This was the killer feature for those too young to remember a life before Uber. Back when I used to drink at bars it was so frustrating to call different cab companies and have them all say they're "5 minutes away." I felt and continue to feel no sorrow for those cab companies that Uber decimated.
I also remember the extremely poor customer service provided by taxi cabs. Dirty cars, rude drivers who acted as if they were doing you a favor instead of engaging in a business transaction. The taxi cartels are no better than Uber and Lyft corporations for sure.
Right. Because taxis don't typically operate at a loss. Whether it's laws like the ones in California or it's just Uber and Lyft having to be profitable, I have little doubt that you'll see large price increases. I actually don't really understand why they haven't just bitten the bullet and done so before now.
Or not being able to get a cab because you're going to a place they don't want to drive (it was way more common in NYC before Uber for a cabbie to ask where you're going before you get in), or the driver doesn't like something about your look (clothing, group, color, etc), etc.
Definitely sucks for the driver. If this new proposition they have cooked up does indeed fail to pass, I suspect they will come up with some sort of "innovation" that will allow them to operate their service with employees collecting W2s. Most likely in the form of a higher price for users.
If Uber hasn't been preparing internally for the possibility of losing this suit, they've been irresponsible in the hopes that California would go "oh shit, they're gonna shoot the hostage".
The drivers (and customers) are the hostages. Uber should've been spending the last few months preparing for the possibility of this ruling being enforced. (I suspect they have been, and "oh we'll have to shut down!" is a negotiating tactic.)
Yeah, I’m totally with the drivers on this. Far too often “disruption” actually is a very predatory undertaking, with far too little benefit to society. The organizations behind this are typically very low on FTE, and maximizing shareholder value and profits and “democratizing” the suppliers (ie a race to the bottom for the drivers).
You see it all over the place, and I for one hope that this trend is reversed in the next decade. It’s not good for society as a whole.
Of course not, that’s the “hostage” part of the grandparent. I’m saying that taxi drivers and delivery services were better off before being “disrupted”. And I’m not talking about CA per se, but generally all western countries Uber operates in.
They may have a case in developing nations, I am not very familiar with the systems over there pre-Uber so I can’t comment on that.
I'm sorry, but I can't possibly humor calling a job you're willingly partaking in a "hostage" situation. If Uber is offering them a better deal than what they were going through, even if it's still a bad one (by your standards), why should we forbid these people from taking it?
I live in a developing nation that takes refugees from communist hellholes and the gig economy is helping them out big time by providing the less advantaged ones with a chance at life, all while improving the lives of its users through the service. And it's not just good economically, by creating new markets they help grow the economy and prevent the spread of xenophobia caused by foreign actors participating in a stagnant economy.
Unless you have solved poverty in your country and no one would ever willingly work in such a job you're only causing harm to other people by strangling Uber and similar companies out of existence.
The power balance between employer (Uber) and their drivers is completely out of balance. To claim that the drivers can just ignore Uber would be false, and neither are they able to effectively unionize because they are not officially employees. As such, they cannot negotiate effectively as a group, which means Uber has all the negotiation power.
Again, I am not saying that this is the same case for developing nations; there maybe was no work and/or ability to unionize in the first place. But for large parts of the world this was the case, and Uber just “disrupted” the negotiation abilities of the drivers.
I believe we’re looking at this from two different points of views, a developing nation vs a developed nation (I’m from The Netherlands).
Why were taxi drivers better off? They were also generally not considered employees (in the US). If anything, the appearance of Uber appears to have spurred some action in defence of taxi drivers, long ignored and kept out of the Fair Labor Standards Act and other legislation to protect the rights of workers.
In fact, for example in NYC, they generally had to pay to work, by being forced to rent cars from medallion owners like the charming Evgeny Freidman (aka Taxi King, formerly an owner of 900 cabs, now a convicted felon).
"The average rate a cabbie paid to take a taxi out for a 12-hour shift climbed 11 percent, to about $85, between 1990 and 1993, based on the most recent figures available from the city's Taxi and Limousine Commission. But meter revenue remained steady during the same period. As a result, the average income of drivers was about $19,000 in 1993, the same as in 1986 and less than in the peak years that immediately followed, taxi commission studies show."
Don’t you think the power balance between Uber and taxi drivers versus the situation before is different?
I’m aware that the US generally already had a very poor system for taxi drivers, but I don’t believe Uber did not make things better. And don’t forget that Uber also has Uber Eats — delivery drivers are most definitely far worse off with that than when they were working for the restaurants themselves.
> Don’t you think the power balance between Uber and taxi drivers versus the situation before is different?
Yes, Uber is more susceptible to competition than the old taxi companies. Where I live there are already three providers, and I stopped using Uber because the other takes a lower cut from the driver.
In the medallion system, you had to submit to Friedman, because even if another provider offered better conditions, they had a small number of medallions.
Competition between employers helps workers.
> I’m aware that the US generally already had a very poor system for taxi drivers, but I don’t believe Uber did not make things better.
Ok, why?
> And don’t forget that Uber also has Uber Eats — delivery drivers are most definitely far worse off with that than when they were working for the restaurants themselves.
Which restaurant replaces its drivers with UberEats? At least around here, the restaurants that already had drivers kept them, and UberEats even lets clients order from those restaurants and have the delivery be made by their own drivers. They just expanded the labor market to restaurants that did not delivery beforehand. I fail to see how can that be worse than before.
Well, I'm sure they have. They fundamentally disagree with the outcome, and so they will just not operate in California. Nobody will because the business model won't allow you to pay people enough money without charging too much. I also fundamentally agree with Uber and others here. They created a platform for someone to make a few bucks. If I sell something on Etsy they don't have to all of a sudden pay for my healthcare costs. The fact that people have turned to driving for Uber (and others) highlights problems with our government, economy, and priorities, not the companies. I really wish people would stop giving government a pass and wanting corporations to come save them. Go vote, educate yourself, and do something with your democracy. If people have to resort to driving for Uber to live, then that's something we need to fix at a state-wide or country-wide level.
Many people depend on rideshare like Uber to get to work like a public utility. Maybe if California (and this is true of other areas) actually built and invested in bike able neighborhoods and public transport, then they wouldn't need Uber.
California will lose this one eventually. You don't know what you have until it's gone.
I am just waiting for the lawsuits for when they shut down from drivers but also politicians threatening to jail the executives for taking that course.
This just isn't about Uber and Lyft but they were targets because some very big money was getting hurt by their existence.
It’d be a very American thing to do to sue for the government enforcing labor rights through legislation and judicial action. Push that throttle forward further while racing to the bottom.
Perhaps put that time into advocating for a living wage and universal healthcare instead of embracing Stockholm Syndrome with gig platforms. They might not be around much longer, but your government will be.
The only freedom an uber contractor has is "when to work". All the pricing and trips are decided by uber, and they can't even reject properly. They are in fact an employees in everything but legal status.
In etsy, you choose your prices, what you sell, and even to whom you sell to, it's definitely a market place.
If this truly is an invalid business model (riders can't/refuse to pay driver's full salary + benefits), then a lot of people willing to work at these lower rates will be losing their jobs / extra income.
What Uber did likely isn't sufficient. Uber restricts the maximum drivers can set, only allows increases in 10% increments, does not allow passengers to see the rates of more than one driver at a time, does not let a passenger set their own rates, does not allow drivers to go below auto-pricing, and still sets surge pricing themselves instead of letting passengers and drivers set pricing when demand is high.
Starting Tuesday morning, drivers at the three test airports can either accept Uber’s original price for outgoing rides, or ask for up to five times more, in increments of 10%. After next week they will have the option to ask for less than Uber’s original price.
Essentially those drivers now are bidding against one another for riders. Uber passengers will see only the lowest proposed fare range. If that driver rejects their ride request, they could see a new, higher fare range, as Uber would then show the request to the next-cheapest driver.
Uber likely wouldn't be in this position if they stayed out of pricing/visibility and let passengers/drivers set whatever rates they wanted to. Just provide a platform for people to get rides and stay out of pricing entirely.
"For some time now" meaning less than 1 month, or long after this particular point was raised in the trial that just concluded.
And importantly, it's not actually in effect in the entire state yet. It's still just limited to the Bay Area, with the rollout to the rest of CA happening over the rest of the summer.
Would a system that allows the drivers to "set their own pay" and in which Uber dispatches drivers with the lowest rates follow the law better? This would clearly be a race to the bottom (the pay would probably be even lower than what Uber drivers get today). Is that a preferable outcome?
I also object to this characterization of consent.
> The only freedom an uber contractor has is "when to work".
How is this not complete freedom? Loads of contracts out there specify the rate that the contractor will be paid, and both parties are expected to uphold that specified pay. Are those contracts no longer valid? In some cases with written contracts, the pay is specified as a non-negotiable condition from the paying party, and the "only freedom" the contractor has is to take it or leave it. Is that a violation? If a contractor never actually gets hired under a contract for which she sets her own rates and all of the other "freedoms" supposedly necessary for forming a contract (in CA), is she being oppressed in some other way?
No one is holding a gun to Uber drivers' heads forcing them to drive. They seem to be doing it voluntarily (this seems the case for every one I've met). Insofar as this is their only option, this is not a problem of Uber's creation, but of the overall political economy. And that, after all, is GP's point.
The difference is that contractors can negotiate those other contracts to change the rate of pay. An Uber driver cannot negotiate how much they get paid by Uber. (Part A of the ABC test.)
In some cases with written contracts, the pay is specified as a non-negotiable condition from the paying party, and the "only freedom" the contractor has is to take it or leave it. Is that a violation?
No, because one of the other factors in being a contractor was having multiple (potential) contracting counterparties (aka clients). An Uber driver contracts with just Uber, not the riders. In contrast, a contractor would generally have more than one client if they were in the business of providing that type of service as a contractor. (Part C of the ABC test. Note that Part C requires a contractor to engage in the legal formalities of creating their own business, so it's not just enough to work for both Uber and Lyft.)
But note that for Uber and Lyft, what matters is not that they failed part A and C of the ABC test, since those are relatively trivial to structure around.
Uber and Lyft fail part B of the ABC test, which is that a worker cannot be engaged in a job that is the usual course of the employer's business. Uber and Lyft call themselves transportation companies, ergo, any worker that is providing a transportation service is automatically an employee under the ABC test. Indeed, drivers are the only workers at Uber/Lyft that would be treated as automatic employees; the programmers could be employees or contractors.
True, but to be fair, that is a huge freedom, and one many people want or need.
Yes, driving Uber is a shit job, but for many people it is far better or more compatible with their lives than waiting tables or working retail, which are the realistic alternatives for most Uber drivers.
> There must have been something compelling about it.
One of those compelling things is that it seems like a better deal. Uber relies on you not doing the expenses math on things like vehicle depreciation, car insurance, unpaid time spent waiting for fares, etc.
> You compare uber to etsy, but uber sets a price and does not even list the name of the driver till you order to pay.
Yes, but the driver is similarly offered the fare, and may choose to accept or not. This is actually one of the critical distinctions between employees and non-employees. If they were an actual employee, Uber would be able to just assign the fare to them.
This is also unlike taxis, where, if your light is on, it is illegal to not accept the fare. (Although violations of these rules are common and blatant, which ironically stopped me from using taxis altogether.)
It’s certainly true that Uber operates in a grey area. When cities have explicitly banned them, they stop operating (e.g. Vancouver). It seems like California has clarified some of the ambiguity around employment, and Uber may similarly stop operating.
The important factor for employee vs contractor isn't whether the worker can accept/reject the job, since employees have that option under many union contracts, and in fact this is how many restaurants have operated for decades (where "job" = "shift").
What matters is whether the worker can independently decide what fare to charge (even if in practice the fare is limited by market forces to what a customer/client would pay). If they can, they are almost always a contractor. If they can't, they are almost always an employee. (Note: Hollywood unions and guilds set minimum rates for work, but members are free to charge higher rates if they can get away with it, and many do. The contractor/employee distinction is largely moot because the unions/guilds took on the healthcare and benefits provisioning functions that employers would normally handle.)
EDIT: reply to ericmay since HN won't let me reply that deep.
No, "accepting" a fare is not the same thing as deciding what fare to charge. Accepting a fare in the Uber/Lyft context means you take the fare Uber/Lyft offers you, or you go home; there is no potential for negotiation or other work. Deciding what fare to charge means you get to post your fare to Uber/Lyft, and customers decide whether they are willing to pay it, or conversely that a customer posts a desired fare, and the driver gets to decide whether they take it. If Uber/Lyft were truly just platforms and their drivers were independent contractors, either of those would be how fares are determined (and in fact, Uber is moving toward the former in CA as a result of this law).
If I offer someone $10 to mow my lawn and that's the only price I'm pay, are they now an employee because they can't decide what fare to charge? Do I now owe the kid down the street and all of her friends a 401k if they rotate through who mows my lawn for that price
Paying someone $10 to mow a lawn occasionally would not turn them into an employee. Terms of payment are just one of the factors in part A of the ABC test (which analyzes the worker's level of independence), so stop focusing on that single non-determinative data point.
Moreover, benefits requirements don't kick in until an employee exceeds a certain threshold of work performed (generally 30+ hours/week) for a single employer, and 401K contributions are not mandatory benefits anywhere. If a worker satisfies the ABC test for independence, they aren't an employee and benefits would not be required unless negotiated for as part of the work contract.
Aren't they deciding what fare to charge by accepting the job?
If I offer someone $10 to mow my lawn and that's the only price I'm willing to pay, are they now an employee because they can't decide what fare to charge? Do I now owe the kid down the street and all of her friends a 401k if they rotate through who mows my lawn for that price?
It's more complicated than that. The kid down the street can say I'll do it for $15 and you can decline. There's no negotiating with Uber. If the kid down the street says no to $10 you're not going to ban him from ever cutting your grass. With Uber if you decline too many offers you will be effectively booted off the platform.
More broadly, you can't compare 1 person trying to contract with 1 other person with 1 multi-billion dollar company contracting with 10s of thousands of people. Dynamics change when it's only a handful of companies hiring many people.
If you want to take this analogy further, if that kid has the opportunity to do something else for more money and keeps declining to cut my grass for $10 I'll ban her from cutting it and find someone else.
There's also no negotiating with me. It's $10, take it or leave it! (If they leave it, like they don't accept the fare, then so be it my grass doesn't get cut and Uber doesn't make money).
> More broadly, you can't compare 1 person trying to contract with 1 other person with 1 multi-billion dollar company contracting with 10s of thousands of people.
Why? The foundational principles seem to be the same to me here.
I think too many people want Uber to be this company that meets these certain expectations and they want that because the government has failed them and so they've turned to corporations to save people via jobs and paid benefits because they want the illusion that someone is paying their fair share. Instead you need to change the laws in your state/country/area to represent your values. If people don't have healthcare, pay money and give them healthcare. Making Uber do it simply isn't going to work here. Especially for them in particular.
To me there is no fundamental difference between me picking up an app and then getting $10 to go pick someone up and someone coming to mow my grass for $10, or someone paying me $20 to move a couch for them. I'm doing some work for some money. That's it. There's nothing more to it.
Yes there is. Or at least there is with most people. Even if you are adamant on price there's plenty of other areas for negotiation like when the work will occur, subscription agreements, or the kid can try to work it out and cut your grass at the same time as your neighbors.
>Why? The foundational principles seem to be the same to me here.
You really don't see a difference in a business transaction between two people and one between a person and a multi-billion dollar corporation?
Based on your last paragraph, you seem to be conflating you paying someone with you getting paid. If your thoughts on this subject are that confused, it makes sense that you're not understanding the issues here.
AB5 is about the relationship between the worker and the person paying them. Fundamentally, yes, it's all just compensation for work performed, but the law is all about the specific details of the work relationship not the zoomed-out overbroad simplification you've reduced it to, because at that level everybody is the same as everyone else and if everybody is the same why bother with any laws at all?
I get your point, but I think the restaurant analogy is flawed.
With restaurants, there’s an ongoing relationship and and expectation about shifts. There’s just a small amount of flexibility. The employee with take some good ones, some bad ones (with more good ones probably going to folks with more seniority, or those favored by the managers).
One couldn’t show up every couple weeks for two peak hours at the restaurant and expect to work. But some Uber drivers do exactly that.
The genius of early (Uber X) Uber was that it launched a service that was illegal, but got away with it and paved a road to legality because it was significantly better than its competitors, liked by customer (read: voters), and displaced competitors no one had much sympathy for.
On the first point, could you supply a bit more than just "wrong"? That's not a very convincing argument. Do you have data? Evidence? Anything besides just "wrong"?
Back in 2014...when they were using billions of VC funding to undercut taxi rates.
Uber hasn't been that cheap in years. Uber is now roughly the same or more than using a taxi in LA, and that doesn't even include Uber's original and more expensive black car service.
Tried it. Then compared it to the prices that I would actually get using the app and found that they were nowhere close to the estimates on the website, because the website estimate doesn't account for surge pricing, driver multipliers, waiting time fees, or taxes and other levied fees.
In contrast, the taxi service you linked to is the all inclusive price and is generally standard for all taxis as a matter of local law.
In the app, Uber is now more expensive than a taxi in LA for long trips.
“Nobody will” is a bet, mostly on history of the last 30 years of winning these bets. If/when someone does do it, being a business that drew a line in the sand is going to make it difficult to adapt. Playing regulatory games is hard.
People are voting & doing something with their democracy; that’s how this passed. And they’ll have another choice when they vote on the prop. You’re tired of people leaning a certain way, I’m tired of people coming up with really cheap shots just because they don’t like outcomes. Get a cup of coffee.
Let's say we leave aside low voting turnout, lack of education about issues, etc. I don't have a problem if people decide to vote Uber and eventually others out of California. Your state, your rules. I don't really use Uber (or Lyft) unless I am traveling so I really don't care what happens to them, and I definitely don't care about what happens to them in California. I just happen to disagree with California, and I think if this goes through it's going to be a losing proposition and once the reality of this sets in (i.e. people won't have access to ride share) it'll cause an actual public opinion upheaval. It's easy to complain about it and be edgy and "support workers rights" - just wait until you reap what you sow.
I'm not sure how my comment on this thread is any more of a cheap shot than any other comment, or how it's more of a cheap shot than telling someone you disagree with to "get a cup of coffee". I thought what I wrote was at least a coherent opinion on the matter. I'm sorry that it made you angry and that you took a negative interpretation of what I wrote. Not my intention.
I suspect this pleases the gov't transit authorities and unions, now they have less competition by decree. (Yes I realize Uber "could" stay, but practically speaking for a business, not really).
It just annoys me it's couched as "we are doing this for the worker!", and then those workers have no work.
If I sell something on Etsy they don't have to all of a sudden pay for my healthcare costs.
Etsy is not even remotely the same thing as Uber. For starters, shops choose what they want to sell, and for how much, and customers choose which shops on Etsy they wish to buy from. Other than handling payment processing, Etsy operates just like a mall.
In contrast, riders don't get to choose which driver they get; Uber chooses for them. Uber chooses how much riders pay and how much of that drivers get. Uber is not a platform, it's just a techified transportation service.
Many people depend on rideshare like Uber to get to work like a public utility.
This is an extremely warped and privileged view to have. Only people with lots of discretionary income used Uber to commute to work before COVID. They did not depend on it. And this is a very small subset of the US or CA populations; most people can't afford to take an Uber to work everyday.
I really wish people would stop giving government a pass and wanting corporations to come save them.
The problem is corporations like Uber that are exploiting their employees, not government. Corporations started paying their executives tens of millions for minimal work instead of the labor force doing the work and actually creating the value.
Maybe if California (and this is true of other areas) actually built and invested in bike able neighborhoods and public transport, then they wouldn't need Uber.
California, including especially the Bay Area, LA, and San Diego, has public transportation, and thousands of miles of bike lanes. It is possible to visit every major city and national park in CA using just public transportation.
With LA you might have a point. We have it but it's young and still growing and not as convenient as it should be. But SF? Are you kidding me? I can take busses, trains, etc. to get anywhere in that city and out to the valley. It's awesome!
Either you aren’t being serious or you just haven’t lived in a city with real public transport.
You can get to a lot of places in the Bay Area by public transport, but the time penalty for doing and the number of services you have to use is absurd outside of downtown SF. Typically 3x driving and upwards.
Compare this to New York, or London or Amsterdam, where it can be close to parity, or on the 1-2x range. (I mention these because I have), and you’ll realize that Bay Area public transport is effectively non-existent.
Zepto, prior to covid, it was faster to take LA Metro between Santa Monica and LA, or Hollywood and LA, or Pasadena and LA, or Long Beach and LA, than it was to drive those same distances. During rush hour, it was approximately 1 hour faster to take Metrolink between LA and OC destinations than it was to drive the same distance. In the Bay Area, it was at least 1 hour faster to take BART cross-bay than to drive, especially if you were headed to places like Dublin or Pleasanton.
Traffic is just that bad in CA.
CA isn't like NY or London. Our cities weren't built to the same level of density as NY or London, and systems that dense would be overkill. Moreover, given that CA's public transportation systems are geographically larger than any other public transportation systems outside of China (in the sense of geographic territory serviced), it would also be prohibitively expensive to build systems that dense in CA. A system as dense as NYC's metro in LA would cost more than a trillion dollars.
I agree with you about rush hour and with central downtown locations only, although even at those times and for those specific routes the Bay Area only approaches parity with the other cities I listed.
I think the point about geographic density is completely fair as an explanation for why the disparity exists, but it mostly serves to confirm the general point.
If you consider the percentage of locations or population addressable in a unit of time - e.g. in 1 hour, by public transport. The Bay Area does terribly.
This is an argument why public transport cannot substitute for ride share or car services in the Bay Area in the way that it can in other cities.
I speak as someone who has personal experience of all of these cities.
LA's public transportation system has one of the largest geographic footprints in the world. Most of the system is buses rather than fixed rail lines, but the rails run from Downtown to Hollywood, Pasadena, Santa Monica/Culver City, and Long Beach. Prior to COVID, more than 1.3 million people used LA Metro each week.
Sure, and it's possible for me to canoe to Antarctica but it's not a reasonable way for anyone to travel.
What an extremely narrow and privileged worldview you have. No wonder people hate techies so much these days...
Every day, more than a million people use CA's public transportation systems to travel between cities for work, even now during COVID. I guess they're all being unreasonable.
I took CA public transportation every working day for 5 years. Compared to the rest of the world, it's unreasonable.
