor and partially employee.
The labor market is a complicated thing, much more complicated than just supply and demand. But these types of controls are often not the right tool for the problem.
1- Do you believe Uber/Lyft/etc exploit any part their labor for corporate gain? 2-What do you believe is the correct control to prevent labor exploitation by Uber/Lyft/ect, assuming your answer to 1 is true?
Seems like they'd have to make them employees under this ABC test.
Generally they work for the staffing company as full time employees, which then places them at google
If you are a contractor, make sure you shop around for managed services. There are transparent vendors out there and some willing to show you their cut (although not many).
They’re typically employees of the staffing company which hired them
For Uber, drivers are not employed and treated as contractors.
For Google, chefs are employed by another company (food services), which has contracts with Google. And also treated as contractors.
I think these two types of contractors are different. Let's say if contractors are already employed and offered insurance and minimum wage, is it ok for them to work as contractors for other companies like Uber or Google?
If anything, they consider it to be a good thing.
Like SpicyLemonZest said, it sounds extremely unlikely that Uber and Lyft, being public, would risk filing fraudulent I-9s.
For 10 years I ran my own consultancy. Every new engagement was a new "job" where I could negotiate the rules of engagement however I deemed fit. Usually lasting no more than 5 days each. Every new month for 10 years I'd think: "this is it, it's over; I have no work scheduled for next month, I'm going to have to give up and get a real job." But somehow the work always rolled in, and I did really well. By the end I was billing over $300/hr, and I worked when and where I saw fit. As far as "gig workers" go, I was about as successful as you can possibly be.
And yet my wife had to work a Real Job at a Real Company because I couldn't buy reasonable health insurance for any price. Any price at all. So I spun down my company and got a real job. The Gig Economy is an utter poopshow; not even at the very top is it sustainable.
Making Uber's bottom-of-the-barrel jobs slightly less abysmal doesn't do crap for the Gig Economy. Driving for Uber isn't a Gig. You're not negotiating your rate on each pickup. It's a carefully managed relationship with the same company each time, who pays for your service on a recurring and predictable fee-for-work basis. It's a job.
Fixing the Gig Economy means making it possible for people to make a living without the shelter of an employer. And making Uber and Lift into real employers doesn't fix it. It's not even related.
Problem: You need a full-time job at a company to get benefits such as healthcare.
Californian solution: Reclassify as many as possible as full-time workers.
Problem: USA immigration laws are horribly inflexible.
Californian solution: Make it illegal to go after illegal immigrants.
I don't think that these passive-aggressive fixes are good for USA's democracy. Either we need to split up the country into more manageable chunks and make moving between states as hard as moving between EU countries or we need to accept the intent of federal laws. Otherwise we will just end up in an ever escalating war of dumb bills to counteract the other sides dumb bills.
You just hit the nail on the head. The real problem is that California is grossly under-represented in government, thanks to the founding fathers and gerrymandering. We have to slap together these hacks because otherwise we would wait centuries to get any real change out of the Fed.
As for "USA's democracy", screw the USA and its' democracy. As a Californian, I care about California's democracy, not the GOP's federalist plutocracy.
Republikans look at California as a rich man to mug who won't fight back. These laws are how we fight back. The USA needs us, we don't need them.
The fact is a state with 38 million people and a GDP equivalent to 20% of the nation should have more representation than moscow mitch's welfare state of kentucky.
The unfairly low representation of large states in the Senate is a huge issue, but it's not what "gerrymandering" means.
If we actually followed the spirit and intentions of the founding fathers, then California would already be grossly under-represented. Add to that the way the GOP rigs the elections via gerry-mandering and . voter suppression, and Californians are treated like slaves, not citizens.
They have all forgotten the battle cry of the republic, "NO TAXATION WITHOUT REPRESENTATION".
#calexit
When the GOP owns the senate, as they do, they attack California's sovereignty at every opportunity. We are net-givers to the federal budget, whereas moscow mitch is a welfare queen whose state is the biggest net-begger.
Our wealth, our culture, our environment are all under attack by a nation of right-wing christian terrorists who resent that us Californian libtards have created the wealthiest, most successful and productive society the world has ever known .. while all they do is shoot guns.
#calexit
As for immigration, the main issue that is that many California families are a mix of American citizens and illegal aliens that have lived here for decades
Contractors don't pay into unemployment, but they're also not eligible to receive unemployment benefits.
It depends on the country of origin, but for many, moving between EU countries is about as moving between states is now. There's some bureaucracy to deal with, but it's not like moving between states in the US is hassle free. Most US states require immigrants from other states get a local drivers license and local car registration, which requires multiple proofs of residence. Don't forget the nightmare of having to deal with two states' taxes (where applicable).
Europeans generally refer to "being on benefits" as unemployment allowance, and no, you cannot move from a poor European country to a rich one to get a higher standard of living unless you can work, or can be supported by someone who works. Certain kinds of social programs in the US have this property as well.
Americans often refer to medical care/insurance as a "benefit", which might be confusing here, but yes you absolutely can (as a European) move to another country without a job and still get medical care in the area you have just moved to.
