I wouldn't hold out hope considering the other key cities Uber operates in (SF and LA in California, NYC in New York, New Jersey, and London [1], which account for 1/4 of their bookings) have made similar determinations. São Paulo was the holdout.
It’s too early to say that they were determined as employees in any of those cities. The cities WANT them to be employees because it takes the burden off them to get jobs for them, but the legality of those ruling haven’t been finalized. There are plenty of reasons why they shouldn’t be considered employees and there was a study released by Cornell this week that showed more than 75% of drivers are part-time anyway and want freedom, not full time employment.
Would that be the Seattle-specific Cornell study [1] that came out on Monday?
Aside from relying on data collected in a specific locality not under discussion, it doesn't appear to make any sort of assertion regarding what drivers want, contrary to your claim on its behalf. Where are you getting that information? You should cite your sources, so others in the conversation can evaluate them independent of the claims you make for them.
>Cornell this week that showed more than 75% of drivers are part-time anyway
10 drivers working 1 hour a week contribute less to the platform than 1 driver working 40 hours a week. The study should adjust for the amount of time drivers are on the platform and not just sheer number of drivers. Just counting drivers seems an obviously flawed approach designed to make the part time count seem high.
> "Uber and Lyft covered the costs of the study [...] The study was priced as cost-plus, which covered the costs of the research plus overhead to the university. In total, study costs came to $120,000. [...] Driver earnings for all of our analyses came directly from Lyft and Uber. "
Even though this is still an ongoing legal battle, laws in each country are very different and might cause Uber business to be viable in some and not others. In Brazil labour laws are extreemly harsh and many say an employee costs between 50% and 150% more as compared to employment costs in other countries[1].
Also the social impact is different in different countries. Brazil is the only developing country in the list above. I live in São Paulo, and I can say before Uber, taxi cabs were a thing for rich people. Uber and it's competitors drove costs so low, poor people can now aford rides. I didn't find Sao Paulo stats, but in Rio, app drivers are 3x the number of cab drivers[2].
Uber estimates 1.9mi users might not be able to afford anymore if the law passes, amongst many other claims [3].
You can’t argue consumer surplus as a benefit (“Everyone gets Uber now!” Versus taxis for just the rich) if you’re avoiding employment costs. Taxis were for rich people because they could afford the fully loaded costs.
If the financial model is unsustainable because of employment law and the costs required by the law, the business is fundamentally flawed and unsustainable.
Uber works thanks to greed. When a driver knows he earns as much as he gets customers he will try to optimize his driving patterns. This cuts down a lot of overhead you otherwise need managing when, where and who should be able to drive for money. Making people employees with minimum hourly wages ruins this dynamic and suddenly Uber would need to add that extra overhead as well.
Not only that, but in São Paulo a taxi license was in some places worth a lot of money. License owners would typically rent it, and would illegally hoard them, giving them to family members who never drove a taxi, just so he could have more and rent them out. Legally, one person could only own one. Then there are the taxi companies, which also hoarded hundreds of licenses, mostly through corrupt means.
I don't think of that as "weaseling out of" at all. If anything, I've been arguing that the single primary thing that nullifies Uber's "they're all just contractors!!" argument is that drivers have no involvement in setting the price. If drivers can set the price though, and actually put in fair bids that they believe are necessary to pay their costs and make an acceptable profit, then it does become much more of a true marketplace and the "all drivers are employees" argument holds a lot less water IMO.
If the laws are not strong enough for them to be forced to do this in bigger markets, then perhaps the laws should be changed?
Depending on companies to self govern is not sustainable even if Uber does not exploit this, the next company will. Such loopholes need to be closed, putting on pressure on some companies is just band aid if they actually change, if not just effort wasted on the wrong thing.
I don't buy regulatory capture as a valid argument either.
To make sure companies do the right thing strong regulations and laws need to be in place, to make sure regulatory bodies and lawmakers are not influenced, people should have more power in government than money does.
Mainly, I do not find it very genuine that they only implemented this policy, likely with extra effort, in one territory. This feels like a play to capture market share and increase growth, even if it doesn't match their existing business model.
Yes, many times this. The gig economy right now is just a ruse to circumvent labor laws in many countries, incredible bad how it took this long for countries to regulate this.
There is a lot of legal precedent for this distinction that depends on your jurisdiction, but largely boils down to how much control the worker has over the work.
Uber and the like claim the workers choose when to work, how much, whether to accept gigs etc. But this is part of the problem: offering gigs at a set rate as take it or leave it is insufficient control. A real contractor would be able to negotiate and adjust this rate.
Uber drivers are employees delivering services core to the function of the business.
>Uber and the like claim the workers choose when to work, how much, whether to accept gigs etc. But this is part of the problem: offering gigs at a set rate as take it or leave it is insufficient control. A real contractor would be able to negotiate and adjust this rate.
Isn't it already built into the system though? If no one drives, surge pricing goes up until someone accepts the ride.
Honestly I see no way individual workers setting the price wouldn't lead to lower prices than you see now. Drivers would have the option to either sit and make 0 money or cut their rate by 10 cents and make some money. The way Uber sets prices pretty much mandates a minimum. If the minimum doesn't cover your maintenance costs, you shouldn't be driving for Uber.
This is where the whole discussion spirals out of control usually.
Uber maintains its business isn't transportation - it's facilitating a market place for transportation. Nonsense, say its detractors, you're running a car service.
It's clear that Uber has gotten into some activities that undermine its own story, like loans for drivers to buy cars and insurance.
It's also clear that Uber drivers don't look like regular employees in many ways - like: they decide their own hours; they can refuse trips; they can contract with other, competing ride-share companies simultaneously.
I don't know how people generate certainty in their opinions on this topic.
> A real contractor would be able to negotiate and adjust this rate.
To be clear, I agree with everything you’re saying. However, if I say I’m willing to pay $100 for a website and will deny all counteroffers, is the person who I hire to make my website a contractor or an employee?
You can make more money as a contractor. The deal is contractors get paid more to take in the risk of being fired. If you are ok with this, you get as liquid money the cash that would have gone to benefits.
So I bill for about 200k USD. My wife gets our medical insurance. I take home about 140k after taxes. If I were an employee, I’d only take home 100k after taxes.
There's only a very small group of workers like in it who could benefit from being a contractor. But there is a vast number of lowly paid workers who are devestated because they can't get benefits. How do we trade off these things?
I don’t think so. Denmark or Sweden lacks a minimum wage. People are free to not work with Uber. They are free to work with them. If there is labor that will accept Uber’s terms, let them. Allow competition. Remove the regulations around taxis having medallions that cost 100k.
They have high taxes instead of regulations. In USA companies are forced to provide all of these benefits to its employees, in Sweden you pay taxes and the government provides them instead. The end result is that companies has to do less and workers don't have to worry about companies trying to trick them into not getting those benefits.
In favour of the vast number of low-paid workers who could really use decent employment benefits.
If the trade-off is that the IT guy billing six-figure sums ends up with a bit less cash in his pocket, because he's required to contribute more to the system that takes care of everyone, well... I won't be losing any sleep over that.
You shouldn’t pervert justice just because someone is poor. If you’re ok with not following justice, but rather an emotional sense of vengeance, then why allow income at all? Let the state provide the needs and have the citizens provide the ability? At some point you either have to admit that you’re ok with theft by the state for the greater good or that you have created some arbitrary line in the sand where theft is not linger okay. The second option is hypocritical, but own that too.
> At some point you either have to admit [...] or that you have created some arbitrary line in the sand
Life in a society is full of arbitrary lines in the sand. When is a person allowed to drink alcohol? Where does your lot of land end and your neighbor's begin? How fast are you allowed to drive on this particular piece of road? Why do you consider the tax rate, of all things, to be so arbitrary?
For a functional society, you have to draw the line somewhere. Ideology instead of pragmatism is a recipe for failure. Being pragmatic is not hypocritical.
I actually want to see most of the lines you cite removed. Property lines are not arbitrary they are contractual. Now where the ruling body politic set those contractual lines might be arbitrary but that is beside the point.
You’ve constructed a straw man. You say your view is practical and mine is idealistic. I say yours is idealistic and mine is practical because mine will allow people to practice more freely.
Equivalently those people on average salaries will tend to think one shouldn't pervert justice to cater for people like us on well above average incomes.
You have designated yourself as a moral authority by sheer force of your existence. I simply explained the benefit and risks of being a contractor. You have decided that I should not be allowed to sell my labor at a rate I and my client accepts.