Trains and buses are infrequent and have terrible evening/weekend schedules. Sure, during rush hour they can likely be faster than the incredibly overcrowded Californian roads, but otherwise they're crap. They're also not exactly cheap!
It's no surprise why Uber & friends started in the bay area, and why it's so popular there. They had no competition. The transit in these places is like the bare minimum possible. It doesn't even come close to touching world-class transit systems popular all over the world.
People depend on Uber for transport because Uber has made their service available, but I strongly doubt that anyone would be stranded at home were they to shutter - and remember, former commuters are flocking to remote work anyway. Uber would be fools to position themselves as too big to fail. They're clearly a marginal business, but even if they were indispensable I think that would just stir CA legislators to further action against them.
They have since before the suit was filed, that's why they are sponsoring a ballot initiative on the November ballot to exempt themselves from the ABC rule articulated in the Dynamex case and then codified in AB5.
The temporary shutdown (which will probably be reversed win or lose, but more profitably if they win) isn't so much a response to the injunction but a stunt related to the campaign for the ballot measure.
They almost certainly have fallback plans if they lose both the suit and the ballot measure, but they aren't as desirable and they'd rather operate with the rules aligned in their favor, and they are willing to accept significant short-term cost to maximize the prospects of that outcome.
I thought that their longer-term plan had been not to need any employees or contractors as drivers in any jurisdiction, and that they were counting on their self-driving technology having matured before this inevitable face-off happened. Although if they had succeeded with introducing something workable, perhaps the state would have blocked it with regulation or legal injunctions in light of the political ramifications of it displacing cab drivers from the job market.
They're all just trying to make a living. And let me remind you that Uber drivers have been caught providing drugs, being prostitutes, and even going on serial murder sprees. All while behind the wheel.
Your comment history is super questionable. Every time I see you commenting on HN, I wonder if you're one of the Russian boogiemen people talk about, or if you're an example of what happens when someone believes too much of what they read on the internet.
We've banned that account but please don't break the site guidelines yourself, especially not with personal attacks. Note this guideline in particular:
"Please don't post insinuations about astroturfing, shilling, brigading, foreign agents and the like. It degrades discussion and is usually mistaken. If you're worried about abuse, email hn@ycombinator.com and we'll look at the data."
I applaud the CEO for this decision. It forces at least a glimpse of understanding on the local voters that one cannot combine ideological utopia and a functional economy.
I think your views of local municipalities ability to provide transportation in california are way too optimistic. San Francisco currently operates the most expensive bus stop ever built https://en.wikipedia.org/wiki/Transbay_Transit_Center
They operate under illegal business models to produce impossibly low costs, driving out all legitimate competitors, including municipal infrastructure.
The Uber business plan has always been to break the law at a massive enough scale that they can buy new laws before enforcement catches up with them.
Then shouldn't you also be applauding the CEO for his decision? I hate to present this kind of gotcha, but I'm honestly confused on how to reconcile "Uber shouldn't exist in California" and "Uber shouldn't announce it's shutting down in California".
I don't personally have an opinion of the CEO but I think most people would have preferred preventing this situation, making it right, or shutting down in a way that doesn't leave users and drivers without much warning. Instead we see this posturing threat.
I was just pointing out that the market exists and there's money to be made. Something will fill the void if Uber leaves.
> one cannot combine ideological utopia and a functional economy.
And still we should try. It's not like California didn't have a functional economy before Uber. Sometimes it's right to make sacrifices in order to uphold our ideas.
Sure, it's a threat. Like "human shields" is a threat. Uber surely isn't slavery, but that doesn't make this threat not a parallel to the "food and shelter" slaveowner defense.
I'm conflicted about this because i believe drivers deserve benefits but also uber should not be forced to pay full benefits for someone who drives just a bit on a weekend night.
Where is the line of hours driven until you get benefits? I dont know, but I think that is the wrong question.
The right question is -- why is this forced onto Uber rather than being a question of national healthcare.
If we offered national healthcare, like many other countries, it would solve the problem across the board. It could be funded by Uber and all other companies through some type of tax. That seems a lot more efficient than trying to solve the problem piecemeal.
> Where is the line? I dont know, but I think that is the wrong question.
40 hours according to the California Department of Industrial Relations and 30 hours according to the Affordable Care Act.
> The right question is -- why is this forced onto Uber rather than being a question of national healthcare.
It's not just healthcare. It's also about unemployment insurance, paid time off, 401k contributions/matching, how the tax burden is split, and on and on.
Well, yes and no. They can avoid healthcare requirements by not allowing people to work 30+ hours per week (as Walmart and MacDonalds often do), but that doesn't get rid of their other obligations to employees (disability, unemployment, social security, payroll tax, etc.). They already provide these services for their non-driver employees, so the issue here is purely cost.
The right question is -- why is this forced onto Uber rather than being a question of national healthcare.
Because one political party has spent the last 4 decades fighting to prevent "national healthcare," forcing states and businesses to deal with it.
Hell, they've spent the last 10 years trying to demolish a law that the overwhelming majority of voters support, including those within their own party.
Totally agree on the root cause here. Curious though - can California deal with this by offering some a state-level single-payer benefit and charging employers? That would be a broader solution that would address many things in one swoop.
California has seriously discussed doing exactly that. But given the situation in DC, it is likely that they would be actively sabotaged by the federal government if they tried. So much for "states rights"....
They have tried, but the aforementioned political party blocked such efforts at the state level in the past, and currently federal law (again, due to that same political party) requires the state to get permission from the federal government to implement a single-payer healthcare system.
However, as currently envisioned, the single-payer system would not charge employers; it would be part of the taxes levied on all taxpayers (including employers), which would spread out the costs more.
Most of the people leaving CA were of the far-right political persuasion, so good riddance to them. And generally, CA is already overpopulated for the amount of housing currently available (or constructable within the near future), so having fewer people actually relieves a lot of the overusage issues currently plaguing many of the public services in CA.
With specific respect to the tax issue, the flipside of "one more tax" to pay for a single-payer system is that it would replace health insurance premiums. Because premiums are currently set for smaller risk sharing pools than a statewide pool of nearly 40 million, and those premiums must also include significant profit margins to pay for health executive's multimillion dollar annual bonuses, it would be very easy for a single-payer tax levy to undercut premiums by more than 50% (and for the single-payer proposals currently under consideration, the employee savings range from 50-90%).
If anything, the problem with a tax for a single-payer health system is that people would be saving so much money compared to paying health insurance premiums that CA would have too many people moving into the state for the rest of our public services to handle.
>> Suffice to say CA has some of the highest taxes of any state, yet it also has some of the worst social problems - poverty, homelessness, etc.
I was under the impression that much of the homelessness problem is because CA is a nice place to live (with or without a home) and because the climate is temperate and thus safer to live than most other places (where a homeless person could literally freeze to death.)
Sorry if this sounds insensitive -- I really want to understand this: I concede that cost of housing could lead to homelessness, but I dont understand this -- isnt the housing cost really a problem just in the two major metro areas? Is housing exorbitant once you leave those areas? For someone who is homeless, is there any gravity anymore to -- say -- being close to SF/SV/Hollywood?
You're right on both counts. CA has a big homeless problem because of the weather, and other states exploit that to use CA as a dumping ground for their own homeless.
LA Times' Steve Lopez interviewed a number of homeless last year in a series of articles. Most of them weren't from LA. They just came because they were told the weather was great and that drugs in LA were free.
CA is a huge state, and while the big cities are mostly liberal, the rural parts of the state are very conservative. Nixon and Reagan hail from Southern California, and up until fairly recently, Orange County and the Inland Empire were more conservative than the Southeast.
A number of far right groups can trace their origins to the Inland Empire or to CA's far North.
As for the homeless issues: multiple states admit that they use CA as their dumping grounds for their homeless. It was, and still is, the unofficial policy of the state of Texas to buy their homeless tickets to LA. (Former TX governor Rick Perry used to openly brag about this, including when he was running for president.) A recent survey conducted by the LA Times last year found that more than half of LA's homeless aren't even from California. They just came here because authorities back home suggested that they would enjoy CA more. Excluding the non-local homeless, LA would have enough beds to house its own homeless. We just don't have enough to house the entire country's homeless as well.
I keep hearing that most of the homeless in SF are actually from SF.
As of 2015, approximately 71% of the city's homeless had housing in the city before becoming homeless, while the remaining 29% came from outside of San Francisco. This figure is up from 61% in 2013.[1]
The biggest factor encouraging Californians to move out of state is high cost of housing, not the higher taxes.
For example on a household income of $100,000 with members married filing jointly, California effective state income tax rate is about 3%, or in this case $3,000.
Moving to a zero state income tax state like Washington or Texas will only save you that much in state taxes but will probably save you a huge amount more in lower housing costs - for a common single-family home perhaps on the order of 20 to $30,000 a year.
If you want to place blame anywhere, place it on restrictive zoning laws that limit the construction of new housing, and on proposition 13 which has disincentivized the building of residential real estate in favor of commercial, and allowed untold numbers of properties to multiply and value over the decades without paying anything near an equivalent increase in property taxes.
Lord have mercy on anyone trying to explain this to angry boomer parents that live in Orange County (mine generally included).
The reason your kids cant buy a house down the street from yours has nothing to do with how much taxes your kids pay and everything to do with the policies that you've voted for over a lifetime of homeownership that have insured way less supply than demand.
These people _love_ to talk about how much more their houses are worth at dinner parties everytime you see them and then are all surprised pikachu face when they've priced out their own kids.
Housing can be affordable or an investment, but not both.
The current solution is also a tax, just in a different form.
A broader solution would not be one-more-tax, it would be net-zero. The current proposal is also a tax -- it forces a cost on Uber (which will be passed onto customers) to solve the problem on a micro level. Whether I pay an "Uber regulatory recovery fee" or some other tax is all net zero. But I'd love to see a broader solution that solves the problem more universally (if not at the federal level, then at least at the state level).
It's pretty clear that the opinionists didn't actually read the studies they linked to, since at least one of the studies they cited to claim that single-payer would increase costs actually said single-payer would do the opposite, to the tune of a more than 8% reduction of 2017 amounts, which was before a number of health insurers jacked up their premiums just because they could. https://www.peri.umass.edu/media/k2/attachments/PollinZetZal...
Let me anecdotally tell you that a large healthcare program has not been good in my experience. Single Payer maybe good though so long as there is choice and competition.
Another consideration is that the US has been setup to allow a sort of localism where states can design their own solutions. It might be best for each system to be setup as a state level item.
Does that not ignore the massive disparity in population between states. In California the risk pool would be wide enough that it wouldn't be a problem, in states with < 1 million residents that suddenly becomes very difficult indeed.
Looking at rates that employers (and then employees pay, especially in copays) the answer would appear to be "expensively".
Look at the NHS in the UK, on average it costs £3k per person per year, outcomes are broadly similar (if not better, especially in areas like post-partum mortality) and as a % of GDP is half as expensive as US healthcare.
ACA was extremely unpopular because of how it was characterized. It is extremely popular today.
Have I been to the post office or the DMV? Sure. And when there are a ton of people who want to use a service, you tend to have to wait.
Have YOU been to a for-profit emergency room? Or a for-profit, non-fast-food restaurant? Hell, go to a Fed Ex or UPS store. They won't be perfect, and you will wait in line.
Yes, I have. The post office seems to do an EXCELLENT job of delivering mail at an absurdly low price (for standard letters or postcards), although when I lived in Chicago for a few years I found that a certain portion of letters were never delivered.
A number of years ago the DMV (I was in New York and New Jersey at the time) offered terrible customer service; these days the DMV I have gone to (New Jersey and Pennsylvania) seem to do an excellent job.
What I can conclude from this is that quality varies, whether in private industry or public services.
The ACA has always hovered around 50% favorability and 40% unfavorability nationally, so "extremely unpopular" isn't accurate. Additionally, support among voters for Medicare for all is about 70%.
The Tea Party predates the ACA and was more a general anti-Obama movement than specifically motivated by one policy.
A single-payer system isn't a state healthcare system.
It's a public-private healthcare system in which a single entity pays all healthcare providers for health services rendered.
Individual providers would still be free to negotiate their own rates with the single-payer entity.
Individual providers would still be free to provide concierge medical services or other non-covered medical services (for example, most plastic surgery).
Individual providers would still be free to distinguish themselves on the basis of patient service.
And with all due respect, the problem with the post office is that the GOP requires it to pay for decades of upfront expenses now rather than when those expenses are incurred, unlike a private business, and the GOP won't actually let the post office operate anything like a private business. If the post office could operate like a private company it would shut down every rural post office in America, since those are just money drains that detract from the profitable urban and suburban facilities. If the post office could operate like a government agency again (like it did before Reagan), it would run as smooth as butter.
>The right question is -- why is this forced onto Uber rather than being a question of national healthcare.
Because that's the way the stupid system currently works?
So it's both- Uber should be forced to work in the current confines of the system, and there should be questions like national healthcare
>If we offered national healthcare, like many other countries, it would solve the problem across the board. It could be funded by Uber and all other companies through some type of tax. That seems a lot more efficient than trying to solve the problem piecemeal.
As others has said, it's not just healthcare.. payroll taxes, other benefits etc.. Uber is basically trying to avoid all of this by pretending that 100% of their workforce are "contractors" even though many work 40+ hours a week like a normal employee.
> ...forced to pay full benefits for someone who drives just a bit on a weekend night.
And for their competitor.
Dara Khosrowshahi is right that there needs to be a "third way." Uber would obviously prefer contractors, and maybe the "third way" talk is just them realizing that's not politically viable, but however they reached the conclusion, they're right that this is a different category of work.
No he's not. This is no different than someone working the morning shift at McDonald's and working the evening shift at Burger King. It should work exactly the same as that.
If you have a job at McDonalds, you can’t take 6 months off (without even notifying anyone!) and come back like nothing has happened. You can’t switch your schedule to a morning shift at Burger King and an evening shift at McDonald’s at will. Being an employee comes with certain benefits, but also certain responsibilities. Not everyone wants to be saddled with those obligations. Some of us want to be able to earn cash whenever we feel like it.
EDIT: To a reply saying I don’t understand how fast food restaurants operate, I certainly do, I’ve worked fast food in my life. While they certainly try to be flexible, you can’t just decide to show up approximately “whenever you feel like it.” The closest approximation to that is to only have 4 hours a week regularly scheduled (otherwise they can’t call you an employee), and then you call in whenever you feel like working to see if they need help (often they will say “yes” but sometimes they will say “no”). However, this arrangement only works once you have enough experience that you can come in and basically work any position in the restaurant, and it’s not something that can be scaled to every worker at the restaurant.
Luckily for Uber, if they don't want their new employees working for Lyft while they're on the clock, they can make it a condition of employment. Bingo bongo, problem solved.
I don't think you actually understand how fast food restaurants operate.
You actually can take several months off from McDonalds if you want and come back. Many employees do, especially the ones that work at college-town McDs...
Moreover, you can switch shifts at will, so long as you find another employee to exchange shifts with.
Pretty much the difference between fast food and Uber is that fast food is a minimum 8 hour shift and Uber can be as short as a 1 minute ride.
And what happens if you decide you won't show up today to work at McDonalds? And tomorrow, and the next day? Without telling anyone? Yeah... that's right.
You might get fired. But since restaurants (especially fast food) deal with this all the time, they just move on and will frequently let people start working again once they've resolved their issues.
And what happens if you don't log in to Uber or Lyft every day? You'll fall off their internal automated lists for ride selection priority and get stuck with all the undesirable rides nobody else wanted to drive.
> I'm conflicted about this because i believe drivers deserve benefits but also uber should not be forced to pay full benefits for someone who drives just a bit on a weekend night.
> Where is the line of hours driven until you get benefits? I dont know, but I think that is the wrong question.
I wonder if there is a reason it could't work like this:
• If you work N hours in a week for employer X, where N meets the benefit threshold, T, for some type of benefit, the employer has to provide that benefit.
• If N does not meet that threshold, the employer has to make a payment of N/T x C to the State, where C is the weekly cost for the person to pay for that benefit themselves.
• The State keeps track of these payments on a per worker basis and works with the benefit providers to use them as a subsidy on the worker's cost to buy the benefit.
For example, for health insurance, if Bob drove 40 hours a week for Uber, Uber would have to offer Bob the same health insurance they provide their full time employees.
If Bob only drives 10 hours a week for Uber, delivers food for Grubhub 15 hours a week, and does 10 hours waiting tables at a cafe, none of those would have to provide health insurance, because the threshold is 30 hours. But Uber would have to contribue 1/3 C, Grubhub 1/2 C, and the cafe 1/3 C to the State for Bob's health insurance. That would be enough to cover Bob getting health insurance on his state's ACA market.
It would actually be more than enough. If the excess carries over to be used in weeks when Bob works less than 30 hours total, then as long as Bob averages 30 hours of work a week, he has health insurance.
Dangerously simplistic viewpoint assuming laws are good and the outcomes of those laws are fair. I'm sure if there was a law personally affecting you negatively you wouldn't feel the same way.
Don't like the laws? Campaign to get them changed.
Until that - follow the laws. It's pretty simple.
The "startups should bend laws because the laws suck" mantra is equally simplistic and immature (not pointing at you, but it's been thrown around A LOT in this sector)
Could this be posturing to get the state to back down on the enforcement of its decision? And does anyone have a guess if Uber is making money in California right now? Given the state is still in lock down.
Honestly, how do you expect Uber to, overnight, suddenly change their entire business model, and interview and choose who to hire on full time? And this is in addition to determining benefits, over time, managing those new employees, etc etc.
There is so much that needs to be changed for this to happen, it would be more shocking if Uber didn't shut down.
Uber has over 22,000 employees [1]. They have HR professionals whose whole job is managing those employees. And they have billions of dollars available to do whatever they need to.
If they wanted to make every driver in California a W-2 employee, I am confident they could do it as quickly as they wanted. And the court wouldn't make them immediately stop. They wouldn't need to shut down. They just need to begin transitioning. Courts are generally reasonable. They'll understand changes take time.
Shutting down is entirely their way of giving the finger to California for making them do something they didn't want to do.
Sure, I'm sure they have some actual contractors who are truly contractors under the law. Maybe some consultants, builders, painters, whatever. But not their drivers.
The correct term for a "side hustle" person is "part-time employee."
it is. Airbnb tried to pull the same trick in New York City. All Uber has to do is follow the law. Of course they can't since their business model is based on violating labour laws. If your business model relies on doing something illegal to make money then you are no better than the mafia, it's just organized crime.
As for people here who invoke "freedom of work". Most people doing these jobs don't have much choice at first place, in order to survive. But eventually Uber will backstab them, one way or another.
> Airbnb tried to pull the same trick in New York City
I think this is a good comparison, with the caveat that there is a major difference in the political calculus: the people who get the most benefit from AirBnB in NYC are people visiting NYC (i.e. people who can't vote in NYC). AirBnB is generally not popular among the people who live here because people don't like transients in their buildings and perceive it (probably rightfully) as driving up rents.
Uber/Lyft on the other hand are used by locals (i.e. voters) as well as tourists. They are perceived as bringing prices down by breaking the supply constraints of the medalian system.
Legality can't be used to derive ethics.
Slavery and prohibition were all legal in the past, but I don't think they're ethical.
In the same way, I consider unethical removing people's freedom to work in the way they voluntarily choose.
Sure, this is what we have now and not following the law, hoping to change things (aka disrupting the taxi lobbies) is a business risk , but I still hope for a society in which people are free to decide how they work.
I wouldn't compare them to mobsters that use violence.
Uber may not have a stellar reputation, but it's not forcing anyone to work.
It's the government which actually resembles a giant mafia gang, imposing rules and asking 99% of the population for money (taxes, or just call it pizzo) on threat of imprisonment - while letting their rich friends avoid them.
Want to be free to have a random part-time gig you can pick up whenever you want? Nope, do-gooders are going to do-good you into a wage slave job like everyone else.
Tragically, the state has also taken away my right to sell my kidneys for money, just trying to "protect" me. I'm an adult, if I want the money isn't it strictly better than I have the freedom to cash in on my human resources?
To add onto this —- living with only one kidney rather than two only barely increases your risk of dying, and many people each year die due to lack of kidneys. So, creating a market here (regulated of course) would save a lot of lives.
You can tell that to my Aunt whose husband died because he couldn’t get a kidney. They would’ve gladly paid $100K and worked a couple more years before retiring if he could’ve lived.
It would likely coerce poor Americans into selling their kidneys to the wealthy so that they could pay off their student debt. Is coercing the poor to sell their organs to the rich a net benefit for society?
For anyone who thinks this is hyperbole, ProPublica has done excellent work investigating how lenders use the court system to imprison Americans who can't pay back their debts: https://www.google.com/search?q=propublica+debtors+prisons
>> I'm an adult, if I want the money isn't it strictly better than I have the freedom to cash in on my human resources [by selling my kidney]?
> Yes.
By this logic, slavery should be legal, because people should have the freedom to sell themselves into it (for instance, to purchase medical care for a loved one).
> Yes. But that wouldn't be slavery really because you are working for a predetermined rate.
Huh? I literally said the person would be selling themselves into slavery, which means becoming chattel property with no rights of any kind. That's nothing like a non-slave "working for a predetermined rate," because those workers still have rights since they're not property.
Sometimes it can be beneficial to you to remove your own options- if you can prove to others that you've removed that option.
For example, look at the prisoners' dilemma. If both prisoners were able to commit, ahead of time, to not defect, this would be better for both prisoners. By removing a choice, and proving you have removed that choice, you actually get a better outcome than what would be possible if you could choose to defect.
This applies in asymmetric situations, too, like contract negotiations given a significant imbalance of bargaining power. It can be beneficial to the worker to, say, prevent themselves from ever agreeing to work in unsafe conditions, even if the boss offers extra pay for it (which the worker might want).
Thus selling organs, or selling your children to "adoptive" parents. It's not about somebody else having "authority"- it's about you intentionally burning bridges, provably pre-committing, removing the "choice" to do things which, on a societal level, could be harmful.
> It can be beneficial to the worker to, say, prevent themselves from ever agreeing to work in unsafe conditions, even if the boss offers extra pay for it (which the worker might want).
Who better to decide if that is beneficial or not than the worker themself?
Categorically false, the law isn’t being changed. A judge ruled that Uber was violating labor laws which specifically protect both contractors and full time employees.
“If the appeal doesn’t work out for Uber, it will be banking on voters to determine its fate. Khosrowshahi said if that’s the case, the service would likely shut down in California until November, when voters in the state decide on Proposition 22, which would exempt drivers for app-based transportation and delivery companies from being considered employees.”