For those of us lucky enough to be in good health, the "Gig economy" as-described would be just fine.
It's a common refrain that only people with health problems need health care, but that's just not true. Risk has a price. That's why health care and life insurance for healthy people is not free. Good health just makes it easier to pretend that risk isn't there.
Tying health care to employment is a historical accident long overdue for change.
Ironically, it came about because of wage freezes imposed by the government during WW2. Employers had to find something to offer to attract workers, and employer-paid insurance did the trick.
The trap, though, was that employer paid insurance was paid with pre-tax dollars, while if you bought it yourself you'd pay in post-tax dollars, making it far more expensive.
This, 100%. It wouldn't solve everything, but it'd be a huge positive step to roll back tax incentives that encourage this.
Health insurance’s main alleged draw is that shit happens when you least expect it, and you can avoid the massive costs when the unexpected happens (accidents, cancer, botulism, whatever). Unfortunately, someone in America found out you can charge monthly fees for health insurance while still making the person pay massive amounts themselves. Just promise they’ll pay a slightly less massive amount.
Only if they are rich enough to post a rather large bond.
That health care should be decoupled from employment.
Are there too many regulations? Insurance is just a business, it seems to me.
Most of the policies are high-deductible, which means you’ll end up paying for the “scratches and sniffles” yourself but have a per-year maximum-out-of-pocket that can be planned for.
It’s not perfect but it at least provides an option whereas before if you had any non-trivial pre-existing condition you couldn’t find any insurance at all.
It seems healthcare.gov is not good enough yet? I don't think classifying government institutions as startups is really correct, though. They have infinite money supply and no requirement to be profitable.
How many people would like to do a startup but don't because they have no food or shelter? We don't really care because the costs of those things are manageable.
The problem isn't that the government isn't paying for it. The problem is that it costs way too much.
You can't be serious. There is a housing affordability crisis throughout the first world.
Housing and food are rights. They should indeed be funded by government, through comprehensive social welfare, and in the case of housing, publicly owned housing.
Only in the most dense urban areas. Not "throughout the first world."
> Housing and food are rights. They should indeed be funded by government, through comprehensive social welfare, and in the case of housing, publicly owned housing.
We do provide public housing and food for those who can't afford it, but the people who utilize it often aren't the ones creating startups.
Additionally, mass exodus of drivers from Uber/Lyft will compel those companies to increase rates
One medical emergency and your credit will be ruined. Wait a seven years without contracting the debt collector and the debt becomes uncollectible. After three years roughly three quarters of the effect on your credit will evaporate. That's what actually happens beyond the hyperbolic political grandstanding.
Remember kids, if you get a bill that you can't possibly pay. Don't pay it. Let it go to collections and pay it for pennies on the dollar (another trick, tell them the most you can pay is $10 a month or something else low. Pay off that debt in 2075) or just wait for it to become uncollectible.
Source: Canadian, walked away from my student loan debt after injury, provincial loan was wiped clean federal loan had to be paid off. Student Visa wiped clean. To be clear I could not work and the bills kept getting harder and harder to pay. I was dying with stress and anxiety about bills. So I stopped paying them and bought food instead. I was young and not prepared for emergencies but it was clear I was sinking. I would like to also add this is NOT a great solution if you can avoid it. Responsible spending is. With the debt, for 7 years I could not get a credit card or take out a loan. If my car died I had to buy a new one right now out of pocket for work. It is not good. So though I had about 20000$ in provincial loans wiped it took me over a decade to pay off the rest of my debt. Today I am 100% debt free and even have a few dollars. The difference in stress levels I live day to day are huge I can not understate how much responsible spending with in your means can do for a person.
Do you owe the debt to American Express? It depends on the state in the US, they can sue you, and try to garnish wages and take assets that way. But some states have laws against things like wage garnishing, it also costs money to sue some one. So if $costToSue > $expectedDebtRecovery they aren't going to sue. They usually just sell the debt to a collections agency who just calls you relentlessly trying to get you to pay, and since the collection agency bought the debt so cheap, they aren't going to throw more costs to collect the money by suing. If they can get any money out of you just by calling, it's a win for them.
This advice is extremely glib and more of a headache than you're is making it out to be. Sure, there's techniques for deal with this shit. It doesn't change the fact that that it's still a giant pile of shit to deal with, and it would just be much better if we as a collective society didn't allow one medical emergency to cause problems for you of this magnitude.
Also, if you're trying to be your own business and your credit is ruined, what do you think happens to that business? My guess? OP was right, and he has to end it all.
Generally nothing, the hospitals don't actually expect you to pay the bill they just want the tax write off they get when they send it to collections. Jeff Bezos might have to pay but if you are just some guy with a business that doesn't even generate enough money to pay for your own health insurance you will most likely be fine.
Where will you live? In my area you need good credit to get an apartment...
Credit affects your life in many ways, I’m not advocating a specific action, just pointing out that the advice above can have negative effects on your life.
The people lauding the wonderful beautified “universal healthcare” (which, btw, they lied to you about never wanting to implement during pre-Obama care con job that made the Health sector rich and the middle class poorer) do t ever actually account all the costs when discussing it, and I will just assume you are doing the same from a point of ignorance, and not intentional deception.