Some people like the flexibility that a contractor role provides. Forcing everyone to become an employee with benefits adds costs that many places will forego by hiring on only a handful of contractors or removing the role entirely.
The point is that the people who end up "reclassified" as employees by these kind of decisions are people who are already de-facto employees in that they do not have the flexibility that genuine contractors do.
No, I have the flexibility, and I have chosen to work for one client. This new unforeseen interpretation of my business contracts (are you even aware of the ramifications for my financial planning, insurance, etc?) is forcing me into things I don't want to do nor my client is interested in, thus making me less flexible, and forces me to pay for things I am absolutely not interested in.
Where are you that has rules that prevents you from being treated as a contractor if you genuinely have the flexibility?
Most places that force these kind of treatments tends to do so only when people have no ability to set their schedule or no realistic prospect of negotiating terms etc. in ways that makes them indistinguishable from employees.
Most of the time there are ways out of this and/or all that ends up being required is for you to be an employee of your own company rather than exploit tax loopholes that were never intended to be used this way. Eg. this is the case in the UK where the dreaded IR35 closed tax loopholes that let people avoid paying themselves a salary for their contracting and instead cut costs by taking out dividends or making their spouses directors etc.. The change did not in any way stop contracting even for a single client, but it prevented people from using it as a way of avoiding tax.
In most of those instances "forcing you pay for things you're not interested in" boils down to not forcing society to take risks on your behalf because people are using contracting as a means to avoid e.g. social service payments and the like.
I'm sure there are places that are exceptions where some people get caught out, and that's a shame, but most of the time these rules benefit far more people, because of the extensive use of "contracting" as a way for employers to get out of obligations with people who have no effective leverage.
I am in Czechia. I am paying less social security (and am getting proportionally less in return) and exactly the same healthcare insurance as everyone else.
If I was to be an employee, I would (or rather, my employer) be forced to do everything based on the employment law, which has severe restrictions on me as well as on my employer and on the kind of relationship we have, which causes extreme loses to me (as I like to be paid proportionally to returns) + paying more for things I don't want and up until now wasn't required to have.
Because I planned and built my life around being a contractor. I have zero use for and zero interest in any of the "benefits", much less from the government; I want the government to leave me alone to do my business as I want - I am not doing anything wrong. I have built my life as I like it, with my own benefits such as flexible lifestyle, my own hardware and office, and financial freedom, and I don't want anyone to trash my hard work. Who will give me back the lost money and time I would've spent with my family? Who will give me back the opportunities I lost? Why is it always me losing something because of some absolutely unrelated issues like Uber drivers, and why is it always handwaved away with "whatever, you have a little less money, cry me a river"?
Here in Norway it works something like this: if you are a contractor full time for the same company for three years (or is it five?) then you are considered an employee by the tax authorities and the company is required to either drop the contract or take you on as an employee.
I've probably got the details wrong but that's the general idea.
I dont know what people think the result this will be, but I can tell you what will not happen, they will not just magically make all the drivers full time employee's
one or more these things will happen if this stands
1. Hours will be limited to part time only
2. Rates for rides will explode, which will likely cause a reduction in revenue probably to the point to mass layoffs
3. Drivers will have to sign Exclusivity and not be allowed to work for any other RideShare service
4. Drivers will have to work a set schedule, set by uber
I am not saying any of these are necessary bad but it seems to me that many of the people "fighting for employee status" seem to think that a change in that status means everything about the service stays the same but now they get vacation, paid sick time and health insurance.
3 and 4 are all but guaranteed to occur. There is no way Uber is going to let drivers only work 10 hours a week for them if they have to pay them full benefits for it.
2 also seems likely although your phrasing is a bit hyperbolic. There is no doubt this will make the taxi market less efficient resulting in higher prices and fewer rides. I doubt it will result in mass layoffs though. Probably more like 10% of current Uber drivers will have to change careers.
Would a good compromise be if you work less than say 15 hours a week you don’t get all the employee benefits and if you work closer to a full time schedule you do?
I hate the idea of closing it off to people that just want to side income.
If Uber drivers become employees, I'd expect Uber would have them work fixed schedules rather than have free working hours.
They try to incentivize drivers to work during off-hours, but can't specify shifts and have their workers remain classified as ICs.
This would make Uber less useful for the workers that want to dip in for an hour or two.
Net utility from the change might still be positive as I suspect these days most drivers work something closer to full-time / shifts, but I'd want to see more data on this.
> If Uber drivers become employees, I'd expect Uber would have them work fixed schedules rather than have free working hours.
In California, this is one of the tests of whether someone is an independent contractor or an employee — who dictates the hours worked.
I wouldn’t be surprised if this ends up biting many drivers in the hurt. Uber can easily say “You want employee benefits? No problem. We tell you when to work, and you probably won’t like your schedule.”
And the crappy schedule may not be because Uber is being ornery — it may just be when they need drivers.
Bizarre thought experiment: if Uber drivers are employed by Uber; shouldn't independent taxi drivers be employed by the city that licenses them on the same basis?
A significant fraction of taxi drivers (>25%) are self-employed. They own their own vehicles and set their own hours of work.
In many cases, they're actually obliged by the terms of their licenses to take fares (actually less independent than Uber drivers). The fares they charge are set by their licensing authorities, rather than being negotiable.
If the argument is that workers should be treated as employees because of the benefits given to employees (like health care), then you could apply that same argument here. The weird thing for me is to see politicians who advocate for universal health care also advocating for more workers being classified as employees. It seems like one of the big benefits of universal health care is that it decouples heath care and earning money, but I rarely see politicians making that argument.
> Net utility from the change might still be positive as I suspect these days most drivers work something closer to full-time / shifts, but I'd want to see more data on this.
You also have to keep in mind that full time minimum wage jobs are more commonly available in the market than jobs with very high flexibility, so we may want to preserve their availability for people who need that.
That may even be what the people driving full time are after. Even if you're driving 40 hours a week, if it means you get to do it in weird slices around your kids' schedules, that could be worth the lack of benefits.
But require them and you end up scheduled in inflexible 8 hour contiguous blocks and you might as well be working at Walmart.
> If Uber drivers become employees, I'd expect Uber would have them work fixed schedules rather than have free working hours.
That's a weird expectation, because millions of people work jobs as employees without fixed schedules, and in areas with similar rulings, this doesn't happen with gig workers.
That leads to what's "underemployment", and to people working multiple side income jobs as their sole source of income with benefits from none of them.
It's already present at 30 hours a week/130 hours a month in the US.
It doesn't necessarily mean that the market for side income jobs is closed, it just closes those jobs and businesses which are nonviable if they're required to pay their employees a reasonable wage.
> I hate the idea of closing it off to people that just want to side income.
Oftentimes this is a necessary side-effect of what (I believe at least) is good legislation. A minimum wage of $7 might close off a job to less qualified people who want to work for less, but on-net I think is a good policy.
I don't understand how people think like this. It's like a policy that gives to the needy by taking from the even more needy is somehow a good idea.
If you want to help people who can't command high wages, lower their taxes and make it up from people who have more money. Or give them a UBI to much the same effect. Don't take the money out of opportunities for even worse off people, that's ridiculous.
Minimum wages were initially created as a way to price people of color out of the job market. They still disproportionally effect people of color. Creating a floor on earnings prevents a large section of the population from ever getting ANY work experience. If they can't ever get to the first rung of the career ladder they're unlikely to ever get beyond that.
There's some weird obsession of hoping that businesses (or the free market) are going to solve all of the problems of society. That's clearly not the case, but instead of the government stepping in to address those issues, they hope that creating things like earnings floor mandates will solve the problem. Those patchwork implementation generally end up having unintended (or in the case of minimum wages, actually intended and racist) consequences.
By adding a boundary with financial implications, you also incentivize businesses to ensure employees don't cross it.
I don't have a good replacement mechanism that keeps benefits tied to employment and isn't complex and likely prone to other perverse incentives. But at the very least, we should be clear about what the incentives end up being.
Which is why I think the right answer is to decouple things like healthcare from employment.
A possible solution is to have no hard cutoff. Work 5 hours a week? Get 5/40ths of full time benefits. Or something like that. Obviously it's tricky with benefits that are all or nothing, though some of that could be adjusted - for health insurance, this could mean Uber offers to pay a variable portion of the cost based on how much you worked in the last ~3 months. With anything on a strictly proportional scale, there's no obvious financial incentive to keep workers from working the number of hours they want.