It’ll be REALLY interesting to watch this all unfold.
The corruption here is incredible - the taxi cab industry had insurance of like $20K per accident (talk to the women who got brain damage), would never pickup in bad areas AND paid their workers as.... independent contractors!!
You think your taxi driver is a W2 employee - please think again.
The number of carve outs in this new "principled" rule is incredible, and more industries keep asking for them (freelance writers, gig musicians etc). Laws should ideally be broadly and equally applied, not this here is the rule except for a, then b, then c,d,e depending on who can lobby in their exceptions.
> You think your taxi driver is a W2 employee - please think again.
Indeed, the "We should return to taxicabs" argument reminds me of a Mozilla employee's comment where they called out how much different people's expectations are of Chrome & Google, than of Firefox & Mozilla: https://news.ycombinator.com/item?id=24122017. Yes, many things are wrong with gig driving.. but driving a taxi meant either making very little (renting the cab & medallion) or incurring an incredible debt load to buy a medallion. Medallions/arbitrary exclusivity isn't going to solve the pay problem (let alone deliver the service that riders now expect), and the taxi industry still won't let medallions die.
This is a law with numerous carvouts (ie, pretty garbage in first place) and HIGHLY selective enforcement.
The discussion is no longer logical. You can't say here is the law - here are facts - here is result. Now it's here is law (with lots of totally random elements and exceptions that are confusing for everyone involved if you actually try and comply with it - I've had folks says they promise they are independent businesses, and they look and act like it, but the law says things like if they don't have all the business licenses setup they are not, and some cities like SF require that if you do work for a company that has business in SF that work can be considered happening in SF and so you need to get licensed there etc etc).
I used to be a stickler for trying to get folks to comply with AB5 - but I'd guess we are at 70% noncomplaince still against letter of law - and it's not worth fighting employers AND contractors to get everyone to switch when they don't want to.
One workaround I've been recently is to hire out of state or look at offshoring - freelance writers are a good example where I don't think there is a way to really hire them legally in CA, but you can still hire them outside of state as I understand it. The mechanics of turning all authors into W2 employees is such a big leap, but most authors don't have all the right business licenses setup in every city they might have work appear.
> We’re legally unequipped to deal well with gig workers.
Yes we are equipped to deal well with gig workers, it's just that Uber doesn't want to play by the rules and want to have it both ways. Let drivers set their own fare, for starter. "Gig workers" aren't a new category of workers just because you use some corporate newspeak to describe these workers.
Are there any restrictions on what the multiplier can be? If not then they can effectively set the fare. The "standard" fare is $X per mile and I want $Y per mile. I just set the multiplier to Y/X
They say the "fare multiplier can range from 0.5x to 5.0x in increments of 0.1". Not fully free, but being able to set over 5x the regular price seems mostly academic.
Any classification of people accepting money for work is pretty much a creature of tax and employment law and big buckets don't really handle cases at the edges very well. For example, freelance writers can write for whoever they want but they also tend to have clients who they do work for regularly--which has caused some to run afoul of the recent California rules. But that looks a lot different from a full-time Uber driver which, in turn, looks a lot different from someone who drives for Uber now and then to puick up some beer money.
Why wouldn't they fit squarely into the category of contractors? They set their own hours and use their own equipment. The fact that the platform sets dynamic prices doesn't change this. Contracts to do work in times with more demand command higher prices in plenty of other industries. Caterers probable charge more during the holidays, right?
The requirements for contractors are (known as the ABC test)[0][1]:
1) Part A of the test requires that the worker 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; and
2) Part B of the test requires that the worker performs work that is outside the usual course of the hiring entity’s business; and
3) Part C of the test requires that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
4) The contractor must actually be in business for themselves.
1) Uber drivers are totally at liberty to set their own hours, and drive in location of their choice ( destination are chosen by Uber, but a worker is at liberty to drive in San Jose one day and San Francisco the next).
2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service.
3) Drivers are independent workers, in business for themselves.
4) Same as above.
With these criteria it unambiguously seems to be the case that ride share drivers are independent contractors. I struggle to see how one could make the case that they are employees.
No, it's not. Is Apple in the business of producing records because it runs iTunes? No, it's in the business of software (and hardware), and some of that software is used to sell music.
Trying to claim that a software service to run a marketplace to sell X is the same thing as actually running a business of building or doing X takes some mental gymnastics.
It takes some seriously bizarre mental gymnastics to call Uber/Lyft "marketplaces" when they don't provide any of the hallmarks of a marketplace, such as the option to select between multiple "stores" (aka drivers) or let drivers compete by offering their own prices.
Even more importantly, with an actual marketplace, you don't transact with the marketplace--you transact with the stores.
And with respect to your Apple analogy: Apple doesn't claim to be in the business of making music, just selling it. Uber/Lyft do claim to be in the transportation/food delivery businesses, and it's literally all over their legally binding SEC filings that the provide to investors every few weeks.
If it quacks like a duck, and it walks like a duck, and it swims like a duck, you can call it a digital platform all you like but it's still a duck.
No, the Apple analogy is entirely accurate. Apple is in the music business. But it's not in the business of making music, it's in the business of selling music. Apple is in the music business in the same vein that a record shop is in the music business.
Uber is in the personal transportation business, at a broader high level. It's in the business of operating a market for rides. Just like how a record store doesn't actually compose and record the music it sells, Uber isn't in the business of actually driving people around. That task is fulfilled by independent workers, who use the platform Uber and Lyft operate to find customers.
Can you point out in said SEC filings where Uber says, "our company's primary business is operating motor vehicles to transport customers"? As in, actually driving their own cars? Because from what I've read they're very careful about describing their business as operating a marketplace for drivers to conduct their own businesses.
We agree that Apple is just selling music, not making it. We disagree on how analogy that applies to Uber.
On its 10K, Uber identifies "gross bookings" as its primary revenue stream. Not "net bookings" or "commissions" or "marketplace fees." Gross bookings. Meaning that it treats all of the income from a ride as its own income, meaning that it's primary business activity is providing transportation services. The same is true for Lyft.
If they want to claim to be technology companies that only make their money from marketplace fees/commissions, they're free to do so but they'll need to change their financial and legal filings to match (and possibly their fare structures as well, since there's a mismatch between what riders pay and what drivers actually get). The reason they haven't done so is because that amount would be a lot smaller than the gross bookings number, but they can't have it both ways.
What impact does this have on the classification of drivers? When Uber takes $10 from a passenger for a ride, and contracts out a driver to transport the passenger for $8 then Uber has a booking for $10 and an expense of $8 for contracting out that ride. This doesn't change the fact that the driver is a contractor who sets their own hours and can drive for competitors.
Yes, Uber and Lyft are involved in providing transportation services but their involvement is in connecting customers with transportation providers. Calling Uber and Lyft taxi companies makes about as much sense as calling an Expedia an airline. Expedia provides air transport, but through reselling the services of airline companies like Delta or Alaska. Uber and Lyft provide transport by reselling the services of independent contractors. Uber and Lyft are taxi companies as much as Expedia is an airline: they're not.
It's a basic principle of contract law that parties can't agree to a valid contract if they don't know the basic fundamental financial terms of the contract, like say, the price.
A driver does not know how much a passenger is paying for the ride. The passenger does not know how much the driver is receiving for the ride. Ergo, they cannot have formed a valid contract with each other. On the other hand, the passenger knows how much they are paying Uber, and the driver knows how much Uber is paying them. This indicates that the common relationship is Uber, and that the driver is acting as Uber's agent with respect to the driving services. This is supported by Uber/Lyft treating gross booking as their revenue. It is a long-standing principle of GAAP that if you are collecting money on someone else's behalf as their agent, it's not your revenue. If you are treating the money as your revenue, and their services as an expense, that indicates they are acting as an agent on your behalf with respect to the services/whatever that gave rise to the revenue. Because the driver is acting as Uber's agent, AB5 comes into play to determine whether they are an employee or independent contractor.
I don't know why you're fixated on Expedia. Expedia is a reseller, which is a thing that has existed as a legal construct for over a century and has an actual meaning and requirements defined by law. Expedia doesn't resell services, it sells reservations/tickets/etc provided by third parties that represent a right to a specific performance of a specified service at a specified time and place by that third party. Importantly, once a transaction is completed on Expedia, the customer must generally seek customer service from the third party, not Expedia, because Expedia's role in the transaction is completed, and Expedia only provides relief if the third party will not, and that relief is limited to refunding the customer for the amount they paid Expedia.
UberLyft don't sell services provided by third parties, they sell a service (transportation or food delivery), and it happens to be performed by third parties on UberLyft's behalf. In contrast to Expedia, none of the participants in the transportation or food delivery service get to select their putative counterpart to the transaction, or the financial terms of the transaction, and after the driver's part is concluded they usually have no further interaction with the passenger as customer service service issues are provided by UberLyft, not the driver. IOW, there are no hallmarks of a business relationship between the driver and customer.
Expedia is a perfect example because they're doing in essence the same thing that Uber and Lyft are doing: reselling transportation services. When you book an Uber what you're doing is informing Uber that you want to go from point a to point b. The Uber finds a third party willing to fulfill that task, and resells this service to the customer at a markup. It's exactly the same thing Expedia does, only in real time.
> UberLyft don't sell services provided by third parties, they sell a service (transportation or food delivery), and it happens to be performed by third parties on UberLyft's behalf.
Which is exactly why the drivers are contractors. You seem to understand that the drivers are third parties, yet are fixated on irrelevant things like revenue from bookings to try and distract from this fact. That Uber treats all of the money paid by the passengers as revenue does not alter the fact that it's drivers are contractors that set their own hours and can drive for competing services.
It's a music publishing company as much as DoorDash is a restaurant. You use DoorDash to get food, but DoorDash is not the person actually making the food. Likewise Apple sells music, but said music is actually recorded and published by some other entity.
Apple has Apple Music, a publishing division, where the head of it has the title Global Director of Music Publishing. It's kind of absurd to say that Apple isn't in the business of music publishing.
If Apple has actually started publishing its own music then indeed Apple would be a music publisher.
But has Uber done the same? Can you charter a car actually driven by Uber employees? As far as I am aware, Uber exclusively builds a platform to link passengers with independent drivers - who can and often do drive for competing services. Akin to what iTunes was before Apple started publishing its own music.
Your argument is circular. Uber drivers aren't employees because they are contractors. They are contractors because driving isn't Uber's core business. Uber's core business isn't driving because they don't have any drivers as employees.
Uber buys cars and leases them to drivers, it offers full-time professional drivers through Black, it invests billions of dollars into self-driving cars, it offers delivery as a B2B service. Look at the Uber Eats advertising[1] - they aren't claiming to connect you to drivers, they are claiming to connect you to your customers.
No, the logic isn't circular at all. Uber drivers set their own hours, crucially, and are free to work at competitors. Someone can drive for Lyft 5 hours one week, and drive for Uber 5 or 15 hours the next. And Uber doesn't tell them when they need to work.
You say that I Uber offers full time drivers through black. Do you mean that Uber assign drivers to work at a specific time frame for a significant duration? All I can tell about Uber Black is that it offers drivers with more stringent requirements (more licensing, more permits), I don't see any advertisement of having someone chauefer you around for a week. If Uber does offer that kind of service, then drivers rendering that service should be employed.
> Look at the Uber Eats advertising[1] - they aren't claiming to connect you to drivers, they are claiming to connect you to your customers.
Yes! This is entirely the point. The driver is a fairly minimal component of an Uber Eats order. Deliver usually amounts to less than a third of a delivery at least where I live and easily under a fifth. And for that reason Uber contract out this part of delivering an Uber Eats order. Simply asking the public "who wants to take this order to the delivery address?" and creating a market for labor is a more effective solution than making hiring decisions, trying to schedule people fairly across the day.
If object to the contractor model as a whole that's its own criticism. But it is exceedingly hard to claim that Uber's relationship with drivers who participate in the market it runs is that of an employer to employee.
> 2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service.
This seems like _quite_ a stretch. With that logic you can make any modern company a "technology business" or a "logistics business", and suddenly everything a company does is outside of their core business.
1) True. But until about 1 month ago, Uber drivers didn't get to set their own rates, and they were punished for not accepting rides. Moreover, a key issue for this test is that Uber matches drivers to riders, so the normal independence that would be expected from a "platform" does not exist.
2) I laughed so hard I scared my neighbor's dog. Uber is a transportation service that happens to use technology (in the form of software) to provide it's service. Have you read their SEC filings or any of their other legal documents? In their own legally binding filings, they describe their primary business as providing transportation and food delivery services, not as a "platform" for whatever.
3 and 4) This is false, but it's a tricky point. Under AB5, it's not enough to just drive for multiple companies; a driver must satisfy certain legal formalities related to being in business for themselves, like setting up a legal entity, getting their own insurance, etc., to prove they are "customarily engaged" in the business. (Note that points 3 and 4 were distinct in the case law but were combined in AB5.) Most drivers haven't done this.
So now Craigslist needs to be regulated as an automobile dealer because it hooks up people selling cars to each other? Is Apple in the business of recording music because it runs iTunes? Does DoorDash need to have their offices inspected for food safety because they run a market for food delivery. No. Craigslist operates a platform for selling cars, it doesn't actually sell cars itself. Apple doesn't actually make music (unless they runs studio they I don't know about), they run a market for artists and record companies to sell their own music. DoorDash operates a platform for restaurants to sell food, it doesn't actually sell food itself. Contrary to your insistence otherwise, running a platform that connects buyers and sellers of something is not the same thing as actually providing that good or service yourself. People say that it takes mental gymnastics to arrive at this conclusion. I see the opposite: how do you manage to convince yourself that people writing code at Uber are in the same line of business as getting behind the wheel of a taxi? How do people convince themselves that a PM at DoorDash works at a restaurant?
Also, you misstate (or rather, only partially state) the description of their business in SEC filings. They describe themselves operating a market for food delivery and personal transportation. They are in the business of transportation and food delivery, but they are a in a different layer than the people actually driving cars. This is akin to saying Expedia is in the airline business. Yes, but they sell airline tickets they don't fly planes. Calling Uber a taxi company makes a out as much sense as saying Expedia is an airline.
And for 3 & 4 this could easily be resolved by having driver set up their own LLCs. But I'm not convinced this is actually a requirement. Plenty of people are contractors and fill out 1099s without operating their own LLC or partnership or some other type of company.
No, not sure how you even got there with Craigslist, and even if AB5 was relevant there's an exception for direct sales that would exempt craiglist and similar sites like ebay.
AB5 doesn't apply outside of the worker classification context, so your rambling about Doordash and food safety regulations is just bizarre. You're right that DoorDash is in the food delivery business and so its delivery drivers would be its employees under AB5 (and thats what the underlying case decided). Door Dash is not in the food preparation business, so restaurant workers wouldn't be treated as DoorDash's workers.
Contrary to your insistence otherwise, running a platform that connects buyers and sellers of something is not the same thing as actually providing that good or service yourself. People say that it takes mental gymnastics to arrive at this conclusion. I see the opposite: how do you manage to convince yourself that people writing code at Uber are in the same line of business as getting behind the wheel of a taxi? How do people convince themselves that a PM at DoorDash works at a restaurant?
I agree that running a platform that connects buyers and sellers in a marketplace is not the same as providing that good/service itself, which is why Amazon Marketplace and eBay don't run afoul of AB5. But UBER/LYFT DOES NOT RUN A MARKETPLACE. They would have to make significant changes to their apps to be considered "marketplaces" by any reasonable or historic definition of the term.
This is akin to saying Expedia is in the airline business.
This is not at all like saying Expedia is in the airline business. Expedia operates like a marketplace. It buys inventory from airlines and hotels and resells them to customers. The ultimate commercial relationship is still between the customer and the airline/hotel. That is not the case with Uber/Lyft as they are currently structured: both the rider and the driver have the commercial relationship with Uber and it only exists through Uber.
And for 3 & 4 this could easily be resolved by having driver set up their own LLCs. But I'm not convinced this is actually a requirement. Plenty of people are contractors and fill out 1099s without operating their own LLC or partnership or some other type of company.
AB5 provides a lot of exemptions, so it's not necessary in every context. Rideshare drivers aren't one of the exemptions.
You're applying double standards here. If Expedia is not an airline, then Uber and Lyft aren't taxi companies. Uber and Lyft buy the services of independent drivers and resells them to customers. If the ultimate commercial relationship is between you and the hotel or airline when you book through Expedia, then it's just as fair to say that the ultimate commercial relationship is between the passenger and Uber/Lyft driver. Just like how Expedia's role is connect a customer with an airline and handle the payment transaction, Uber/Lyft's role is to connect a passenger with a driver and handle the payment transaction.
Crucially, your statement that the commercial relationship only exists through Uber is patently false. Drivers can, and do, driver for different ride sharing companies. A passenger could hire a driver through Uber on one day, and hire the same driver through Lyft on the next.
> If the ultimate commercial relationship is between you and the hotel or airline when you book through Expedia, then it's just as fair to say that the ultimate commercial relationship is between the passenger and Uber/Lyft driver.
When I book a flight through Expedia I enter a contract of carriage with the airline, not Expedia. This is a contractural matter, not just an abstract concept of "commercial relationship."
And when you take an Uber, you enter a contract of carriage with the Uber driver. Uber drivers have to have contract of carriage permits for this reason.
You do not enter into a contract of carriage with the Uber driver. At no point in using Uber or Lyft does the app have you agree to a specific contract with the driver, which is required for the contract of carriage to apply...
(In contrast, with taxis, signage in the vehicle indicates that proceeding with a ride does indicate acquiescence to the standard terms locally governing taxi services.)
So Uber requires it's drivers to have contract of carriage permits for no reason at all? No, you are entering a contract of carriage with Uber driver when you schedule a ride.
Taxi services and medallions specifically allow drivers to be hailed from the street. Uber and Lyft drivers don't get hailed Dr the street and thus don't need taxi medallions. This isn't something new, services like Super Shuttle operate in the same way. Uber drivers don't have such signage because they're not taxis, they're like super shuttle. You didn't hail them from the street you booked a ride through a service.
> 2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service.
What good is all that software and technology if a driver doesn't pick me up when I request a ride. Uber very much depends on drivers to perform their core function.
Absolutely. This actually a type of relationship that many businesses have. Most hair salons don't actually employ any hairdresser. They employ the people that clean the shop, and run the register. But the hairdresser themselves are independent and lease a stall in the shop. The salon very much depends on the independent hairdressers to function.
Pointing out that Uber would cease to function without independent contractors is entirely correct, but does nothing to demonstrate that that these workers should be categorized as employees rather than contractors.
I'm wildly out of my depth, but why couldn't Uber drivers be regulated effectively as micro-franchises? The dynamics seem pretty similar -- drivers benefit from the Uber marketing, brand (which brings trust which is necessary in a business as personal as getting into a stranger's car) and "secret sauce" (the dispatch network and app experience). Uber wants to control some aspects of each "franchise" like the cleanliness of vehicles, making sure that they don't discriminate against customers in unappealing areas, and, to some extent pricing. This is necessary to maintain the Brand and keep customers coming back. Uber doesn't want to get into all aspects of running the franchise (setting hours, making sure drivers are only driving for them etc), because it would un-profitable to do at such scale -- just like McDonalds doesn't want to get deal with the management of individual restaurants.
I think it's more like "gig workers" were created to try to do an end run around hard won protection for workers.
The idea that someone driving (or waiting for pickups) 40+ hours a week is somehow different is different than somehow different than someone (e.g.) doing tech support for 40+ hours a week is absurd.
The number 40 (sometimes 30) has become this arbitrary standard with large binary differences on each side of the fence. This makes it very difficult for people to negotiate time off, less than full time schedules, partial retirement etc.
Laws written in the past often are deeply tied to the assumption of one american lifestyle and dream, which is no longer the reality, and thus is very inefficient for many many people. Laws written to instead capture the concepts and algorithmically scale them would be much more effective. Something like $EMPLOYER must pay N/40ths of the healthcare cost where N is the number of hours worked.
People with 2 jobs could get full healthcare premiums covered.
People who want to scale back to 1/2 time would know what to expect and it wouldnt be a binary decision factor.
It is entirely different, since you can start or stop your work at any time, can choose to only work when the pay is good enough, and are not committed to a single company. I don't think a job where you can start working by just installing and app, and get paid by the job, should be treated as the same as one where you are required to work some amount each week and get paid the same every week.
That is objectively not true. Most of the "gig economies" were previously done by employees who did not have the kind of benefits you are implying. Taxi drivers almost uniformly do not receive any health insurance benefit at all.
Gig economy was designed to circumvent overburdening regulation and supply restrictions, making the service cheaper, more available and more effective for users. The benefits of this are very obvious in the case of taxis versus uber.
There obviously needs to be a new class of workers. I've seen the phrase "Dependent Contractor" tossed around here on HN and I think it'd do quite well.
If you work for an employer who sets your hours, pay, etc., you'd still be designated as an employee.
If you sell your labor to multiple entities, and/or you set your own pay rate, you're an independent contractor.
If you do not set your pay rate, you'd be a "dependent contractor", and entitled to at least some basic worker protections, but not necessarily things like mandatory paid 15-minute breaks. Those should continue to be required for employees whose hours are set by the company for them, but it feels silly to regulate a thing like this when an Uber driver is completely free to just turn the app off if they need a break.
A "dependent contractor" is literally what an employee is, except that in your scenario it would just be an employee without the decades of hard-fought labor protections like bathroom breaks.
No, a "dependent contractor" is completely different from a regular employee. As an employee you are generally required to work certain hours, or at the very least do a certain amount of work in a week, and are paid either hourly or salaried. A dependent contractor, in this example, can set their own hours, start or stop working whenever they want, and gets paid per job rather than per hour or month.
Today I learned from the internet that I have been wrong about the advice I have been providing clients for the past decade... /s
Employees have contracts, too.
Everything you have described as supposed features of dependent contractors are features of independent contractors. Indeed, that last point is one of the biggest historical factors (in the US, and most of Europe) for determining whether a worker is an employee or a contractor. Historically what made a worker an independent contractor instead of an employee was that a worker was economically independent from an employer for their livelihood because they had other clients paying them for the same work. The work independence factors are an outgrowth of that analysis.
As to your other points:
Many employees can set their own hours. Most white collar employees can (and now do, as a result of COVID). It is hourly workers that can't chose when they work, because they are paid on the basis of time work rather than labor performed. Generally, whether a contractor can set their own hours is determined by the contract.