Here is a representative example of a wonderful splendrous worker with universal healthcare in Europe.
1), as surveys here too show, for the same job, you’ll be making about 50-75% the salary of an American equivalent (see following points).
2) Your tax burden on that immensely lower income will be approaching 30% effective income tax (FYI, e.g., the 42% tax rat starts applying at €55,000, just for a reference point … and no, that is not a typo)
3) on that lower income and higher taxes amount, you then get to pay huge retirement taxes too, on the order of effectively approaching 20%, with heart wrenching and soul sucking outcomes when you see the “pension” people are given after a life of paying into an utterly incompetent and failed retirement system. For reference, think of paying into a retirement system at going on 20% of your income and then getting about 1/4 of your salary to live off in “retirement”. It’s sad and sick and immoral. If people had been able to simply invest their own money in a global fund, they would probably be swimming in money in retirement, but instead they were pillaged and plundered in order to give them a pittance in “retirement”. It’s really a morally bankrupted and depraved system.
4) so now that we’ve reduced your already lower income by around 50% from taxes and a con job retirement system, let’s talk about the health care system cost that will run you about €300 per month in employee costs every month just for a single person, not counting the employer contribution of another ~€900; again, for a single individual. And on top of that, you are also going to have copays to see the doctor (albeit about 1/2 to 1/3 of the cost in the USA, so you get to save $5-15), but you also get to go to a doctor for a prescription and a pharmacy to buy things like basic over the counter medications like ibuprofen .… that comes in blister packs of 20 you get “for free”(see tax burden and health insurance costs above for reference of level of “freeness”). Again, no, those are not typos or errors, they are very much representative examples.
4) gasoline is taxed at 100%, in most European countries or more, with talk of increasing it. And no, again, that is not a typo. For reference, in the USA gasoline is taxed at around the 20-25% range. The reason I mention that, is because it’s not only a taxation on mobility, it again sucks the disposable income of the lower income people dry.
And none of that even goes into the fact that medical care is determined by the insurance that pulls typical insurance things where when it’s time to pay out all the sudden the medical care is deemed not necessary.
The saddest thing about the health care cost debate is that it seems to be driven by a con job to trick people into a trap that will enslave them to authoritarian control even more without any benefits from it, if not only more detrimental effects like Obamacare that only served to drive up costs and then peg them at new levels that made health insurance companies and the medical sector richer, while Medicare fraud and pull pushing has run amok.
I actually find it curious that especially this community would not realize that the ideal system is not a centralized monolith running on a con job and no backups, but a highly competitive d...
Since we're ticking off items, Australia has both a public pension scheme and compulsory private retirement savings (superannuation). Taxes on petrol are higher than the US but lower than Europe.
I think you've been sucked in by the talking points, mate.
You may claim "is much cheaper", but reality is that you just don't know and are not being told the full cost of what you are being forced to pay for.
I don't know what you think you are explaining to me, the USA also has a public and private retirement planning system, and again, AUS is not exactly as bad off as Europe; but reality is that you don't see the freight train that is barreling down on you. The thing that makes the USA, AUS, and EU very very difficult to compare for even the supposed experts, is that there are so many modulating variables. Not only are they variables, but they qualitatively modulate things. For an example, you think your system works great in AUS and you have lower taxes and a public health care system that works ... what you don't consider, intentionally ignore, or are propagandized not to even be able to take in; are things like the fact that you don't have huge populations that drain the life, energy, focus, and money out of the USA by the billions. For example an estimate of the cost of various existing welfare programs in the USA ... not ones where you even get something at overpriced and inefficient rates like universal healthcare ... costs the American tax payer approaching the amount of the whole GDP of all of Australia. Think about that, the money equivalent of work, energy, and focus of the whole Australian economy, what every single man, woman, and child does in the economy; goes towards welfare programs to support people that are drains on society. They are even largely not only not contributors to society, spending a whole life of being a net overwhelming negative contributor, but increasingly they are not even American citizens that are draining the country.
The point is, you can sit there and chide big mean America for not providing health care, while also not having any idea what you pay for that, nor the overwhelming cost it would be to take care of everyone in the USA, in addition to the fact that you take for granted that the US tax payer funds the protection that keeps China from a full on invasion and even allows you to engage in free trade at the American tax payer's expense. And all that while you spit in American's face. Reality is that none of this math makes any sense or adds up in any manner when all the full accounting is done. Do you want to pay for the health care pampering of someone that chose to get morbidly obese while you lives healthy and saved your money instead of buying food with it? Reality is that if the USA were to adopt some universal healthcare system, it would bankrupt the USA and trigger a global economic collapse as all the fools don't realize just how dependent they are on the USA, and then they would also find themselves without the massive military that keeps them safe from others more than willing to conquer them when given the chance. Choices have consequences, my friend, and I do not think you have the ability to recognize the precarious situation the world is in as types like you keep sawing at the branch you are sitting on.
