Uber's defense is that it is licensing lead generation software to drivers, and that it just takes a commission from each trip as payment for use of its software.
In many ways, I can see it. I think the issue lies in a lot of Uber's current policies around drivers e.g. very strict rules around cancellations. If Uber was just a lead generation provider then it shouldn't care or intervene if a driver decides they don't want a job, but depending on the scenario you can be punished if you don't want to take a job.
Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.
> Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.
I'm going to go with yes. The only times I use ride sharing services (Lyft, not Uber) are in high-density situations like getting to and from the airport. Depending on the hour there will be dozens to hundreds of drivers hovering in the area trying to get rides. As soon as "rider available" appears on screen a dozen different drivers are mashing the accept button.
Up until a year or two ago, the drivers would then see where I want to go and then call me on the phone to say they didn't want to go there, telling me to cancel the ride they had accepted. I systematically refused every time so that (usually after a few minutes) they would give up and cancel it themselves. This would usually happen for 2 or 3 drivers in a row, making ride-sharing a miserable experience for me.
I assume the cancellation penalties have been made much more serious, because this hasn't happened to me in a while now.
> Up until a year or two ago, the drivers would then see where I want to go and then call me on the phone to say they didn't want to go there, telling me to cancel the ride they had accepted. I systematically refused every time so that (usually after a few minutes) they would give up and cancel it themselves. This would usually happen for 2 or 3 drivers in a row, making ride-sharing a miserable experience for me.
I've only had that happen a couple of times for me, but that's because I'm mostly a Lyft user. What was more common on Lyft was drivers calling me to ask "Where are you going?", and when I'd respond with "I already put my destination into the app", they'd hang up and cancel on me.
Edit: About the cancellation penalties. I don't know about Uber, but on Lyft when I as a rider have to cancel on somebody, I sometimes see options pop up saying "driver asked me to cancel" or "driver is not moving". They know when drivers are using trickery to get out of dinging their cancellation rate. And when I have to cancel for "driver is not moving", I also get a message saying they'll waive the cancellation fee because there was an issue with my ride (note: I get this message before I see the list of cancellation reasons to pick from, not after).
Oh yeah, they 100% know of all the shit drivers do to get out of cancellation penalties on their end. My favorite is when I actually had to use the "driver is going the wrong way" option when I was looking at a map and had a driver decide to go north up a highway when I was very clearly south of even his starting point.
This comment doesn't make sense to me (as a part time Uber driver myself).
First, the driver doesn't see your destination until he picks you up.
Second, there is no competition or reason to rush to "mash" the button, the ride request is exclusive to you as a driver for the 10 seconds that you see it.
Drivers often call you and ask you where your drop location is. Depending on your answer, they often cancel. Or worse, ask you to cancel. I've even had cancellations after I've sat in the car.
Lyft is the worst about this, I assumed Uber penalizes them because i can’t recall it happening in the past 6 months with them, but I’ll get back to back Lyft call & cancels.
Doesn't that basically give them a bad mark and cause the software to no longer give them rides? I mean that's grounds for firing if it was a regular taxi company.
I'm not based out of US, so the experience will vary. My understanding of drivers getting bad marked is that here the demand for Uber at peak times is still larger than the supply, hence even though you might be penalised via de-prioritisation, uber would still get you a ride to fulfil. They are also penalised by being given lower pay incentives. But talking to most drivers, the trade-offs of cancelling are worth it for them, since they often cancel drop locations from where demand would be lower, or to far off places where they wouldn't get another ride to complete, or have to go out of the way to return to the area they generally are comfortable operating in.
Whenever I've raised this issue with Uber(via their absurdly bad support feature), I generally get an automated response in the line of "We're so sorry for the bad experience, we understand that this has caused you a lot of trouble... We take your feedback seriously..", etc.
> This comment doesn't make sense to me (as a part time Uber driver myself).
As I noted in the comment, I use Lyft, not Uber, so I can't say if it works differently. What I can say (and what other people in this thread have confirmed) is that it does happen surprisingly regularly.
> First, the driver doesn't see your destination until he picks you up.
If that's the case, it's easy to see how even on Uber a driver might call you to find out where you want to go, and then tell you to cancel because they don't want to go there.
Oddly enough cancellations have been much worse for me this year when trying to go from SF->Oakland. Most infuriating is when drivers come close enough to lie and say they're at the pickup spot (showing them my destination) then just drive away without stopping. I mostly use Lyft, so I'm not sure if this is a problem with Uber as well.
Doesn’t Uber in the USA just assign rides automatically? Or do drivers opt into the rides they want? But what you describe is how didi works in China when interfacing with taxis (you could get a taxi or ride share through the app, drivers will simply ack any rides they want to take, payment is handled normally, didi doesn’t get a cut).
Yeah, even being charitable, I don't see how Uber's model[1] is remotely reasonable. They pretty clearly take direct control over the relationship. The rider deals with Uber, and the driver deals with Uber. Nothing at all like the ebay/fiverr "hey find someone to link up with" model.
[1] Edit: To clarify, I mean "the model they're promoting of what their core business is", i.e. the claim that "they're a lead-gen platform they license out"; I'm not saying they're business model is financially non-viable.
In fact, I'd argue that's the primary reason why Uber/Lyft got popular in the first place. At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. If Uber can't enforce something similar, why should I use Uber?
> At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service.
Most of us don’t have such great experiences with taxis as you do. “Legally bound” still leaves a lot of wiggle room for really crappy experiences.
The usual: being taken for a ride (literally), not showing up for a pickup, broken credit card readers. American taxis are just horrid. Not as bad as SE Asia, but nowhere near Europe or other developed country standards.
Not to mention that it's much harder to enforce something that's legally bound. If they give you a crappy experience, the only way you can do anything about it is by reporting it to the government (suing them?) which is usually a painful process. And if your case is even heard, you'll need evidence proving it.
Because rideshare carefully uses economic incentives to generate outcomes by market means, not by "enforcing" through the heavy hand that only the government understands.
A) it’s not clear the outcomes are desirable in the first place and b) why are market means better? The market is good at deriving efficient prices in certain circumstances but it really depends on whether the desired outcome aligns with efficient pricing. Personally the problem Uber solves is a nice app to hail the taxi with, which doesn’t appear to have anything to do with market effects, whereas the material effects of Uber mostly seem to be exploitation of employees.
Setting the "entire price" just means being a marketmaker. I'm sure you are familiar with the concept. The "commission" would therefore refer to the spread or the take. There is real risk in this and competition, and anyone can feel free to get in there making a market with a tighter spread if they feel they can do so. Bet they can't. Lead generation is not a phrase used by anyone but the idiotic press, so that part is a strawman.
>Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.
Honestly, just keep the 'we don't show drivers with a less than X star rating' in place, and allow the rider to give the driver a low rating for cancelling. Self correcting problem - drivers that routinely cancel will be pushed out, and the (potential) one bad rating shouldn't hurt routinely good drivers.
In practice drivers do set their prices by only driving when the price is what they're willing to pay (e.g. only during surge pricing). In contrast to an employee that works specific hours and has to take every ride while on the clock.
> In practice drivers do set their prices by only driving when the price is what they're willing to pay
So your argument is that drivers really set the price...
> (e.g. only during surge pricing)
And your example of drivers setting the price is...algorithms running at Uber and Lyft that set prices. Algorithms which Uber and Lyft would surely regard as proprietary trade secrets and resist disclosing to drivers, passengers, or government regulators.
How is that drivers setting prices, exactly? If an Uber driver wants to give me a ride to the airport, the Uber app decides that it costs $X. If that Uber driver believes that Uber's surge pricing model is inaccurate and thinks the real price should be $Y, there is no facility for me and the driver to negotiate on a different price.
Similar to how many other independent contractors set their price - they decide what they are willing to work for and, as contracts come in, they either accept or reject based on what that contract is offering to pay.
Just like how contractors will have several contracts they are choosing between, drivers routinely use multiple apps in parallel so they can choose between various contracts/rides.
What are you saying? Uber matches you to a willing driver to pick you up for $X, it's a competitive market so whatever "algorithm" you think they use it's the market that decides the price, but the driver "should" get $Y? Well you are free to tip $Y-$X to the driver then. Why don't you try that next time?
What competitive market? There is no spread, no bidding. Buyers and sellers cannot negotiate. Uber decides prices based on some proprietary, secret algorithm.
"We are going to pay you $X, if you don't like it you can leave" is called a salary, not a marketplace.
Not only that, but uber and lyft copy each other's prices. When one of them lowers the pay to drivers, the other one follows soon. Usually, the pay to drivers is lowered, but the cost to riders doesn't go down as much, and uber/lyft has been taking much more from drivers, especially the 'surge' surcharge. Much less of that goes to the driver than before.
The fact that choosing to use Uber represents a certain amount of trust in the driver (basic background check, identity information, etc), makes it more than lead generator or transparent broker.
> The issue is whether doing so would drastically deteriorate the quality of the service for riders.
This is the exact reason I want Uber to lose this. Anything that would keep drivers classified as contractors is harmful to the actual customers, because the drivers being employees mean that they have to actually follow policies set by Uber.
Uber's defense fails The Duck Test. They are describing a job, people doing a job, people paying for a job, and people taking a cut of the profits. They just don't use those words.
I suspect if/when this gets to a higher court, the whole thing will come crashing down, because to allow Uber's weaselly redefinition of common terms, would be to allow other classes of employment to similarly become unprotected.
I totally agree. I'm neutral on Uber, but their advertising is that you book an Uber ride. You don't use Uber to find a driver you like and then hire that driver from now on. Basically, the drivers are treated as the fungible part of providing service to the passengers. Contrast with Airbnb where owners can treat it like an advertising network to market their rental room, and it's totally reasonable to expect that a good experience will lead to more business for that homeowner specifically, not just the app in general.
>You don't use Uber to find a driver you like and then hire that driver from now on. Basically, the drivers are treated as the fungible part of providing server to the passengers.
Which is also one of the reasons that Uber became successful. A lot of the "Uber for..." companies that provided more personal services like massages or house cleaning failed for this exact reason. As soon as a user found a provider they liked it was easy for the two parties to come to a deal for ongoing service and cut out the tech company. That is how a lead generating company works. Uber doesn't function that way because the provider and the consumer don't have an ongoing relationship because the drivers have all been commoditized.
As a matter of fact I know of one person who met a driver through Uber and decided to hire them daily to get to their job without going through Uber ever again. I think that this is extremely rare and that everything in Uber is set up to prevent something like this. Same thing goes for Airbnb and the obfuscation of emails.
It is rare. The reason Uber and Lyft don’t have the same “work outside the network” problem that Wag / Airbnb does is because when you want a ride you want it now. If you had to wait for your “personal” driver to free up, you’d be waiting... or have to deal with scheduling in advance.
You schedule dog walks and lodging in advance, so it is quite tempting to cut the middle man out once you find what you like. Not so with transportation.
It used to be more common. Back when it was all town cars, and up through the early days of UberX, I frequently got business cards and phone numbers from my drivers.
I think it's actually a violation of the uber TOS for the driver to circumvent the app, and of the passenger not following the community guidelines of Uber, if I understand correctly. Similar to how Wag's new TOS tries to prevent contractors from seeking pet walking outside of the service.
I do feel that driver's being able to work for multiple ride sharing companies at the same time does make it a bit different from a normal job. A majority of drivers have both Lyft and uber enabled at the same time.... so are they employees of both? How should benefits be calculated?
If I am an employee of a company, they are probably not going to let me work for a competitor while I am on the clock with them.
> A majority of drivers have both Lyft and uber enabled at the same time.... so are they employees of both?
Having the app enabled is being on-call for potential assignments, not actually working. In my youngest years, I did that for multiple temp agencies at the same time a lot. Are they employees of both? Sure. Multiple W-2 employers is not that uncommon for people doing temp work.