I'm not aware of any contractors that can simply start and stop working during a contracted job without violating their contract, so in that respect your point isn't valid for any worker, employee or otherwise.
Current classifications are irrelevant because the parent was laying out a new system, in which you could either be an employee, an independent contractor, or a dependent contractor. Under that proposed system, there is a significant difference between a dependent contractor and an employee, because the dependent contractor can choose to stop working whenever they want, and can work for multiple companies, while an employee could not do that.
And regardless, I don't know of any hourly employees who can choose to stop working for several weeks without notice, and then start working again whenever they want. That is a major difference between something like Uber, and a normal hourly job. Also hourly people are paid by the hour, while with Uber you are paid by the job.
A dependent contractor is an employee (if they are an individual). This has been the actual state of the law for decades in the US and EU. Redefining existing terms doesn't change that, and the parent's comment doesn't create a meaningful distinction between the existing classifications.
Worse, it creates distinctions that are based on factors that are largely irrelevant to the employee-contractor classification.
Today, employees are free to choose to stop working whenever they want (the US has at-will employment) and can work for multiple companies (indeed, most American workers work for multiple companies, especially those who work multiple part-time jobs to make ends meet).
I don't know of any contractor that can choose to stop working for several weeks without notice during a contract and get rehired by the client they walked out on. They'd have to find a new client. This is no different from an employee getting terminated for not showing up for several weeks.
And with respect to getting paid by the job: while this is one of the big factors for independent contractors, it is not exclusive to them. Employees in the entertainment industry get paid per job (game programmers get paid per game, members of the Hollywood guilds and unions get paid per project, union musicians get paid per recording or tour, etc.)
How would you compare a "dependent contractor" to a restaurant worker who is largely paid in tips, and where management changes their working schedule frequently and erratically?
The dependent contractor can stop working without facing reprocussions, the restaurant worker has to work the shifts that they are scheduled or they will get fired.
Also the restaurant worker is guaranteed minimum wage, while the dependent contractor is not, since they are not paid hourly.
I disagree. Every Uber driver, also drives for Lyft and some format of gig on-demand services (like Postmates, Uber eats) during the same hours. If there is a ride from Uber they pick up that ride, if not they switch to Lyft and pick up their rides. I'm yet to see an employer who will be okay with their employee doing it.
If a grocery store cashier could punch out an hour into their shift, take a day off on a whim, or switch between 3 different grocery stores depending on which is paying better, I'd be inclined to agree with you, but you have to admit that gig work is quite different than traditional employer-employee relationships (which is why they're classified as independent contractors in most of the U.S.). They're not paid a salary or hourly; they're paid per gig, and they're under no obligation to accept any gig.
True, they're not nearly as empowered as a traditional independent contractor like a plumber who can set his own prices, but they're not as powerless as a traditional employee who has no control over their hours either. They're something in between, and their work should be regulated as such.
We need to end employer based health insurance, every other major problem is easily solvable within the gig worker framework (you can have people accrue PTO and other standard benefits based on hours worked).
Strongly agree. I'll never understand the argument of forcing people to give up the benefits they already have as gig-economy workers and become full-time employees. Despite all the issues with the current situation, there are still a lot of obvious benefits that these workers do get like the ability to set their own hours, not having to work exactly 40 hours every week, and being able to work on multiple platforms.
There is a very obvious solution that gives them the best of both worlds, and also helps millions of other unemployed, part-time employed, and entrepreneurial Americans. Let's make it easier for people to get by and meet their basic needs without tying their well being to long-term full-time employment at a large corporation.
> Despite all the issues with the current situation, there are still a lot of obvious benefits that these workers do get like the ability to set their own hours, not having to work exactly 40 hours every week, and being able to work on multiple platforms.
None of those are linked to being an employee or contractor.
I think they are in some cases. An employee can forbid you from working for a competitor at the same time, for example. This is usually a good thing - e.g. Apple doesn't want their Siri engineers moonlighting on the Alexa team after hours. I don't think contractors can be subject to the same sweeping restrictions.
I believe for employees paid by the hour, the employer can also dictate the number of hours per week and even the specific schedule.
Employers have much more control over their employees -- that's at the heart of the contractor-employee distinction.
I am not "the company", just a spectator that is observing what companies are actually doing in practice.
Yes, companies could always choose to give employees better perks out of the goodness of their heart. That's not really relevant, what's relevant is what they're actually doing. And if a company like Uber were to pay all the extra overhead to bring on all drivers as full-time employees, it would be crazy for them not to set their hours much more tightly so they would absolutely do that.
We're very well equipped, we just don't use the laws we already have. If we did the gig economy would die overnight. Just class all of them as employees and be done with it. Gig workers existed in the past. Many harbors used them. You got paid for every piece removed or stowed in the hold of a ship. Governments the world over realized this led to all kinds of bad outcomes and outlawed the practice. Containerization did the rest. So we already know this particular demon and the solution was to make it illegal and to make all such people employees.
"Driver protections" are the reason we have Uber and Lyft to begin with. Cab companies were very well regulated and paid. But the service sucked. I was hung out to dry in areas of San Francisco in 2009 - where cabs would simply not come because it was inconvenient for them.
Uber has a lot of power here. They have the ability to speak directly to millions of young people, and explain the issue to their advantage and ensure the vote goes their way and the only issue the people will see is that they are no longer allowed to take uber, and will vote to get that back.
That's surely what they're doing. Of course, they probably chose a bad time for this. If those customers are social distancing, probably fewer of them will be inconvenienced than before. I share one car with two people, so used uber a lot pre-pandemic, but haven't needed one at all since March.
Uber is already effectively shut down in the East Bay. I idly wondered the other day and it was going to be 20 minutes before a car got to my origin in Berkeley.
Work within the law and everything is fine. Uber routinely tries to avoid that (even when there are escape hatches available to them they don't use them; it really seems part of the DNA of that company to do things as shady as possible without actively killing people), both flaunting the protections intended by the laws and giving itself an advantage over their competitors who adhere to regulations.
Lyft certainly has the option to comply with the law and jack up their prices to compensate. There are probably fewer "frivolous" reasons to use ride-sharing at the moment anyway and a decent percentage of that class of urbanites aren't all that price sensitive.
> Lyft certainly has the option to comply with the law and jack up their prices to compensate
They also have the option, if they can find the financing, to comply with the law and burn money building an entrnched user base before jacking up prices to compensate.
I mean, even on the old model, that's how Uber got itself entrenched and hard to displace.
You left out that it might make people support Prop. 22, though it could also backfire. The other choice would be hire some of the drivers who are already effectively full-time and pass on the added cost to riders, but in the days of Covid, that won't make the same splash as suspending service.
Uber Eats has a number of competitors for food delivery services in CA.
And since UberEats's drivers already tend to work for their competitors as well, the effect of Uber pulling out of the market probably wouldn't even be noticeable.
It is not like the competitors is going to have a good time dealing with this any easier.
And they have even lesser cash to burn.
The delivery price is already a significant chunk of the order, and if the price goes up significantly, I guess the option for people is to stop ordering food and cook at home.
Which is good and probably saving me a lot of money anyway once I get used to it, but I don't think drivers will be the only one that are unhappy with this.
The article is only three bullet points one of which is:
> If the appeal doesn’t work out for Uber, it will bank on voters to determine its fate in voting on Proposition 22, which would exempt drivers for app-based transportation and delivery companies from being considered employees.
That’s the rule of law working as intended. I don’t remember voting to shut Uber down, despite my representatives trying to do so again and again over the years because Uber exposed their corruption and incompetence.
When you vote for a politician in America, you aren’t voting for a set of “policies” despite what everyone would have you believe. You’re voting for someone to do decision making in your place.
I'm sure there's part of that, and there's nothing wrong with that. This is a bad law. The other part are the logistics of creating a set of new policies, and systems to adhere to this law - which takes time.
That's not what the OP said, though. You can't just carry an argument to its complete extreme - that's not how it works.
OP said that THIS law wasn't too much, not that over-regulation doesn't exist. Please reply to the opinion that this law isn't too much. I would be interested to hear your thoughts.
> You can't just carry an argument to its complete extreme - that's not how it works.
Reductio ad absurdam is a legitimate way to respond to an argument, if the argument is susceptible to it.
"It's not a bad law - if Uber can't operate in compliance with it, it has a bad business model." is an argument that could be used to defend any law. It defends the concept of law itself, rather than the specific law we are discussing. It's perfectly reasonable to point that out and ask where the line should be drawn.
> Reductio ad absurdam [sic] is a legitimate way to respond to an argument, if the argument is susceptible to it.
Reductio ad absurdum does not mean "exaggerate to absurdity," which is what the GGP actually did:
>>>> It's not a bad law - if Uber can't operate in compliance with it, it has a bad business model.
>>> Really, is there no such thing as over-regulation, in your mind? No red tape too sticky? No hoop too high to jump through?
If you want to label this kind of argument, the correct term is straw man. It doesn't address what vkou said, but rather sets up an exaggeration that is easier to attack and dismiss. Loughla was entirely correct in his criticism.
Uber has been breaking the law and refusing to comply. It doesn’t matter if the law is good or bad. That debate already happened.
California’s elected representatives debated and passed the law. Californians by proxy want this law. If they don’t want it anymore or want it to change based on feedback they’ll make their voice heard and that may happen.
Uber and Lyft didn’t exist not that long ago and they don’t just have the right to exist if their business model can’t work within labor laws. And personally, I think it can work just fine - they’re just crying and complaining that they won’t get to hit their growth targets because they’ll have to charge the real price instead of the subsidized one.
AB5 has not achieved its intended effect and has had a number of unintended consequences, including collateral damage in industries such as freelance journalism and other contract jobs where "full-time" employment results in the employer going bankrupt. Being familiar with some of these industries, I estimate that AB5 has led to a net loss of jobs, economic activity, and civic engagement in CA, again without achieving its stated aims. As an example, AB5 further stresses small local newspapers/news sites, which are a key vehicle for public accountability and civic engagement.
A likely outcome now is that Uber/Lyft will carve out an exemption for taxi drivers (like a few other industries with effective lobbying operations have already done) while distressed small employers continue to suffer from AB5's effects.
I have mixed feelings about gig work generally, but then I'm not at all sure a lot of part-time employment in retail isn't even worse given the way scheduling is done. And, clearly, AB5 has been, as you say, damaging to freelance journalism and other white-collar fields where, in practice, a freelancer does a lot of their work for one or two clients.
This is akin to saying the Fair Labor Standards Act was a "bad law" because it ended child labor, which I'm sure also caused a temporary "net loss of jobs, economic activity, and civic engagement"
No, that's not true. They were doing something wrong, because children are generally recognized as not being fit to give consent for all sorts of things. The laws against child labor merely recognized this.
The case for AB5, a law against consensual adult labour is murkier.
Is the existence of a unionized workforce against consensual adult labor? The expanded use of for contract work has largely been a tool to walk around legislation to improve labor standards.
In jobs where it is virtually impossible to organize others doing a similar task such as was the case with most of the jobs impacted by AB5, its totally reasonable for these folks to lobby the government to fight for their interests.
Given that there's broad agreement on what consent is and very little agreement on what exploitation is, that's always going to be contentious.
Maybe with a labour monopsyny? I guess we don't want the big mining company in the small town to run down it's workers. Whenever I think of the best argument for unions, I think of small towns subjugated by mining companies or mills. But a ride-share company with competition in a big city?
Except these are adults of sound mind willingly entering into the agreement. I absolutely loathe these types of arguments first because its false equivalence and secondly, because why do you know better than the Freelance Journalists who were hurt by this? Stop nannying.
Adults of sound mind enter into all sorts of highly regulated agreements, starting from employment, to tenancy, to gym memberships, to even things like marriages [1].
The reason for why all those agreements are highly regulated isn't because they adults entering them are not of sound mind. The reason for it is that there is often a large imbalance of power between the two parties in the contract.
This kind of regulation has been the foundation of common law for nearly a millennium, and has been present in other legal systems for far longer than that.
[1] (As it turns out, you can't [2] marry someone with the stipulation that they can't divorce you, or with a fly-by-night, grossly inequitable pre-nup.
[2] Well, you can, but the judges will laugh your contract out of the room when you try to enforce it.
Economic regulation of this order has not been around > 300 years in fact it's only been really been a question of what is the right balance since post industrialization. And the fact we're having this discussion at all means there are arguments to be had in either direction for worker regulation of this nature. I personally believe over regulation is harmful and we're currently seeing that harm play out to independent workers in multiple industries in California.
That's a pretty generic argument. We all know the government creates regulations.
Why are you defending AB5 specifically? Why is this specific regulation good? Keep in mind that it has had a lot of negative, unintended side effects already.
This argument has been made against every single expansion of worker rights in American history.
When the dust settles, business carries on just fine while we get to enjoy things like a 40-hour week with overtime pay if the employer needs more, safety regulations, sick leave, etc.
That's because we make over $41/hour (the legal threshold for exemption from overtime pay for salaried employees, where the "hours" are determined by average working hours per week). At that rate, we're not exactly suffering.
I don't think that's quite true - so long as one is salaried, one generally doesn't get paid overtime. I had a $70k/yr salaried job once with no overtime pay.
A better example is probably the minimum wage, which also imposes government-mandated conditions on employment, applies to adults, and is countered by very similar arguments: it harms economic activity, and interferes with the ability of adult citizens to enter into whatever employment agreement they desire.
Whether the minimum wage actually harms economic activity does not have a clear answer; you can find studies all over the place in terms of conclusions.
And the supporting argument--that businesses should be regulated because they have asymmetrical power when hiring--is also used to justify other policies that HN folks tend to like, such as the California prohibition on non-compete agreements.
Not at all. Children are not able to make many legal decisions for themselves. As a society we make this distinction repeatedly from contract law to sexual intercourse. And we’ve decided that whatever economic inefficiencies arise are worth the social gains.
This however is very different. Adults (in the US) are allowed to willfully enter into mostly any sort of agreement with another consenting party. In areas where that’s not the case, there is usually some other greater fundamental social protection that we seek to prioritize (i.e. you cannot legally permit someone to murder you). This law however continues to encroach on the things that free individuals can do. If I want to work for Uber under the terms that apparently many millions of others also want to, then that is my right. The government is effectively seeking to make this illegal...for my own protection.
The issue here is that 99% of HN commentators, politicians, etc have no experience in the gig economy yet project their own ideology onto the situation. Would it be better for workers if Uber provided more benefits? Sure. But Uber loses billions every quarter. So who pays for this? If Uber doesn’t pass on the costs to consumers, it goes bust. If Uber does, there’s a good chance that consumers spend less, or use alternatives. Either way it is likely to harm drivers.
The beauty of a free market is that if Uber was legitimately a bad deal for drivers, they would have never had a business in the first place.
Ending child labour, having a minimum wage, and having the barest minimum of employment safety standards also has a negative impact on economic activity, and bankrupts some employers. [1]
Hell, If our goal was maximizing economic activity at all costs, we'd be rounding up idlers, and putting them to work, involuntarily.
[1] Ones whose business model relies on one of the following:
* Exploitation of children.
* Providing labour-intensive products for less then the cost of keeping a labourer alive, housed, and fed.
* Running machine shops where workers have to juggle chainsaws, while breathing in asbestos dust, and licking radium-coated postage stamps.
The law was written to target Uber, because Uber was in compliance with the existing laws. The narrative that Uber was always violating the law is false -- if that was true, a new law would not have been needed.
The state wasn't able to get the result it wanted in cases against Uber, so it changed the rules. I don't see how a company can be expected to be in compliance when the state is determined to pass laws that make its business model illegal.
> The law was written to target Uber, because Uber was in compliance with the existing laws....
> The state wasn't able to get the result it wanted in cases against Uber, so it changed the rules. I don't see how a company can be expected to be in compliance when the state is determined to pass laws that make its business model illegal.
You could say the same thing about the laws that banned companies from dumping so much pollution into the environment that rivers would catch on fire (e.g. https://ohiohistorycentral.org/w/Cuyahoga_River_Fire). Many, if not all, those polluters were likely in compliance with all the laws and rules that were in effect at that time, then they found themselves out of compliance when the law changed.
Laws are changed when an undesirable result is observed that happens to be in compliance with all current laws. The bug is patched with a new law, and the companies have to either figure out how to make their current business comply, or pivot into a new business because of the changed environment.
Are you arguing that there should be no such thing as a part-time employee? Either work 40 hours per week with full benefits or stay home? That seems... weird.
That’s not cynical, that sounds wholesome. That’s exactly how democracy should work. I expect you are one of those urbanites because you haven’t mentioned the drivers being the loudest voice for changing this judgement. They are the ones suffering from this faux-compassion via authoritarian judges who think marketplaces aren’t legitimate businesses (someone tell NASDAQ, the App Store and play store, Steam, malls, etc.)
Nope. Live in an exurban town on the other side of the country and don't think I have ever taken an Uber/Lyft that wasn't associated with travel to another city. And rarely take them even then.
To play devil's advocate, even if they wanted to follow the law in good faith, they'd need to completely restructure their business. Until they can do so, they'd need to be shut down.
Can someone with legal expertise chime in but in cases like this, can a company like Uber lay out a plan for restructuring and be like "ok we'll comply but over the course of a year and here's the plan"? Or does it have to be done ASAP? The latter seems sort of infeasible. Curious about how these judgments are resolved. My feeling is that judges and the government aren't out there to hurt anyone since compliance is the goal rather than punishment but I have no real legal expertise. Thanks in advance.
Not a lawyer, but as a citizen why would we expect a company to be allowed to violate a law for an extended period of time after a court has ruled that the conduct is illegal?
That seems like the definition of capriciously applying laws, and would seem like it would create more problems arising from unequal application of laws.
> That seems like the definition of capriciously applying laws, and would seem like it would create more problems arising from unequal application of laws.
AB5 is a case of capriciously writing laws. The state wrote a new law that was specifically intended to put Uber and similar companies in a state of noncompliance with it.
Isn't every law specifically intended to put a group of people in noncompliance with it? What's the point of making a law if everyone was going to comply regardless?
The power to create laws is not supposed to be used as weapon. It clearly was in this case.
AB5 was written in bad faith with the goal of hurting specific companies, not with the goal of writing a sensible law that sets a framework for how businesses ought to operate. They wrote it in such a hurry that it unintentionally hurt a bunch of other people and small businesses. That's not how laws are supposed to work.
So if a government sees a company's actions as too unethical what are they to do about it other than target them with a law? I don't know about the specifics of this law, Ill assume you're correct it's poor, but I have trouble understanding your point of the law not being used as a weapon against these companies. That seems to be all its for to me, something to be used to stop a bad actors behavior. I can't imagine the majority of laws are created preemptively.
Laws aren't allowed to be created as weapons, under US constitutional law this is often referred to as illegal taking, if AB5 was illegal taking these companies would've been able to get the law halted which it seems to have not happened.
Would you consider all labor and environmental laws to have been crafted as a weapon?
One could argue that much of our labor and environmental protective apparatus was written to curb behaviors of specific companies (or "business models," if you prefer).
It’s usually written to make existing manufacturing activity clean up after itself, or existing employment relationships better for the employees. There may be some collateral damage, but the intent is not to destroy.
“People’s jobs should be better” is a different goal from “bad jobs should not exist.” It may be used as a tool to achieve the former, but we care whether it’s actually effective at doing so.
Is the intent here really to destroy? Is it really the case compliance with the law is only possible for employers like Walmart, The Gap, and thousands of other small firms in California? I'm very in favor of gig work, but the notion that the only option left is to stop work rather than hire folks as employees seems obviously facile. Notably, there's no exemption for the many other companies that operate passenger transport in the state.
Your last sentence is interesting because the entire point of a labor law like this one is to bring jobs under the remit of labor protections so that "people's jobs should be better" is something that can even be addressed.
b) Its existence will trigger a “race to the bottom” that threatens all workers.
c) Gig work is not very important to casual gig workers, so taking it away would not harm them.
d) Taking away gig work will prompt gig workers to find real jobs which are better for them, anyway.
Low margin employers like Walmart and Amazon ruthlessly squeeze efficiency from
their employees to ensure productivity > cost for every shift. The could not do otherwise - such are the economics of a low margin business. The gig economy offers the option of working “inefficiently,” and some people value that enough to trade off compensation for it. Maybe the gig economy companies could operate like Walmart, but the point is people are choosing gig work over Walmart for a reason.
> specifically intended to put Uber and similar companies in a state of noncompliance with it.
It would be capricious if it were more targeted, written without ample public discussion, or if the affected firms had no ability to continue operations. As I understand it, none of that is true of AB5. For example, the affected companies are free to use contingent workforces in a manner similar to the other many thousands of companies that were not affected.
I'm far from an expert on the law, but wouldn't a fair read also be that those companies were operating in noncompliance with community norms (as expressed by voter preferences), and so lawmakers plugged a regulatory hole?
In that way, could it be seen as similar to a body writing a new law (say) prohibiting people from carrying long rifles into grocery stores? Would that also be a law written capriciously?
If it wasn't targeted, then why are there so many exceptions written into the law? Lawmakers added exemptions for dozens of different types of businesses. If this was intended to be a generic law about worker classification they wouldn't have needed to do that. They really had Uber and similar companies in their crosshairs, and they intended to apply this law narrowly to them.
Thanks for the clarification! (I am definitely not an expert on this law.)
Just reading up on it, I see exemptions for (simplifying a bit) a) highly-paid professions and b) commercial fishers, repo agencies, and people who drive for driving clubs(?). The first category absolutely makes sense if the aim is something like "companies shouldn't abuse the 'contractor' classification to take advantage of low-paid workers". The second category smells like lobbying.
Unless I'm missing some of the dozens of types of businesses, I don't see how the exemptions are broadly anything more than a red herring here. I guess they could have left the exemptions and then put a $ figure and an inflation tie, but that has proven problematic as well.
How would you have written a law to express the goal of "companies shouldn't abuse the 'contractor' classification to take advantage of low-paid workers" ?
> A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. (nonitalic emphasis mine)
IANAL but that's not an exception - that's the bill saying that if the primary part of the ABC test does not apply, then the existing regulations for that licensed business take over from AB5.
From my quick glance, all of the exceptions I could find boiled down to this FAQ from the CA state website or older legislation explicitly mentioned right next to the exceptions in AB5 [2]:
> 4) Do AB 5 and Labor Code section 2750.3 require use of the ABC test in all situations?
> ...
> Additionally, where a court determines the ABC test cannot apply for a reason other than an express exception, the Borello test, described in Question 5 below, will apply. For example, if a court were to determine in a particular case that the ABC test is preempted by an applicable federal law, the Borello test would be used.