Though I agree healthcare is the one thing that would probably be better off not tied to employment.
Even better, just stop having non-cash benefits for employees whatsoever, which would allow them to command higher compensation in cash and then buy whatever "benefits" they want or with it or not.
The entire concept of "benefits" came out of regulatory arbitrage to avoid 20th century wage controls or because of differential tax treatment. It's an anachronism that should cease to exist.
They stop being morons pretty quick after having been bitten though.
Remember: we are in this situation right now with freelancers, gig workers, etc. If you're worried about creating an army of uninsured, they already exist.
They're not, and constantly assuming they are is incredibly patronizing.
And if they are, aren't the people deciding all of these things for everybody also "people"? Clearly then we shouldn't rely on their decisions because people are morons.
> That goes double when it comes to money and health.
So give a tax credit to individuals for having a minimum amount of high deductible health insurance but structure it as a "tax" for not doing so, which triggers loss aversion and causes people to buy it to avoid the "tax". It changes nothing for the people who were already doing the math and it catches the "morons" you were worried about.
Not having employers provide health insurance doesn't necessarily mean a free-for-all.
For example (IIRC) the Swiss system unbundles this, but it's obligatory to buy insurance, so that you are not free to be selfish "moron" (i.e. to pay nothing until you get sick, and then your neighbors pay so as not to have people dying in the gutter).
I mostly agree but there are a lot of caveats here. Health insurance is the biggest one, of course. ACA is better than nothing but it's not great.
The other that comes to mind is life insurance. Some people can't buy individual life insurance at any price due to preexisting conditions but they can get a group policy from their employer (up to certain limits) with no questions asked.
> I mostly agree but there are a lot of caveats here. Health insurance is the biggest one, of course. ACA is better than nothing but it's not great.
It would be better than employer-provided insurance, especially if people weren't being discouraged to buy high deductible plans, because it would cause patients to be price-sensitive for routine non-emergency care, which would bring down overall costs in a major way. (Which is why the ACA doesn't do that -- the industry doesn't want lower costs, because that's their revenue.)
> Some people can't buy individual life insurance at any price due to preexisting conditions but they can get a group policy from their employer (up to certain limits) with no questions asked.
I'm not sure why it's supposed to be a good thing that people can force other people to subsidize their life insurance after the risk of early payout is already known. It's like letting someone's family buy life insurance after they've already died. That's not insurance, it's charity. Insurance is what you get if you bought it before the risk came to light.
I'm having a hard time parsing that bit about health insurance
- "it would be better" - what is "it"?
- "it would cause patients" -again, what is"it" referencing?
> I'm not sure why it's supposed to be a good thing that people can force other people to subsidize their life insurance after the risk of early payout is already known. It's like letting someone's family buy life insurance after they've already died. That's not insurance, it's charity. Insurance is what you get if you bought it before the risk came to light.
This is one of the most callous and uncaring things I’ve ever read on this terrible website. Congratulations.
I truly believe this is the only solution in the long-term. Certainly it looks impossible for individuals to have access to healthcare without employer-negotiated support, but that’s _because_ it’s the status quo and effectively the only current way to get insurance. If we changed the process across the board (e.g. by banning employer-sponsored healthcare), there would be new systems built so individuals could collectively bargain (or do so through a single-payer government system).
Not at all. Uber may discreetly and artificially limit the orders for drivers from their infrastructure (assuming idle or downtime don't count as work hours). Grab, for example, has been known to unilaterally and unfairly reduce the workloads on drivers not affiliated with an exclusive fleet company.
Boundaries should always have constant slopes. The best example I'm familiar with is the benefits that kick in for a US employee who works full time. This results in companies doing a number of actions to get their workers to work near enough to full time without crossing that line. 11 people working 36.5 is much cheaper than 10 working 40.
If the law instead was sloped, offering a partial benefit equal to hours/40, this wouldn't happen. (To avoid creating an incentive for mass overtime, the law would allow for over 100% benefits.)
The gig economy should be nipped in the bud. It's nothing but bad for workers. It lets companies do complete end-runs around employment regulation, with many earning below minimum wage.
Society needs to confront the fact that capitalist control of government has removed the ability for a huge segment of society to care for themselves and their families.
I always ask Uber drivers why they are driving. The reasons are alway to the tune of:
* Part-time (sick family member, needs extra cash, etc)
* He can drive 14h/day and make bank (up to 5 times the minimum wage)
* He is unemployed
* Previously worked a blue collar, minimum wage jog with a shitty boss. Makes almost double minimum wage with no shitty boss
The "suffering of others" isn't caused by the gig economy.
Simply removing the gig economy does nothing to help those in need. It serves only to pat yourself on the back and think you are ridding the world from capitalist oppression.
Focus on removing the suffering of others first, and the gig economy will collapse on its own.
There is huge demand for easy to get unstable jobs, lots of people want these. Not having them removes options from people, they aren't worse than other jobs just different.
I mean, depending on the country in question they are worse than other jobs (namely by not offering healthcare benefits). People trade long-term benefits for short-term profits and the end result is that the tax payer is on the hook for those that slip through the system and need medical care.
All of these laws leading to full employment/benefits seem like a good thing on paper, but I wonder if it will lead to regulatory capture by the existing ride sharing companies, making it impossible for new entrants to join? Also what will be the long term consequences?
Also let's say you didn't want Uber/Lyft/whoever to dictate your working hours, could you reject the full benefits for flexibility?
I'm from São Paulo and I'm embarrassed about this decision. Brazil's labor laws treat the "workers" as stupid people, unable to negotiate good terms by themselves. It's much better for them to have an intermediary - the government! - to handle this, and then pay 50% of everything that you make in taxes for this wonderful protection. It's ridiculous.
>I'm from São Paulo and I'm embarrassed about this decision.
Strange, I'm from Europe and I'm proud of this decision.
>Brazil's labor laws treat the "workers" as stupid people, unable to negotiate good terms by themselves.
No, it just treats them as regular people that deserve the same rights as everyone, but which (as poor people in need of work and individuals) don't have the same negotiating power as a multionational employer to enforce them...
I'm from Brazil and Brazil is one of the most regulated places on Earth regarding labor laws and it costs the country a lot of productivity. You shouldn't assume that every country is like the average European country and thus what's good for Europeans will be good for the rest of the world.
Exactly my thoughts as well. I think we shouldn't be so quick to pass judgement on decisions made in Brazil without hearing the various points of views. I get the impression is that there's a lot of bureaucracy and internal tension in Brazil. Is this getting at all better over time, or is it spiraling out of control?
Spiraling out of control and accelerating. Brazil is dominated by very powerful interest groups, some of them corporate, some of them unions, which lobby for laws mostly in order to ensure they keep their power.
The unions keep wanting stronger labor laws, but these tend to apply in practice only to high-class workers in very unionized professions, while everyone else is lucky to even get a job at all, because the obligations our labor laws create are so insane that most smaller employers need to use legal loopholes just to be able to pay the bills at the end of the month (one of the most common ones is asking workers to open a personal company and paying their company for "services rendered" instead of the worker - labor courts hate this, but they know if they closed the loophole half of the country would be out of a job the next week)
The corporations keep trying to make labor laws weaker, but they tend to do so in ways that screw over the lower-class workers while the high-class, unionized workers are able to maintain most of their privileges.
It's a terrible situation. To make it worse, our legislative representatives and a large part of the electorate are very much infatuated with the (false) idea that our labor laws actually "protect" all workers, which makes it very hard to reform them. They are kind of a sacred cow to a lot of Brazilians. I don't see it getting better any time soon.
(I'm a US-raised Brazilian who currently lives in Brazil, by the way)
As a Brazilian I agree completely. You see, a story told several times is a very powerful thing. And Brazilian people have been told such a story by our government for so long that people not only don't realize how broken the system is, but they fight to protect it.
To quote the best movie ever made:
"You have to understand, most of these people are not ready to be unplugged. And many of them are so inert, so hopelessly dependent on the system that they will fight to protect it."
About our labor laws: They were created by a populist and fascist (I mean in the literal meaning, guy admired Mussolini) government, they are very, VERY, VEEEERY rigid and extreme, to the point Brazil has more "informal" workers than "formal", thing is, "informal" is just euphemism for illegal, basically the labor laws are so bad that most of the population work illegally.