Of course this exact same thought process can be applied to other american 'quirks'. e.g. mass shootings and gun control.
But due to Medicare etc, it's not that big of a deal whether a worker is a contractor or employee.
What is the reason insurance providers don't want to insure contractors?
But whatever, it did suck to pay ~$1K per month for health insurance.
If you’re billing at $300/hr and working when and how you want, it actually seems immensely disingenuous to try to associate with the sympathies for people stuck in the gig economy con job the tech tyrants have been imposing on society as a kind of excuse why you couldn’t manage to fill your consultancy pipeline.
I also guarantee he could have gotten health insurance, he just did not feel comfortable paying the roughly $1,000 to $2,000 per month it would have cost because his business pipeline was not full of work consistently.
People don’t realize just how much health care costs, regardless of whether it’s American employees who don’t realize the employers contribution is about 4-5 time what they pay monthly, or the worshiped and beatified “universal healthcare” that is “free” in Europe where massive taxes are paid to augment the also massive individual monthly cost taken out of people’s paychecks.
The American system costs way more for comparable care, precisely because of our insane system. Every single dollar or hour spent on medical billing issues and dealing with insurance and arguing over who pays is total deadweight loss.
I don't think it's abnormal not to want to pay those rates.
$1,000+ a month is absolutely insane for health insurance and at $2,000 a month you're now beyond the cost of most rent for something that you'll hopefully never need to use for decades, but more importantly you have no options. It's either pay massive fees (+ copays, etc.) due to no real competition or go without insurance. For the last few years no insurance also came with paying thousands upon thousands of dollars a year in fines too.
I am an uninsured freelance worker too for reference. But that plan definitely wouldn't work out if I had a family to insure, and then the costs are astronomical to the point where you would be in debt and have no savings unless you were absolutely crushing it.
Worth noting that American per capita spending on healthcare is much higher compared to European countries despite a lower life expectancy.
Before Obamacare and without the ability to bargain as a large scale employer, my insurance options were limited to "defined benefit" plans where the maximum they'd pay out in an emergency was limited to about what you paid in in about a year or so. Effectively no emergency coverage, just incidental stuff.
Another fun feature: preexisting conditions. For which insurers will pay $0. It's pretty horrible, and one state where I lived passed a law so the pregnancy could not be considered a preexisting condition for insurance purposes. Which meant that if you were pregnant you were denied coverage at all. By everyone. Without exception.
Perhaps your state had a $1k/mo option for insurance, mine did not. Even at $5k/mo (if I had it) plans would not cover an emergency. None of the plans available to the self-employed would.
I do agree without reservation that linking healthcare to employment is crippling for independent contractors. As I understand it, the setup allows employers to deduct substantial costs from taxable income. So basically governments are subsidizing the obscene profitability of health insurers, the pharmaceutical industry, and some provider sectors.
Back in the late 90s, I was able to get ~affordable health insurance through AFL-CIO SBWA Local 125. But that service went down in flames, so I ended up paying ~$1K per person. As I recall, I could deduct 50% of medical expenses, but it was still the largest expense after mortgage and taxes.
And if it had been $5K per month, I couldn't have managed it.
What?
Can't you buy personal health insurance with decent coverage for on the order of $500/month? And that's for plans with low deductables. $6000/yr for personal health insurance for an individual seems perfectly reasonable.
I'm concerned because I'm planning on eventually pursuing my own startup. If I can't get health insurance, this becomes extremely risky and untenable. If your post is correct, how does self-employment even work?
My understanding is that individuals can buy affordable personal health insurance. Am I wrong?
And they fix it by simply moving them as FT employees, because to the State of California that's the easiest thing they can do. Single-payer free healthcare for all - which is the right thing to do is too much for the State.
This is just how bad the State of California is being run.
Singling out California for not taking the unprecedented step of rolling out single-payer alone--which is a difficult proposition to say the least in a country that guarantees freedom of movement--is bizarre.
Workers need benefits which is understandable because they can't even go to doctors when they are sick.
You're telling me if I were disabled and could not work I could just move to Europe and live on the healthcare system? That's not at all true.
Secondly, EU freedom of movement isn't as strong. See Directive 2004/38/EC, such as the points reproduced below which AFAIK some countries already take advantage of:
"Union citizens should have the right of residence in the host Member State for a period not exceeding three months without being subject to any conditions or any formalities other than the requirement to hold a valid identity card or passport, without prejudice to a more favourable treatment applicable to job-seekers as recognised by the case-law of the Court of Justice."
"Persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions."
Given their political support of illegal immigration, I don't think it's bizarre at all.
They're among the richest, left-wing states in the country. Relative to other states, there's absolutely no shortage of political support or money. If they can't handle implementing their own utopian health care system, I don't know why any of us should trust that it can be done well at a federal level.
Med-cal is basically poverty level coverage (138% FPL - $29k for a family of 3)
The main issues with can't afford (or more honestly can afford but it is very painful) healthcare are at the higher numbers as subsidies fade out. $83k for a family of 3 has no subsidies, but even high deductible insurance is going to go for $10k/year (meaning expected costs are realistically hitting above $13k). That's over 20% of take-home income.