Note that the "express exception" in the case of the repo agencies is due to existing CA state law governing that profession which supersedes AB5 as long as the "repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact."
In the case of other licensed professions like doctors, veterinarians, and yes, commercial fishermen (who must have a commercial fishing license) they are all covered by existing, more specific, legislation and federal laws that by definition require exceptions in the State law - otherwise it'd be even more bogged down in the courts. That's why there's the Borello test and explicit exception: in order to fit in with other existing laws.
This is all just seems like self serving FUD from our industry but again, IANAL.
> Can someone with legal expertise chime in but in cases like this, can a company like Uber lay out a plan for restructuring and be like "ok we'll comply but over the course of a year and here's the plan"?
No, except perhaps as a settlement offer, but because the law gives specific rights to workers which State executive officials don't have the authority to bargain away, I don't know that would be effective except against any fines, etc, that might be due to the State; individual workers would still have claims until they complied.
> Or does it have to be done ASAP?
It has to be done from the effective date of the legal requirement to avoid legal penalties; for the preliminary injunction, it has to be done on whatever timeline (which may be immediately) is specified in the injunction once any stay on the injunction ends (this one was stayed for 10 days during which Uber is attempting to appeal to have it lifted) to avoid contempt penalties for defying the injunction.
> The latter seems sort of infeasible.
Yes, it's risky to have a business plan that depends on breaking the law.
> Yes, it's risky to have a business plan that depends on breaking the law.
The business plan didn’t break the law; a new law was introduced to disrupt the existing business plan. This is pretty obvious no matter your opinion about Uber’s business model or the novel law in question.
The new law merely codified a legal standard that the California Supreme Court had previously come up with (in Dynamex in 2018) as an interpretation of existing law.
Since this is the result of a court case, where they should have been complying with the law already, no, there is no transition period.
The transition period was the ~2 months between AB5 being signed and it coming into effect (+ the year leading up to it, which they could've also used to prepare).
> can a company like Uber lay out a plan for restructuring and be like "ok we'll comply but over the course of a year and here's the plan"?
IANAL, but well, this is kinda basic. All laws come with instructions about that. Some do give them that time, other laws do not and say they must be followed immediately.
I read the parent's emphasis in "even if they wanted to follow the law in good faith" on even. It's quite possible they agree and meant:
I don't think they want to follow the law in good faith, but even if they did, they'd have to shut down while they restructure to accommodate the law, so this outcome doesn't tell us much about their thinking yet.
Hadn't heard of that and had to look it up. To save anyone else the time, apparently Prop 22 is a one that (as best I understand) would reverse AB 5 specifically for app-based driving apps, which seems really narrow and preferential, even by the standards of CA propositions. Here's the Ballotpedia:
It just adds uber drivers to the already ridiculous list of exempt jobs in this stupid law, like doctors, dentists, insurance agents, lawyers, accountants, real estate agents, hairstylists, architects, professional engineers, private investigators, psychologists, veterinarians, securities brokers and dealers, investment advisers, direct sales salespersons,
commercial fishermen,...
Oh, just to clarify (for both you and the sibling[1]), I do not think AB5 was some masterpiece of public policy, and some of its distinctions are really kafkaesque[2]. My uneasiness is more that, you know, if you're gonna do a proposition to fix it, wouldn't you want a more general fix, especially given all the professions it's micromanaging?
Like, something better than "okay app-based drivers don't have to deal with that mess"? Perhaps a simpler, general rule for when contractor rules wouldn't apply? Though I guess the politics of it mean that you do have to be super narrow like this just to get it passed.
But solid general purpose laws are the responsibility of the lawmakers. They're the reason there's a crazy exception list, and they deserve the blame for it. The proposition doesn't make it meaningfully worse.
A general fix would let legislators off the hook by specifically giving themselves an exception (of which there is already quite a few) the legislators now have to deal with all the unintended, but very predictable, consequences of there shitty law without even getting to say the people wanted it.
> which seems really narrow and preferential, even by the standards of CA propositions
This is why the proposition system in CA is screwed. It's no longer being used in good faith. Almost every proposition is a law written by a lobbyist group who couldn't find a sponsor in the legislature so they take it directly to the people.
It truly highlights the folly of direct democracy.
> apparently Prop 22 is a one that (as best I understand) would reverse AB 5 specifically for app-based driving apps, which seems really narrow and preferential, even by the standards of CA propositions.
And no surprise, it was written and pushed by Uber and other app-based gig work companies, and they're going to spend a lot of money to promote it. From your link:
> On August 30, 2019, three companies—DoorDash, Lyft, and Uber—each placed $30 million into campaign accounts to fund a ballot initiative campaign should the legislature pass AB 5 without compromising with the companies.... The companies Instacart (Maplebear, Inc.) and Postmates also joined the campaign, each contributing $10 million. Together, the five businesses had provided more than $110 million in support of the ballot initiative.
They are literally forbidden by the court to operate as they have been. They need to make their drivers into employees.
You think they can do that overnight?
And why do you think it’s economically feasible to do so even if they could do it? Do you think users have an appetite to pay 2X or more per ride?
It’s possible the regulatory burden makes this an infeasible business. That’s certainly the case with a lot of other economic activity such as private city buses, affordable daycare, etc.
At this point, Uber is acting childish. They refuse to play by the rules, and opt to take their ball and go home. What is it with SV companies and petty schoolyard tier drama like this? Just follow the damn law.
If a ridesharing platform can't classify drivers as contractors for legal reason, and if they can't classify drivers as employees for business reasons[1], can they classify drivers as owners? It's certainly legal for small businesses not to pay reasonable wages or benefits to their owners.
This ruling may give a substantial advantage to a ride-sharing service structured as a worker's co-operative. That'd be awesome, IMO.
The problem is that the co-operative model is not successfully funded in the initial phases. There is little infrastructure for worker-owned businesses in this country. There is little guidance for getting investment and start-up capital when the overall aim is to primarily put profits into owners' hands and not investors'.
We need a government that supports these efforts first. A good first step would be to pass first-right-of-refusal laws.
There is zero barrier to entry for a rideshare service. (Just ask the city of Austin.) Absent COVID, competitors would be coming out of the woodwork to supply this market with fairly-paid drivers. That means the cost of a ride will double, but that simply means we'll be paying taxicab rates for much better service than taxis provided in the past. We've known all along that Uber's prices were too low to be sustainable anyway.
This. During the period where Uber and Lyft weren't operating in Austin, there were several local alternatives that popped up right away, worked just fine, operated within local regs, and that I honestly preferred service-wise. If Austin can do it, I bet California can.
Yes, but after that Uber and Lyft aggressively drove those local alternatives out of business by giving effectively-free rides for the next couple of months. The majority of my rides around the downtown area during that time cost me _maybe_ a few dollars out of pocket. That is if I even paid at all, vs using "credit" which seemed to be arbitrarily added to my account.
It is illogical to start up a new business when it is more than likely that the previous incumbent will just come back in X number of months and operate at a loss until you're gone.
"Other ride-hailing companies that entered the market in 2016 have also since suspended their operations in Austin. Fasten ceased its U.S. operations in 2018, and Fare closed in June 2017."
That's because the business model just doesn't work, it requires ridiculous scale and the ability to exploit workers to function - that is why Uber is so aggressive with this and even more reason to shut it down.
Financials aside, I don't even know what this is supposed to look like from an organizational perspective. IMHO the biggest problem Lyft and Uber are facing is not an increase in cost, it's a reduction in flexibility.
You can't afford to pay extra people to sit there on the clock if there's no demand. (plenty of drivers turn the app on in their house and go about their regular day, maybe only getting 1-2 rides in between eight hours of playing video games) Do you forcibly clock people out?
You now have to be really careful about the 40 hours. You definitely can't afford to pay people overtime, and for all intents and purposes you can't allow people to work enough hours to constitute "full time" either. So if someone hits 35 hours or whatever, you have to clock them out.
How do you handle drivers who turn down lots of rides? You have to fire them I suppose?
This is not a problem you can just throw money at. I'm glad I'm not a product manager at Lyft/Uber right now. I'm not convinced it's possible to operate in California anymore.
I guess another thing is that a lot of uber drivers could get fired b/c of just cost and the ones that stay on full-time are going to get thrashed around with little choice in what rides they want to pick.
Yeah, this is a huge mess, it kind of makes sense why they choose to fight in legal battles in the past, it's just easier than figuring this out from a product perspective.
Decoupling “benefits” like healthcare and retirement from employment is the real issue. Should be a government responsibility, given out equally, paid for by taxes.
We already have social security and medicare. The problem is that we refuse to expand these excellent social programs, opt to hobble them, and then point out how bad they are after we've bled them out. The American way.
88% of democratic voters (and 68% of independents) support Medicare for All, yet inexplicably DNC leadership voted against including in the 2020 party platform.
> Uber has argued its drivers prefer working as independent contractors, though California AG Xavier Becerra rejected that claim as a "bogus argument."
The link on the "California AG Xavier Becerra" is a google search link instead of CNBC's actual article. A mistake?
> "What worker doesn't want to have access to paid sick leave?" Becerra said. "What worker doesn't want to have unemployment insurance at a time of Covid-19 crisis? What worker doesn't want to know that they'll get paid for overtime if they work 60 hours in a week or 12 hours in a day?"
Since when are we reasoning about workers starting from what they want? If we go by that reasoning, "What worker does not want to be paid 3 trillion dollars per year?". Work only exists in a narrow space between a consumer and a service. Increase the costs of running the service, and you don't have work anymore. That's not very hard to understand.
Uber doesn’t “deny basics” any more than I deny basics when I hire a plumber and pay the plumber in cash instead of hiring them on as an employee.
EDIT: Uber isn’t the “plumbing company”. It’s a marketplace for transportation solutions, and accepts job offers and then sends the jobs out to contractors who have indicated they are interested in accepting such jobs. This isn’t just a “polite fiction”, this is fundamentally how Uber operates, and why they are shutting down in California. AB5 is a terrible law and I hope it is reversed or carved out to uselessness. I see it as a net negative for the economy, and especially for the workers who will now be receiving zero supplemental income during these tough times. Uber drivers are not employees of Uber.
You’ve got the wrong side of the analogy. You hiring the plumber makes you the rider in this analogy. The plumbing company is Uber. AB5 says that the plumbing company can’t just hire the plumber as an independent contractor every time your toilet breaks and send them to you to avoid giving them employee benefits.
Right, you get price increases instead, which are a more regressive way to guarantee a basic minimum standard of living than a publicly funded safety net.
Really? Wouldn't barely profitable businesses cease to be profitable anymore and go bankrupt
Surely if we mandated that the federal minimum wage is $50, we'd see businesses go out of business left and right, correct? Why would we not see a directional change like this for smaller hikes? Do you have any sources?
The question being posed isn't wrong, it's just incomplete:
> "What worker doesn't want to have unemployment insurance at a time of Covid-19 crisis? What worker doesn't want to know that they'll get paid for overtime if they work 60 hours in a week or 12 hours in a day? What workers wouldn't trade their ability to set their own hours for these benefits?"
Plenty of people were driving for Uber and Lyft before the pandemic when unemployment was low and real wages were growing. The notion that people were predominantly driving for Uber and Lyft out of desperation does not hold up to scrutiny.
This thread is being rate limited reply in edit:
These drivers aren't slaves. Out if all their work options they chose ride share. Now, their options are likely going to be strictly worse. The "bar" might be low from your perspective, but it was the best option these workers. How do you think their situation is improved by eliminating (or drastically altering by removing the ability of drivers to set their own hours) this option?
Work only exists in a narrow space between a consumer and a service.
And to be quite frank, not all services have a right to life.
If some employer/business can't meet the bare minimum of workers right, well, sucks to be them. Hopefully a competent competitor will pop up.
It's downright toxic that we live in a world where consumers get cheap products and services, on the backs of either rampant workers rights violations, or heavily subsidized VC-money.
But in this case you are assuming a worker wants those things. They might not need various benefits (health, etc.) as they get them via another job or a spouse.
If you look at reddit.com/r/uberdrivers, Uber mandating everyone be employees is.. controversial.
Just make the whole service distributed. Cut out Uber. Connect me directly to a driver through open source software.
Person A exists who is willing to drive from point a to point b for x price. I am willing to pay x price. An open source software exists to connect us both in real time.
Who will the government regulate in this scenario?
I think that you’re underestimating just how much infrastructure goes into running something like Uber. A friend of mine does ML work at Grab (South East asia ride hailing company) and the amount of data processing that goes into getting a good fast and cheap ride is incredible.
It might be possible to somehow distribute it and pay people at home for spare compute time, but it would still run into latency and spike problems.
If this existed, there would be a much stronger case for the drivers being independent contractors. Uber employees are employees specifically because Uber dictates most aspects surrounding their work outside of their hours.
The Uber situation seems to be echoing the deregulation of the CA energy market [0]. First, hopes of new efficiencies through unleashed market forces, then bad-faith actors (Enron), then clusterfuck, then taxpayers left worse off.
I don't know what kind of background checks and interviewing (if any) Uber drivers have to currently go through (beyond having a valid driver's license and good driving history?), but if I'm hiring someone as a full time employee, you better believe I'm going to be more rigorous and it will cost me more, and that will limit the number of available Uber drivers IMO, or the number Uber will allow to work for 40+ hours. In turn that lowers supply, driving up Uber prices even further. I don't know how this makes sense overall. If a driver chooses to Uber as their primary (or sole) source of income, that's their choice. Do drivers that hustle more for Uber get a larger cut? (I think that's fair).
This is not about Uber, but about how a government can force something on a business model. Something seems off about forcing a company that created massive opportunity for people in the first place. (I am in no way supporting Uber because I think their leadership and culture have very questionable ethics).
How much more are local, state, and federal governments going to reap from taxes once drivers are classified as full time employees?
Uber (& Lyft) run extensive background checks at the state and federal level and are regulated to do so at the city, county, state level depending on the city. It's actually already a pretty expensive process and overall the company eats the cost for all of it (as one should expect).
For the number of drivers who are 40+ hours, thats <15% of the driving population and so if this kind of law sticks it definitely greatly impacts who will be able to work for Uber and for Uber to still make money off that.
Overall it's a mess, AB5 is a poorly written law :/
From my favorite capitalist, an oil futures trader on WS:
Between 9:30-4:00 I’d kill my own mother to make a dime a trade. Kill my own fucking mother.
Do we seriously think Uber would not slash wages to shit, deny healthcare, work drivers till they dropped, and then killed someone’s mother if they could make a dime and get away with it?
People seriously believe they would not do that unless someone (AKA The State) does not stop them?
I’ve worked in corporate America, they would kill you for a nickel if it could lift their stock price.
Welcome to the “system.” Now back to work!
Your boss has their eye on a new house. And YOU are going make sure they have that downpayment. :-)
That’s a very cynical view.
What about You and I who also have a down payment and a mortgage?
You can argue that Uber was exploiting workers, but at the same time, none of them were forced to work. All made a free choice. And now “The State” has essentially legislated them out of their jobs.
The State has literally said, “you’re too stupid to realize you’re being taken advantage of, so you can’t work this job”.
I’d say that “The State” is far more of a problem here than Uber.
I definitely agree with you on this issue, but want to point out that "free choice" can lead to suboptimal outcomes. Here's an excerpt by Singer:
> Suppose I live in the suburbs and work in the city. I could drive my car to work, or take the bus. I prefer not to wait around for the bus, and so I take my car. Fifty thousand other people living in my suburb face the same choice and make the same decision. The road to town is choked with cars. It takes each of us an hour to travel ten miles. In this situation, according to the liberal conception of freedom, we have all chosen freely. Yet the outcome is something none of us want. If we all went by bus, the roads would be empty and we could cover the distance in twenty minutes. Even with the inconvenience of waiting at the bus stop, we would all prefer that. We are, of course, free to alter our choice of transportation, but what can we do? While so many cars slow the bus down, why should any individual choose differently? The liberal conception of freedom has led to a paradox: we have each chosen in our own interests, but the result is in no one’s interest. Individual rationality, collective irrationality…
I recommend reading the book Atlas Shrugged by Ayn Rand. California will attack and attack and attack because those in government believes they are morally superior. The only way they will learn is when Capitalists fight back by "turning off the engine of the world".
In case someone actually wants to read Atlas Shrugged, I did actually read it. It's a fictional world where the strawmen business people are happen to always be good and moral, and are oppressed by the strawman government people who are bad and greedy. Also the author occasionally has her characters go on multi-page speeches, for instance about how we ought to be using gold for currency.
In case it's not clear, Atlas Shrugged is a piece of fiction and using it to draw parallels to reality is like saying "I recommend watching Disney's The Lion King. Zoos keep hogs apart from lions because they think they can't get along".
As a sidenote to balance my scathing review, I rather liked one of her earlier novels, Fountainhead. If you want to read an Ayn Rand novel I'd go for that one, as it's more about a type of "rugged individualism" than an economic system. It directly grapples at the question of the nature of invention/innovation: whether as a product of individual genius or standing on the shoulder of giants. Obviously the novel has an answer but it's not exactly a solved question in real life, and at least some of Ellsworth Toohey's quotes aren't half bad.
I recall reading that. It's all very true, but it also glosses over the fact that some people acquire money through regulatory capture, violent crime, inheritance, etc, etc.
I think capitalism is the best system we have, but Atlas Shrugged espouses a rosy picture of anarcho-capitalism like Marx espouses a rosy picture of anarcho-communism that doesn't work when real humans come into play.
I've come to believe that having market forces bring out the best in society is a state of constant work to cultivate those forces in a human direction.
I mean, consider the alternative, which is how taxis used to work. Investors like Gene Friedman would own fleets of medallions, and drivers would rent the medallioned cars. Or drivers would own their own medallion. Definitely, for sure, the drivers were not employees.
One big difference was that there were no big public companies to sue. In Chicago, clever class action lawyers tried suing the city, since they set all of the standards that are the basis of the employee/contractor distinction. It got up to the 7th Circuit, where Posner wrote an an opinion that went basically "uh, no."
I'm sure both Uber and Lyft have contingency plans to quickly hire drivers as employees. It is more they don't want to switch to the employee model and then back again if the Prop passes
Can we talk about the upside of being a contractor? It takes more effort to keep tabs of what you do but there are many benefits to being a single person entity. I believe lack of education about being an LLC or incorporated entrepreneur or maybe the high bar of understanding its benefits contributed to the opinion that being W2 for Uber is much better.
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[ 3.1 ms ] story [ 580 ms ] threadYou see it all over the place, and I for one hope that this trend is reversed in the next decade. It’s not good for society as a whole.
Are they better off having no income?
They may have a case in developing nations, I am not very familiar with the systems over there pre-Uber so I can’t comment on that.
I live in a developing nation that takes refugees from communist hellholes and the gig economy is helping them out big time by providing the less advantaged ones with a chance at life, all while improving the lives of its users through the service. And it's not just good economically, by creating new markets they help grow the economy and prevent the spread of xenophobia caused by foreign actors participating in a stagnant economy.
Unless you have solved poverty in your country and no one would ever willingly work in such a job you're only causing harm to other people by strangling Uber and similar companies out of existence.
Again, I am not saying that this is the same case for developing nations; there maybe was no work and/or ability to unionize in the first place. But for large parts of the world this was the case, and Uber just “disrupted” the negotiation abilities of the drivers.
I believe we’re looking at this from two different points of views, a developing nation vs a developed nation (I’m from The Netherlands).
In fact, for example in NYC, they generally had to pay to work, by being forced to rent cars from medallion owners like the charming Evgeny Freidman (aka Taxi King, formerly an owner of 900 cabs, now a convicted felon).
"The average rate a cabbie paid to take a taxi out for a 12-hour shift climbed 11 percent, to about $85, between 1990 and 1993, based on the most recent figures available from the city's Taxi and Limousine Commission. But meter revenue remained steady during the same period. As a result, the average income of drivers was about $19,000 in 1993, the same as in 1986 and less than in the peak years that immediately followed, taxi commission studies show."
https://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-d...
I’m aware that the US generally already had a very poor system for taxi drivers, but I don’t believe Uber did not make things better. And don’t forget that Uber also has Uber Eats — delivery drivers are most definitely far worse off with that than when they were working for the restaurants themselves.
Yes, Uber is more susceptible to competition than the old taxi companies. Where I live there are already three providers, and I stopped using Uber because the other takes a lower cut from the driver.
In the medallion system, you had to submit to Friedman, because even if another provider offered better conditions, they had a small number of medallions.
Competition between employers helps workers.
> I’m aware that the US generally already had a very poor system for taxi drivers, but I don’t believe Uber did not make things better.
Ok, why?
> And don’t forget that Uber also has Uber Eats — delivery drivers are most definitely far worse off with that than when they were working for the restaurants themselves.
Which restaurant replaces its drivers with UberEats? At least around here, the restaurants that already had drivers kept them, and UberEats even lets clients order from those restaurants and have the delivery be made by their own drivers. They just expanded the labor market to restaurants that did not delivery beforehand. I fail to see how can that be worse than before.
Many people depend on rideshare like Uber to get to work like a public utility. Maybe if California (and this is true of other areas) actually built and invested in bike able neighborhoods and public transport, then they wouldn't need Uber.
California will lose this one eventually. You don't know what you have until it's gone.
I suspect they will if Lyft does, regardless of public statements intended to pressure the politicians.
This just isn't about Uber and Lyft but they were targets because some very big money was getting hurt by their existence.
Perhaps put that time into advocating for a living wage and universal healthcare instead of embracing Stockholm Syndrome with gig platforms. They might not be around much longer, but your government will be.
The only freedom an uber contractor has is "when to work". All the pricing and trips are decided by uber, and they can't even reject properly. They are in fact an employees in everything but legal status.
In etsy, you choose your prices, what you sell, and even to whom you sell to, it's definitely a market place.
Starting Tuesday morning, drivers at the three test airports can either accept Uber’s original price for outgoing rides, or ask for up to five times more, in increments of 10%. After next week they will have the option to ask for less than Uber’s original price.
Essentially those drivers now are bidding against one another for riders. Uber passengers will see only the lowest proposed fare range. If that driver rejects their ride request, they could see a new, higher fare range, as Uber would then show the request to the next-cheapest driver.
https://www.sfchronicle.com/business/article/Uber-tests-lett...
Uber likely wouldn't be in this position if they stayed out of pricing/visibility and let passengers/drivers set whatever rates they wanted to. Just provide a platform for people to get rides and stay out of pricing entirely.