I am 33, and I NEVER, had legal work, never found one, and thus for example I can't get unemployment benefits and many other rights.
Reason for that is these jobs are extremely rare, because it is ludicrously expensive to offer them, in some fields of all money a company spend in personel, 95% go to government (usually it is around 60%).
---
Now the second subject, is Uber relationship with Brazil, basically government so far been very hostile to Uber, and tries everything to screw with them, thing is, Uber (and competitors) here been a blessing, not just because it meant "cheaper cabs", but because it was only thing that could rid of Taxi Mafia.
Here in Brazil we have not only strong medallion laws, but often there are corrupt politicians in the Taxi Mafia, where they find excuses to not grant medallions legally, so they can sell them in exchange of bribes and favors, before Uber existed this got to a point where Taxi drivers would kill competitors on the street for some reasons, for example picking up passengers in an certain area without permission from the Taxi Mafia was a reason for that person to be killed.
This is an dishonest and naive take at Brazilian labor laws.
We were the last country in the Americas to abolish slavery, only 60 years before Vargas created the framework to our current labour laws. Before that there were laws but they were seldom followed.
Of course the laws could use a reform (they are often confusing) but we have many good worker rights that we shouldn't give up.
Don't think he's being dishonest. Vargas was indeed a fascist, and I don't see what our being shamefully late to abolish slavery has to do with our labor laws being good or bad.
Brazil has tons of structural economic problems since its inception ever since the Portuguese came over. Saying the labor laws are to blame is completely wrong.
Most of our labor laws are there for middle-class people to look at them and think "wow, aren't our labor laws great?" while most actual lower-class people can't get jobs that actually follow the labor laws because most people who employ them aren't able to both pay the bills and deal with all the financial obligations and regulatory uncertainty our labor laws create.
>Strange, I'm from Europe and I'm proud of this decision.
It's not strange to us that you Europeans think you know better than us poor stupid little brown people what's better for ourselves. That's your entire history since the 16th Century, assuming yourselves to be the only "civilized" people who should tell everyone else how to live. :)
>It's not strange to us that you Europeans think you know better than us poor stupid little brown people what's better for ourselves.
That's some projecting you're doing there. For one, I'm one of the "brown people Europeans" myself, not the "cool" northern / western ones. And my people had nada to do with the Latin America or Africa or Asia. If anything, we were enslaved ourselves (and part of my country was colonized).
In any case, I don't think I "know better than [you people]". In fact I agree with the law passed by YOUR country - so if anything, I merely think your legislators and fellow citizens who voted for it know better than you do.
Where are you getting 50% from? Everything I can find suggests tax rates in Brazil are below those of most OECD countries, and well below the OECD average for example, and the full tax wedge (which includes employer contributions) average for OECD for every category they report on is below 50% [1].
You are looking at taxes. There is probably more taxes in the form of health insurance / retirement thing. It's incomparable to Europe since in most EU countries you probably get some coverage in return to the money you paid while, in third-world countries, health care is sub-bar or non-existent.
As for retirement, inflation will probably eat that.
The numbers I compared to were the "full tax wedge" numbers which includes social service payments both on the employee AND employer side on top of income taxes. I on purpose picked the category that gives the highest numbers in the OECD report, well above the numbers people will see on their tax returns in most cases.
I'm sure the commenter above was including something else, which is what I'm curious about, given that as far as I can tell the highest marginal federal tax rate I can find is only 27.5%, and average effective rates far lower, but I don't know what other costs people might incur.
If Brazil is in fact a higher tax country than most of the wealthiest countries in the world, I'd love to know more.
Regarding universities, they may be free, but the number of admissions is very, very limited. The competition is very harsh. In reality, most people who are able to get in are those capable of paying for very good schools or preparatory courses, and these courses can be very expensive [0]. Sometimes, people have to try for years before being able to join those universities [1].
When your family is very poor, this situation makes it impossible for the student to keep on trying. Sometimes parents can't keep paying for the preparatory course, or worse, the student may have to forfeit it's dreams of studying in favor of working and helping with household expenses.
As seen in [0], most people studying in free universities are actually in a pretty good financial situation.
Sometimes, people from very poor families manage to study for free, but this is rare and often newsworthy [2].
In my humble opinion, I don't think universities are really free. There are many financial costs associated with studying in a public university.
Sweden places the tax burden on the individual not the corporations. Their Corp tax rat is 21%. The same rate that the Republicans pushed for in the tax change. The difference is the average citizen is taxed at 48% vs the US average of 21.
Really I am not convinced - I know a UK expat (worked for Citi bank) and he was paying well over 15% just for heath care just for him - and his wife already had federal benefits (Something senior in the FBI)
Total tax wedge (which includes taxes paid by the employer) for an average Swedish citizen without children is ~43%. For one with children it is lower.
Total taxes paid by the employee for an average Swede is closer to 25%.
The highest marginal rate for someone on an average salary in Sweden is around 48% for the total tax wedge, but someone on the average is not paying that marginal rate.
For the same categories the total tax wedge for the US is 24%, and the total tax ~18% (for comparison the marginal rate for an average earner in the US in the same category is 40.8%)
If you look at the spreadsheets you will see, for example, the 13th salary included as overhead. It's not overhead: it's part of employee income and goes directly in their pocket.
The 95% figure is for hourly employees and counts worst-case expenses over their raw hourly rate. In every other country vacations (including weekends!) are just counted as employee income and in that spreadsheet it's accounted as some sort of tax. Every country's overhead rate would go up if you accounted things in this absurd way.
The FGTS is a really stupid scheme that should die but ultimately goes into the employee's pocket, so it's also a form of income and not a tax. (It's a kind of mandatory savings account.)
Do you think anyone in Brazil drives for Uber by choice? The Civil Engineers and Lawyers who can't find jobs in their fields? I have a friend who got a masters in Chemical Engineering 5 years ago and to this day sells cupcakes for a living. I know how nice it is to live in this neoliberal bubble of the free market, but I suggest you step outside and take a look at the reality of the country you live in.
> Brazil's labor laws treat the "workers" as stupid people
This has nothing to do with stupidity, intelligence or anything like that. This has to do with leverage. A multi-national giant corporation like Uber has a lot of leverage over Brazilian workers. If Uber treats them like figurative slaves and gives them too little money, workers have very little they can do against this. It is government's responsibility to protect people from this power imbalance. Yes Uber should have a freedom to charge/pay whatever market accepts and workers should have freedom to negotiate their own benefits. But at the same time Uber needs to implement a minimum care for their workers, and if not government should be able to enforce them to do so.
Welcome to brazil, where the middle class is almost bellow poverty line, but they still vote conservative because they dream they will become millionaires overnight, only if they just manage to elect the right-most wing candidate.
You have a 99.99% employee base voting for the interest of the business owners. It's crazy.
They're just doing what they've been told is best for them by Bolsonaro, the same way the largely-impoverished American South votes for Trump. (I assume it's a similar voting block in the UK for Johnson but I haven't looked it up)
That's uncannily accurate in an entirely different manner. Many Brazilians "dream" they will become millionaires if the marxists get in power again, due to hyperinflation.
That's true in the market for e.g. rides, but then that's good, customers get lower prices. Meanwhile their competition in the market for labor is mainly the likes of Walmart and Starbucks. There is no plausible mechanism for Uber to "outcompete" Walmart by offering cheaper rides because Walmart isn't in that line of business to begin with.
I believe that people will take deals that don't benefit them. But that's not the point here. The numbers are made up, but say Uber makes 10$ per ride and the driver makes 10$ per ride.
If the drivers get together, they might be able to negotiate 15$ per ride, leaving 5$ per ride for Uber. However, it might be hard for the people to do that, so the government can step in to improve conditions for riders by negotiating for them as a block.
All of this labor theory only applies when you're negotiating with a monopolist. Otherwise the company already has thin margins as a result of needing to compete with other companies -- remember all that stuff about Uber losing money? -- and there is little more they can give you without trading it against something else you want, like flexibility or number of hours.
The primary way they could pay drivers more is by charging higher fares. But then there is lower demand for rides, so they need fewer drivers, so some of the drivers lose their jobs. If you think that's a good trade off then take it now -- quit and go do something else. It will cause the remaining drivers to be able to command higher compensation.
Everybody wants to be the one to get paid more and not the one who loses their job, but some of them will necessarily be wrong.
Given that people fall for scams that take money in return for a fake promise of employment, yes, I do.