My guess is that no one is serious about healthcare and that it's simply a get-out-the-vote scheme like abortion and gun rights.
"a difficult proposition to say the least in a country that guarantees freedom of movement"
Levels of benefits already differ considerably, no? If freedom of movement is a deal killer, than it seems to me that strict, highly enforced immigration laws would also be a precondition.
We need a new, third type of classification.
The pertinent part of the bill:
2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Of course, there's a bunch of exceptions for various professions toward the end.
Which of these three clauses are not satisfied by drivers for a ridesharing company?
This would be a hard sell because Uber and Lyft are in the business of providing transportation to people. They may argue that they're only providing the platform that enables drivers to provide rides, but considering the amount of evidence that says otherwise, I'd like to see their lawyer making that argument with a straight face.
It takes serious mental gymnastics to say a driver is not simply an employee of the company, in terms of operational workflow. Drivers aren’t going off and figuring out everything (or even hardly anything) about giving rides at their own discretion, or even just with minor intervention from a central dispatch. The whole thing is constantly controlled in lock step by the central dispatch, and Uber, Lyft, etc., employ data scientists and other experts specifically to make it more centrally coordinated based on data.
Frankly the only thing the driver controls is the financial risk of the car itself and clocking in / clocking out overall (though this is also manipulated with incentives).
Au contraire, it is the various governments over the years that have re-regulated drivers (cannot drive in certain areas at certain times, must display decal, must carry license, must pay ransom fees, cannot stop in places, etc.) in ways that have taken away their control over work. We're headed back to capped and regulated taxis, unfortunately. New York City already has a black market trading TNC plates, just like medallions, and prices are back to taxi levels. Hope you like that.
Choosing the route, for example, is a service the ride hailing companies rely on the driver to perform. Like an employee.
Choosing to run an errand, give me a break? You can’t be serious? Employees do that stuff all the time. That type of thing is not related to the distinction between contractor or employee.
If you work, say, in a restaurant and decide you want to go pick up your laundry, expect the shift supervisor to tell you no.
Certainly some employees enjoy that flexibility, but that is entirely at the discretion of your employer.
Uber also is a technology company just like eBay.
If Uber riders were able to pick the driver they wanted and drivers were able to design their own advertisement page the riders see as well as being able to negotiate with the rider directly without loosing the Uber's platform protection, I would agree.
The relationship between customer-seller is just much different than rider-ridee.
If Uber wants to be treated as a marketplace and sidestep this new law, it needs to make significant changes - if drivers are truly independent contractors they should be able to set their own prices at a minimum.
It's like saying that the drivers aren't employees because Uber doesn't provide health benefits.
Companies routinely get in trouble for forcing their employees to buy their own equipment. But it still happens all the time because of the power imbalance even when they're employees.
This is one of the many thing which makes all this such an existential threat to Lyft/Uber. Even just when it comes to minimum wage there will be a huge fight because so many drivers make less than that when the equipment is taken into account
They would need to redesign their entire app and business model to do that.
A marketplace generally allows those who operate in it to set their own pricing. The fact that Uber exclusively determines both cost and pay for the drivers would run counter to your 'marketplace' argument.
They have literally none of the hallmarks of being a marketplace.
I really hope I'm reading that wrong. I might want to do work for a California company one day ;-)
However companies like Airbnb (hospitality) and Uber (ride sharing) will be able to hire programmers as contractors because writing software is not main source of income for those firms.
Core business is understood to mean primary revenue generating activity, which is getting paid for facilitating rides. They don't charge any money for the use of the software.
This seems to be saying the same thing: https://smallbusiness.chron.com/true-owner-llc-cannot-w2-inc...
The article is referring to true LLCs, i.e., those which have elected pass through treatment.
HMRC provide this tool to determine employment status:
https://www.gov.uk/guidance/check-employment-status-for-tax
It classifies the contractors who wrote the tool itself inside IR35 while HRMC (the people contracting them to write the tool) do not.
Uber however is a taxi company and the brunt of their primary activities are done (atm) by contractors. Driving people around is their core business - even if they will probably give the defense that they're only a middle man with an app that links independent drivers up with people looking for a ride.
This is one of the reasons UPS supported the bill. It creates parity between the two.
Could uber work around this by having everyone form their own LLC to be an uber driver, and making that process painless for people? (or making it painful and not caring about the long term ramifications)
I'd make the guess that one could go into finer detail on what specific type of software development falls in-line with the daily activities, but software development in general might be too broad. An ecommerce company probably could argue php development is part of its daily development, but if it hired a contractor to modify their build system, that might be outside the scope of their core business.
I.e., Uber could not outsource driving if it calls itself a transportation company, but it could outsource accounting functions.
As the company grew much larger, we did eventually expand our product line, and did build a team. But for several years, we just had 1 dedicated hardware guy.
And that's why they're not a transportation company - they're a company that matches two sides of a marketplace connecting drivers with passengers.
Or at least that's one of the directions I'd expect their lawyers to look into.
> An individual who holds an active license from the State of California and is practicing one of the following recognized professions: lawyer, architect, engineer, private investigator, or accountant.