> How should benefits be calculated?
In most cases, they will probably work little enough for each as to not reach mandatory benefit eligibility under most employer mandates.
> If I am an employee of a company, they are probably not going to let me work for a competitor while I am on the clock with them.
If you are an employee of a company giving on-demand assignments, they probably aren't going to consider you on the clock merely because you have indicated you are available to take an assignment if it becomes available.
If there are minimum paid shift rules in play, they may consider you on the clock and demand exclusivity for the paid period once you accept a job, even if there is a lull between assignments, though.
"Multiple W-2 employers is not that uncommon for people doing temp work."
But not simultaneously. Once I went to a neghborhod where I knew I would not get any Lyft rides (stodgy white folk in suburban San Diego) and took Uber rides specifically to nail bonuses on both platforms.
The new law enshrines the existing case-law test into statute, so if they are properly categorized as contractors under existing state law, then they are also properly categorized as contractors under the new law.
That said, if they were on on-demand W-2 temporary workers instead of contractors, then they’d probably be treated exactly like all such workers (who often are signed up with multiple agencies to receive assignments) are by their employers and not be paid when they were merely willing to receive assignments but only after they had been offered and accepted and were actually working on a particular assignment.
This is somewhat true for higher level jobs, but once you hit retail, and blue collar jobs generally, it stops being true.
McDonalds doesn't care if I also work at Burger King. Target doesn't care if I also work at WalMart. A plumber is generally fine if their assistant also works for another one.
All of this is subject to still doing the first job satisfactorially, of course.
You aren’t “clocked in” in to Target, McDonald’s and Walmart at the same time though. I imagine many of these drivers are marked “available” on lyft, Uber and probably some delivery stuff all at once.
I’ve always wondered what would happen if legislation required them all to open Go their API’s so drivers could use some “app to rule them all” that talks to lyft, Uber and more and helps them choose the best assignments....
At the moment, rideshare drivers don't get paid for being available, so the analogy to being "clocked in" at a regular job falls down.
This is how the rideshare companies claim an absurdly high hourly rate for driving — you only get that rate while actually giving rides and it is generally infeasible to be giving rides all the time. The effective hourly rate is much lower.
The question isn’t whether they’re doing a job, it’s whether drivers are acting as contractors vs employees while performing the job.
Ironically, taxi drivers are also contractors. I’m surprised nobody has brought up the fact that the status quo pre-Uber was a contractor model as well.
The real problem is that the Dynamex decision is legislation from the bench that redefines “contractor.” The historical definition of a contractor was basically only c in the abc test. It will be interesting to see how the court decisions come down. As the press release points out, the precedent so far is mixed.
Just dropping in to say that “legislation from the bench” is a charged, shallow criticism that says nothing except about the critic’s own political philosophy. The fact is, courts have been legislating from the bench for as long as we have had courts, and before then — the U.S. inherited its judicial traditions from England, after all. California is a common law jurisdiction. The essence of common law is that courts create law in the course of issuing their holdings.
Without going down the rabbit hole of Constitutional Law, I’ll just point out that there are folks on the Federal Supreme Court that disagree, in principle, that courts should be making laws.
That aside, if you think it’s a shallow criticism in this case, why do you think it required legislative action to have any effect? In other words, if this wasn’t legislation from the bench, ab5 is a noop.
I’m well aware that there are Supreme Court justices who claim to believe that courts should not make law. And yet... they continue to make law every time they contribute to a majority opinion.
As to AB5, I’m not really educated on the particulars of Dynamex or the political process around AB5 to opine on why it’s been codified. There are many possible reasons, ranging from a desire to try to freeze the law in place, to, as you say a “noop.” This, too, is just a part of the system.
Isn't being a driver on Uber platform same as being a seller on Amazon marketplace? Amazon takes care of delivery, cancellation etc and charges a commission for those services.
I feel like it's pretty clear that gig economy jobs don't neatly fit in either of the existing categories of workers: they're not quite employees (you can clearly work or not work whenever you want) or contractors (you clearly have very little negotiating power or information in choosing your work or guaranteeing your wages). Attempts to munge them into one of those categories are just doomed; a new category is needed.
Failing that, if they are to be counted as individual contractors they should be able to negotiate like those: without one-sided deceptive deals.
Ridesharing companies, Labor, and the California legislature missed an opportunity to identify a third type of employee. The truth is always somewhere in the middle, and the most objective truth (to me) suggests that rideshare drivers honestly sit somewhere between employees and contractors.
The politics of what has occurred here is probably the pendulum swinging too far, but in the right direction: the classification of 'contractor' just isn't correct to describe these workers, and the legislature did its best to rectify that.
Lyft and Uber put forward good faith proposals [1] to fix this...They did bring a lot of labor groups in on the last year and worked with the government for that.
my experience is that this is hardly ever true in politics. Legislators are generally balancing what they think is right (or what they think voters think is right) with what is in their own self interest (such as getting re-elected). As a result, they most often do their best to serve their own self-interest first and foremost. They raarely try to rectify something if rectifying it is at odds with their self-interest.
Rectifying this situation would likely involve some third category "somewhere in the middle", but that's not what we got.
They would be more like contractors if economies of scale favored open cross compatible ride sharing platforms, instead of proprietary institutions and and oligopoly.
If there were 10 ridesharing apps, and any customer could reach any driver using a different app, would you still consider the driver as having not negotiation power? The driver could uncheck "allow riders from uber" if they didnt want uber provided leads. Ride hailing should be as open as SMS, and then drivers AND passengers would gain power in the relationship. By using government to benefit consumers and shun proprietary lockin, the issues could be solved without creating a new employee class. The root need for that class in the first place is Ubers anti-competitive side.
I'm thinking more like email, ActivityPub, XMPP, or hate to say it, blockchain. There doesnt need to be an aggregator App if its a federated protocol or a shared database. A blockchain would be a central store of truth regarding ride history and reputation. Your reputation would build across access clients. If a client doesnt keep innovating, and there is demand for more features, newer ones would come along, without throwing away the database and starting over.
> they're not quite employees (you can clearly work or not work whenever you want)
You can work only when the platform routes a job to you, not “whenever you want”. It's on-demand temporary work with a faster “job is available, do you accept it?” cycle than most, but the general idea of such on-demand work as regular W-2 employment has been around for a long time.
You are just repeating the Uber party line that somehow "employment" is antithetical to flexible work hours.
It's frightening to see people just lap that up because it happens to coincide with their day job. But nothing in labor law prevents a company like Uber from "disrupting work" and offering that flexibility to employees.
The current employee model as codified in our tax and legal system definitely has lots of assumptions around only having a single W2 employer. Certaintly not impossible, but definitely not a good fit.
I agree with the OP, and I am not just "repeating the Uber party line". I believe 3 categories of work are needed:
1. Employee (e.g. current W2), where you have a single full-time employer who is primarily responsible for your wages and benefits.
2. Independent Contractor, where the IC has full control over their rates, where they do the work, their tools, etc.
3. "Flexible" employee, where the employee has full control over their hours and availability, and to work for multiple employers, but doesn't have control over rates or how the work is done.
> The current employee model as codified in our tax and legal system definitely has lots of assumptions around only having a single W2 employer.
No, it doesn't; multiple W-2 employees is a common thing and the law has no assumptions that conflict with it.
(Multiple full-time W-2 employers, maybe, are something of an issue, but not merely multiple W-2 employers.)
> "Flexible" employee, where the employee has full control over their hours and availability, and to work for multiple employers, but doesn't have control over rates or how the work is done.
This seems like regular on-demand temp work, where pretty much every feature of that is routine, and has always been W-2. Sure, technology including platforms like Uber, et al., make it practical to have more rapid offer/accept cycles and finer-grained work assignments, but they don't fundamentally change the nature of on-demand temp work in a way which requires any different treatment legally than such work has historically been given.
Many people have multiple jobs (even full-time jobs) and receive multiple W2s in the mail every year. I'm not an expert in employment law but I haven't seen evidence that the current multi-job system isn't workable here. You can have multiple part time jobs, and if one job goes over a certain threshold of hours then they have to provide you benefits. If you have multiple full-time jobs, all of them are required to offer you participation in employer-sponsored benefits, although you typically only pick one. Is that not how it works?
Uber and lyft and DoorDash etc aren’t paid as wall clock hours though. You can be “clocked in” to as many as you want at once. One drive you might be working for Uber and the very next might be some Postmates order. Maybe even both on the same trip.
Focusing on wall clock hours doesn’t make sense for these kinds of jobs.
1. It's not like it would be difficult to track all of the little chunks of time worked and add them all up. Everything is automated anyway, and nobody is filing time cards.
2. In the end, the wall clock is how workers experience time when they're out doing work for these companies. They get their bike out and go deliver food for a few hours, or get in their car and drive around the city picking up and dropping off passengers. It's not clear to me that the interstitial minutes between gigs should be considered free time for the workers that goes uncompensated. If they drop off a passenger and pick up a new one within five or ten minutes, they've been working continuously. They haven't had a chance to go home and take their socks off and relax. They're working. It seems like a step backwards for everyone's mental well-being to use technology to clock the exact minutes that they produce value for the company, and cut off their pay the instant they stop producing. It's like a widget assembly line monitored by cameras where workers get automatically clocked in only when they're physically touching the widgets, so that if they sit up to stretch, or walk over to the cabinet to grab a different tool, or even if the conveyor belt is sending the next widget over to be worked on, they stop getting paid. I wouldn't want to work like that.
3. The fact that someone can be doing work for multiple companies at the same time doesn't seem like such a big problem to me. If they're on a segment of a route in which they're simultaneously delivering a passenger and someone's lunch, they should get paid for both. And the same contiguous-time rules I mentioned in #2 above can apply - as long as they're continuously picking up lunches and passengers within a certain interval, they're working two jobs.
in response to 2 and 3: What about the status quo where gig workers are running 2-5 apps at once. If they are payed between trips, do they collect minimum wage from all companies?
The simple solution is to ban the use of contractor workers in the taxi industry. It's too precarious of a job, and one that many people rely on for a sole source of income.
This would take the pressure of other industries that use independent contractors, such as tech.
Right now a couple of bad actors like Uber, are ruining the independent contractor category of work. Forcing states to put more laws in place.
I think the law will be bad for the people it affects, so this is good news for Uber drivers. Uber isn't operating at a profit, so they don't have extra margin to pass on in the form of extra driver pay or employee benefits. If Uber has to shrink their business in California or exit entirely, that won't be good for drivers either.
It reminds me of before my software engineering career, when I was working at The Gap. The job wasn't great, but a lot of people really needed more hours. Unfortunately, there was a rule that nobody could work more than 29 hours a week. Everyone hated it. Employees hated it the most because if they needed extra money they couldn't take an extra shift. The managers hated it too because it was just more rules for them to deal with.
Apparently, this rule existed because there was a law saying that past 30 hours a week, employees had to get some extra benefits. Gap corporate just changed the job to avoid that law. As a result, that job got worse, and nobody got more benefits. Just unintended consequences.
This line of thinking can be used against almost any form of labor protections. People don't work in sweatshops because they love the job, they do it because they are desperate. That desperation allows their employer to take advantage of them. The government therefore needs to step in to protect the workers from being taken advantage of. In an ideal world that regulation would also come with some type of social safety net to protect the workers in event of any of these negative repercussions. That safety net is much more difficult to get support for politically (because it costs money) so it is usually an afterthought.
I hear this argument a lot, and I wonder, would anyone who has gone through an extended period of poverty agree with it? I went through this myself, and all the worker "protection" laws just made it that much harder to get back on my feet because they limited how much I could work. Or forced me to allocate some of my pay to benefits I didn't need rather than the expensive treatment I desperately needed to stay alive in the short-term.