Aside from that, what is your limiting principle? Where is the power imbalance line between an employer and employee too much for this principle to bear?
It doesn’t exist. The people would stop working for the employer. They would work in other business. Perhaps work for those in direct competition to The Employer. The Employer would go out of business.
This is the kind of libertarian drivel I thought would be out of fashion by now. This isn't the naive early 2000s internet anymore. In the real world labor markets are not perfectly competitive, from non-compete clauses, to no-poaching agreements, to skillset mismatches, to a dozen other major factors increasing employer market power.
You’re right. The government puts restrictions on businesses that give established entities a competitive advantage. The government could end non competes. Some have. I’m not for no government. I’m for government of, for and by the people. Corporations are not and never will be people. They are contracting entities.
Except rampant inequality enforces the power imbalance between the prospective employer and employee. Even without protection from competitors, established players will crush or absorb competition.
This listing overlooks one of the biggest imbalances that lots of folks seem to overlook: employer monopsony. There are big chunks of the country where one dominant employer effectively controls employment, either directly or indirectly through the ability to pressure suppliers. Piss off the wrong person and you have a problem.
Of course, people born in those places can theoretically vote with their feet, although most people seem to find that much easier said than done.
We are essentially on the same page. I was specifically responding to 'darwinwhy' . Infact I want employees to break non-compete agreements if they can get away with it because of it's somewhat inherent unfairness.
>workers should have freedom to negotiate their own benefits
This is likely where the comment of laws treating the workers as stupid people comes from - Brazilian labour laws are very rigid with an amazing amount of restrictions around negotiating different benefits, working hours, etc. If, however, you earn a higher salary then you fit into a different category of labour laws and are allowed more flexibility. The thinking seems to be "if you earn under this amount you probably didn't receive a good enough education to know what is good for you". Sometimes that may be true, but it is a very dangerous line of thinking.
Disclaimer: I work for Uber and I'm brazilian. Opinions are my own, etc.
What the GP is criticizing is that they see this as a power move to increase government income through taxes. The underbrush is that this money is then stolen by corrupt government officials (it's common perception in brazil that that's just the way the brazilian government works).
In this light, Uber is just the sucker-du-jour who gets to be "screwed over" in the latest corruption ploy.
Uber's perspective in this type of matter is that there are a large number of drivers who don't do ridesharing full time or even on a consistent part time basis (for example, one's free to do it once or twice ever). An apt comparison might be someone who sells stuff on craigslist - yes you can do it full time, but people often do it for just extra cash, without considering it a "job" per se. So you can see why Uber might not like to restrict driving opportunities only to those who are willing to commit to a full-time employment arrangement.
With all this said, I'm all for having drivers who are effectively working full time hours to be able to earn a reasonable income. I'm not too familiar w/ the state of lobbying in Brazil, but my understanding is that Uber is going to be lobbying in the US for a third employment category and one of the talking points of that proposal is to work towards income improvements for drivers. The position that drivers are not employees goes both ways: if they are considered Uber's clients, it behooves that Uber should do its darn best to provide the platform with the best payouts in the industry, lest drivers would flock to a better paying competitor.
I would love to see a single cite of a successful negotiation by a driver with ride-sharing services regarding matters of pay or pricing. Negotiation is not possible in contracts of adhesion.
wow!! slow down. you being from sao paulo, doesn't mean anything in the rights of workers. your comment would've been relevant, if you were an uber driver in sao paolo. but yeah gvt protections are very much needed in every country to protect the hoi polloi against corporations.
There's a massive power asymmetry between a mega international corporation and an individual.
It has nothing to do with 'intelligence' or 'competence'.
Surpluses go to the power. If employees had power, they'd be able to 'negotiate' better terms on their own, they never well.
At the 'low end' of the labour market, we have to have some kind of regulations or else they would get paid the 'bare minimum to survive' and an entire economy of accommodation, food, services would pop up around that system. Maybe like favelas?
So the issue is: 'where do we draw the line?' - which is really hard.
>Brazil's labor laws treat the "workers" as stupid people, unable to negotiate good terms by themselves.
Hmm, ok that's quite a view. I would say that nearly all works are certainly unable to negotiate good terms by themselves.
The only workers that can negotiate their own terms are the small minority that are very highly skilled and in demand... laws like this are trying to help the vast vast majority who have NO power because the employer can just replace them with anyone else at the drop of a hat.
Well that's hardly a surprise. At this point idk why anyone would assume Uber wouldn't at least take a cut, if not the whole thing. Look how they treat drivers any other time.
Just to put this in context, this is a first instance ruling. There were dozens of those already in Brazil, but they are all reverted in upper instances because the supreme Labour Court has already decided they are not employees (Brazilian labour laws have very specific requirements to be considered so and Uber drivers definitely fail a couple of those objective requirements).
I understand that there is a need to protect those drivers (and other gig economy workers), but trying to bend the law's definition is not the right way to do it. This will get reversed as all other cases did.
In Brazil the worker protections laws are very, VERY regid, and Uber is not bending them, what they do literally fits our legal definition of contract work.
That said... our laws get bent a lot, specially by tech companies, for example often I see offers for "Flexi" jobs, that is euphemism for registering the worker legally in one job, but paying him outside the legal framework for another job, this is obviously illegal, but is wildly popular, because our labor laws are waaaaaay too much.
The law establishes that to be considered an employee/employer relationship, there needs to be a level of control from the employee's journey/hours, etc.
That control simply does not exist between Uber and Uber drivers and that is why it is considered that they fail the legal employee definition.
Obviously there is disagreement, as with everything in Law, but in this case you really need to bend the definition to make it fit the requirement.
As I said before, I fully agree that Uber drivers and other gig workers need some protection, but I also fully agree with the ruling that they do not fit the current legal objective definition of a employee/employer relationship. It simply does not.
We need new laws for those cases, or to change the legal definition (which is unlikely). Judges giving those rulings is basically having judges creating laws, which is not how it is supposed to be (by the way, Brazil does not have Common Law, so other rulings do not have the same power as in US/UK and other Common Law states).
Is there a reason that the (lower?) courts would keep producing these rulings if the supreme Labour Court has already made the issue clear? Do the judges at those lower courts have reason to believe each case is meaningfully different?
They just do not agree with the Superior court's decision, so they keep giving those rulings knowing full well they will be reverted.
Labour Justice is its own court in Brazil. They have their own structure that only judges labour issues and they are usually very protective of employees. My guess is that this is just a form of protest by the first instance judges that do not agree with the ruling.
This, unfortunately, is very common in Labour cases in Brazil (at least it was when I stopped being a lawyer there about 3 years ago).
Doesn't this move hurt ride seekers in under-served areas? If every driver now has fixed cost for Uber, each driver needs to be scheduled and positioned to maximize Uber's revenue. A driver's health insurance costs the same whether the driver is driving during prime hours or at 3 in the morning. Uber has every incentive to not schedule many drivers off hours. For riders this mean either no ride or a very high-cost ride, whereas before Uber had no problem with letting as many drivers who wanted drive whenever they wanted.
There's another advantage: large employers have huge bargaining power compared to individual employees, so a dollar just goes farther when the employer spends it.
184 comments
[ 3.6 ms ] story [ 194 ms ] threadGiven that São Paulo is a key City for Uber, according their prospectus Sampa is the second most active city This will be a long ongoing legal battle.
[1] https://news.ycombinator.com/item?id=23713582
Aside from relying on data collected in a specific locality not under discussion, it doesn't appear to make any sort of assertion regarding what drivers want, contrary to your claim on its behalf. Where are you getting that information? You should cite your sources, so others in the conversation can evaluate them independent of the claims you make for them.
[1] https://digitalcommons.ilr.cornell.edu/reports/71/
Which was funded by the rideshare companies themselves and which has been heavily criticized for its methods, it should be pointed out.
10 drivers working 1 hour a week contribute less to the platform than 1 driver working 40 hours a week. The study should adjust for the amount of time drivers are on the platform and not just sheer number of drivers. Just counting drivers seems an obviously flawed approach designed to make the part time count seem high.
> "Uber and Lyft covered the costs of the study [...] The study was priced as cost-plus, which covered the costs of the research plus overhead to the university. In total, study costs came to $120,000. [...] Driver earnings for all of our analyses came directly from Lyft and Uber. "
Yeah, real convincing.
[1] https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?a...