And importantly, it's not actually in effect in the entire state yet. It's still just limited to the Bay Area, with the rollout to the rest of CA happening over the rest of the summer.
I also object to this characterization of consent.
> The only freedom an uber contractor has is "when to work".
How is this not complete freedom? Loads of contracts out there specify the rate that the contractor will be paid, and both parties are expected to uphold that specified pay. Are those contracts no longer valid? In some cases with written contracts, the pay is specified as a non-negotiable condition from the paying party, and the "only freedom" the contractor has is to take it or leave it. Is that a violation? If a contractor never actually gets hired under a contract for which she sets her own rates and all of the other "freedoms" supposedly necessary for forming a contract (in CA), is she being oppressed in some other way?
No one is holding a gun to Uber drivers' heads forcing them to drive. They seem to be doing it voluntarily (this seems the case for every one I've met). Insofar as this is their only option, this is not a problem of Uber's creation, but of the overall political economy. And that, after all, is GP's point.
In some cases with written contracts, the pay is specified as a non-negotiable condition from the paying party, and the "only freedom" the contractor has is to take it or leave it. Is that a violation?
No, because one of the other factors in being a contractor was having multiple (potential) contracting counterparties (aka clients). An Uber driver contracts with just Uber, not the riders. In contrast, a contractor would generally have more than one client if they were in the business of providing that type of service as a contractor. (Part C of the ABC test. Note that Part C requires a contractor to engage in the legal formalities of creating their own business, so it's not just enough to work for both Uber and Lyft.)
But note that for Uber and Lyft, what matters is not that they failed part A and C of the ABC test, since those are relatively trivial to structure around.
Uber and Lyft fail part B of the ABC test, which is that a worker cannot be engaged in a job that is the usual course of the employer's business. Uber and Lyft call themselves transportation companies, ergo, any worker that is providing a transportation service is automatically an employee under the ABC test. Indeed, drivers are the only workers at Uber/Lyft that would be treated as automatic employees; the programmers could be employees or contractors.
Yes, driving Uber is a shit job, but for many people it is far better or more compatible with their lives than waiting tables or working retail, which are the realistic alternatives for most Uber drivers.
The simplest explanation is that for whatever reason, those better-paying retail or food service jobs were not an option.
One of those compelling things is that it seems like a better deal. Uber relies on you not doing the expenses math on things like vehicle depreciation, car insurance, unpaid time spent waiting for fares, etc.
Just because you make a new app and don't follow the rules in the hope you get to big to fail doesn't mean it works.
Uber specifically displays the current problem with new startups, they don't make things more effective, or cheaper.
They borrow money, set low prices and don't follow the law and then lobby to change them.
Uber is a taxi service I don't know why anybody would think otherwise.
You compare uber to etsy, but uber sets a price and does not even list the name of the driver till you order to pay.
One is comparable to a bazar, the other is a taxiservice with a nice app.
Yes, but the driver is similarly offered the fare, and may choose to accept or not. This is actually one of the critical distinctions between employees and non-employees. If they were an actual employee, Uber would be able to just assign the fare to them.
This is also unlike taxis, where, if your light is on, it is illegal to not accept the fare. (Although violations of these rules are common and blatant, which ironically stopped me from using taxis altogether.)
It’s certainly true that Uber operates in a grey area. When cities have explicitly banned them, they stop operating (e.g. Vancouver). It seems like California has clarified some of the ambiguity around employment, and Uber may similarly stop operating.
What matters is whether the worker can independently decide what fare to charge (even if in practice the fare is limited by market forces to what a customer/client would pay). If they can, they are almost always a contractor. If they can't, they are almost always an employee. (Note: Hollywood unions and guilds set minimum rates for work, but members are free to charge higher rates if they can get away with it, and many do. The contractor/employee distinction is largely moot because the unions/guilds took on the healthcare and benefits provisioning functions that employers would normally handle.)
EDIT: reply to ericmay since HN won't let me reply that deep. No, "accepting" a fare is not the same thing as deciding what fare to charge. Accepting a fare in the Uber/Lyft context means you take the fare Uber/Lyft offers you, or you go home; there is no potential for negotiation or other work. Deciding what fare to charge means you get to post your fare to Uber/Lyft, and customers decide whether they are willing to pay it, or conversely that a customer posts a desired fare, and the driver gets to decide whether they take it. If Uber/Lyft were truly just platforms and their drivers were independent contractors, either of those would be how fares are determined (and in fact, Uber is moving toward the former in CA as a result of this law).
If I offer someone $10 to mow my lawn and that's the only price I'm pay, are they now an employee because they can't decide what fare to charge? Do I now owe the kid down the street and all of her friends a 401k if they rotate through who mows my lawn for that price
Paying someone $10 to mow a lawn occasionally would not turn them into an employee. Terms of payment are just one of the factors in part A of the ABC test (which analyzes the worker's level of independence), so stop focusing on that single non-determinative data point.
Moreover, benefits requirements don't kick in until an employee exceeds a certain threshold of work performed (generally 30+ hours/week) for a single employer, and 401K contributions are not mandatory benefits anywhere. If a worker satisfies the ABC test for independence, they aren't an employee and benefits would not be required unless negotiated for as part of the work contract.
If I offer someone $10 to mow my lawn and that's the only price I'm willing to pay, are they now an employee because they can't decide what fare to charge? Do I now owe the kid down the street and all of her friends a 401k if they rotate through who mows my lawn for that price?
I guess I'm not following here.
More broadly, you can't compare 1 person trying to contract with 1 other person with 1 multi-billion dollar company contracting with 10s of thousands of people. Dynamics change when it's only a handful of companies hiring many people.
There's also no negotiating with me. It's $10, take it or leave it! (If they leave it, like they don't accept the fare, then so be it my grass doesn't get cut and Uber doesn't make money).
> More broadly, you can't compare 1 person trying to contract with 1 other person with 1 multi-billion dollar company contracting with 10s of thousands of people.
Why? The foundational principles seem to be the same to me here.
I think too many people want Uber to be this company that meets these certain expectations and they want that because the government has failed them and so they've turned to corporations to save people via jobs and paid benefits because they want the illusion that someone is paying their fair share. Instead you need to change the laws in your state/country/area to represent your values. If people don't have healthcare, pay money and give them healthcare. Making Uber do it simply isn't going to work here. Especially for them in particular.
To me there is no fundamental difference between me picking up an app and then getting $10 to go pick someone up and someone coming to mow my grass for $10, or someone paying me $20 to move a couch for them. I'm doing some work for some money. That's it. There's nothing more to it.
No you won't. Or at least most people won't.
>There's also no negotiating with me
Yes there is. Or at least there is with most people. Even if you are adamant on price there's plenty of other areas for negotiation like when the work will occur, subscription agreements, or the kid can try to work it out and cut your grass at the same time as your neighbors.
>Why? The foundational principles seem to be the same to me here.
You really don't see a difference in a business transaction between two people and one between a person and a multi-billion dollar corporation?
AB5 is about the relationship between the worker and the person paying them. Fundamentally, yes, it's all just compensation for work performed, but the law is all about the specific details of the work relationship not the zoomed-out overbroad simplification you've reduced it to, because at that level everybody is the same as everyone else and if everybody is the same why bother with any laws at all?
With restaurants, there’s an ongoing relationship and and expectation about shifts. There’s just a small amount of flexibility. The employee with take some good ones, some bad ones (with more good ones probably going to folks with more seniority, or those favored by the managers).
One couldn’t show up every couple weeks for two peak hours at the restaurant and expect to work. But some Uber drivers do exactly that.
Wrong
> Uber specifically displays the current problem with new startups, they don't make things more effective, or cheaper.
Wrong (https://www.businessinsider.com/uber-vs-taxi-pricing-by-city... and even more since then with Uber X expansion)
No one likes a pedant.
Uber hasn't been that cheap in years. Uber is now roughly the same or more than using a taxi in LA, and that doesn't even include Uber's original and more expensive black car service.
https://www.uber.com/us/en/price-estimate/ versus http://www.lacitycab.com/rates/
Try it
In contrast, the taxi service you linked to is the all inclusive price and is generally standard for all taxis as a matter of local law.
In the app, Uber is now more expensive than a taxi in LA for long trips.
People are voting & doing something with their democracy; that’s how this passed. And they’ll have another choice when they vote on the prop. You’re tired of people leaning a certain way, I’m tired of people coming up with really cheap shots just because they don’t like outcomes. Get a cup of coffee.
I'm not sure how my comment on this thread is any more of a cheap shot than any other comment, or how it's more of a cheap shot than telling someone you disagree with to "get a cup of coffee". I thought what I wrote was at least a coherent opinion on the matter. I'm sorry that it made you angry and that you took a negative interpretation of what I wrote. Not my intention.
> the business model won't allow you to pay people enough money
Doesn't sound viable, does it?
Do you mean to say that, after expenses and benefits are taken into account, an Uber driver working 40 hours a week makes less than minimum wage?
Etsy is not even remotely the same thing as Uber. For starters, shops choose what they want to sell, and for how much, and customers choose which shops on Etsy they wish to buy from. Other than handling payment processing, Etsy operates just like a mall.
In contrast, riders don't get to choose which driver they get; Uber chooses for them. Uber chooses how much riders pay and how much of that drivers get. Uber is not a platform, it's just a techified transportation service.
Many people depend on rideshare like Uber to get to work like a public utility.
This is an extremely warped and privileged view to have. Only people with lots of discretionary income used Uber to commute to work before COVID. They did not depend on it. And this is a very small subset of the US or CA populations; most people can't afford to take an Uber to work everyday.
I really wish people would stop giving government a pass and wanting corporations to come save them.
The problem is corporations like Uber that are exploiting their employees, not government. Corporations started paying their executives tens of millions for minimal work instead of the labor force doing the work and actually creating the value.
Maybe if California (and this is true of other areas) actually built and invested in bike able neighborhoods and public transport, then they wouldn't need Uber.
California, including especially the Bay Area, LA, and San Diego, has public transportation, and thousands of miles of bike lanes. It is possible to visit every major city and national park in CA using just public transportation.
You really had me for a moment until I realized you're joking :)
In all seriousness, public transportation in California is the real joke.
> It is possible to visit every major city and national park in CA using just public transportation.
Sure, and it's possible for me to canoe to Antarctica but it's not a reasonable way for anyone to travel.
You can get to a lot of places in the Bay Area by public transport, but the time penalty for doing and the number of services you have to use is absurd outside of downtown SF. Typically 3x driving and upwards.
Compare this to New York, or London or Amsterdam, where it can be close to parity, or on the 1-2x range. (I mention these because I have), and you’ll realize that Bay Area public transport is effectively non-existent.
CA isn't like NY or London. Our cities weren't built to the same level of density as NY or London, and systems that dense would be overkill. Moreover, given that CA's public transportation systems are geographically larger than any other public transportation systems outside of China (in the sense of geographic territory serviced), it would also be prohibitively expensive to build systems that dense in CA. A system as dense as NYC's metro in LA would cost more than a trillion dollars.
I think the point about geographic density is completely fair as an explanation for why the disparity exists, but it mostly serves to confirm the general point.
If you consider the percentage of locations or population addressable in a unit of time - e.g. in 1 hour, by public transport. The Bay Area does terribly.
This is an argument why public transport cannot substitute for ride share or car services in the Bay Area in the way that it can in other cities.
I speak as someone who has personal experience of all of these cities.
Sure, and it's possible for me to canoe to Antarctica but it's not a reasonable way for anyone to travel.
What an extremely narrow and privileged worldview you have. No wonder people hate techies so much these days...
Every day, more than a million people use CA's public transportation systems to travel between cities for work, even now during COVID. I guess they're all being unreasonable.
Trains and buses are infrequent and have terrible evening/weekend schedules. Sure, during rush hour they can likely be faster than the incredibly overcrowded Californian roads, but otherwise they're crap. They're also not exactly cheap!
It's no surprise why Uber & friends started in the bay area, and why it's so popular there. They had no competition. The transit in these places is like the bare minimum possible. It doesn't even come close to touching world-class transit systems popular all over the world.
The temporary shutdown (which will probably be reversed win or lose, but more profitably if they win) isn't so much a response to the injunction but a stunt related to the campaign for the ballot measure.
They almost certainly have fallback plans if they lose both the suit and the ballot measure, but they aren't as desirable and they'd rather operate with the rules aligned in their favor, and they are willing to accept significant short-term cost to maximize the prospects of that outcome.
They shouldn't force to operate a business that loses money, which is not going to be sustainable anyway.
Unless "take what you can carry then shut down in CA" was the plan.
Are alternatives like Lyft closing down in California, too?
I'm sure they are fine, but we must now ensure this scenario can not ever repeat.
If you don't want to read things outside your bubble, feel free to go back to Reddit.
"Please don't post insinuations about astroturfing, shilling, brigading, foreign agents and the like. It degrades discussion and is usually mistaken. If you're worried about abuse, email hn@ycombinator.com and we'll look at the data."
https://news.ycombinator.com/newsguidelines.html
https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...
The cities that will be hurt are the ones that over relied on a parasitic business instead of investing in essential infrastructure.
The Uber business plan has always been to break the law at a massive enough scale that they can buy new laws before enforcement catches up with them.
I was just pointing out that the market exists and there's money to be made. Something will fill the void if Uber leaves.
And still we should try. It's not like California didn't have a functional economy before Uber. Sometimes it's right to make sacrifices in order to uphold our ideas.
Where is the line of hours driven until you get benefits? I dont know, but I think that is the wrong question.
The right question is -- why is this forced onto Uber rather than being a question of national healthcare.
If we offered national healthcare, like many other countries, it would solve the problem across the board. It could be funded by Uber and all other companies through some type of tax. That seems a lot more efficient than trying to solve the problem piecemeal.
40 hours according to the California Department of Industrial Relations and 30 hours according to the Affordable Care Act.
> The right question is -- why is this forced onto Uber rather than being a question of national healthcare.
It's not just healthcare. It's also about unemployment insurance, paid time off, 401k contributions/matching, how the tax burden is split, and on and on.
So uber can avoid this requirement by only allowing drivers to work for 40/30 hours per week?
Because one political party has spent the last 4 decades fighting to prevent "national healthcare," forcing states and businesses to deal with it.
Hell, they've spent the last 10 years trying to demolish a law that the overwhelming majority of voters support, including those within their own party.
However, as currently envisioned, the single-payer system would not charge employers; it would be part of the taxes levied on all taxpayers (including employers), which would spread out the costs more.
Do you feel strongly that one more tax would solve all of California's problems?
With specific respect to the tax issue, the flipside of "one more tax" to pay for a single-payer system is that it would replace health insurance premiums. Because premiums are currently set for smaller risk sharing pools than a statewide pool of nearly 40 million, and those premiums must also include significant profit margins to pay for health executive's multimillion dollar annual bonuses, it would be very easy for a single-payer tax levy to undercut premiums by more than 50% (and for the single-payer proposals currently under consideration, the employee savings range from 50-90%).
If anything, the problem with a tax for a single-payer health system is that people would be saving so much money compared to paying health insurance premiums that CA would have too many people moving into the state for the rest of our public services to handle.
Ha! Yeah, CA is known for it’s multitude of far-right groups.
And if they are so far right, why are they leaving and voting for left wing policies in other states?
Suffice to say CA has some of the highest taxes of any state, yet it also has some of the worst social problems - poverty, homelessness, etc.
I’d say it CA inability to run a tight ship despite all the taxes that is causing people to leave.
I was under the impression that much of the homelessness problem is because CA is a nice place to live (with or without a home) and because the climate is temperate and thus safer to live than most other places (where a homeless person could literally freeze to death.)
Sorry if this sounds insensitive -- I really want to understand this: I concede that cost of housing could lead to homelessness, but I dont understand this -- isnt the housing cost really a problem just in the two major metro areas? Is housing exorbitant once you leave those areas? For someone who is homeless, is there any gravity anymore to -- say -- being close to SF/SV/Hollywood?
LA Times' Steve Lopez interviewed a number of homeless last year in a series of articles. Most of them weren't from LA. They just came because they were told the weather was great and that drugs in LA were free.
A number of far right groups can trace their origins to the Inland Empire or to CA's far North.
As for the homeless issues: multiple states admit that they use CA as their dumping grounds for their homeless. It was, and still is, the unofficial policy of the state of Texas to buy their homeless tickets to LA. (Former TX governor Rick Perry used to openly brag about this, including when he was running for president.) A recent survey conducted by the LA Times last year found that more than half of LA's homeless aren't even from California. They just came here because authorities back home suggested that they would enjoy CA more. Excluding the non-local homeless, LA would have enough beds to house its own homeless. We just don't have enough to house the entire country's homeless as well.
I keep hearing that most of the homeless in SF are actually from SF.
As of 2015, approximately 71% of the city's homeless had housing in the city before becoming homeless, while the remaining 29% came from outside of San Francisco. This figure is up from 61% in 2013.[1]
[1]https://en.wikipedia.org/wiki/Homelessness_in_the_San_Franci...
For example on a household income of $100,000 with members married filing jointly, California effective state income tax rate is about 3%, or in this case $3,000.
Moving to a zero state income tax state like Washington or Texas will only save you that much in state taxes but will probably save you a huge amount more in lower housing costs - for a common single-family home perhaps on the order of 20 to $30,000 a year.
If you want to place blame anywhere, place it on restrictive zoning laws that limit the construction of new housing, and on proposition 13 which has disincentivized the building of residential real estate in favor of commercial, and allowed untold numbers of properties to multiply and value over the decades without paying anything near an equivalent increase in property taxes.
The reason your kids cant buy a house down the street from yours has nothing to do with how much taxes your kids pay and everything to do with the policies that you've voted for over a lifetime of homeownership that have insured way less supply than demand.
These people _love_ to talk about how much more their houses are worth at dinner parties everytime you see them and then are all surprised pikachu face when they've priced out their own kids.
Housing can be affordable or an investment, but not both.
A broader solution would not be one-more-tax, it would be net-zero. The current proposal is also a tax -- it forces a cost on Uber (which will be passed onto customers) to solve the problem on a micro level. Whether I pay an "Uber regulatory recovery fee" or some other tax is all net zero. But I'd love to see a broader solution that solves the problem more universally (if not at the federal level, then at least at the state level).
CA could fix it’s own health system to cover everyone. Yes, there are federal rules they’d need to work around, but they could do it.
https://www.nytimes.com/2018/05/25/business/economy/californ...
Basically, one someone tallied up the cost, it ran out of steam. Just like in VT.
Let me anecdotally tell you that a large healthcare program has not been good in my experience. Single Payer maybe good though so long as there is choice and competition.
Another consideration is that the US has been setup to allow a sort of localism where states can design their own solutions. It might be best for each system to be setup as a state level item.
Look at the NHS in the UK, on average it costs £3k per person per year, outcomes are broadly similar (if not better, especially in areas like post-partum mortality) and as a % of GDP is half as expensive as US healthcare.
There's many good reasons to avoid nationalized healthcare. Have you been to the post office or the DMV?
Have I been to the post office or the DMV? Sure. And when there are a ton of people who want to use a service, you tend to have to wait.
Have YOU been to a for-profit emergency room? Or a for-profit, non-fast-food restaurant? Hell, go to a Fed Ex or UPS store. They won't be perfect, and you will wait in line.
Yes, I have. The post office seems to do an EXCELLENT job of delivering mail at an absurdly low price (for standard letters or postcards), although when I lived in Chicago for a few years I found that a certain portion of letters were never delivered.
A number of years ago the DMV (I was in New York and New Jersey at the time) offered terrible customer service; these days the DMV I have gone to (New Jersey and Pennsylvania) seem to do an excellent job.
What I can conclude from this is that quality varies, whether in private industry or public services.
The Tea Party predates the ACA and was more a general anti-Obama movement than specifically motivated by one policy.
It's a public-private healthcare system in which a single entity pays all healthcare providers for health services rendered.
Individual providers would still be free to negotiate their own rates with the single-payer entity.
Individual providers would still be free to provide concierge medical services or other non-covered medical services (for example, most plastic surgery).
Individual providers would still be free to distinguish themselves on the basis of patient service.
And with all due respect, the problem with the post office is that the GOP requires it to pay for decades of upfront expenses now rather than when those expenses are incurred, unlike a private business, and the GOP won't actually let the post office operate anything like a private business. If the post office could operate like a private company it would shut down every rural post office in America, since those are just money drains that detract from the profitable urban and suburban facilities. If the post office could operate like a government agency again (like it did before Reagan), it would run as smooth as butter.
Because that's the way the stupid system currently works?
So it's both- Uber should be forced to work in the current confines of the system, and there should be questions like national healthcare
>If we offered national healthcare, like many other countries, it would solve the problem across the board. It could be funded by Uber and all other companies through some type of tax. That seems a lot more efficient than trying to solve the problem piecemeal.
As others has said, it's not just healthcare.. payroll taxes, other benefits etc.. Uber is basically trying to avoid all of this by pretending that 100% of their workforce are "contractors" even though many work 40+ hours a week like a normal employee.
And for their competitor.
Dara Khosrowshahi is right that there needs to be a "third way." Uber would obviously prefer contractors, and maybe the "third way" talk is just them realizing that's not politically viable, but however they reached the conclusion, they're right that this is a different category of work.
EDIT: To a reply saying I don’t understand how fast food restaurants operate, I certainly do, I’ve worked fast food in my life. While they certainly try to be flexible, you can’t just decide to show up approximately “whenever you feel like it.” The closest approximation to that is to only have 4 hours a week regularly scheduled (otherwise they can’t call you an employee), and then you call in whenever you feel like working to see if they need help (often they will say “yes” but sometimes they will say “no”). However, this arrangement only works once you have enough experience that you can come in and basically work any position in the restaurant, and it’s not something that can be scaled to every worker at the restaurant.
You actually can take several months off from McDonalds if you want and come back. Many employees do, especially the ones that work at college-town McDs...
Moreover, you can switch shifts at will, so long as you find another employee to exchange shifts with.
Pretty much the difference between fast food and Uber is that fast food is a minimum 8 hour shift and Uber can be as short as a 1 minute ride.
And what happens if you don't log in to Uber or Lyft every day? You'll fall off their internal automated lists for ride selection priority and get stuck with all the undesirable rides nobody else wanted to drive.
> Where is the line of hours driven until you get benefits? I dont know, but I think that is the wrong question.
I wonder if there is a reason it could't work like this:
• If you work N hours in a week for employer X, where N meets the benefit threshold, T, for some type of benefit, the employer has to provide that benefit.