I drove for Uber and it was seriously the only job I could get and it saved my life. I know of many other drivers who are battling disabling conditions who drive for Uber as well. Jobs that are as flexible as Uber are non-existent.
I find it really disappointing how many people debate this issue without ever actually listening to the people in poverty. That means talking to real people doing the job. Not just the protestors in the streets. And frankly, if you have time to protest, you're probably not that poor. The poorest of the poor work whenever they can and do not spend time on things that don't earn them money.
> if you have time to protest, you're probably not that poor
i dont know what protests you've been attending but the one's ive helped at for laundry and warehouse workers were filled with people that were not only supporting families on minimum wage but also contained people who were here on visas.
in america you're always taking a risk by protesting an employer.
Minimum wage is not, on its own, enough to afford average rent anywhere in America. If you're making minimum wage and have no other access to support: you're poor.
This is, ultimately the major reason why the status quo never changes here: people dont want to acknowledge their class.
I'm not a fan of the whole "late-stage capitalism" meme, but I think that perfectly describes your complaint here.
The ideal approach is two pronged, you raise the standard which benefits society as a whole and increase the social safety net to take care of those few lost in transition.
The same principle applies to a wide variety of economic changes from increased labor regulations, to housing, to free trade, to automation. Your complaint here is mainly that we haven't followed through on protecting those caught in transition. We shouldn't fall into the trap of mistaking that for a valid criticism against raising the societal standard.
My point is that it's impossible for us to keep up and fix everyone's problem for them. We need to empower people to make their own choices. That's the best way to help.
And my point is that many times a decision made out of desperation is not really a decision at all. We should empower people so that they truly have a choice on some of these issues.
There has to be a line somewhere, though, right? We don’t want people to be able sign away their labor for the next X years and accidentally reinvent indentured servitude, for example.
Yes, definitely. I would view that as restricting choice.
I think the best way to increase wages is more and more jobs so that workers have bargaining power. I've used Uber as a fall-back and it dramatically increases my bargaining power.
I know at least in some situations it goes like this:
A group of people have been living off the land for centuries. At some point a government comes in and takes the land from them to sell to a factory owner so the government can profit. With no land to farm, working at that factory becomes their best option. But the workers get abused. Women get raped. Their pay is stolen. Still they don’t have a better option. They try to unionize. The government police come in and kill the union leaders. The people keep working there because they have no better option. That does not mean the situation isn’t horrible.
It’s not enough to say they chose this job freely. A lot of coercion goes on. How prevalent is this stuff? I’m not sure. But don’t assume most sweatshop workers just decided this was best with no coercion. People like you and me aren’t paying much attention and a lot of bad stuff happens when we’re not looking. It doesn’t help that corporations benefit greatly from reduced labor prices and so the media and advertisers don’t want to talk about these issues.
There's truth to that story, but it doesn't paint the whole picture.
Rural life is dull, you have a limited social circle and limited access to culture. And you have few opportunities. People today still crowd into overpriced cities with poor living conditions, because they dream of 'making it', and they can't bear the thought of toiling away at agriculture (or at a lesser job).
In China, an entire generation has been uplifted out of poverty by voluntarily relocating off of farms and into manufacturing jobs, and it's been so successful that it's cited as a reason for the popularity of current authoritarian leadership.
I don't get the comparison with China. They still have an incredibly significant agricultural workforce (like 30% of workers are in agriculture) compared to 2% in the US. The US already moved people off farms to factories before WWII and we're in a different stage of economic development.
We're not talking about subsistence farming vs driving for Uber here.
That's a tragic story but I don't see how it's relevant to Uber. There's absolutely no coercion going on. People are free to join and leave as they wish. I still believe that having the ability to drive for Uber is always better than not having that opportunity.
I largely agree with that, but with a couple of possible exceptions where it is relevant. 1) Some people bought cars or quit other jobs because Uber offered a much larger pay and bonuses two years ago. 2) Uber also killed the taxi industry, which offered better working conditions to drivers.
I would be curious to hear you expand on your point here. It is in the format of a correction that is refuting my comment, but I honestly see those two statements as nearly identical. People are desperate because they don't have any other better alternatives.
I'm not the poster you replied to, but I can weigh in with my experience. I think the two statements, while similar, are usually employed by those with opposing socioeconomic views.
>People don't work in sweatshops because they love the job, they do it because they are desperate
>People don't work in sweatshops because they love the job, they do it because its better than any of their alternatives
The first statement is often part of a moral argument against exploitation and expressed in conjunction with a an desire or indifference to eliminating the job. The second is usually used in an argument which frames the worker as a rational actor and lacks the moral judgement.
A common, if inflammatory, example is sex work. On one hand, sex workers can be seen a desperate, vulnerable, and forced by circumstances into an inherently exploitative relationship. Those that hold this position often believe that sex work should be made or kept illegal to protect the individuals from this exploitation.
The alternative framing is that sex workers choose the job because it is the least bad of the available options. Removing the option will only push workers into a less preferable occupation.
Not the OC, but I’ve heard that comment line often:
- what appears like sweatshops are actually significantly preferable working conditions for the local population; workshops are hot and crowded sure, but it’s sheltered and beats back-breaking farming, where pests can eat your yearly revenue overnight; (that point you agree with, as far as I can tell)
- so much that, in some conditions “sweatshops” are a positive thing and local people are excited over it: they show up early, some singing, in their best clothes; (I have no evidence of this handy right now, you might disagree but if you read the first point, it shouldn’t be a surprise); example of that is the young rural Chinese workers who were happy to be hosted on bunk beds at Foxconn and others because that meant they could save more money, talking about it like Facebook grads talk about free food; that effect might not last, doesn’t appear to have for Foxconn (or Facebook);
- in the early conditions, “sweatshops” are great and external political forces trying to ban them, or more often regulate them out of profitability i.e. existence, comes off as horribly misguided attempts; an extreme version of “better is the enemy of good” difficult to parse for a population without many options;
- adding expensive controls works against workers’ expressed interests that could be either a. legitimate but conditional (they need the money and the local standards are low, working fast is a tiring but reasonable way to achieve their goal) or b. the capitalist version of Stockholm syndrome. In my experience, it’s nowhere easy to sort the two edge-cases apart. If that’s the case, a market-liberal option is to let bad employers loose their workers by making sure there’s low employment overall, the places with real opportunities can poach them away. Also essential: personal growth needs to happen; I wasn’t super hopeful that “the market” would deliver until Lambda school.
That line of reasoning has been the first criticism of trade and workers’ unions since the XIXth century and the vertiginous growth of the Industrial revolution: they defend current tradesmen and employees against newcomers. I think trade unions can do amazing things to help spread the wealth but I would be wary about that edge.
There are newer arguments in favour of Uber in that sense:
- how easy it is to get a job, fast even: a massive upside of Uber is that you can enrol under a day and get paid within seconds of dropping your passenger; people with stranger schedules, deaf people, with non-violent criminal background have testified in that sense; anyone familiar with “Growth”, especially on a platform would recognise the approach;
- at this point, “unintended” consequences are widely documented; public servants should expect rules like that would back-fire, and adapt their rulings; Uber’s margins or lack thereof are public; other similar companies have left markets, leaving their workers in the dust; it’s easy to confuse the valuation of an IPO with free cash, to mistake Growth for Profit (God knows every reporter covering tech makes that mistake) but I doubt that Uber can afford to raise compensation by a lot;
- there are now many alternatives in the gig-economy: bad employers cannot retain workers; e.g. Amazon’s warehouse would not retain anyone if they were that bad. I’m less familiar with Amazon and convinced by that one, but if you go on money-making/saving forums, you’ll notice how so many contributors have tried and compared dozens of gig-platforms. The common thread? Everyone there started by being excluded from the standard employment market by personal circumstances, unintended consequences of regulation, prejudice or sometimes just being a terrible human begin. But that’s the starting point.
I really don’t think that the gig economy is the solution: banning 29-hour limits, having incentives to accommodate for handicap, family life, etc. for any business that can shift hours also need to be in place. Few people want a series of gigs; for the few who do, what many of those companies have done isn’t worse than the alternative. For the many who want a stable, predictable job, I don’t think the solution is to regulate industries where tasks are, say, very time-specific.
Disclaimer: I’ve worked for Deliveroo (the non-US equivalent to Doordash) and dealt with those questions a lot. I’m overall proud of the work there, from many personal contacts with riders; I also have a litany of complaints handy, mainly because it was my job to prioritise them all (and there were a lot and many were really bad but not as bad as unemployment/dealing drugs/failing to make it as a Grime singer).
I would have a more critical take against Uber Taxi, mainly around how they abused the financial illiteracy of their workers. That’s one aspect I would certainly want to see regulated.
>This line of thinking can be used against almost any form of labor protections
If the government really care about worker well being then the government should directly help them, instead of using company as middleman. For example by providing universal health care or universal basic income.
You seem to be implying a false choice here. Specifically that we (the government is comprised of individuals) can not engage both in labor protections at the same time as we attempt to create a universal health care system.
Right, but you're questioning a position that doesn't really exist. Pretty much everyone that is a strong advocate for labour protections would also like universal healthcare, it's just much more likely we can achieve labour protection in the short term than universal healthcare.
Sure, but if that is your position you should go out and advocate for this better thing instead of bemoaning the efforts other people are making as misplaced.
This shows up anytime people try to make some sort of progressive improvement to society, people come out of the woodwork to complain that it's not the right solution, without doing anything (other than complaining I guess) to motivate a better solution.
While I agree with you that the unintended consequences of this bill will be a net negative, I take particular issue with this statement, "Uber isn't operating at a profit, so they don't have extra margin to pass on in the form of extra driver pay or employee benefits."
That's not how it works. Uber isn't operating at a profit because their current-investor-subsidized-rates are below the cost of their service. But there is a bit of a chicken-and-egg problem there: there rates are low because they want to gain marketshare, which is only enabled by the flood of VC/IPO money.
Eventually, all of the rideshare companies will need to raise their rates to cover the cost of service, and that cost should include reasonable remuneration for their workers. If it turns out the market isn't viable at those costs (i.e. if people just stop taking rideshares altogether because it's too expensive), then it never should have existed in the first place.
I don't think it will be a binary black or white, but rather a reduction. Which means a reduction in pay and a reduction of hours. Subsidy via VC money is an independent modifier.
If it turns out the market isn't viable at those costs (i.e. if people just stop taking rideshares altogether because it's too expensive), then it never should have existed in the first place.
I think we basically agree. The dangerous outcome is that Uber becomes more expensive for end users in California, Uber drivers become employees, but they make exactly minimum wage because that's the minimum Uber can pay them, and Uber's profits in California go to zero. (I doubt the Uber business will cease to exist because taxis are so bad in comparison.) Uber's market shrinks because they became more expensive, so they can hire fewer people.
Is that better for anyone? It sounds worse for both Uber drivers and for Uber users than the status quo. Unless you think that a minimum wage job is superior to the current job of Uber driver, and we really need more minimum wage jobs.
Things that can't go on forever don't go on forever. Uber's business model is unsustainable at its current prices. At some point, the investor money will run out, and it will have to either raise prices or cut costs. It's very hard to see where it can cut costs.
Which means it is inevitable that Uber will become more expensive, or it will fail. It's just a matter of time.
If Uber shuts down transportation won't disappear. People will have to switch to modes of transportation that may be a little more expensive but actually allow the workers to make a real living without taking on all the risk.
I don't think we can be certain that displaced drivers won't find other opportunities. I imagine most of the appeal is the low friction to entering rideshare driving vs. traditional employment (fast food chains, etc). The talking point that people are somehow skilled enough for rideshare driving, yet not other low-skill work, seems to me like a talking point to have discouraged AB5 from happening. I question the factuality of the statement.