For example a Software Developer can't start a professional corporation in California like a lawyer, architect, civil engineer, accountant etc...
1) a four-year degree from a university program accredited by the Engineering Accreditation Committee (EAC) of the Accreditation Board for Engineering and Technology (ABET),
2) an eight-hour examination on the fundamentals of engineering (FE) usually taken in the senior year of college,
3) four years of acceptable experience,
4) a second examination on principles and practice
5) written recommendations from other professional engineers.
It wouldn't be a requirement for a job necessarily, but not a bad thing to have.
It's a proffesional level job, but reconisation usually means being a member of some sort of proffesional body - no idea what the software one of those would be?
In theory this should be really good for software contractors, because in this should rip out the middlemen (i.e. the firms who get the contract to do the work and turn around and subcontract the work to you for pennys on the dollar). Now in theory these middlemen are gone and you as the software developer should be able to obtain the contract directly directly from the company.
You must have missed the part of my comment that specifies:
"the firms who get the contract to do the work and *turn around and subcontract the work to you for pennys on the dollar"
>(e.g. Uber might contract with local companies formed solely to employ Uber drivers in that locality, so that Uber doesn't have to deal with all of the complexity of treating all of its drivers as employees.)
Then what is to stop this new employment firm Uber has to contract with to obtain drivers from deciding after they have the infrastructure of drivers in place from cutting Uber out and launching their own ride-share app?
At the end of the day Uber isn't claiming drivers as contractors because of complexity, they are doing it to lower their costs.
Hmmm, I've never seen that arrangement before. Maybe it's a common thing somewhere though. I can't imagine why anyone would take that kind of job.
"control and direction" - sure, they give you direction. But do they control what tools you use, when and how you do it?
"connection with the performance of the work" - Are they controlling the final deliverable, or the performance, again, as in when and how the work is done?
I suspect that software consultants have a reasonable argument that they control their own work, while their clients have control over the acceptance of the final deliverable, so the above points are not fulfilled.
Edit: And for B, it just seems like having a 2nd client would fulfill that criteria. Your 2nd client is outside usual course of the 1st clients business.
The items are already part of California's contract law well before this current gig economy bill.
California classifies 'independent contractor' as [1]:
1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
2. Whether or not the work is a part of the regular business of the principal or alleged employer;
3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
4. The alleged employee's investment in the equipment or materials required by his or her task or his or her employment of helpers;
5. Whether the service rendered requires a special skill;
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
7. The alleged employee's opportunity for profit or loss depending on his or her managerial skill;
8. The length of time for which the services are to be performed;
9. The degree of permanence of the working relationship;
10. The method of payment, whether by time or by the job; and
11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.
The key line for software developers who are independent contractors is "Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;"
Contractors that work in a home office, using their skills to bring to a company for a project, at their own place, time and tools, that is an independent contractor.
It could be argued that drivers that own their cars, that can choose to accept or deny a particular task, without it hurting their competitive rating, could be seen as an 'independent contractor'.
I think the gig economy bill from OP is targeting known companies that are taking advantage of this by wanting 'independent contractors' that they can schedule and dictate their day and use metrics against them when they aren't available at the time. They should pay people as employees if they need people available then have contractors fill in when needed. This will probably lead to some fulltime Uber/Lyft and the rest floaters that can be like the current gig setup.
[1] https://www.dir.ca.gov/dlse/FAQ_IndependentContractor.htm
What if the consultant is forced to attend every single meeting the client (via PM/other manager) decides to schedule? That seems to violate the spirit of "control over performance" part of it.
Curious because it is recently relevant to me..
When I personally worked as a contractor, the other contractors I worked with mostly bounced from short gig to short gig. That would probably meet (B). (A) was a bit more subjective.
If you're a long-time contractor for a single customer, and that single customer has a high level of direction over your day-to-day work, you are at risk of being defined a W2 employee by a legal entity like the IRS. (Or the state of CA.) In such a case, it's important that you clearly understand the legal difference between a contractor and an employee; and have some frank discussions with your "customer." It's important to point out that your "customer" bears the risk of you being redefined as an employee, so it's in their best interest to make sure that your contractor relationship follows the law as best as possible.
I'm confused. You seem to be applying (B) to the contractor somehow, where my reading is that it applies to the company doing the contracting. It doesn't matter what the contractor is doing; if a company makes widgets, they can't hire a contractor to make widgets. It doesn't matter if the widgets are a different color or if the contractor only ever makes widgets for any given company for a few months at a time.
Yes and no. A company that hires contractors who bounce from gig to gig meets (B) assuming that the software in the other gigs applies to different businesses.
Assume I make websites on contracts. If I make a website for a butcher, a baker, and a candlestick maker; the butcher, the baker, and the candlestick maker clearly meet (B).
'cause these look like every long-term contractor needs to become an employee in one way or another.
In this case, it's just financially to your benefit to be a consultant. This sword will cut both ways.
But what happens to people when the robots have all of the jobs?
People think it's not going to affect them because their job is special. It's just a matter of a few years difference, everyone's job will be affected. Even computer programming.