• If N does not meet that threshold, the employer has to make a payment of N/T x C to the State, where C is the weekly cost for the person to pay for that benefit themselves.
• The State keeps track of these payments on a per worker basis and works with the benefit providers to use them as a subsidy on the worker's cost to buy the benefit.
For example, for health insurance, if Bob drove 40 hours a week for Uber, Uber would have to offer Bob the same health insurance they provide their full time employees.
If Bob only drives 10 hours a week for Uber, delivers food for Grubhub 15 hours a week, and does 10 hours waiting tables at a cafe, none of those would have to provide health insurance, because the threshold is 30 hours. But Uber would have to contribue 1/3 C, Grubhub 1/2 C, and the cafe 1/3 C to the State for Bob's health insurance. That would be enough to cover Bob getting health insurance on his state's ACA market.
It would actually be more than enough. If the excess carries over to be used in weeks when Bob works less than 30 hours total, then as long as Bob averages 30 hours of work a week, he has health insurance.
The "startups should bend laws because the laws suck" mantra is equally simplistic and immature (not pointing at you, but it's been thrown around A LOT in this sector)
I'm confident Uber is capable of doing complex things quickly when it is in Uber's interests to do so.
But what would you call it, and how does that change the argument about why they're doing this?
There is so much that needs to be changed for this to happen, it would be more shocking if Uber didn't shut down.
Uber has over 22,000 employees [1]. They have HR professionals whose whole job is managing those employees. And they have billions of dollars available to do whatever they need to.
If they wanted to make every driver in California a W-2 employee, I am confident they could do it as quickly as they wanted. And the court wouldn't make them immediately stop. They wouldn't need to shut down. They just need to begin transitioning. Courts are generally reasonable. They'll understand changes take time.
Shutting down is entirely their way of giving the finger to California for making them do something they didn't want to do.
[1] https://www.uber.com/newsroom/company-info/
What about the people that just work for a little side hustle. Like 5-10 hours a week?
The correct term for a "side hustle" person is "part-time employee."
As for people here who invoke "freedom of work". Most people doing these jobs don't have much choice at first place, in order to survive. But eventually Uber will backstab them, one way or another.
I think this is a good comparison, with the caveat that there is a major difference in the political calculus: the people who get the most benefit from AirBnB in NYC are people visiting NYC (i.e. people who can't vote in NYC). AirBnB is generally not popular among the people who live here because people don't like transients in their buildings and perceive it (probably rightfully) as driving up rents.
Uber/Lyft on the other hand are used by locals (i.e. voters) as well as tourists. They are perceived as bringing prices down by breaking the supply constraints of the medalian system.
It will be interesting to see how this plays out.
In the same way, I consider unethical removing people's freedom to work in the way they voluntarily choose.
Sure, this is what we have now and not following the law, hoping to change things (aka disrupting the taxi lobbies) is a business risk , but I still hope for a society in which people are free to decide how they work.
I wouldn't compare them to mobsters that use violence. Uber may not have a stellar reputation, but it's not forcing anyone to work. It's the government which actually resembles a giant mafia gang, imposing rules and asking 99% of the population for money (taxes, or just call it pizzo) on threat of imprisonment - while letting their rich friends avoid them.
Yes.
For anyone who thinks this is hyperbole, ProPublica has done excellent work investigating how lenders use the court system to imprison Americans who can't pay back their debts: https://www.google.com/search?q=propublica+debtors+prisons
Debtors prisons are bad but of course that’s a separate issue.
> Yes.
By this logic, slavery should be legal, because people should have the freedom to sell themselves into it (for instance, to purchase medical care for a loved one).
Huh? I literally said the person would be selling themselves into slavery, which means becoming chattel property with no rights of any kind. That's nothing like a non-slave "working for a predetermined rate," because those workers still have rights since they're not property.
Sometimes it can be beneficial to you to remove your own options- if you can prove to others that you've removed that option.
For example, look at the prisoners' dilemma. If both prisoners were able to commit, ahead of time, to not defect, this would be better for both prisoners. By removing a choice, and proving you have removed that choice, you actually get a better outcome than what would be possible if you could choose to defect.
This applies in asymmetric situations, too, like contract negotiations given a significant imbalance of bargaining power. It can be beneficial to the worker to, say, prevent themselves from ever agreeing to work in unsafe conditions, even if the boss offers extra pay for it (which the worker might want).
Thus selling organs, or selling your children to "adoptive" parents. It's not about somebody else having "authority"- it's about you intentionally burning bridges, provably pre-committing, removing the "choice" to do things which, on a societal level, could be harmful.
Who better to decide if that is beneficial or not than the worker themself?
Yes.
https://en.wikipedia.org/wiki/California_Assembly_Bill_5_(20...
If you had wanted to discuss workers rights, you should have led with that.
Sort of like driving for Uber...?
It’ll be REALLY interesting to watch this all unfold.
You think your taxi driver is a W2 employee - please think again.
The number of carve outs in this new "principled" rule is incredible, and more industries keep asking for them (freelance writers, gig musicians etc). Laws should ideally be broadly and equally applied, not this here is the rule except for a, then b, then c,d,e depending on who can lobby in their exceptions.
Pathetic.
It seems like given enough time the ridesharing industry is adopting all the bad habits of the Taxi industry.
Indeed, the "We should return to taxicabs" argument reminds me of a Mozilla employee's comment where they called out how much different people's expectations are of Chrome & Google, than of Firefox & Mozilla: https://news.ycombinator.com/item?id=24122017. Yes, many things are wrong with gig driving.. but driving a taxi meant either making very little (renting the cab & medallion) or incurring an incredible debt load to buy a medallion. Medallions/arbitrary exclusivity isn't going to solve the pay problem (let alone deliver the service that riders now expect), and the taxi industry still won't let medallions die.
The discussion is no longer logical. You can't say here is the law - here are facts - here is result. Now it's here is law (with lots of totally random elements and exceptions that are confusing for everyone involved if you actually try and comply with it - I've had folks says they promise they are independent businesses, and they look and act like it, but the law says things like if they don't have all the business licenses setup they are not, and some cities like SF require that if you do work for a company that has business in SF that work can be considered happening in SF and so you need to get licensed there etc etc).
I used to be a stickler for trying to get folks to comply with AB5 - but I'd guess we are at 70% noncomplaince still against letter of law - and it's not worth fighting employers AND contractors to get everyone to switch when they don't want to.
One workaround I've been recently is to hire out of state or look at offshoring - freelance writers are a good example where I don't think there is a way to really hire them legally in CA, but you can still hire them outside of state as I understand it. The mechanics of turning all authors into W2 employees is such a big leap, but most authors don't have all the right business licenses setup in every city they might have work appear.
They have more control so they are more likely to be considered actual contractors.
They’re arguably neither contractors nor employees, and shoe horning them into either category will inevitably lead to some absurdities.
Yes we are equipped to deal well with gig workers, it's just that Uber doesn't want to play by the rules and want to have it both ways. Let drivers set their own fare, for starter. "Gig workers" aren't a new category of workers just because you use some corporate newspeak to describe these workers.
Uber has allowed this since June [1].
[1] https://www.uber.com/blog/california/set-your-fares/
They are basically a contractor but are not required to register as a company.
They are still forced to have a accident, health and pension insurance but not a unemplyoment insurance(like employees have).
Doesn't apply to uber though afaik.
1) Part A of the test requires that the worker 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; and
2) Part B of the test requires that the worker performs work that is outside the usual course of the hiring entity’s business; and
3) Part C of the test requires that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
4) The contractor must actually be in business for themselves.
[0] - https://www.californiaemploymentlawreport.com/2019/03/unders...
[1] - https://www.dir.ca.gov/dlse/faq_independentcontractor.htm
2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service.
3) Drivers are independent workers, in business for themselves.
4) Same as above.
With these criteria it unambiguously seems to be the case that ride share drivers are independent contractors. I struggle to see how one could make the case that they are employees.
That is some serious mental gymnastic.
Trying to claim that a software service to run a marketplace to sell X is the same thing as actually running a business of building or doing X takes some mental gymnastics.
Even more importantly, with an actual marketplace, you don't transact with the marketplace--you transact with the stores.
And with respect to your Apple analogy: Apple doesn't claim to be in the business of making music, just selling it. Uber/Lyft do claim to be in the transportation/food delivery businesses, and it's literally all over their legally binding SEC filings that the provide to investors every few weeks.
If it quacks like a duck, and it walks like a duck, and it swims like a duck, you can call it a digital platform all you like but it's still a duck.
Uber is in the personal transportation business, at a broader high level. It's in the business of operating a market for rides. Just like how a record store doesn't actually compose and record the music it sells, Uber isn't in the business of actually driving people around. That task is fulfilled by independent workers, who use the platform Uber and Lyft operate to find customers.
Can you point out in said SEC filings where Uber says, "our company's primary business is operating motor vehicles to transport customers"? As in, actually driving their own cars? Because from what I've read they're very careful about describing their business as operating a marketplace for drivers to conduct their own businesses.
On its 10K, Uber identifies "gross bookings" as its primary revenue stream. Not "net bookings" or "commissions" or "marketplace fees." Gross bookings. Meaning that it treats all of the income from a ride as its own income, meaning that it's primary business activity is providing transportation services. The same is true for Lyft.
If they want to claim to be technology companies that only make their money from marketplace fees/commissions, they're free to do so but they'll need to change their financial and legal filings to match (and possibly their fare structures as well, since there's a mismatch between what riders pay and what drivers actually get). The reason they haven't done so is because that amount would be a lot smaller than the gross bookings number, but they can't have it both ways.
Yes, Uber and Lyft are involved in providing transportation services but their involvement is in connecting customers with transportation providers. Calling Uber and Lyft taxi companies makes about as much sense as calling an Expedia an airline. Expedia provides air transport, but through reselling the services of airline companies like Delta or Alaska. Uber and Lyft provide transport by reselling the services of independent contractors. Uber and Lyft are taxi companies as much as Expedia is an airline: they're not.
A driver does not know how much a passenger is paying for the ride. The passenger does not know how much the driver is receiving for the ride. Ergo, they cannot have formed a valid contract with each other. On the other hand, the passenger knows how much they are paying Uber, and the driver knows how much Uber is paying them. This indicates that the common relationship is Uber, and that the driver is acting as Uber's agent with respect to the driving services. This is supported by Uber/Lyft treating gross booking as their revenue. It is a long-standing principle of GAAP that if you are collecting money on someone else's behalf as their agent, it's not your revenue. If you are treating the money as your revenue, and their services as an expense, that indicates they are acting as an agent on your behalf with respect to the services/whatever that gave rise to the revenue. Because the driver is acting as Uber's agent, AB5 comes into play to determine whether they are an employee or independent contractor.
I don't know why you're fixated on Expedia. Expedia is a reseller, which is a thing that has existed as a legal construct for over a century and has an actual meaning and requirements defined by law. Expedia doesn't resell services, it sells reservations/tickets/etc provided by third parties that represent a right to a specific performance of a specified service at a specified time and place by that third party. Importantly, once a transaction is completed on Expedia, the customer must generally seek customer service from the third party, not Expedia, because Expedia's role in the transaction is completed, and Expedia only provides relief if the third party will not, and that relief is limited to refunding the customer for the amount they paid Expedia.
UberLyft don't sell services provided by third parties, they sell a service (transportation or food delivery), and it happens to be performed by third parties on UberLyft's behalf. In contrast to Expedia, none of the participants in the transportation or food delivery service get to select their putative counterpart to the transaction, or the financial terms of the transaction, and after the driver's part is concluded they usually have no further interaction with the passenger as customer service service issues are provided by UberLyft, not the driver. IOW, there are no hallmarks of a business relationship between the driver and customer.
> UberLyft don't sell services provided by third parties, they sell a service (transportation or food delivery), and it happens to be performed by third parties on UberLyft's behalf.
Which is exactly why the drivers are contractors. You seem to understand that the drivers are third parties, yet are fixated on irrelevant things like revenue from bookings to try and distract from this fact. That Uber treats all of the money paid by the passengers as revenue does not alter the fact that it's drivers are contractors that set their own hours and can drive for competing services.
But has Uber done the same? Can you charter a car actually driven by Uber employees? As far as I am aware, Uber exclusively builds a platform to link passengers with independent drivers - who can and often do drive for competing services. Akin to what iTunes was before Apple started publishing its own music.
Uber buys cars and leases them to drivers, it offers full-time professional drivers through Black, it invests billions of dollars into self-driving cars, it offers delivery as a B2B service. Look at the Uber Eats advertising[1] - they aren't claiming to connect you to drivers, they are claiming to connect you to your customers.
Uber's core business is clearly driving.
[1] https://www.ubereats.com/restaurant/en-US/signup
You say that I Uber offers full time drivers through black. Do you mean that Uber assign drivers to work at a specific time frame for a significant duration? All I can tell about Uber Black is that it offers drivers with more stringent requirements (more licensing, more permits), I don't see any advertisement of having someone chauefer you around for a week. If Uber does offer that kind of service, then drivers rendering that service should be employed.
> Look at the Uber Eats advertising[1] - they aren't claiming to connect you to drivers, they are claiming to connect you to your customers.
Yes! This is entirely the point. The driver is a fairly minimal component of an Uber Eats order. Deliver usually amounts to less than a third of a delivery at least where I live and easily under a fifth. And for that reason Uber contract out this part of delivering an Uber Eats order. Simply asking the public "who wants to take this order to the delivery address?" and creating a market for labor is a more effective solution than making hiring decisions, trying to schedule people fairly across the day.
If object to the contractor model as a whole that's its own criticism. But it is exceedingly hard to claim that Uber's relationship with drivers who participate in the market it runs is that of an employer to employee.
This seems like _quite_ a stretch. With that logic you can make any modern company a "technology business" or a "logistics business", and suddenly everything a company does is outside of their core business.
2) I laughed so hard I scared my neighbor's dog. Uber is a transportation service that happens to use technology (in the form of software) to provide it's service. Have you read their SEC filings or any of their other legal documents? In their own legally binding filings, they describe their primary business as providing transportation and food delivery services, not as a "platform" for whatever.
3 and 4) This is false, but it's a tricky point. Under AB5, it's not enough to just drive for multiple companies; a driver must satisfy certain legal formalities related to being in business for themselves, like setting up a legal entity, getting their own insurance, etc., to prove they are "customarily engaged" in the business. (Note that points 3 and 4 were distinct in the case law but were combined in AB5.) Most drivers haven't done this.
Also, you misstate (or rather, only partially state) the description of their business in SEC filings. They describe themselves operating a market for food delivery and personal transportation. They are in the business of transportation and food delivery, but they are a in a different layer than the people actually driving cars. This is akin to saying Expedia is in the airline business. Yes, but they sell airline tickets they don't fly planes. Calling Uber a taxi company makes a out as much sense as saying Expedia is an airline.
And for 3 & 4 this could easily be resolved by having driver set up their own LLCs. But I'm not convinced this is actually a requirement. Plenty of people are contractors and fill out 1099s without operating their own LLC or partnership or some other type of company.
AB5 doesn't apply outside of the worker classification context, so your rambling about Doordash and food safety regulations is just bizarre. You're right that DoorDash is in the food delivery business and so its delivery drivers would be its employees under AB5 (and thats what the underlying case decided). Door Dash is not in the food preparation business, so restaurant workers wouldn't be treated as DoorDash's workers.
Contrary to your insistence otherwise, running a platform that connects buyers and sellers of something is not the same thing as actually providing that good or service yourself. People say that it takes mental gymnastics to arrive at this conclusion. I see the opposite: how do you manage to convince yourself that people writing code at Uber are in the same line of business as getting behind the wheel of a taxi? How do people convince themselves that a PM at DoorDash works at a restaurant?
I agree that running a platform that connects buyers and sellers in a marketplace is not the same as providing that good/service itself, which is why Amazon Marketplace and eBay don't run afoul of AB5. But UBER/LYFT DOES NOT RUN A MARKETPLACE. They would have to make significant changes to their apps to be considered "marketplaces" by any reasonable or historic definition of the term.
This is akin to saying Expedia is in the airline business.
This is not at all like saying Expedia is in the airline business. Expedia operates like a marketplace. It buys inventory from airlines and hotels and resells them to customers. The ultimate commercial relationship is still between the customer and the airline/hotel. That is not the case with Uber/Lyft as they are currently structured: both the rider and the driver have the commercial relationship with Uber and it only exists through Uber.
And for 3 & 4 this could easily be resolved by having driver set up their own LLCs. But I'm not convinced this is actually a requirement. Plenty of people are contractors and fill out 1099s without operating their own LLC or partnership or some other type of company.
AB5 provides a lot of exemptions, so it's not necessary in every context. Rideshare drivers aren't one of the exemptions.
Crucially, your statement that the commercial relationship only exists through Uber is patently false. Drivers can, and do, driver for different ride sharing companies. A passenger could hire a driver through Uber on one day, and hire the same driver through Lyft on the next.
When I book a flight through Expedia I enter a contract of carriage with the airline, not Expedia. This is a contractural matter, not just an abstract concept of "commercial relationship."
(In contrast, with taxis, signage in the vehicle indicates that proceeding with a ride does indicate acquiescence to the standard terms locally governing taxi services.)
Taxi services and medallions specifically allow drivers to be hailed from the street. Uber and Lyft drivers don't get hailed Dr the street and thus don't need taxi medallions. This isn't something new, services like Super Shuttle operate in the same way. Uber drivers don't have such signage because they're not taxis, they're like super shuttle. You didn't hail them from the street you booked a ride through a service.
What good is all that software and technology if a driver doesn't pick me up when I request a ride. Uber very much depends on drivers to perform their core function.
Pointing out that Uber would cease to function without independent contractors is entirely correct, but does nothing to demonstrate that that these workers should be categorized as employees rather than contractors.
Laws written in the past often are deeply tied to the assumption of one american lifestyle and dream, which is no longer the reality, and thus is very inefficient for many many people. Laws written to instead capture the concepts and algorithmically scale them would be much more effective. Something like $EMPLOYER must pay N/40ths of the healthcare cost where N is the number of hours worked. People with 2 jobs could get full healthcare premiums covered.
People who want to scale back to 1/2 time would know what to expect and it wouldnt be a binary decision factor.
Gig economy was designed to circumvent overburdening regulation and supply restrictions, making the service cheaper, more available and more effective for users. The benefits of this are very obvious in the case of taxis versus uber.
If you work for an employer who sets your hours, pay, etc., you'd still be designated as an employee.
If you sell your labor to multiple entities, and/or you set your own pay rate, you're an independent contractor.
If you do not set your pay rate, you'd be a "dependent contractor", and entitled to at least some basic worker protections, but not necessarily things like mandatory paid 15-minute breaks. Those should continue to be required for employees whose hours are set by the company for them, but it feels silly to regulate a thing like this when an Uber driver is completely free to just turn the app off if they need a break.
Employees have contracts, too.
Everything you have described as supposed features of dependent contractors are features of independent contractors. Indeed, that last point is one of the biggest historical factors (in the US, and most of Europe) for determining whether a worker is an employee or a contractor. Historically what made a worker an independent contractor instead of an employee was that a worker was economically independent from an employer for their livelihood because they had other clients paying them for the same work. The work independence factors are an outgrowth of that analysis.
As to your other points:
Many employees can set their own hours. Most white collar employees can (and now do, as a result of COVID). It is hourly workers that can't chose when they work, because they are paid on the basis of time work rather than labor performed. Generally, whether a contractor can set their own hours is determined by the contract.
I'm not aware of any contractors that can simply start and stop working during a contracted job without violating their contract, so in that respect your point isn't valid for any worker, employee or otherwise.
And regardless, I don't know of any hourly employees who can choose to stop working for several weeks without notice, and then start working again whenever they want. That is a major difference between something like Uber, and a normal hourly job. Also hourly people are paid by the hour, while with Uber you are paid by the job.
Worse, it creates distinctions that are based on factors that are largely irrelevant to the employee-contractor classification.
Today, employees are free to choose to stop working whenever they want (the US has at-will employment) and can work for multiple companies (indeed, most American workers work for multiple companies, especially those who work multiple part-time jobs to make ends meet).
I don't know of any contractor that can choose to stop working for several weeks without notice during a contract and get rehired by the client they walked out on. They'd have to find a new client. This is no different from an employee getting terminated for not showing up for several weeks.
And with respect to getting paid by the job: while this is one of the big factors for independent contractors, it is not exclusive to them. Employees in the entertainment industry get paid per job (game programmers get paid per game, members of the Hollywood guilds and unions get paid per project, union musicians get paid per recording or tour, etc.)
Also the restaurant worker is guaranteed minimum wage, while the dependent contractor is not, since they are not paid hourly.
True, they're not nearly as empowered as a traditional independent contractor like a plumber who can set his own prices, but they're not as powerless as a traditional employee who has no control over their hours either. They're something in between, and their work should be regulated as such.
There is a very obvious solution that gives them the best of both worlds, and also helps millions of other unemployed, part-time employed, and entrepreneurial Americans. Let's make it easier for people to get by and meet their basic needs without tying their well being to long-term full-time employment at a large corporation.
None of those are linked to being an employee or contractor.
I believe for employees paid by the hour, the employer can also dictate the number of hours per week and even the specific schedule.
Employers have much more control over their employees -- that's at the heart of the contractor-employee distinction.
So it is disingenuous, when the company talks about additional benefits of being a contractor because those are all self imposed.
Yes, companies could always choose to give employees better perks out of the goodness of their heart. That's not really relevant, what's relevant is what they're actually doing. And if a company like Uber were to pay all the extra overhead to bring on all drivers as full-time employees, it would be crazy for them not to set their hours much more tightly so they would absolutely do that.
"Driver protections" are the reason we have Uber and Lyft to begin with. Cab companies were very well regulated and paid. But the service sucked. I was hung out to dry in areas of San Francisco in 2009 - where cabs would simply not come because it was inconvenient for them.
- Inconvenience a certain class of urbanites who have grown accustomed to being driven around in the hopes that they
- Complain loudly to their representatives and other governmental officials in the hope that
- The state will reverse this judgement
Your 20 min pick up time is because drivers don't want to accept the fares. Both for health and earnings reasons.
Good riddance.
If Lyft continues to operate, that certain class of urbanites will switch to Lyft before they complain to their reps.
They also have the option, if they can find the financing, to comply with the law and burn money building an entrnched user base before jacking up prices to compensate.
I mean, even on the old model, that's how Uber got itself entrenched and hard to displace.