This seems like a weird statement. The people driving for Uber presumably looked at their options and decided to drive instead of apply to fast food chains. If they wanted to work in fast food, they could have?
Maybe I misunderstand, but what you're saying sounds vaguely like "I know what's better for you".
What I am saying is, misplaced workers (if Uber does indeed become subject to AB5 and they must be employees) is these folks will find other work. The related point is these people are fully capable of that work.
Finding new work can be painful, but the damages are over-stated because there's low friction to entering work that doesn't demand specialized skills. Do you have two hands and can walk? Great, you can work the french fry fryer at McD's.
It was a single example of a low-skilled job. The generalized point is that you can go to any employer looking for low-skilled labor. There's high transferability between these sort of jobs.
My point was that there's not an unlimited supply of low-skilled jobs. The fact that if you're qualified for one, you're qualified for another isn't really relevant when they can be very hard to find in some areas.
There's been a bifurcation in employment: high-skilled and low-skilled employees are most in demand. The service industry is hurting for people. Hotels, restaurants, fast food places, etc. In fact, the NYTimes recent wrote about the hotel industry:
Whether or not it's profitable for Uber or any business to hire you, is that business' decision. It's not yours to make. And there is no evidence that ridesharing companies cannot afford to pay drivers more. What if prices go up 20-30% and the level of service stays exactly the same? Then it was a silly concern with no basis in reality. I don't think evidence shows that Uber will immediately fire all drivers if they must be classified as employees.
Do you genuinely believe that this change will have no effect on the market? That the number of people driving will be the same? That everyone will just be able to continue to drive for Uber/Lyft, on the same schedule that they currently do, but make 20-30% more?
I know that the answer is "no" since you've already said "they can just go work a fast food fryer". But that's hard to reconcile with this last statement of yours.
This is an interesting read about the hotel industry. I don't think it disproves the idea though that there are people who want to low-skilled jobs who can't find them. For instance, from that article:
"The popular Mackinac Island in northern Michigan has only 500 year-round residents but approximately 3,000 jobs in the summer months. Delays on the approval for seasonal worker visas this year forced one resort to temporarily close its restaurant."
When it's their "season", they're probably hurting for staff, but when it's not, all those thousands of people are out of work and need to try to find a new job...
I have fully employed friends who have driven uber during moments when they needed more cash, who would not have gone through hoops to work a second formal job.
How will the law change anything for Uber or it's drivers? As I understand it, this law just codifies existing legal precents under which Uber has already successfully withstood legal challenges. It doesn't really change the nature of the ongoing legal challenges that Uber will continue to face.
IMHO, the whole point of this law is just to weaken the existing precedent by giving exemptions to the Lawmakers' buddies and donors.
Isn't the law sort of protecting people from themselves? My understanding is the majority of Uber drivers don't even make money, they just convert equity from their car into cash. Making them employees might mean forcing it to be an actual viable job, and it might mean that job no longer exists. But these people are probably better off selling their cars (and buying economical ones) than working for Uber anyway.
They're getting off lightly. Uber demonstrates why we need a corporate death penalty. Serial lawbreaker Travis Kalanick should be in prison for the rest of his life, most of his criminal conspirators on the board should be there with him, and the company should be dissolved and forgotten.
Recall that among their hundreds of other crimes, there are actual conspiracies to conceal criminal activities from law enforcement. This is not "breaking things and moving quick", this is a multibilliondollar international conspiracy that has escaped justice for far too long.
Interesting that this comment is getting poor reception when this has shown, historically, to be a very effective way of dealing with oligarchs. Especially ones that, as you've correctly stated, have a long history of breaking laws and abusing workers and customers.
I challenge anyone reading this thread to really criticize why they believe their own personal interests are aligned in any way with the people who have a controlling share in uber.
> their own personal interests are aligned in any way with the people who have a controlling share in CorpX
Is that really the bar we should be using? My interests don't align with the corner store small business owner who sells bread in a small rural town, should I be okay with terminating her business too?
As someone who drives Uber on occasion when I'm a little bored and looking for something to do, I think it's great that I'm not an Uber employee.
I can do 10 hours or I can do 0 hours based on nothing but my own whim. I don't have a problem with people organizing to get a better deal for themselves, but I like the way it works now.
I've worked for companies that misclassify workers, and Uber isn't it as far as I understand.
I may be convinced otherwise, but I don't see it.
> I guess the issue arises when we got people working full-time hours but still being classified as an independent contractor.
Why though? There's plenty of contractors in other industries that work exclusively for a single client, often for 40+ hours per week. In technology in particular it's more common than having multiple concurrent clients (per person, not per consultancy).
In some countries there are limits on how long a company can employ a contractor. I can't find it at the moment but I think that here (Norway) it is something like four years. After that the contractor is supposed to be either let go or offered permanent employment. Perhaps someone more familiar with the rules could chip in, I've only been contracting for a short period.
I think the situation is somewhat similar in the US except that instead of a legal maximum the contract must specify an explicit end date after which there must be a break in employment.
Why not just provide both options to drivers? They can choose to be full-time employees, with whatever conditions that demands (e.g. exclusivity, hours, wages), or they can choose to take the independent contractor route, choosing their own hours, having control but being subject to whatever fares Uber wants to levy.
There is very little downside for the employee to be classified as such rather than as a contractor. The vast majority of the downside is for the employer.
I'm a W-2 employee at the company I work for, and they don't dictate my hours.
That's because your employer is choosing not to dictate your hours on their own volition. But an employer has every right to exercise that and that's the talking point.
That impacts whether you're eligible for overtime pay. Given that contractors are never mandated to receive overtime pay, a contractor position can never be superior in this regard.
Exempt status also impacts whether your hours are fixed or not. If they tell you that you must be in the office from 9AM to 5 PM, then you aren’t exempt.
> If they tell you that you must be in the office from 9AM to 5 PM, then you aren’t exempt.
That's not correct; the difference is that failure to fulfill such a requirement is a discipline issue (which can be dealt with by discipline up to an including termination), but not a pay issue based on hours worked as it would be for a non-exempt hourly employee.
If you decide to not work for 2 months without telling anyone do you think you would still be employed? Because neither Uber nor Lyft would stop you from doing that.
The bill is intended to protect people for whom driving is one of their primary sources of income. Not to be callous, but most people aren't particularly worried about how this affects those who drive for Uber on occasion when they're "a little bored and looking for something to do".
It wouldn't be an end to flexible work times, but due to per-employee overhead costs, the cost/benefit to the employer from the number of hours an employee works clearly spikes at a few different points due to overheads. At 0hrs/week, there is no overhead. At 20hrs, this is another ideal point since while you do have to give your labor a lot of rights, you don't need to offer certain benefits (vacation, sick pay, disability, health insurance) in many states (notably this works differently in california). At 40hrs, this is another good point since you don't have to pay overtime rates (but at least this cost isn't a big spike).
Basically there's a bunch of laws that spike certain expensive costs for employees if they work different amounts. Therefore its not very profitable to allow completely flexible work times. Otherwise many of their Hawaii drivers would drive for 21 hours for benefits, and the labor costs would be higher than if you were required to either drive for 20 hours or 40 hours.
I think ideally employees wouldn't be mandated to provide any expensive benefits to full-time employees and benefits would be centralized and funded through more taxation instead.
But mostly, uber is complaining because labor laws are complex
Not to nitpick in your post, but for CA this would be at 30 hours for the benefit of healthcare. CA Industrial Relations still classifies 40 as full-time, so unclear on what benefits are tied to that
Mandated wage guarantees and the costs of benefits would force Uber/Lyft to implement supply controls, which would result it a large fraction of drivers not being allowed to go online and drive.
The thing is, I would rather you are more restricted or stop driving for Uber, and full-time drivers get decent terms, then you get to keep your (seemingly) unnecessary side money and full-time people, for whom it is the main job, have substandard conditions and rights.
Ideally there wouldn't be a tradeoff, but in practice it seems like there is one.
The more important group that loses without flexible hours are people who get by on a combination of part time jobs, or are training/educating themselves and need extra money to support themselves.
What's wrong with being a temp employee with flex hours?
You raise a good point that labor law has an ugly bimodality regarding employee and independent contractor, where it might be better to refactor the law so that different protections apply based on some particulars of the arrangement. Working <10hrs/wk vs >20hrs/wk is one good place to draw a distinction.
I have considered driving for Uber very casually, but a few things keep me from doing it. First, I cannot drive the car I would prefer to drive (a two-seat sports car). Second, I would have to file a bunch of extra paperwork at tax time. Third, Uber doesn't allow drivers any control over the areas they wish to serve (so I could ensure that I'm just making short trips, etc). And, I guess the final nail in the coffin is that I wouldn't have much control at all over my preferred service area (say I wanted to just do a quick trip that ends no more than 5 miles from my house).
Well if you know the pains and struggles of rideshare drivers don't whitewash their issues, you have other sources of income and do not rely on making an average rate to pay the rent, you don't weigh buying gasoline against food. I think you are a shill, Uber is very active in this regard.
"Please don't make insinuations about astroturfing. It degrades discussion and is usually mistaken. If you're worried, email us and we'll look at the data."
The question is simply posed but unfortunately is rather difficult to answer because it depends what you mean by fake.
Accounts with a history are very valuable to companies in the business of "creating organic public support".
Also an author can be part of a community bit have a motivation to drive a discussion in a certain direction.
In either case it doesn't mean the post, the author, or the history are "fake" but it can mean there is some level of astroturfing going on.
Anyway I've been informed the guidelines prohibit such insinuations and I can understand why as they are an easy accusation but don't lend towards evidence based or productive discussions so I've removed my comment.
For those interested in understanding the underlying case law that AB5 codifies (a decision called Dynamex Operations West, Inc. v. Superior Court), my company, Judicata, published a visual (and tech-enabled) explanation of the decision when it was first published: https://blog.judicata.com/understanding-dynamex-the-californ...
Whether or not Uber drivers are employees or contractors under Dynamex and the ABC test is an open question, but the Uber explanation of the bill's impact is more or less correct.
One of the tests is: “that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact”
Since Uber rates drivers, does background checks, sets the routes, leases cars, etc., how does Uber plan to avoid this check? Do ratings sort drivers, or is Uber effectively creating a credential that governs the driver? What does the distribution of driver activity look like?
It’s hard to believe an all-or-nothing determination will hold. Surely some fraction of most-active drivers will end up getting called employees.
It’s one thing to explain the law (and case law) and yet another to provide an explanation with evidence. The latter is what we need (especially as voters), yet the former is what lawyers like to peddle because it makes them money. Uber’s post is almost 100% legalese. CEO Dara had an opportunity to make a grounded statement here, but didn’t.
IIUC, AB5 might end up making Uber a monopoly in California (and US if other states follow suit) via regulatory capture.
Currently, most drivers seem to drive for both Uber and Lyft (based on their cars having stickers for both). But if classified as employees, and being guaranteed a minimum wage, then Uber/Lyft might require them to be exclusively available. As a result, the drivers will have to choose either Uber and Lyft and since Uber has more market share, they will likely choose Uber and Lyft will be squeezed out.
True, but the majority opinion driving AB5 seems to be that most drivers are doing this as their full time jobs. Yes, there are those who drive a few hours occasionally as a hobby or for extra side income, but they don't count much. If the number of Lyft drivers falls significantly, consumers will have to wait longer to get a Lyft ride and they will start abandoning Lyft. Hastening the spiral.
Another comment mentioned that Lyft might pay drivers more to keep them, but given that both Uber and Lyft are hemorrhaging money, it seems unlikely that either will be willing to pay drivers more. Also, Uber just needs to pay the same as Lyft for a little while, and just wait out the decline of Lyft due to AB5.