Why am I so sure about this? Because there is a very large research effort going on aimed at AGI and they _are_ making progress. And the potential rewards are enormous. And the hardware capability is available now.
A few years is probably hopelessly optimistic.
I think it is possible that we will need a new paradigm for society, since jobs are a core aspect of the current one.
Its more likely you ll see drivers forming shell contractor companies so they can still work for both uber and lyft etc
Ridesharing drivers will now be paid wages, not based on the time that they have a passenger? Will the ridesharing service have to pay for the cars and their maintenance?
From the article, it seem the only effect is that drivers are going to be scheduled in advance, and flexibility is going to be decreased.
That’s a claim the ride-sharing companies are making but the law doesn’t require that. They could do that, but they could also let drivers take a shift at a moment’s notice. In that scenario, though, there may not be a shift available when a driver wants one. The ride sharing company will have to pay at least minimum wage so they probably won’t offer a shift when demand is low. Perhaps that won’t be a huge difference in effect in terms of a driver getting work since the limiting factor is demand, regardless.
There are significant effects besides scheduling, though. Drivers will have to get basic benefits like minimum wage, unemployment benefits, etc. there are a lot of labor laws that make a distinction, so there will be a lot of changes from that perspective.
In terms of vehicles, I would think drivers would be able to continue using their own vehicles, but would need to be paid for that somehow. The typical way to do that is a per mile amount which covers everything, fuel, wear, depreciation, etc.
(c) (1) Subdivision (a) and the holding in Dynamex do not apply to a contract for “professional services” as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:
(A) The individual maintains a business location, which may include the individual’s residence, that is separate from the hiring entity. Nothing in this subdivision prohibits an individual from choosing to perform services at the location of the hiring entity.
(B) If work is performed more than six months after the effective date of this section, the individual has a business license, in addition to any required professional licenses or permits for the individual to practice in their profession.
(C) The individual has the ability to set or negotiate their own rates for the services performed.
(D) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individual’s own hours.
(E) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.
(F) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.
"Professional services" include:
(i) Marketing
(ii) Administrator of human resources
(iii) Travel agent services
(iv) Graphic design
(v) Grant writer
(vi) Fine artist
(vii) [IRS enrolled agent]
(viii) Payment processing agent
(ix) [Certain still photographer or photojournalist ... ]
(x) [Certain freelance writer, editor, or newspaper cartoonist ... ]
(xi) [Certain licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist ... ]
[And even more exceptions for real estate agents, repo people, etc.,.]
Just as in the UK actual Self employed contractors on a 3 month contract get hit by IR35 but Barristers working on the same case for a decade do not.
If workers in this field want to call themselves "software engineers" and gain the benefits of a professional title, like lawyers and architects, they're going to have to start following the other practices of professional fields. Just because a college dropout makes a popular webpage that sells a lot of advertising, that does not necessarily make him an "engineer".
What are those benefits?
It would probably cause the low end of pay to go up for software engineers, but not affect the high end.
1 they kept changing the requirements 2 what are the benefits
ironically as I started on the mech Engineering route I am more an "Engineer" than many other developers
The other part was at my first Job I was on the Vocation track in mech eng and got to the first rung on the Certification track. "technician engineer" I think it was called
You get a nice little salary bump or something usually, but you also get the risk associated with the bridge falling down. You sign off on the design and can be liable for negligence and malpractice.
You have to take a little test when you graduate college, then work under another professional engineer for 5 years, then take another test.
CA basically has no professional software engineering license yet.
The NSPE used to have a software engineering PE, but my understanding is that they dropped it for lack of interest. Until we see some legislation somewhere that mandates the kind of sign-offs mentioned above, I don't think we're going to see PE's in the software world.
IANAL but I imagine that's exactly the point. There are always incidentals, like let's say you're a restaurant and you need to hire a plumber to fix your toilet or if you're a real estate agent and you need to hire a programmer to do your website.
The problem becomes if you need to hire a freelance programmer to do some work for your software development company. There the "C" part of the test becomes a lot more of a gray area IMO.
In that case, C is irrelevant because you've already failed B AFAICT. This law makes it so that it's simply not possible for a software company to contract out software jobs to individuals. It has to either contract the software to another company, or do the job in house with W2 employees.
C, if my reading is correct, means that (ignoring licensing issues) you can't contract a carpenter to fix your plumbing.
People can already be full-time drivers if they wanted. Those jobs have existed for a century. In reality, the vast majority of Uber/lyft drivers already have a FT job and drive for secondary income with the time and location of their choosing. Retirees, students, fixed income, disabled, and many others who are just supporting their families.
Shifting them to employee status will cut many supporting incomes while adding a few more driving jobs with strict conditions, basic benefits and bare minimum hours. Many more will suffer than gain (if any). Another case of California having some of the worst politics in the nation.
For those downvoting, I would like to know what exactly you disagree with here.
Even at the Federal level, the taxes net out the same. For employees, your employer pays half of your social security contribution, but as a contractor, you have to pay the employers half on your taxes.