I imagine not.
And since UberEats's drivers already tend to work for their competitors as well, the effect of Uber pulling out of the market probably wouldn't even be noticeable.
And they have even lesser cash to burn.
The delivery price is already a significant chunk of the order, and if the price goes up significantly, I guess the option for people is to stop ordering food and cook at home.
Which is good and probably saving me a lot of money anyway once I get used to it, but I don't think drivers will be the only one that are unhappy with this.
Or the restaurants can just go back to hiring their own delivery drivers and taking orders over the phone.
> If the appeal doesn’t work out for Uber, it will bank on voters to determine its fate in voting on Proposition 22, which would exempt drivers for app-based transportation and delivery companies from being considered employees.
OP said that THIS law wasn't too much, not that over-regulation doesn't exist. Please reply to the opinion that this law isn't too much. I would be interested to hear your thoughts.
Reductio ad absurdam is a legitimate way to respond to an argument, if the argument is susceptible to it.
"It's not a bad law - if Uber can't operate in compliance with it, it has a bad business model." is an argument that could be used to defend any law. It defends the concept of law itself, rather than the specific law we are discussing. It's perfectly reasonable to point that out and ask where the line should be drawn.
Reductio ad absurdum does not mean "exaggerate to absurdity," which is what the GGP actually did:
>>>> It's not a bad law - if Uber can't operate in compliance with it, it has a bad business model.
>>> Really, is there no such thing as over-regulation, in your mind? No red tape too sticky? No hoop too high to jump through?
If you want to label this kind of argument, the correct term is straw man. It doesn't address what vkou said, but rather sets up an exaggeration that is easier to attack and dismiss. Loughla was entirely correct in his criticism.
Uber has been breaking the law and refusing to comply. It doesn’t matter if the law is good or bad. That debate already happened.
California’s elected representatives debated and passed the law. Californians by proxy want this law. If they don’t want it anymore or want it to change based on feedback they’ll make their voice heard and that may happen.
Uber and Lyft didn’t exist not that long ago and they don’t just have the right to exist if their business model can’t work within labor laws. And personally, I think it can work just fine - they’re just crying and complaining that they won’t get to hit their growth targets because they’ll have to charge the real price instead of the subsidized one.
A likely outcome now is that Uber/Lyft will carve out an exemption for taxi drivers (like a few other industries with effective lobbying operations have already done) while distressed small employers continue to suffer from AB5's effects.
I think it's quite fair to call AB5 a bad law.
Unless your argument is that there’s nothing an adult should be able to do that a child shouldn’t be able to do?
The case for AB5, a law against consensual adult labour is murkier.
In jobs where it is virtually impossible to organize others doing a similar task such as was the case with most of the jobs impacted by AB5, its totally reasonable for these folks to lobby the government to fight for their interests.
Maybe with a labour monopsyny? I guess we don't want the big mining company in the small town to run down it's workers. Whenever I think of the best argument for unions, I think of small towns subjugated by mining companies or mills. But a ride-share company with competition in a big city?
The reason for why all those agreements are highly regulated isn't because they adults entering them are not of sound mind. The reason for it is that there is often a large imbalance of power between the two parties in the contract.
This kind of regulation has been the foundation of common law for nearly a millennium, and has been present in other legal systems for far longer than that.
[1] (As it turns out, you can't [2] marry someone with the stipulation that they can't divorce you, or with a fly-by-night, grossly inequitable pre-nup.
[2] Well, you can, but the judges will laugh your contract out of the room when you try to enforce it.
Why are you defending AB5 specifically? Why is this specific regulation good? Keep in mind that it has had a lot of negative, unintended side effects already.
When the dust settles, business carries on just fine while we get to enjoy things like a 40-hour week with overtime pay if the employer needs more, safety regulations, sick leave, etc.
I'm going to guess most of us here on HN aren't getting any overtime pay
Whether the minimum wage actually harms economic activity does not have a clear answer; you can find studies all over the place in terms of conclusions.
And the supporting argument--that businesses should be regulated because they have asymmetrical power when hiring--is also used to justify other policies that HN folks tend to like, such as the California prohibition on non-compete agreements.
This however is very different. Adults (in the US) are allowed to willfully enter into mostly any sort of agreement with another consenting party. In areas where that’s not the case, there is usually some other greater fundamental social protection that we seek to prioritize (i.e. you cannot legally permit someone to murder you). This law however continues to encroach on the things that free individuals can do. If I want to work for Uber under the terms that apparently many millions of others also want to, then that is my right. The government is effectively seeking to make this illegal...for my own protection.
The issue here is that 99% of HN commentators, politicians, etc have no experience in the gig economy yet project their own ideology onto the situation. Would it be better for workers if Uber provided more benefits? Sure. But Uber loses billions every quarter. So who pays for this? If Uber doesn’t pass on the costs to consumers, it goes bust. If Uber does, there’s a good chance that consumers spend less, or use alternatives. Either way it is likely to harm drivers.
The beauty of a free market is that if Uber was legitimately a bad deal for drivers, they would have never had a business in the first place.
Hell, If our goal was maximizing economic activity at all costs, we'd be rounding up idlers, and putting them to work, involuntarily.
[1] Ones whose business model relies on one of the following:
* Exploitation of children.
* Providing labour-intensive products for less then the cost of keeping a labourer alive, housed, and fed.
* Running machine shops where workers have to juggle chainsaws, while breathing in asbestos dust, and licking radium-coated postage stamps.
The state wasn't able to get the result it wanted in cases against Uber, so it changed the rules. I don't see how a company can be expected to be in compliance when the state is determined to pass laws that make its business model illegal.
https://en.m.wikipedia.org/wiki/California_Assembly_Bill_5_(...
> The state wasn't able to get the result it wanted in cases against Uber, so it changed the rules. I don't see how a company can be expected to be in compliance when the state is determined to pass laws that make its business model illegal.
You could say the same thing about the laws that banned companies from dumping so much pollution into the environment that rivers would catch on fire (e.g. https://ohiohistorycentral.org/w/Cuyahoga_River_Fire). Many, if not all, those polluters were likely in compliance with all the laws and rules that were in effect at that time, then they found themselves out of compliance when the law changed.
Laws are changed when an undesirable result is observed that happens to be in compliance with all current laws. The bug is patched with a new law, and the companies have to either figure out how to make their current business comply, or pivot into a new business because of the changed environment.
They should either treat their drivers like FT employees, pivot to a new (legal) service, or shut down entirely (and disband the company).
If they can't treat their drivers decently and follow the law, they shouldn't exist.
Nope. Live in an exurban town on the other side of the country and don't think I have ever taken an Uber/Lyft that wasn't associated with travel to another city. And rarely take them even then.
That seems like the definition of capriciously applying laws, and would seem like it would create more problems arising from unequal application of laws.
AB5 is a case of capriciously writing laws. The state wrote a new law that was specifically intended to put Uber and similar companies in a state of noncompliance with it.
AB5 was written in bad faith with the goal of hurting specific companies, not with the goal of writing a sensible law that sets a framework for how businesses ought to operate. They wrote it in such a hurry that it unintentionally hurt a bunch of other people and small businesses. That's not how laws are supposed to work.
One could argue that much of our labor and environmental protective apparatus was written to curb behaviors of specific companies (or "business models," if you prefer).
“People’s jobs should be better” is a different goal from “bad jobs should not exist.” It may be used as a tool to achieve the former, but we care whether it’s actually effective at doing so.
Your last sentence is interesting because the entire point of a labor law like this one is to bring jobs under the remit of labor protections so that "people's jobs should be better" is something that can even be addressed.
a) The gig economy is viscerally disgusting.
b) Its existence will trigger a “race to the bottom” that threatens all workers.
c) Gig work is not very important to casual gig workers, so taking it away would not harm them.
d) Taking away gig work will prompt gig workers to find real jobs which are better for them, anyway.
Low margin employers like Walmart and Amazon ruthlessly squeeze efficiency from their employees to ensure productivity > cost for every shift. The could not do otherwise - such are the economics of a low margin business. The gig economy offers the option of working “inefficiently,” and some people value that enough to trade off compensation for it. Maybe the gig economy companies could operate like Walmart, but the point is people are choosing gig work over Walmart for a reason.
It would be capricious if it were more targeted, written without ample public discussion, or if the affected firms had no ability to continue operations. As I understand it, none of that is true of AB5. For example, the affected companies are free to use contingent workforces in a manner similar to the other many thousands of companies that were not affected.
I'm far from an expert on the law, but wouldn't a fair read also be that those companies were operating in noncompliance with community norms (as expressed by voter preferences), and so lawmakers plugged a regulatory hole?
In that way, could it be seen as similar to a body writing a new law (say) prohibiting people from carrying long rifles into grocery stores? Would that also be a law written capriciously?
Just reading up on it, I see exemptions for (simplifying a bit) a) highly-paid professions and b) commercial fishers, repo agencies, and people who drive for driving clubs(?). The first category absolutely makes sense if the aim is something like "companies shouldn't abuse the 'contractor' classification to take advantage of low-paid workers". The second category smells like lobbying.
Unless I'm missing some of the dozens of types of businesses, I don't see how the exemptions are broadly anything more than a red herring here. I guess they could have left the exemptions and then put a $ figure and an inflation tie, but that has proven problematic as well.
How would you have written a law to express the goal of "companies shouldn't abuse the 'contractor' classification to take advantage of low-paid workers" ?
> A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. (nonitalic emphasis mine)
IANAL but that's not an exception - that's the bill saying that if the primary part of the ABC test does not apply, then the existing regulations for that licensed business take over from AB5.
From my quick glance, all of the exceptions I could find boiled down to this FAQ from the CA state website or older legislation explicitly mentioned right next to the exceptions in AB5 [2]:
> 4) Do AB 5 and Labor Code section 2750.3 require use of the ABC test in all situations? > ... > Additionally, where a court determines the ABC test cannot apply for a reason other than an express exception, the Borello test, described in Question 5 below, will apply. For example, if a court were to determine in a particular case that the ABC test is preempted by an applicable federal law, the Borello test would be used.
Note that the "express exception" in the case of the repo agencies is due to existing CA state law governing that profession which supersedes AB5 as long as the "repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact."
In the case of other licensed professions like doctors, veterinarians, and yes, commercial fishermen (who must have a commercial fishing license) they are all covered by existing, more specific, legislation and federal laws that by definition require exceptions in the State law - otherwise it'd be even more bogged down in the courts. That's why there's the Borello test and explicit exception: in order to fit in with other existing laws.
This is all just seems like self serving FUD from our industry but again, IANAL.
[1] https://leginfo.legislature.ca.gov/faces/billCompareClient.x...
[2] https://www.dir.ca.gov/dlse/faq_independentcontractor.htm
No, except perhaps as a settlement offer, but because the law gives specific rights to workers which State executive officials don't have the authority to bargain away, I don't know that would be effective except against any fines, etc, that might be due to the State; individual workers would still have claims until they complied.
> Or does it have to be done ASAP?
It has to be done from the effective date of the legal requirement to avoid legal penalties; for the preliminary injunction, it has to be done on whatever timeline (which may be immediately) is specified in the injunction once any stay on the injunction ends (this one was stayed for 10 days during which Uber is attempting to appeal to have it lifted) to avoid contempt penalties for defying the injunction.
> The latter seems sort of infeasible.
Yes, it's risky to have a business plan that depends on breaking the law.
The business plan didn’t break the law; a new law was introduced to disrupt the existing business plan. This is pretty obvious no matter your opinion about Uber’s business model or the novel law in question.
The transition period was the ~2 months between AB5 being signed and it coming into effect (+ the year leading up to it, which they could've also used to prepare).
IANAL, but well, this is kinda basic. All laws come with instructions about that. Some do give them that time, other laws do not and say they must be followed immediately.
I don't think they want to follow the law in good faith, but even if they did, they'd have to shut down while they restructure to accommodate the law, so this outcome doesn't tell us much about their thinking yet.
https://ballotpedia.org/California_Proposition_22,_App-Based...
Like, something better than "okay app-based drivers don't have to deal with that mess"? Perhaps a simpler, general rule for when contractor rules wouldn't apply? Though I guess the politics of it mean that you do have to be super narrow like this just to get it passed.
[1] https://news.ycombinator.com/item?id=24134978
[2] ctrl-f for "35" https://slatestarcodex.com/2019/12/02/links-12-19/
But solid general purpose laws are the responsibility of the lawmakers. They're the reason there's a crazy exception list, and they deserve the blame for it. The proposition doesn't make it meaningfully worse.
This is why the proposition system in CA is screwed. It's no longer being used in good faith. Almost every proposition is a law written by a lobbyist group who couldn't find a sponsor in the legislature so they take it directly to the people.
It truly highlights the folly of direct democracy.
And no surprise, it was written and pushed by Uber and other app-based gig work companies, and they're going to spend a lot of money to promote it. From your link:
> On August 30, 2019, three companies—DoorDash, Lyft, and Uber—each placed $30 million into campaign accounts to fund a ballot initiative campaign should the legislature pass AB 5 without compromising with the companies.... The companies Instacart (Maplebear, Inc.) and Postmates also joined the campaign, each contributing $10 million. Together, the five businesses had provided more than $110 million in support of the ballot initiative.
To put that amount in perspective, it's 40% of the amount the Biden campaign plans to spend nationally on ads in Septemter: https://www.nytimes.com/2020/08/05/us/politics/biden-ads.htm....
They are literally forbidden by the court to operate as they have been. They need to make their drivers into employees.
You think they can do that overnight?
And why do you think it’s economically feasible to do so even if they could do it? Do you think users have an appetite to pay 2X or more per ride?
It’s possible the regulatory burden makes this an infeasible business. That’s certainly the case with a lot of other economic activity such as private city buses, affordable daycare, etc.
https://www.theverge.com/2020/3/19/21186865/uber-rides-decli...
“Allow homeless encampments locally in inconvenient locations to visually show how bad things are getting.”
“Allow looting, pillaging, free cop-zones and curfews in inconvenient localities to visually show how bad things are getting.”
“Allow mass protests during a pandemic but arrest business owners who choose to open to visually show how bad things are getting.”
The playbook is, inconvenience enough people into the action you are interested in from them.
Business have the right to decide if playing a market is worth it or not.
In this case, the public clearly wants to know about and discuss this, as demonstrated by this thread and the news coverage.
You and I were not forced to read the article and discuss it, but here we are by our own choice.
From my perspective, think it is an interesting and engaging topic that I want to explore further.
From Uber's perspective, they have every interested in raising awareness and support for their cause.
This ruling may give a substantial advantage to a ride-sharing service structured as a worker's co-operative. That'd be awesome, IMO.
1: this is a very big if
https://www.yesmagazine.org/economy/2018/01/04/the-platform-...
The problem is that the co-operative model is not successfully funded in the initial phases. There is little infrastructure for worker-owned businesses in this country. There is little guidance for getting investment and start-up capital when the overall aim is to primarily put profits into owners' hands and not investors'.
We need a government that supports these efforts first. A good first step would be to pass first-right-of-refusal laws.
It is illogical to start up a new business when it is more than likely that the previous incumbent will just come back in X number of months and operate at a loss until you're gone.
Let's call it "startup's ruin".
https://communityimpact.com/austin/central-austin/impacts/20...
"RideAustin shuts down operations"
"Other ride-hailing companies that entered the market in 2016 have also since suspended their operations in Austin. Fasten ceased its U.S. operations in 2018, and Fare closed in June 2017."
Financials aside, I don't even know what this is supposed to look like from an organizational perspective. IMHO the biggest problem Lyft and Uber are facing is not an increase in cost, it's a reduction in flexibility.
You can't afford to pay extra people to sit there on the clock if there's no demand. (plenty of drivers turn the app on in their house and go about their regular day, maybe only getting 1-2 rides in between eight hours of playing video games) Do you forcibly clock people out?
You now have to be really careful about the 40 hours. You definitely can't afford to pay people overtime, and for all intents and purposes you can't allow people to work enough hours to constitute "full time" either. So if someone hits 35 hours or whatever, you have to clock them out.
How do you handle drivers who turn down lots of rides? You have to fire them I suppose?
This is not a problem you can just throw money at. I'm glad I'm not a product manager at Lyft/Uber right now. I'm not convinced it's possible to operate in California anymore.
Yeah, this is a huge mess, it kind of makes sense why they choose to fight in legal battles in the past, it's just easier than figuring this out from a product perspective.
They just want to take, and take, and take, and take. They never want to give.
https://thehill.com/hilltv/what-americas-thinking/494602-pol...
The link on the "California AG Xavier Becerra" is a google search link instead of CNBC's actual article. A mistake?
Since when are we reasoning about workers starting from what they want? If we go by that reasoning, "What worker does not want to be paid 3 trillion dollars per year?". Work only exists in a narrow space between a consumer and a service. Increase the costs of running the service, and you don't have work anymore. That's not very hard to understand.
A service that can only exist if workers are denied basics probably shouldn't exist.
EDIT: Uber isn’t the “plumbing company”. It’s a marketplace for transportation solutions, and accepts job offers and then sends the jobs out to contractors who have indicated they are interested in accepting such jobs. This isn’t just a “polite fiction”, this is fundamentally how Uber operates, and why they are shutting down in California. AB5 is a terrible law and I hope it is reversed or carved out to uselessness. I see it as a net negative for the economy, and especially for the workers who will now be receiving zero supplemental income during these tough times. Uber drivers are not employees of Uber.
And suddenly a competitor that gives it’s employees regular benefits is viable! The magic of a regulated free market.
This hasn't been found to be the case when increasing the minimum wage, though.
Surely if we mandated that the federal minimum wage is $50, we'd see businesses go out of business left and right, correct? Why would we not see a directional change like this for smaller hikes? Do you have any sources?
The fair debate is only about whether more jobs is better than less jobs with higher pay.
[0] https://www.vox.com/the-highlight/2019/7/13/20690266/seattle...
Then by all means let's increase the minimum wage to 100 USD/hour, so that everyone will be happy and there will be no effect on the economy.
Are you sure about your claim?
> "What worker doesn't want to have unemployment insurance at a time of Covid-19 crisis? What worker doesn't want to know that they'll get paid for overtime if they work 60 hours in a week or 12 hours in a day? What workers wouldn't trade their ability to set their own hours for these benefits?"
The answer, as it turns out, is a lot of workers.
This thread is being rate limited reply in edit:
These drivers aren't slaves. Out if all their work options they chose ride share. Now, their options are likely going to be strictly worse. The "bar" might be low from your perspective, but it was the best option these workers. How do you think their situation is improved by eliminating (or drastically altering by removing the ability of drivers to set their own hours) this option?
Edit: If the "best option" isn't a good option then there is a problem.
And to be quite frank, not all services have a right to life.
If some employer/business can't meet the bare minimum of workers right, well, sucks to be them. Hopefully a competent competitor will pop up.
It's downright toxic that we live in a world where consumers get cheap products and services, on the backs of either rampant workers rights violations, or heavily subsidized VC-money.
If you look at reddit.com/r/uberdrivers, Uber mandating everyone be employees is.. controversial.
Person A exists who is willing to drive from point a to point b for x price. I am willing to pay x price. An open source software exists to connect us both in real time.
Who will the government regulate in this scenario?
It might be possible to somehow distribute it and pay people at home for spare compute time, but it would still run into latency and spike problems.
[0] https://en.wikipedia.org/wiki/California_electricity_crisis
This is not about Uber, but about how a government can force something on a business model. Something seems off about forcing a company that created massive opportunity for people in the first place. (I am in no way supporting Uber because I think their leadership and culture have very questionable ethics).
How much more are local, state, and federal governments going to reap from taxes once drivers are classified as full time employees?
Government partially exists to protect people against themselves.
For the number of drivers who are 40+ hours, thats <15% of the driving population and so if this kind of law sticks it definitely greatly impacts who will be able to work for Uber and for Uber to still make money off that.
Overall it's a mess, AB5 is a poorly written law :/
From my favorite capitalist, an oil futures trader on WS:
Between 9:30-4:00 I’d kill my own mother to make a dime a trade. Kill my own fucking mother.
Do we seriously think Uber would not slash wages to shit, deny healthcare, work drivers till they dropped, and then killed someone’s mother if they could make a dime and get away with it?
People seriously believe they would not do that unless someone (AKA The State) does not stop them?
I’ve worked in corporate America, they would kill you for a nickel if it could lift their stock price.
Welcome to the “system.” Now back to work!
Your boss has their eye on a new house. And YOU are going make sure they have that downpayment. :-)
> Suppose I live in the suburbs and work in the city. I could drive my car to work, or take the bus. I prefer not to wait around for the bus, and so I take my car. Fifty thousand other people living in my suburb face the same choice and make the same decision. The road to town is choked with cars. It takes each of us an hour to travel ten miles. In this situation, according to the liberal conception of freedom, we have all chosen freely. Yet the outcome is something none of us want. If we all went by bus, the roads would be empty and we could cover the distance in twenty minutes. Even with the inconvenience of waiting at the bus stop, we would all prefer that. We are, of course, free to alter our choice of transportation, but what can we do? While so many cars slow the bus down, why should any individual choose differently? The liberal conception of freedom has led to a paradox: we have each chosen in our own interests, but the result is in no one’s interest. Individual rationality, collective irrationality…
Taken from https://slatestarcodex.com/2014/09/13/book-review-singer-on-...
Who is John Galt?
In case it's not clear, Atlas Shrugged is a piece of fiction and using it to draw parallels to reality is like saying "I recommend watching Disney's The Lion King. Zoos keep hogs apart from lions because they think they can't get along".
As a sidenote to balance my scathing review, I rather liked one of her earlier novels, Fountainhead. If you want to read an Ayn Rand novel I'd go for that one, as it's more about a type of "rugged individualism" than an economic system. It directly grapples at the question of the nature of invention/innovation: whether as a product of individual genius or standing on the shoulder of giants. Obviously the novel has an answer but it's not exactly a solved question in real life, and at least some of Ellsworth Toohey's quotes aren't half bad.
I think capitalism is the best system we have, but Atlas Shrugged espouses a rosy picture of anarcho-capitalism like Marx espouses a rosy picture of anarcho-communism that doesn't work when real humans come into play.
I've come to believe that having market forces bring out the best in society is a state of constant work to cultivate those forces in a human direction.
One big difference was that there were no big public companies to sue. In Chicago, clever class action lawyers tried suing the city, since they set all of the standards that are the basis of the employee/contractor distinction. It got up to the 7th Circuit, where Posner wrote an an opinion that went basically "uh, no."