Curious where you are getting that most drivers are full-time. Every time I make conversation with my Uber/Lyft driver, I often learn it's just a side hustle for them that supplements their 9-5 (n > 20).
Assuming that Uber has a competitive advantage because of their brand, and both Uber and Lyft are rational actors who want to maximize their profits, they will end up in a state where Uber has higher margins than Lyft.
I think the proper classification of drivers is likely an existential threat to Uber, and they are responding as such. I find it highly unlikely that a court would find transportation to be outside the scope of Uber's business. Although you have to almost admire the sheer brazenness in their admission that they will not adhere to the law.
There's some nuance being lost here - they aren't saying they will violate the law, they are saying that their lawyers will advance an argument that the law (ABC test) does not apply to them.
I think the legislature and many on HN believe that courts will think it's absurd that Uber's drivers are doing work "outside the usual course" of Uber's business. I'm inclined to agree, but I'm not a lawyer and I don't know how well written the law was or whether California courts will include legislative intent in applying that language.
You're right about the article, I was responding to people in this thread: "broadcasting their intention [to break the law] in advance", "[admitting] that they will not adhere to the law" and so on. Those are the statements I am responding to.
Perhaps you should have indicated that's what your disagreement was, I think we agree but you misrepresent what I mean by "apply". Since it's not clear what it means to "pass" or "fail" the ABC test, and Uber is using the term "pass" to indicate that condition of the test is false (i.e.: failed), I used the term apply.
For example, when the Lemon test applies to something, it's because all of its three prongs are true. Is that a "pass" or a "fail"? That distinction I think is irrelevant to the law, but I'm sure the litigants on both sides would argue that their argument is good ("pass"), and the opposing argument is bad ("fail").
A city putting up decorations for a religious event and denying others would argue that they have "passed" the Lemon test, while articulating that one of its conditions "fails".
A litigant against such a city would argue the city "fails" the test.
I did not want to use Uber's language ("But just because the [ABC] test is hard does not mean we will not be able to pass it") because their job is to frame things positively for their client. Passing the ABC test is trivial - I'm doing it right now! So are you! What we care about is whether or not the test applies to something, that is, it entails some consequences, and Uber is going to argue that one of the specific prongs of the test will fail. From their view, this is a win, and this is them "passing" the test.
> I find it highly unlikely that a court would find transportation to be outside the scope of Uber's business
TBH considering the language of the bill, it s very plausible to say that driving people around is not "their usual course". The same way that google is not an advertiser, and airbnb is not a hotel chain.
That's like saying Yellow Cab is not a taxi company because the drivers are independent contractors who lease their cars from the company, and it doesn't actually drive anyone around.
Ebay matches sellers (who choose what to sell) with buyers (who choose what to buy).
Uber tells drivers where to go, and when, if the driver agrees to do the work. Uber regulates the kind of cars acceptable, and regulates who does the work. Your Uber driver can't subcontract the drive to another driver.
> Your Uber driver can't subcontract the drive to another driver.
Drivers can absolutely sub-contract. most choose not to in the US but it's the core of how the Uber Black business functions (a limosine company with a number of employee drivers) and is still how it meets demand in developing markets or in developing economies.
Uber doesn't tell drivers where to go or when, drivers are free to go whereever they like (but Uber does provide incentives and information on where demand is)
Uber regulates what cars are acceptable the same way an Ebay seller has to maintain some standards in their store. Similarly Ebay also verifies that you can even be a seller on their platform, just like Uber does with background checks, DMV checks, etc.
To your last point on subcontracting...I'm not even sure thats part of being a contractor or employee so its neither here nor there.
uber has in the past successfully claimed that its customers are its drivers and its users are .. its users. They classify both as clients, and it seems to have worked so far.
> Your Uber driver can't subcontract the drive to another driver.
Even if their ToS does not allow it , it's not the law
The only existential threat to Uber is how long it takes self driving cars to become a reality. Human drivers are a speed bump in their business model. It only affects the length of their runway and thus when they intersect with self driving cars.
When the ACA passed, mandating that large employers offer health insurance to all full time employees, there was a massive push by large employers in retail and food service to cap people's hours and make sure very few qualified as full time. This was because health insurance costs employers about $10k per employee per year, and if you are paying someone $10/hr ($20k/yr at 40hrs a week), raising labor costs 50% is a nonstarter.
An outcome like that may be possible here as an unintended consequence, with Uber and Lyft capping most drivers at 20hrs a week, and full time drivers splitting their time between the two (20hrs for each).
The problem is that health care is attached to employment. The solution might take the form of universal health care, it might be not-so-universal private health care, it might be some hybrid. But don't gloss over what the problem is because you'll lose common ground with people and end up arguing over the solution and not agreeing that there's a problem.
This is where one can say sure. But in reality with the lack of public healthcare, it's just hiding an large cost on society when the person ends up running up medical bills and is unable to pay.
I think there is more truth to their argument than people are giving them credit for. It seems like an in bad faith perspective to not give their claim some credence. It makes YOUR argument stronger to first make the best version of Ubers argument before rebutting it.
Does it make me a Microsoft employee if I use Outlook to conduct business? Does it make me an Ebay employee if I sell things through ebay? Until Uber eliminates the ability for drivers to drive Uber and Lyft simultaneously, and bounce between the services at will, I DO view it as drivers paying for 1) a dispatch and messaging service 2) payment processing 3) insurance 4) a resume host 5) a customer funnel. Thats more than just a technology or software company, Uber sells transportation services to drivers. The fact alone that they can have two messaging/dispatch apps open at once, on two phones, makes me question, which company do you think the driver works for? Both simultaneously? Just the one that the passenger is from? Is having both Uber and Lyft open looking for passengers any different than listing something I have for sale on Etsy, Ebay and Amazon, and pulling the listing once it sells out?
Ebay doesn't control how much you sell your product for. Ebay doesn't police how you sell, package, or ship your product. It's mostly hands off. Compare this with the level of control Uber exerts on its drivers.
Similarly, Ebay's service is less dependent on how well you provide your commerce services, it pretty much lets the market determine your prospects on its platform. On the other hand, Uber is highly reliant on the conduct of its drivers and the service the provide.
That's a difference that arises out of a goods market (with some services attached) vs. a more pure-play labor/services market, but it's not a fundamental distinction about control or what is core to the platform provider. The whole gig economy is a new phenomenon, because it is enabled by the ease of communication that is only recently possible to create a liquid labor market, something that should be applauded.
The obvious Duck test is staring you in the face, that here is a new type of thing that only half looks like a duck, and should be treated as such, which is what rideshare companies have been arguing for forever, including at the legislative level. Instead of forcing a non-duck into a duck because of stupidity, lack of imagination, or pure emotional hatred for certain companies, the level-headed thing to do is to look at how such a new type of market really should work for the benefit of all participants. The race-to-the-bottom thing that drivers complain about is a consequence of ideological cock-blocking by pandering politicians unable to come up with a real solution between fucked-up taxi medallions and raw market forces. AB5's madness lies in pretending it's the 1950's and takes the cake in making it worse not just for gig companies but a shit load of other industries as collateral damage.
Uber and lyft have to dictate the price the end user pays. Nobody would use the service if they had to collect bids from a bunch of drivers each time they wanted to go somewhere. As a result they wouldn’t have an effective pool of customers needed to attract drivers.
I agree with others. These “gig economy” jobs are a different classification of worker that doesn’t currently exist. Dunno what the details should be but they aren’t quite contractors and they aren’t quite employees.
California could have taken the lead and helped define this new classification...
Whether they need to do it for their business to work isn't that relevant, they are still doing those things.
In the UK we have two classifications that are different from self employed (contractors). We have worker and employee. They're similar but differ in the level of control the employer has and the responsibilities of the employer.
The case in the UK decided that the drivers were workers but not employees.
Making it illegal is the the whole point of AB5. Contractor status was once for a very specific kind of worker: independent professionals who were basically solo businesses. It has turned into a giant loophole, where worker have the downsides of employment along with the downsides of being a contractor. AB5 aims to return to the status quo, where if you want to hire a bunch of employees, you really have to treat them like employees.
They were arguably employees before (and outside of CA) and unarguably employees under AB5. That’s why Uber is making this ridiculous claim that it’s not a transportation company: otherwise, its drivers are employees.
If the law says they're employees, they're employees until the law changes. In the same vein as my earlier post, the fact that a corporation wants to "employ" (in the basic dictionary sense) workers under certain arbitrary terms doesn't make said arbitrary terms legal, nor does it create a mandate to make them legal.
> These “gig economy” jobs are a different classification of worker that doesn’t currently exist.
This isn't necessarily wrong, but if you want to make the claim, you'll have to say what that new classification is.
Current employment law has a well-evolved set of protections that help prevent employees getting too badly screwed. Traditional contractor relationships, on the other hand, use the power of the market (that is, the contractor ability to either easily switch clients or maintain multiple clients) to keep things fair.
If there's something in between, it can't be the status quo (we treat you like employees when it's convenient but call you contractors so we can screw you over). And it also can't be some midpoint, like an employee-lite, where Uber, etc, just exploit people 50% less than now but 50% more than they could with real employees.
> Traditional contractor relationships, on the other hand, use the power of the market (that is, the contractor ability to either easily switch clients or maintain multiple clients) to keep things fair.
There's a lot fewer clients to choose from but doesn't driving for Uber and Lyft simultaneously satisfy this to some extent?
Except Uber doesn't dictate how you use the app, they set parameters on how you can use it. They also don't tell you that you HAVE to take all rides, but if you do not meet a quality bar or are abusing their product then they can kick you off it / revoke your access...
The only difference here is the payment. And to that end, if Outlook supported the ability to transfer money then it still wouldn't make Microsoft your employer...
> The fact alone that they can have two messaging/dispatch apps open at once, on two phones, makes me question, which company do you think the driver works for? Both simultaneously?
I'm not saying you are guilty of this, but I think many of us with full-time, salaried jobs tend to not be able to grasp that yes, you can be an employee of multiple companies simultaneously.
You can't necessarily be paid by more than one employer for the same unit of time -- but that's not what's happening here.
If a driver who is an employee of both platforms accepts a Lyft ride, they are working as an employee for that one company for the duration of the ride. If they then accept an Uber ride, they are working as an employee for that one company for the duration of the ride.
Keep in mind there's no minimum amount of time you have to work to be considered working as an employee. Even if you're clocking in for just 5 minutes, you're still a working employee for those 5 minutes and should get paid for those 5 minutes.
The only difference between this type of employment relationship and traditional employment relationships is that at least in theory, the drivers can set their own working hours. Although the degree to which Uber and Lyft exert influence over drivers' working hours makes me wonder just how freely chosen they are.
But even if Uber, Lyft, and the like are able to argue that drivers can freely chose their working hours, that's NOT the only criterion necessary to be considered contractors. It is possible to be able to freely chose your own working hours yet still be classified properly as an employee, provided other factors point toward an employment relationship.
What if you accept a Lyft ride before youve completed your Uber ride?
Im not even making the argument that they are employees or contractors, I am more saying that drivers are consumers of Ubers matching service, and that there is some accuracy in viewing Uber as a matchmaking service and payment facilitator.
Why aren't other industries up in arms about this? I work for Intel and we have a ton of contractors, so does Google. Under 'A' of the 'ABC' test, it seems to me that most contractors for these companies would now be employees.
The bill specifically excepts a bunch of professions (doctors, lawyers, engineers...) Secondly the contractors for most of these Intel/Google, etc are employed by someone else.
No, it exchanges it for attention, which it sells, but an exchange of the world's information for other valuable commodities is key to it's business model.
> Our proposal avoids the potential harm of forcing drivers to be employees, whether or not they want to—and the vast majority tell us they don’t want to be.