Also the social impact is different in different countries. Brazil is the only developing country in the list above. I live in São Paulo, and I can say before Uber, taxi cabs were a thing for rich people. Uber and it's competitors drove costs so low, poor people can now aford rides. I didn't find Sao Paulo stats, but in Rio, app drivers are 3x the number of cab drivers[2].
Uber estimates 1.9mi users might not be able to afford anymore if the law passes, amongst many other claims [3].
[1]: I won't pick specific sources, search 'custo brazil' if you are interested [2]: https://oglobo.globo.com/rio/pesquisa-mostra-que-aplicativos... [3]: https://www.uol.com.br/tilt/noticias/redacao/2020/03/09/nova...
If the financial model is unsustainable because of employment law and the costs required by the law, the business is fundamentally flawed and unsustainable.
This is the most important question!
Is there a way, inside the brazilian legislation, to give them full workers rights but keeping the pricing per km rather than hour?
There really should be...
Sampa is a nickname for the city of São Paulo, in case anyone was slightly confused.
Uber is trying to weasel out of this in Switzerland by letting drivers set price but it won't fly.
Depending on companies to self govern is not sustainable even if Uber does not exploit this, the next company will. Such loopholes need to be closed, putting on pressure on some companies is just band aid if they actually change, if not just effort wasted on the wrong thing.
I don't buy regulatory capture as a valid argument either.
To make sure companies do the right thing strong regulations and laws need to be in place, to make sure regulatory bodies and lawmakers are not influenced, people should have more power in government than money does.
Mainly, I do not find it very genuine that they only implemented this policy, likely with extra effort, in one territory. This feels like a play to capture market share and increase growth, even if it doesn't match their existing business model.
Uber and the like claim the workers choose when to work, how much, whether to accept gigs etc. But this is part of the problem: offering gigs at a set rate as take it or leave it is insufficient control. A real contractor would be able to negotiate and adjust this rate.
Uber drivers are employees delivering services core to the function of the business.
Isn't it already built into the system though? If no one drives, surge pricing goes up until someone accepts the ride.
Honestly I see no way individual workers setting the price wouldn't lead to lower prices than you see now. Drivers would have the option to either sit and make 0 money or cut their rate by 10 cents and make some money. The way Uber sets prices pretty much mandates a minimum. If the minimum doesn't cover your maintenance costs, you shouldn't be driving for Uber.
Uber maintains its business isn't transportation - it's facilitating a market place for transportation. Nonsense, say its detractors, you're running a car service.
It's clear that Uber has gotten into some activities that undermine its own story, like loans for drivers to buy cars and insurance.
It's also clear that Uber drivers don't look like regular employees in many ways - like: they decide their own hours; they can refuse trips; they can contract with other, competing ride-share companies simultaneously.
I don't know how people generate certainty in their opinions on this topic.
You don't tell the person building your home how many employees he's allowed to have, and how new his tools must be.
To be clear, I agree with everything you’re saying. However, if I say I’m willing to pay $100 for a website and will deny all counteroffers, is the person who I hire to make my website a contractor or an employee?
So I bill for about 200k USD. My wife gets our medical insurance. I take home about 140k after taxes. If I were an employee, I’d only take home 100k after taxes.
That sounds like a recipe for a race to the bottom that ends in Dickensian sweatshops.
When I think of markets with "as little regulation as possible", Denmark and Sweden don't really cross my mind...
If the trade-off is that the IT guy billing six-figure sums ends up with a bit less cash in his pocket, because he's required to contribute more to the system that takes care of everyone, well... I won't be losing any sleep over that.
Life in a society is full of arbitrary lines in the sand. When is a person allowed to drink alcohol? Where does your lot of land end and your neighbor's begin? How fast are you allowed to drive on this particular piece of road? Why do you consider the tax rate, of all things, to be so arbitrary?
For a functional society, you have to draw the line somewhere. Ideology instead of pragmatism is a recipe for failure. Being pragmatic is not hypocritical.
You’ve constructed a straw man. You say your view is practical and mine is idealistic. I say yours is idealistic and mine is practical because mine will allow people to practice more freely.
Cry me a river. There are tech workers barely getting by because they're being forced into being considered "contractors".
Most places that force these kind of treatments tends to do so only when people have no ability to set their schedule or no realistic prospect of negotiating terms etc. in ways that makes them indistinguishable from employees.
Most of the time there are ways out of this and/or all that ends up being required is for you to be an employee of your own company rather than exploit tax loopholes that were never intended to be used this way. Eg. this is the case in the UK where the dreaded IR35 closed tax loopholes that let people avoid paying themselves a salary for their contracting and instead cut costs by taking out dividends or making their spouses directors etc.. The change did not in any way stop contracting even for a single client, but it prevented people from using it as a way of avoiding tax.
In most of those instances "forcing you pay for things you're not interested in" boils down to not forcing society to take risks on your behalf because people are using contracting as a means to avoid e.g. social service payments and the like.
I'm sure there are places that are exceptions where some people get caught out, and that's a shame, but most of the time these rules benefit far more people, because of the extensive use of "contracting" as a way for employers to get out of obligations with people who have no effective leverage.
If I was to be an employee, I would (or rather, my employer) be forced to do everything based on the employment law, which has severe restrictions on me as well as on my employer and on the kind of relationship we have, which causes extreme loses to me (as I like to be paid proportionally to returns) + paying more for things I don't want and up until now wasn't required to have.
I've probably got the details wrong but that's the general idea.
one or more these things will happen if this stands
1. Hours will be limited to part time only
2. Rates for rides will explode, which will likely cause a reduction in revenue probably to the point to mass layoffs
3. Drivers will have to sign Exclusivity and not be allowed to work for any other RideShare service
4. Drivers will have to work a set schedule, set by uber
I am not saying any of these are necessary bad but it seems to me that many of the people "fighting for employee status" seem to think that a change in that status means everything about the service stays the same but now they get vacation, paid sick time and health insurance.
That is very very unlikely to be the result
> 4. Drivers will have to work a set schedule, set by uber
> 1. Hours will be limited to part time only
This undermines Uber's contractor argument, I also doubt they would do this.
So yes today Uber, as contractors, will not do that, the second the law requires them to be classified as employees then they will
2 also seems likely although your phrasing is a bit hyperbolic. There is no doubt this will make the taxi market less efficient resulting in higher prices and fewer rides. I doubt it will result in mass layoffs though. Probably more like 10% of current Uber drivers will have to change careers.
Overall, this is a net harm for drivers.
I hate the idea of closing it off to people that just want to side income.
They try to incentivize drivers to work during off-hours, but can't specify shifts and have their workers remain classified as ICs.
This would make Uber less useful for the workers that want to dip in for an hour or two.
Net utility from the change might still be positive as I suspect these days most drivers work something closer to full-time / shifts, but I'd want to see more data on this.
In California, this is one of the tests of whether someone is an independent contractor or an employee — who dictates the hours worked.
I wouldn’t be surprised if this ends up biting many drivers in the hurt. Uber can easily say “You want employee benefits? No problem. We tell you when to work, and you probably won’t like your schedule.”
And the crappy schedule may not be because Uber is being ornery — it may just be when they need drivers.
A significant fraction of taxi drivers (>25%) are self-employed. They own their own vehicles and set their own hours of work.
In many cases, they're actually obliged by the terms of their licenses to take fares (actually less independent than Uber drivers). The fares they charge are set by their licensing authorities, rather than being negotiable.
You also have to keep in mind that full time minimum wage jobs are more commonly available in the market than jobs with very high flexibility, so we may want to preserve their availability for people who need that.
That may even be what the people driving full time are after. Even if you're driving 40 hours a week, if it means you get to do it in weird slices around your kids' schedules, that could be worth the lack of benefits.
But require them and you end up scheduled in inflexible 8 hour contiguous blocks and you might as well be working at Walmart.
That's a weird expectation, because millions of people work jobs as employees without fixed schedules, and in areas with similar rulings, this doesn't happen with gig workers.
It's already present at 30 hours a week/130 hours a month in the US.
It doesn't necessarily mean that the market for side income jobs is closed, it just closes those jobs and businesses which are nonviable if they're required to pay their employees a reasonable wage.
Oftentimes this is a necessary side-effect of what (I believe at least) is good legislation. A minimum wage of $7 might close off a job to less qualified people who want to work for less, but on-net I think is a good policy.