The only thing I can come up with is unemployment insurance, which contractors don’t pay, but they also can’t collect unemployment.
If I’m missing something, please clarify.
There are also immigration issues -- Uber will need to collect documentation so that workers can set their W2, and even though CA bans requiring businesses to use e-verify, Uber does business in many states and this would fall under interstate commerce concerns, and the federal government requires it for some border states and also for any business that sells to the federal government, so there is gonna be a whole host of immigration issues around e-verify, right in time for the election season. (E-verify is one of those things that is wildly popular, supported by both a majority of Democrats and Independents as well as the GOP, but hated by CA legislators and some in the business community, so expect this to set the stage for an e-verify showdown and battles over executive orders in 2020).
Then there are all the issues about whether Uber is going to limit hours, require working hours, or otherwise regulate their workforce a lot more than they currently are. Here by Uber, I mean all the taxi driving apps/companies, of course. Will Uber just "fire" drivers that don't generate enough fares to justify a set minimum wage? Will it no longer be allowed for drivers to come down from Sacramento and work in SF? Will Uber limit lunch breaks to a certain length, and force the app to be turned on during pre-arranged hours? A lot depends on how Uber responds.
Minimum wage requirements alone will raise incomes and thus taxes. Add in bigger salaries, benefits, vehicles, equipment, etc that the company will now have to pay for.
Some people want to do these types of gigs for extra income, but now if your an employee then probably companies will want you to be on a schedule and a minimum number of hours.
I forget where but seen a story where someone was told by one of their clients that they were letting them go because of this new law. Happened to be their biggest client too, but they were doing remote work and lived in California...
So now I guess some companies might want to let go of people from California and contract with residents of Texas or any other state instead.
Kinda reminds me of when states started changing their sales tax nexus laws, I was doing affiliate marketing but didn't have any success as still starting out.
But my state changed their law to try to collect from remote sellers and changed it to count affiliate sales too. So I got a notice kicking me out of the program on a short notice... If I had built up landing pages and traffic, I'd be left holding the bag... or adjust them to aim at another company but would have been a huge setback.
You could go from making a comfy living online to making zero. I know gurus tell people to build up multiple streams of income, but in this case, all companies could do the same. Look at affiliate sales from the state, look at compliance costs... If making enough sales to justify then comply or just ban residents of the said state from the program and move on. So by trying to tax companies, they could have ended up hurting their residents instead. So by trying to get sales tax, they ended up with neither, losing out on both sales tax along with the income tax on the commissions since companies just decided to pull out completely from letting those residents be affiliates, so they were longer eligible to earned any commissions.
"We regret to inform you that Nexus state tax regulations in Ohio were just passed July 1st of this year. Unfortunately, we are unable to work with any Ohio based affiliates, due to the Nexus Tax Laws currently under enforcement in the state."
This was back in 2015. I think more than a few states changed their laws on this, I believe they are referred to as a cookie nexus. and some programs have a minimum threshold to cash out too. So I guess they can kick you out and keep your money... Lucky I didn't have any in my account as was recently dabbling in this area.
So kinda sad that you could lose out on income just because of the state you are domiciled in. Wouldn't surprise me if other companies outside of California is going to end contracts with people just because they live in California. Kinda feels like discrimination in a way.
However maybe setting up a corporation instead of being a sole proprietorship that could be a workaround. Don't deal with California individuals, deal with California companies instead even if it's just only a company size of 1. So ride sharing apps could require drivers to set up an LLC and pay that instead of paying them directly maybe. But then California has high taxes and franchise fees already, so maybe it's just not worth it. There's already a mass exodus from California, so wouldn't surprise me if this makes even more people question if they should leave the state also. Move somewhere cheaper and get to keep your clients too if you are a freelancer.
"How do I get past the Uber paywall these days?"
See how absurd that sounds?
Pay for the products and services that you consume.
It's terribly misguided and anti-freedom.
I think it is a problem if companies like Uber are not honest with their employees, like neglecting to mention that their cars may break down and require maintenance, which should be factored into the income. But that is about honest information sharing, not forced employment.
Nevertheless, people should be free to do contract work and negotiate contracts on their own terms.
Taxis are... not "going away". They may get more expensive. Taxi companies are simply going to make a comeback.
Uber was making it easier/cheaper for passangers - it did very little for the drivers themselves.
They can't be "fired", since they were never properly hired in the first place! They were never regarded as employees. That's exactly what this legislation is setting out to change!
Your post makes zero sense, so I'll keep it short for you. Uber was the middleman, and without it - both individual drivers as-well as taxi companies have significantly more leverage over the consumers, and can now start charging higher prices.
So how does a driver get clients without Uber? If they can get clients without Uber, why did they use Uber?
How do clients know they can trust a driver? Taxi, OK - a taxi driver has to shell out serious money to get a license. Sometimes they must show proof of training. That makes them somewhat trustworthy, especially since their license can be revoked after a transgression.
For Uber, I suppose they tried to replace that with a rating system.
Without Uber, how do you propose making it work? I suspect simply becoming taxi drivers is not a viable option for many Uber drivers - because of the time and money commitment.