> Contrary to some of the rhetoric we’ve heard, AB5 does not automatically reclassify any rideshare drivers from independent contractors to employees.
This may seem like an immediate contradiction, but I guess they've reframed it so their proposal is actually in line with AB5?
great pr-speak
> But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces.
Also seems like they will continue to thwart where they can (which I can't blame them for really) but seems aggressive to note. This reads more like a shareholder update, which makes sense.
> Governor Newsom has already committed to sign AB5, which would go into effect in January 2020. Because we continue to believe drivers are properly classified as independent... drivers will not be automatically reclassified as employees, even after January of next year...
> Uber and Lyft together have already transferred $60 million into a campaign committee account, and we are open to investing more to put us in the strongest position possible to run a winning campaign... We are confident that California voters and the millions of riders and drivers who use Uber will step up to protect these important work opportunities.
Translation: "We're betting that we can get a ballot initiative passed legalizing what we do faster than the State of California can bust us for violating AB5."
> Importantly, our ballot measure will not ask voters to exempt us from AB5, even though nearly every other industry in California that works with independent contractors received an exemption from the ABC test through special amendments I mentioned earlier. Instead, we will ask voters to support the pro-driver policies we have advocated for: giving drivers access to benefits and an earnings floor and retaining the flexible access to on-demand work they enjoy today.
It doesn't sound like the proposal is intended avoid compliance with AB5 but to create conditions where new bills that make the ABC test harder pass will have less support.
Uber's argument is that the core of their business is the technology which allows them to act as a two-sided marketplace and logistics company, connecting and routing physical goods and people.
Connecting riders and drivers is one thing which takes advantage of their technology but their are others. Connecting riders and scooters, connecting couriers to restaurants and hungry people, connecting people who want to go to the Hamptons with helicopters, etc.
Uber will argue that it has nothing to do with the driving part and the driving is just one of the many uses of their technology.
The difficult part of that argument will be that they have so many rules and regulations that they place on drivers and rides that's it's hard to argue they're just providing a hands-off matching & logistics service.
Uber's position here seems to be that they are a technology company that connects drivers with things that need to be driven from A to B (people, restaurant orders, etc.). Not sure I buy that but it sounds like they're willing to ask the courts to decide on that if this goes into law.
i'm guessing they would claim they are an ridsharing platform, with the purpose of allowing drivers and riders to find each other and facilitate the transaction, rather than a taxi service.
the problem with that argument is that they have a lot of control of the driver side of the platform, directly through pricing and indirectly through ratings and access.
Because we continue to believe drivers are properly classified as independent, and because we’ll continue to be responsive to what the vast majority of drivers tell us they want most—flexibility—drivers will not be automatically reclassified as employees, even after January of next year.
We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now. But we will also continue to advocate for the independence and choice that drivers tell us again and again in surveys, polls, focus groups, and personal conversations that they value most.
Uber management is not going to get the message until top management goes to jail for contempt of court.
There is nothing about providing benefits to people who meet the criteria for employment that prevents Uber from allowing drivers choice.
They will not be able to keep as many drivers or allow infinite drivers to sign up, and they will not be able to pay benefits to people who only work a very small amount per week (I assume this is in the law). But beyond that, there is absolutely no reason they cannot or should not continue to let drivers sign in and out when they want.
What should they do to drivers who don't meet their minimum hours needed to pay for the benefits in a given week? Fire them? Immediately? Should it be a warning? How many warnings do you get? Meanwhile is Uber/Lyft still on the hook for all the benefits? How can they avoid these flaky drivers? Better screening upfront such as an interview? How will drivers feel when they get a notification they have to drive 8 hours today or they'll get a warning because it's the end of the week and they are short. What if it's a slow day and Uber doesn't need more drivers today? It would make more sense to spread drivers hours out of over the week. The relationship starts to sound drastically different for both parties. Especially for the 45% of drivers working less than 10 hours currently who will have to find other side jobs or go without.
There would need to be a grace period and there would be a warning. There is no reason someone needs to be immediately fired just because they have a light week.
What I have a hard time understanding is the 3rd of the 3 tests that determine if a person can be classified as independent contractor. [1]
I understand A & B, but as for C, why does someone's normal job have to be in that same line of work to be considered an independent contractor? What does whether a person is a driver professionally, or a teacher making money on the side, determine whether they're performing work as a contractor?
Maybe someone more expert can explain.
-------
[1]
ABC Test that all 3 conditions must be satisfied for worker to be considered a contractor:
"...
(a) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
(b) that the worker performs work that is outside the usual course of the hiring entity’s business; and
(c) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”
Could someone knowledgeable about employment law explain what will change for Uber/Lyft drivers if the companies are forced to reclassify them as employees?
The post talks about "potential harm" and says that how many hours drivers have to work and whether they can work for competitors at the same time "would all change." Is that right?
This is just a PR post by Uber. Don't take any of it as fact.
No one knows the true impact of this. Companies will find lots of interesting ways to follow the letter of the law but not the spirit of it. As they always do.
If you really want speculation on it then find someone who's actually a lawyer and not directly affected by it (so they aren't biased). Which I haven't seen yet.
There are some other excellent explanations in this thread, but it boils down to the idea that if drivers are employees, the company starts to care about how much they work. For example, if they work more than 40 hours in a single week, they need overtime pay. That means that a driver today who decides to work 80 hours one week and take a vacation the next would (if classified as an employee) be costing Uber a lot of money, so they will probably need to ban that behavior to stay competitive. From an employees perspective, this means they have less flexibility in their work schedule.
I like how they both claim that the law does not actually apply to them, and that they are exploring working with Lyft and others on a statewide ballot measure in response to the law (clearly, implicitly, a referendum to reverse it.) They are careful to avoid making the self-contradiction explicit, but the implication is clear.
That is a clever argument that they are in business of lead generation. But if that was true then the consumer wouldn’t know Uber, they would know x ride share service. The problem with Uber is they also control the end user experience and pricing, so it’s a real stretch to argue they are not in the business of providing rides to customers.
Honestly I think their argument could be bolstered a lot if they made a simple change. Imagine you call an Uber, then your app tells you billy wants your job. You can see he is 4.5 star rated with 1000 rides, he is est 3 min away, and he wants $15. Do you accept? If so Uber connects you. If not Uber goes back to finding someone else.
With that change Uber removes itself from being in the business of rideshare, and now is in business of connecting drivers with riders (as they’ve claimed all along). They need to let drivers dictate prices and ask users to choose.
Would love to see source data that Uber is referencing (I know it's not possible, as it's highly guarded secret) - I suspect they cherry pick it a lot.
"In the US, 92% of drivers drive less than 40 hours per week, and 45% of drivers drive less than 10 hours per week. [...] We will continue to defend the innovation that makes that kind of choice, flexibility, and independence a reality for over 200,000 drivers in California".
1. Does this distribution looks in California, not across whole US? Why talk about two different cases, unless you cherry pick?
2. How does this % look like, when we look at drivers that work for more than few months?
A very clever thing they're doing is conflating being an employee with not having flexible hours, as if part time jobs don't exist. Fast food chains don't hire independent contractors and yet lots of people have flexible shifts.
Fast food chain is busy from 12 AM - 2 AM, 5 PM - 7 PM. These shifts may be desirable or undesirable because of the time they occur. To be able to get the "easy" shifts (slow ones) at 10 PM or something, they can make it so that you HAVE to take a part of the other shifts... If you can't, you don't meet their eligibility and you lose your job.
If you are an employee in a shift based business, you definitely give up some rights to having completely flexible work hours.
This is percentage of drivers, not percentage of hours worked.
It would make sense that there are lot of drivers that don't drive very often. They might even have stopped driving altogether, but didn't cancel their account.
It's like a website talking about total users that ever signed up, instead of 7-day active users.
It doesn't clearly state if those durations are during an active ride, also including time to pickup, or including time active waiting for a pickup task.
This subtlety could drastically change the data interpretation.
Despite how it is covered, the law notably fails to do ANYTHING to help gig employees as it just codifies existing case law.
What this law does do is carve out exceptions in that case law so that gig employees have LESS protection.
This law could have been paired with other real protections for gig employees but that did not happen. No minimum wage guarantee extensions, no rights to organize, no improvements in access to the safety net...etc
How do people let our politicians get away with claiming they are protecting people with a bill that does nothing but erode those protections?
So basically their tactic is to eke out a few more years out of their business model as their fight with California over the classification slowly snakes its way through the courts to the California supreme court, and hope that in the meantime they can come up with a better business model?
It is actually not a terribly bad idea. They have the money to pay for the slow court battle, and it is strictly cheaper than complying.
Dynamex lost (Dynamex Operations West, Inc. v. Superior Court), which caused AB5 to be written. Uber did not yet lose (or even get sued) over this yet IIRC
Some of the exceptions were for professions like Lawyers, Accountants, and Professional Engineers. There are already well established protocols for interacting with these people, so let's not complicate things with AB-5.
I'm sure some of the exemptions are not so cool though.
What have established protocols got to do with anything? The question at hand is, is Dynamex a good, widely applicable test or not? Yes or no? If it is, then use it. If it isn't, something is severely broken, which you plainly see with so many exemptions, and it should not be used.
They continue to use the term "rideshare", which just boggles my mind. So, I guess "share" in this case means that Uber is "sharing" a "cut" of the proceeds with the driver. Maybe they should call it, "fareshare" (but then that would be a play on words that turns out to be an oxymoron).
That's an interesting point, actually. Uber and Lyft do both support shared rides (which they call Uber Pool and Lyft Line, respectively), but my understanding is that the vast majority of their rides are not actually "shared".
Honestly, would the, "three important points" have even been a remote consideration of Uber, Lyft, etc., if this legislation was was not even proposed (let alone passed) in the first place?
This sounds a lot like someone apologizing and saying they are deeply sorry, only after they are caught doing something wrong.
Uber always positions itself to be whatever is most advantageous for it given the current situation. Just a "technology-based platform", no, they are a just a modern taxi company that uses a tech platform.
I think for many "big tech" companies there needs to be a paradigm shift in how society views them, not as pure tech companies that produce technology solely for technology's sake, but like Uber - companies that use tech as a means to an end of a another business (in most cases). Facebook as a news company, Amazon as a retailer, Airbnb as a short term rental unit provider, etc. (these aren't all necessarily accurate descriptions).
I can read between the lines an assumption that Uber will do the bare minimum required by law while exercising all restrictions on drivers they are legally allowed to.
How can they be for self-organization of drivers (as states in the release) while battling in other state courts for prohibiting unions?
If they want to allow drivers to also drive for other platforms (again, from the text), just don’t enforce such clauses in employment contracts.
They’re talking about all the changes they supposedly want to see while the only thing stopping it from happening is Uber deciding not to.
As if being an employee must mean a rigid schedule and inflexible working hours.
> We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now.
Translation: "We want to help our workers by fighting against their own attempts to assert their legal rights. We will do so in special courts where we hire and pay the judges. This will be perfectly fair."
>Bringing drivers access to robust portable benefits like sick leave and injury protection;
What? Those are embarassing offers.
> Our proposal avoids the potential harm of forcing drivers to be employees, whether or not they want to—and the vast majority tell us they don’t want to be
I would love to see the data behind the 'vast majority'
I'd bet the huge percentage of drivers that simultaneously do Lyft and Uber would not like being an employee of one or the other, as their employer would prevent that.
I wonder what'd the courts would say if Uber decided to charge a nominal fee (say $1/year) for the driver app in the App Store? That would make it more obvious that it's a piece of software that is being licensed by drivers for lead generation.