If you want to help people who can't command high wages, lower their taxes and make it up from people who have more money. Or give them a UBI to much the same effect. Don't take the money out of opportunities for even worse off people, that's ridiculous.
There's some weird obsession of hoping that businesses (or the free market) are going to solve all of the problems of society. That's clearly not the case, but instead of the government stepping in to address those issues, they hope that creating things like earnings floor mandates will solve the problem. Those patchwork implementation generally end up having unintended (or in the case of minimum wages, actually intended and racist) consequences.
I don't have a good replacement mechanism that keeps benefits tied to employment and isn't complex and likely prone to other perverse incentives. But at the very least, we should be clear about what the incentives end up being.
Which is why I think the right answer is to decouple things like healthcare from employment.
Though I agree healthcare is the one thing that would probably be better off not tied to employment.
The entire concept of "benefits" came out of regulatory arbitrage to avoid 20th century wage controls or because of differential tax treatment. It's an anachronism that should cease to exist.
People are, in the large, morons. That goes double when it comes to money and health.
Remember: we are in this situation right now with freelancers, gig workers, etc. If you're worried about creating an army of uninsured, they already exist.
They're not, and constantly assuming they are is incredibly patronizing.
And if they are, aren't the people deciding all of these things for everybody also "people"? Clearly then we shouldn't rely on their decisions because people are morons.
> That goes double when it comes to money and health.
So give a tax credit to individuals for having a minimum amount of high deductible health insurance but structure it as a "tax" for not doing so, which triggers loss aversion and causes people to buy it to avoid the "tax". It changes nothing for the people who were already doing the math and it catches the "morons" you were worried about.
Not having employers provide health insurance doesn't necessarily mean a free-for-all.
For example (IIRC) the Swiss system unbundles this, but it's obligatory to buy insurance, so that you are not free to be selfish "moron" (i.e. to pay nothing until you get sick, and then your neighbors pay so as not to have people dying in the gutter).
The other that comes to mind is life insurance. Some people can't buy individual life insurance at any price due to preexisting conditions but they can get a group policy from their employer (up to certain limits) with no questions asked.
It would be better than employer-provided insurance, especially if people weren't being discouraged to buy high deductible plans, because it would cause patients to be price-sensitive for routine non-emergency care, which would bring down overall costs in a major way. (Which is why the ACA doesn't do that -- the industry doesn't want lower costs, because that's their revenue.)
> Some people can't buy individual life insurance at any price due to preexisting conditions but they can get a group policy from their employer (up to certain limits) with no questions asked.
I'm not sure why it's supposed to be a good thing that people can force other people to subsidize their life insurance after the risk of early payout is already known. It's like letting someone's family buy life insurance after they've already died. That's not insurance, it's charity. Insurance is what you get if you bought it before the risk came to light.
This is one of the most callous and uncaring things I’ve ever read on this terrible website. Congratulations.
If the law instead was sloped, offering a partial benefit equal to hours/40, this wouldn't happen. (To avoid creating an incentive for mass overtime, the law would allow for over 100% benefits.)
Society needs to confront the fact that capitalist control of government has removed the ability for a huge segment of society to care for themselves and their families.
If the gig economy cannot compete on a level playing field, keeping the benefits stable, it is just a race to the bottom.
I always ask Uber drivers why they are driving. The reasons are alway to the tune of:
* Part-time (sick family member, needs extra cash, etc) * He can drive 14h/day and make bank (up to 5 times the minimum wage) * He is unemployed * Previously worked a blue collar, minimum wage jog with a shitty boss. Makes almost double minimum wage with no shitty boss
The "suffering of others" isn't caused by the gig economy.
Simply removing the gig economy does nothing to help those in need. It serves only to pat yourself on the back and think you are ridding the world from capitalist oppression.
Focus on removing the suffering of others first, and the gig economy will collapse on its own.
At least that's how it functions in the US.
Abolishing slavery certainly nipped the plantation economy in the bud, pretty certain that was a good thing though.
Also let's say you didn't want Uber/Lyft/whoever to dictate your working hours, could you reject the full benefits for flexibility?
There were dozens of rulings like this in Brazil already. They all got reversed in upper instances.
Strange, I'm from Europe and I'm proud of this decision.
>Brazil's labor laws treat the "workers" as stupid people, unable to negotiate good terms by themselves.
No, it just treats them as regular people that deserve the same rights as everyone, but which (as poor people in need of work and individuals) don't have the same negotiating power as a multionational employer to enforce them...
The unions keep wanting stronger labor laws, but these tend to apply in practice only to high-class workers in very unionized professions, while everyone else is lucky to even get a job at all, because the obligations our labor laws create are so insane that most smaller employers need to use legal loopholes just to be able to pay the bills at the end of the month (one of the most common ones is asking workers to open a personal company and paying their company for "services rendered" instead of the worker - labor courts hate this, but they know if they closed the loophole half of the country would be out of a job the next week)
The corporations keep trying to make labor laws weaker, but they tend to do so in ways that screw over the lower-class workers while the high-class, unionized workers are able to maintain most of their privileges.
It's a terrible situation. To make it worse, our legislative representatives and a large part of the electorate are very much infatuated with the (false) idea that our labor laws actually "protect" all workers, which makes it very hard to reform them. They are kind of a sacred cow to a lot of Brazilians. I don't see it getting better any time soon.
(I'm a US-raised Brazilian who currently lives in Brazil, by the way)
"You have to understand, most of these people are not ready to be unplugged. And many of them are so inert, so hopelessly dependent on the system that they will fight to protect it."
About our labor laws: They were created by a populist and fascist (I mean in the literal meaning, guy admired Mussolini) government, they are very, VERY, VEEEERY rigid and extreme, to the point Brazil has more "informal" workers than "formal", thing is, "informal" is just euphemism for illegal, basically the labor laws are so bad that most of the population work illegally.
I am 33, and I NEVER, had legal work, never found one, and thus for example I can't get unemployment benefits and many other rights.
Reason for that is these jobs are extremely rare, because it is ludicrously expensive to offer them, in some fields of all money a company spend in personel, 95% go to government (usually it is around 60%).
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Now the second subject, is Uber relationship with Brazil, basically government so far been very hostile to Uber, and tries everything to screw with them, thing is, Uber (and competitors) here been a blessing, not just because it meant "cheaper cabs", but because it was only thing that could rid of Taxi Mafia.
Here in Brazil we have not only strong medallion laws, but often there are corrupt politicians in the Taxi Mafia, where they find excuses to not grant medallions legally, so they can sell them in exchange of bribes and favors, before Uber existed this got to a point where Taxi drivers would kill competitors on the street for some reasons, for example picking up passengers in an certain area without permission from the Taxi Mafia was a reason for that person to be killed.
We were the last country in the Americas to abolish slavery, only 60 years before Vargas created the framework to our current labour laws. Before that there were laws but they were seldom followed.
Of course the laws could use a reform (they are often confusing) but we have many good worker rights that we shouldn't give up.
Brazil has tons of structural economic problems since its inception ever since the Portuguese came over. Saying the labor laws are to blame is completely wrong.
Most of our labor laws are there for middle-class people to look at them and think "wow, aren't our labor laws great?" while most actual lower-class people can't get jobs that actually follow the labor laws because most people who employ them aren't able to both pay the bills and deal with all the financial obligations and regulatory uncertainty our labor laws create.
It's not strange to us that you Europeans think you know better than us poor stupid little brown people what's better for ourselves. That's your entire history since the 16th Century, assuming yourselves to be the only "civilized" people who should tell everyone else how to live. :)
That's some projecting you're doing there. For one, I'm one of the "brown people Europeans" myself, not the "cool" northern / western ones. And my people had nada to do with the Latin America or Africa or Asia. If anything, we were enslaved ourselves (and part of my country was colonized).
In any case, I don't think I "know better than [you people]". In fact I agree with the law passed by YOUR country - so if anything, I merely think your legislators and fellow citizens who voted for it know better than you do.
Maybe you should colonize them again and enlighten them of your correct perspective.
Employers typically have way more financial and legal ability to negotiate themselves a better position versus one individual employee.
[1] OECD numbers are available from OECD's Taxing Wages 2020 report: https://www.oecd.org/tax/taxing-wages-20725124.htm
As for retirement, inflation will probably eat that.
I'm sure the commenter above was including something else, which is what I'm curious about, given that as far as I can tell the highest marginal federal tax rate I can find is only 27.5%, and average effective rates far lower, but I don't know what other costs people might incur.
If Brazil is in fact a higher tax country than most of the wealthiest countries in the world, I'd love to know more.
Universities are also free.
When your family is very poor, this situation makes it impossible for the student to keep on trying. Sometimes parents can't keep paying for the preparatory course, or worse, the student may have to forfeit it's dreams of studying in favor of working and helping with household expenses.
As seen in [0], most people studying in free universities are actually in a pretty good financial situation.
Sometimes, people from very poor families manage to study for free, but this is rare and often newsworthy [2].
In my humble opinion, I don't think universities are really free. There are many financial costs associated with studying in a public university.
[0] http://www.brasil-economia-governo.org.br/2016/06/15/como-as... [1] https://g1.globo.com/pb/paraiba/noticia/2020/01/29/paraibano... [2] https://diariodonordeste.verdesmares.com.br/metro/estudante-...
Source: http://www.guiatrabalhista.com.br/tematicas/custostrabalhist...
[0]: https://papayaglobal.com/countrypedia/country/brazil/
[1]: https://papayaglobal.com/countrypedia/country/sweden/
> and then pay 50% of everything that you make in taxes for this wonderful protection
For non-salary labour costs to make up a large amount relative to salary is a very, very different argument.
Total taxes paid by the employee for an average Swede is closer to 25%.
The highest marginal rate for someone on an average salary in Sweden is around 48% for the total tax wedge, but someone on the average is not paying that marginal rate.
For the same categories the total tax wedge for the US is 24%, and the total tax ~18% (for comparison the marginal rate for an average earner in the US in the same category is 40.8%)
Source: OECD Taxing Wages 2020
The 95% figure is for hourly employees and counts worst-case expenses over their raw hourly rate. In every other country vacations (including weekends!) are just counted as employee income and in that spreadsheet it's accounted as some sort of tax. Every country's overhead rate would go up if you accounted things in this absurd way.
The FGTS is a really stupid scheme that should die but ultimately goes into the employee's pocket, so it's also a form of income and not a tax. (It's a kind of mandatory savings account.)
Income taxes disproportionately hit labor in a world were capital is becoming more and more concentrated.
> and then pay 50% of everything that you make in taxes for this wonderful protection
about employees.
I don't see how corporation tax is relevant to that.
> Brazil's labor laws treat the "workers" as stupid people
This has nothing to do with stupidity, intelligence or anything like that. This has to do with leverage. A multi-national giant corporation like Uber has a lot of leverage over Brazilian workers. If Uber treats them like figurative slaves and gives them too little money, workers have very little they can do against this. It is government's responsibility to protect people from this power imbalance. Yes Uber should have a freedom to charge/pay whatever market accepts and workers should have freedom to negotiate their own benefits. But at the same time Uber needs to implement a minimum care for their workers, and if not government should be able to enforce them to do so.
Welcome to brazil, where the middle class is almost bellow poverty line, but they still vote conservative because they dream they will become millionaires overnight, only if they just manage to elect the right-most wing candidate.
You have a 99.99% employee base voting for the interest of the business owners. It's crazy.
If people continue to drive for Uber, doesn't that mean the app is still a net positive for them, or do you believe people would pay to work?
Your comment is a great example of what the parent comment is saying, the belief that people are too damn dumb and they need protection.
This is by definition the opposite of what "outcompeted" means.
If the drivers get together, they might be able to negotiate 15$ per ride, leaving 5$ per ride for Uber. However, it might be hard for the people to do that, so the government can step in to improve conditions for riders by negotiating for them as a block.
The primary way they could pay drivers more is by charging higher fares. But then there is lower demand for rides, so they need fewer drivers, so some of the drivers lose their jobs. If you think that's a good trade off then take it now -- quit and go do something else. It will cause the remaining drivers to be able to command higher compensation.
Everybody wants to be the one to get paid more and not the one who loses their job, but some of them will necessarily be wrong.
Given that people fall for scams that take money in return for a fake promise of employment, yes, I do.
Aside from that, what is your limiting principle? Where is the power imbalance line between an employer and employee too much for this principle to bear?
Of course, people born in those places can theoretically vote with their feet, although most people seem to find that much easier said than done.
https://obamawhitehouse.archives.gov/sites/default/files/pag...
This is likely where the comment of laws treating the workers as stupid people comes from - Brazilian labour laws are very rigid with an amazing amount of restrictions around negotiating different benefits, working hours, etc. If, however, you earn a higher salary then you fit into a different category of labour laws and are allowed more flexibility. The thinking seems to be "if you earn under this amount you probably didn't receive a good enough education to know what is good for you". Sometimes that may be true, but it is a very dangerous line of thinking.
What the GP is criticizing is that they see this as a power move to increase government income through taxes. The underbrush is that this money is then stolen by corrupt government officials (it's common perception in brazil that that's just the way the brazilian government works).
In this light, Uber is just the sucker-du-jour who gets to be "screwed over" in the latest corruption ploy.
Uber's perspective in this type of matter is that there are a large number of drivers who don't do ridesharing full time or even on a consistent part time basis (for example, one's free to do it once or twice ever). An apt comparison might be someone who sells stuff on craigslist - yes you can do it full time, but people often do it for just extra cash, without considering it a "job" per se. So you can see why Uber might not like to restrict driving opportunities only to those who are willing to commit to a full-time employment arrangement.
With all this said, I'm all for having drivers who are effectively working full time hours to be able to earn a reasonable income. I'm not too familiar w/ the state of lobbying in Brazil, but my understanding is that Uber is going to be lobbying in the US for a third employment category and one of the talking points of that proposal is to work towards income improvements for drivers. The position that drivers are not employees goes both ways: if they are considered Uber's clients, it behooves that Uber should do its darn best to provide the platform with the best payouts in the industry, lest drivers would flock to a better paying competitor.
I would love to see a single cite of a successful negotiation by a driver with ride-sharing services regarding matters of pay or pricing. Negotiation is not possible in contracts of adhesion.
There's a massive power asymmetry between a mega international corporation and an individual.
It has nothing to do with 'intelligence' or 'competence'.
Surpluses go to the power. If employees had power, they'd be able to 'negotiate' better terms on their own, they never well.
At the 'low end' of the labour market, we have to have some kind of regulations or else they would get paid the 'bare minimum to survive' and an entire economy of accommodation, food, services would pop up around that system. Maybe like favelas?
So the issue is: 'where do we draw the line?' - which is really hard.
Hmm, ok that's quite a view. I would say that nearly all works are certainly unable to negotiate good terms by themselves.
The only workers that can negotiate their own terms are the small minority that are very highly skilled and in demand... laws like this are trying to help the vast vast majority who have NO power because the employer can just replace them with anyone else at the drop of a hat.
It does so via push notifications in India, so does its rival Ola but news report says that funds weren't distributed to the drivers properly[1].
[1]https://www.huffingtonpost.in/entry/uber-ola-hyped-relief-fu...
I understand that there is a need to protect those drivers (and other gig economy workers), but trying to bend the law's definition is not the right way to do it. This will get reversed as all other cases did.
That said... our laws get bent a lot, specially by tech companies, for example often I see offers for "Flexi" jobs, that is euphemism for registering the worker legally in one job, but paying him outside the legal framework for another job, this is obviously illegal, but is wildly popular, because our labor laws are waaaaaay too much.
The law establishes that to be considered an employee/employer relationship, there needs to be a level of control from the employee's journey/hours, etc.
That control simply does not exist between Uber and Uber drivers and that is why it is considered that they fail the legal employee definition.
Obviously there is disagreement, as with everything in Law, but in this case you really need to bend the definition to make it fit the requirement.
As I said before, I fully agree that Uber drivers and other gig workers need some protection, but I also fully agree with the ruling that they do not fit the current legal objective definition of a employee/employer relationship. It simply does not.
We need new laws for those cases, or to change the legal definition (which is unlikely). Judges giving those rulings is basically having judges creating laws, which is not how it is supposed to be (by the way, Brazil does not have Common Law, so other rulings do not have the same power as in US/UK and other Common Law states).
Labour Justice is its own court in Brazil. They have their own structure that only judges labour issues and they are usually very protective of employees. My guess is that this is just a form of protest by the first instance judges that do not agree with the ruling.
This, unfortunately, is very common in Labour cases in Brazil (at least it was when I stopped being a lawyer there about 3 years ago).
The advantage, though, to the employer paying them is they are paid out of the employee's pre-tax income.