AB5 didn't appear out of nowhere, and its passage didn't come as a surprise. The potential impact of AB5 on Uber's business would have been priced into the stock as the bill progressed through the legislature.
this is probably going to be labeled as a naive view, but to me it's clear that no one cares about the spirit of the sharing economy (not even corps like uber or airbnb): no one should be dedicating 100% of their "work time" to ubering... nor buying up properties to rent it out as airbnb permanently... I thought it was about unused/wasted time/resources that could be shared (for some profit).
Corps likely airbnb and uber should probably go back to building their platforms to promote occasional resource assignment rather than permanent.
> I thought it was about unused/wasted time/resources that could be shared (for some profit).
This is the fiction sold by AirBnB, Uber, etc. You just can’t grow forever (as these companies require) by “sharing.” Do you think investors would continue to happily light billions on fire if Uber didn’t have huge ambitions?
This is very similar to Etsy. Founded as a handmade marketplace until they realized not enough people make stuff by hand to keep growing. Now it’s just a mass-produced shit shop just like every other place.
That's because these companies have purposefully misrepresented themselves as part of the sharing economy despite the fact that their core business models are nothing like Freecycle or Couchsurfer, or even like casual carpooling.
Are they really trying to claim that Uber is not a transportation company but instead "a technology platform for several different types of digital marketplaces"?
This is how they've always been. Uber's "customers" are the drivers. They are buying access to the platform, thats how they categorize driver bonuses and incentives to "marketing" expenses apparently
The post was written by their CLO. They are not trying to claim as such, they are succeeding. I am not a lawyer, but I don't think this legal interpretation of the company is a lie. It seems like the classification is constantly under scrutiny. A legal falsehood like you claim it is would've fallen apart by now.
Lawyers argue all the time. It's not a legal truth because their chief attorney says so. They are entitled to claim (within reason) as much as anyone else is.
And, of course, they will claim the most favorable definition. In other situations, notably when they are arguing against entrenched transit/transport interests, they "become" a transport company. It's a question of which hat fits the day.
> But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces.
Previous rulings have found his statement to be accurate. So you don't have to take his word for it, you can take a judge's.
Lawyers and representatives have been making stretch arguments for the entities they represent for centuries. Did you really expect the company's legal group to not try and argue around this? Why do you think they have jobs?
I don't think any of Ubers claims are changed in this post. This post just claims that AB5 changes nothing for Uber because Uber is already operating under the Dynamex precedent.
The post truth era is people claiming this bill adds protections for gig workers when it's actual effect is to limit those protections from applying to the lawmakers buddies and donors.
eBay is a marketplace because people have always bought and sold stuff. There was no pre-existing marketplace of drivers looking to drive people around for money before Uber came along.
The government seems to be solving the wrong issue. Shouldn't the government instead fix the
Whatever it is that makes being classified as contractor suck in the first place?
If the court rules that Uber drivers are employees per the AB5, my guess is there will be no more drivers with 40 hours a week. Ride sharing companies will just do what fast food has done and cap working hours at 29 per week to avoid healthcare benefits. This will also mean that neither uber or lyft can capture the market, because they will need each-other to supplement hours to the drivers.
What's the defense of a business model that loses bucketloads of money despite not treating their drivers with the dignity they deserve? Both Uber and Lyft are not going to be killed by regulation, they're going to be killed for being shitty businesses.
Yeah, the term really got me when I first heard about Uber... my thoughts was it was more like a near-demand carpool service to pull together extra passengers for where you were going anyway (for a small fee). Reality it's more like a Taxi service with private vehicles.
Still wouldn't mind seeing another ride share app with carpooling as the focus.
Yes, calling it "ride-sharing" has always been disingenuous at best. I suspect the idea was to make it sound more small-scale and personal, less formal and commercial, so that people wouldn't feel it needs regulation or oversight as much as a commercial transportation service.
No, AB5 simply requires that they compete fairly with all other transit systems that recognize their employees as employees.
The reality is that all these “gig economy” companies are only able to compete by unfairly claiming that their employees are somehow not their employees.
Wow, just .. wow. I thought it was going to be Uber's plan of coming under compliance of AB5 and sugar coating the entire thing to made them sound like some honorable people. But no, they're still scum. You get half way through and you realize it's just business as usual. We're going to ignore, fight and not give a shit about the law.
The build up to this legislation was that it was specifically around companies like Lyft, Uber, Dolly, etc. To argue against this just shows how desperate the company is to not give up anything.
Personally I stopped using Uber in 2016 and never looked back. I'd rather pay more for a Lyft. If both of them disappear tomorrow, there will always be Taxis; and maybe cities will finally start building out real mass transit like America has needed for decades, instead of hanging on to the brain-dead dream of a self-driving cab.
Uber's defense is that it is licensing lead generation software to drivers, and that it just takes a commission from each trip as payment for use of its software.
In many ways, I can see it. I think the issue lies in a lot of Uber's current policies around drivers e.g. very strict rules around cancellations. If Uber was just a lead generation provider then it shouldn't care or intervene if a driver decides they don't want a job, but depending on the scenario you can be punished if you don't want to take a job.
Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.
> Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.
I'm going to go with yes. The only times I use ride sharing services (Lyft, not Uber) are in high-density situations like getting to and from the airport. Depending on the hour there will be dozens to hundreds of drivers hovering in the area trying to get rides. As soon as "rider available" appears on screen a dozen different drivers are mashing the accept button.
Up until a year or two ago, the drivers would then see where I want to go and then call me on the phone to say they didn't want to go there, telling me to cancel the ride they had accepted. I systematically refused every time so that (usually after a few minutes) they would give up and cancel it themselves. This would usually happen for 2 or 3 drivers in a row, making ride-sharing a miserable experience for me.
I assume the cancellation penalties have been made much more serious, because this hasn't happened to me in a while now.
> Up until a year or two ago, the drivers would then see where I want to go and then call me on the phone to say they didn't want to go there, telling me to cancel the ride they had accepted. I systematically refused every time so that (usually after a few minutes) they would give up and cancel it themselves. This would usually happen for 2 or 3 drivers in a row, making ride-sharing a miserable experience for me.
I've only had that happen a couple of times for me, but that's because I'm mostly a Lyft user. What was more common on Lyft was drivers calling me to ask "Where are you going?", and when I'd respond with "I already put my destination into the app", they'd hang up and cancel on me.
Edit: About the cancellation penalties. I don't know about Uber, but on Lyft when I as a rider have to cancel on somebody, I sometimes see options pop up saying "driver asked me to cancel" or "driver is not moving". They know when drivers are using trickery to get out of dinging their cancellation rate. And when I have to cancel for "driver is not moving", I also get a message saying they'll waive the cancellation fee because there was an issue with my ride (note: I get this message before I see the list of cancellation reasons to pick from, not after).
Oh yeah, they 100% know of all the shit drivers do to get out of cancellation penalties on their end. My favorite is when I actually had to use the "driver is going the wrong way" option when I was looking at a map and had a driver decide to go north up a highway when I was very clearly south of even his starting point.
This comment doesn't make sense to me (as a part time Uber driver myself).
First, the driver doesn't see your destination until he picks you up.
Second, there is no competition or reason to rush to "mash" the button, the ride request is exclusive to you as a driver for the 10 seconds that you see it.
Drivers often call you and ask you where your drop location is. Depending on your answer, they often cancel. Or worse, ask you to cancel. I've even had cancellations after I've sat in the car.
Lyft is the worst about this, I assumed Uber penalizes them because i can’t recall it happening in the past 6 months with them, but I’ll get back to back Lyft call & cancels.
Doesn't that basically give them a bad mark and cause the software to no longer give them rides? I mean that's grounds for firing if it was a regular taxi company.
I'm not based out of US, so the experience will vary. My understanding of drivers getting bad marked is that here the demand for Uber at peak times is still larger than the supply, hence even though you might be penalised via de-prioritisation, uber would still get you a ride to fulfil. They are also penalised by being given lower pay incentives. But talking to most drivers, the trade-offs of cancelling are worth it for them, since they often cancel drop locations from where demand would be lower, or to far off places where they wouldn't get another ride to complete, or have to go out of the way to return to the area they generally are comfortable operating in.
Whenever I've raised this issue with Uber(via their absurdly bad support feature), I generally get an automated response in the line of "We're so sorry for the bad experience, we understand that this has caused you a lot of trouble... We take your feedback seriously..", etc.
> This comment doesn't make sense to me (as a part time Uber driver myself).
As I noted in the comment, I use Lyft, not Uber, so I can't say if it works differently. What I can say (and what other people in this thread have confirmed) is that it does happen surprisingly regularly.
> First, the driver doesn't see your destination until he picks you up.
If that's the case, it's easy to see how even on Uber a driver might call you to find out where you want to go, and then tell you to cancel because they don't want to go there.
Oddly enough cancellations have been much worse for me this year when trying to go from SF->Oakland. Most infuriating is when drivers come close enough to lie and say they're at the pickup spot (showing them my destination) then just drive away without stopping. I mostly use Lyft, so I'm not sure if this is a problem with Uber as well.
I noted elsewhere, but for me it’s super common with Lyft and super rare with Uber.
Doesn’t Uber in the USA just assign rides automatically? Or do drivers opt into the rides they want? But what you describe is how didi works in China when interfacing with taxis (you could get a taxi or ride share through the app, drivers will simply ack any rides they want to take, payment is handled normally, didi doesn’t get a cut).
Uber presents a ride to the driver through the app and the drivers must accept the rides they want to take[1]
[1] https://help.uber.com/partners/article/getting-a-trip-reques...
Yeah but it's round robin. You don't lose a ride by not mashing the button quickly enough.
Wouldn't surprise me if both were true, and they A/B-tested it by region.
Yeah, even being charitable, I don't see how Uber's model[1] is remotely reasonable. They pretty clearly take direct control over the relationship. The rider deals with Uber, and the driver deals with Uber. Nothing at all like the ebay/fiverr "hey find someone to link up with" model.
[1] Edit: To clarify, I mean "the model they're promoting of what their core business is", i.e. the claim that "they're a lead-gen platform they license out"; I'm not saying they're business model is financially non-viable.
In fact, I'd argue that's the primary reason why Uber/Lyft got popular in the first place. At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. If Uber can't enforce something similar, why should I use Uber?
> At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service.
Most of us don’t have such great experiences with taxis as you do. “Legally bound” still leaves a lot of wiggle room for really crappy experiences.
> Most of us don’t have such great experiences with taxis as you do.
What kind of negative experiences did you have with taxis that you didn’t get with the ride hailing apps?
The usual: being taken for a ride (literally), not showing up for a pickup, broken credit card readers. American taxis are just horrid. Not as bad as SE Asia, but nowhere near Europe or other developed country standards.
Not to mention that it's much harder to enforce something that's legally bound. If they give you a crappy experience, the only way you can do anything about it is by reporting it to the government (suing them?) which is usually a painful process. And if your case is even heard, you'll need evidence proving it.
As opposed to the unregulated jungle of Uber, where you can legally pound sand. How is the unregulated market better?
Because rideshare carefully uses economic incentives to generate outcomes by market means, not by "enforcing" through the heavy hand that only the government understands.
A) it’s not clear the outcomes are desirable in the first place and b) why are market means better? The market is good at deriving efficient prices in certain circumstances but it really depends on whether the desired outcome aligns with efficient pricing. Personally the problem Uber solves is a nice app to hail the taxi with, which doesn’t appear to have anything to do with market effects, whereas the material effects of Uber mostly seem to be exploitation of employees.
> and that it just takes a commission from each trip as payment
They don't just take a commission, they set the entire price.
They set the rules, about the types of vehicles, about cleanliness, about myriad other things. The route. "Lead generation" is obtuse.
Setting the "entire price" just means being a marketmaker. I'm sure you are familiar with the concept. The "commission" would therefore refer to the spread or the take. There is real risk in this and competition, and anyone can feel free to get in there making a market with a tighter spread if they feel they can do so. Bet they can't. Lead generation is not a phrase used by anyone but the idiotic press, so that part is a strawman.
>Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.
Honestly, just keep the 'we don't show drivers with a less than X star rating' in place, and allow the rider to give the driver a low rating for cancelling. Self correcting problem - drivers that routinely cancel will be pushed out, and the (potential) one bad rating shouldn't hurt routinely good drivers.
The user experience is much better not dealing with that shit. Reordering rides when you have somewhere to be is not a good time.
Considering drivers can't even set their own prices, this fails that test from the get go.
In practice drivers do set their prices by only driving when the price is what they're willing to pay (e.g. only during surge pricing). In contrast to an employee that works specific hours and has to take every ride while on the clock.
> In practice drivers do set their prices by only driving when the price is what they're willing to pay
So your argument is that drivers really set the price...
> (e.g. only during surge pricing)
And your example of drivers setting the price is...algorithms running at Uber and Lyft that set prices. Algorithms which Uber and Lyft would surely regard as proprietary trade secrets and resist disclosing to drivers, passengers, or government regulators.
How is that drivers setting prices, exactly? If an Uber driver wants to give me a ride to the airport, the Uber app decides that it costs $X. If that Uber driver believes that Uber's surge pricing model is inaccurate and thinks the real price should be $Y, there is no facility for me and the driver to negotiate on a different price.
Similar to how many other independent contractors set their price - they decide what they are willing to work for and, as contracts come in, they either accept or reject based on what that contract is offering to pay.
Just like how contractors will have several contracts they are choosing between, drivers routinely use multiple apps in parallel so they can choose between various contracts/rides.
What are you saying? Uber matches you to a willing driver to pick you up for $X, it's a competitive market so whatever "algorithm" you think they use it's the market that decides the price, but the driver "should" get $Y? Well you are free to tip $Y-$X to the driver then. Why don't you try that next time?
What competitive market? There is no spread, no bidding. Buyers and sellers cannot negotiate. Uber decides prices based on some proprietary, secret algorithm.
"We are going to pay you $X, if you don't like it you can leave" is called a salary, not a marketplace.
Not only that, but uber and lyft copy each other's prices. When one of them lowers the pay to drivers, the other one follows soon. Usually, the pay to drivers is lowered, but the cost to riders doesn't go down as much, and uber/lyft has been taking much more from drivers, especially the 'surge' surcharge. Much less of that goes to the driver than before.
The fact that choosing to use Uber represents a certain amount of trust in the driver (basic background check, identity information, etc), makes it more than lead generator or transparent broker.
> The issue is whether doing so would drastically deteriorate the quality of the service for riders.
This is the exact reason I want Uber to lose this. Anything that would keep drivers classified as contractors is harmful to the actual customers, because the drivers being employees mean that they have to actually follow policies set by Uber.
Maybe relaxing the rules will be an unintended consequence of the law.
Uber's defense fails The Duck Test. They are describing a job, people doing a job, people paying for a job, and people taking a cut of the profits. They just don't use those words.
I suspect if/when this gets to a higher court, the whole thing will come crashing down, because to allow Uber's weaselly redefinition of common terms, would be to allow other classes of employment to similarly become unprotected.
I totally agree. I'm neutral on Uber, but their advertising is that you book an Uber ride. You don't use Uber to find a driver you like and then hire that driver from now on. Basically, the drivers are treated as the fungible part of providing service to the passengers. Contrast with Airbnb where owners can treat it like an advertising network to market their rental room, and it's totally reasonable to expect that a good experience will lead to more business for that homeowner specifically, not just the app in general.
>You don't use Uber to find a driver you like and then hire that driver from now on. Basically, the drivers are treated as the fungible part of providing server to the passengers.
Which is also one of the reasons that Uber became successful. A lot of the "Uber for..." companies that provided more personal services like massages or house cleaning failed for this exact reason. As soon as a user found a provider they liked it was easy for the two parties to come to a deal for ongoing service and cut out the tech company. That is how a lead generating company works. Uber doesn't function that way because the provider and the consumer don't have an ongoing relationship because the drivers have all been commoditized.
As a matter of fact I know of one person who met a driver through Uber and decided to hire them daily to get to their job without going through Uber ever again. I think that this is extremely rare and that everything in Uber is set up to prevent something like this. Same thing goes for Airbnb and the obfuscation of emails.
It is rare. The reason Uber and Lyft don’t have the same “work outside the network” problem that Wag / Airbnb does is because when you want a ride you want it now. If you had to wait for your “personal” driver to free up, you’d be waiting... or have to deal with scheduling in advance.
You schedule dog walks and lodging in advance, so it is quite tempting to cut the middle man out once you find what you like. Not so with transportation.
It used to be more common. Back when it was all town cars, and up through the early days of UberX, I frequently got business cards and phone numbers from my drivers.
I think it's actually a violation of the uber TOS for the driver to circumvent the app, and of the passenger not following the community guidelines of Uber, if I understand correctly. Similar to how Wag's new TOS tries to prevent contractors from seeking pet walking outside of the service.
I did this a few times (no ongoing commitments) when I was a Lyft driver.
I would think in addition we'd have to see the ability to book with a specific driver for a future ride for 'lead generation' to hold up.
I do feel that driver's being able to work for multiple ride sharing companies at the same time does make it a bit different from a normal job. A majority of drivers have both Lyft and uber enabled at the same time.... so are they employees of both? How should benefits be calculated?
If I am an employee of a company, they are probably not going to let me work for a competitor while I am on the clock with them.
> A majority of drivers have both Lyft and uber enabled at the same time.... so are they employees of both?
Having the app enabled is being on-call for potential assignments, not actually working. In my youngest years, I did that for multiple temp agencies at the same time a lot. Are they employees of both? Sure. Multiple W-2 employers is not that uncommon for people doing temp work.
> How should benefits be calculated?
In most cases, they will probably work little enough for each as to not reach mandatory benefit eligibility under most employer mandates.
> If I am an employee of a company, they are probably not going to let me work for a competitor while I am on the clock with them.
If you are an employee of a company giving on-demand assignments, they probably aren't going to consider you on the clock merely because you have indicated you are available to take an assignment if it becomes available.
If there are minimum paid shift rules in play, they may consider you on the clock and demand exclusivity for the paid period once you accept a job, even if there is a lull between assignments, though.
"Multiple W-2 employers is not that uncommon for people doing temp work."
But not simultaneously. Once I went to a neghborhod where I knew I would not get any Lyft rides (stodgy white folk in suburban San Diego) and took Uber rides specifically to nail bonuses on both platforms.
They are not paid by either Uber or Lyft when they are waiting for a ride, so no, it's not simultaneous.
Not currently, because they are contractors. Who can say under the new law?
The new law enshrines the existing case-law test into statute, so if they are properly categorized as contractors under existing state law, then they are also properly categorized as contractors under the new law.
That said, if they were on on-demand W-2 temporary workers instead of contractors, then they’d probably be treated exactly like all such workers (who often are signed up with multiple agencies to receive assignments) are by their employers and not be paid when they were merely willing to receive assignments but only after they had been offered and accepted and were actually working on a particular assignment.
This is somewhat true for higher level jobs, but once you hit retail, and blue collar jobs generally, it stops being true.
McDonalds doesn't care if I also work at Burger King. Target doesn't care if I also work at WalMart. A plumber is generally fine if their assistant also works for another one.
All of this is subject to still doing the first job satisfactorially, of course.
Funnily enough, the fast food industry is rife with non-competes:
https://www.foodandwine.com/news/fast-food-non-compete-agree...
"Amazingly, Healey’s office suggests that 80 percent of fast food workers are locked into these types of agreements."
Wonder why. (Hint: it keeps wages low and workers tied to their places of employ.)
You aren’t “clocked in” in to Target, McDonald’s and Walmart at the same time though. I imagine many of these drivers are marked “available” on lyft, Uber and probably some delivery stuff all at once.
I’ve always wondered what would happen if legislation required them all to open Go their API’s so drivers could use some “app to rule them all” that talks to lyft, Uber and more and helps them choose the best assignments....
At the moment, rideshare drivers don't get paid for being available, so the analogy to being "clocked in" at a regular job falls down.
This is how the rideshare companies claim an absurdly high hourly rate for driving — you only get that rate while actually giving rides and it is generally infeasible to be giving rides all the time. The effective hourly rate is much lower.
The question isn’t whether they’re doing a job, it’s whether drivers are acting as contractors vs employees while performing the job.
Ironically, taxi drivers are also contractors. I’m surprised nobody has brought up the fact that the status quo pre-Uber was a contractor model as well.
The real problem is that the Dynamex decision is legislation from the bench that redefines “contractor.” The historical definition of a contractor was basically only c in the abc test. It will be interesting to see how the court decisions come down. As the press release points out, the precedent so far is mixed.
Just dropping in to say that “legislation from the bench” is a charged, shallow criticism that says nothing except about the critic’s own political philosophy. The fact is, courts have been legislating from the bench for as long as we have had courts, and before then — the U.S. inherited its judicial traditions from England, after all. California is a common law jurisdiction. The essence of common law is that courts create law in the course of issuing their holdings.
Without going down the rabbit hole of Constitutional Law, I’ll just point out that there are folks on the Federal Supreme Court that disagree, in principle, that courts should be making laws.
That aside, if you think it’s a shallow criticism in this case, why do you think it required legislative action to have any effect? In other words, if this wasn’t legislation from the bench, ab5 is a noop.
I’m well aware that there are Supreme Court justices who claim to believe that courts should not make law. And yet... they continue to make law every time they contribute to a majority opinion.
As to AB5, I’m not really educated on the particulars of Dynamex or the political process around AB5 to opine on why it’s been codified. There are many possible reasons, ranging from a desire to try to freeze the law in place, to, as you say a “noop.” This, too, is just a part of the system.
Um, do you know what AB5 IS?
AB5 is a law codifying the Dynamax decision--the precise opposite of legislating from the bench.
I was talking about the Dynamex decision, not ab5. Obviously legislation is not legislation from the bench.
Isn't being a driver on Uber platform same as being a seller on Amazon marketplace? Amazon takes care of delivery, cancellation etc and charges a commission for those services.
Interesting argument. And since marketplace is said to be more than half of sales now, maybe thats their primary business.
A coordinated Amazon/Uber/Lyft shut down in California would be something to behold.
That would be good. It could e.g. open the way for apple to be forced to hire all the app programmers
There are $60M dollars of lobbying being deployed by Uber and Lyft to precisely try to change what would be most likely to happen.
That amount of money can go a long way. Unfortunately.
I feel like it's pretty clear that gig economy jobs don't neatly fit in either of the existing categories of workers: they're not quite employees (you can clearly work or not work whenever you want) or contractors (you clearly have very little negotiating power or information in choosing your work or guaranteeing your wages). Attempts to munge them into one of those categories are just doomed; a new category is needed.
Failing that, if they are to be counted as individual contractors they should be able to negotiate like those: without one-sided deceptive deals.
Ridesharing companies, Labor, and the California legislature missed an opportunity to identify a third type of employee. The truth is always somewhere in the middle, and the most objective truth (to me) suggests that rideshare drivers honestly sit somewhere between employees and contractors.
The politics of what has occurred here is probably the pendulum swinging too far, but in the right direction: the classification of 'contractor' just isn't correct to describe these workers, and the legislature did its best to rectify that.
Lyft and Uber put forward good faith proposals [1] to fix this...They did bring a lot of labor groups in on the last year and worked with the government for that.
[1] https://www.sfchronicle.com/opinion/openforum/article/Open-F...
> the legislature did its best to rectify that.
my experience is that this is hardly ever true in politics. Legislators are generally balancing what they think is right (or what they think voters think is right) with what is in their own self interest (such as getting re-elected). As a result, they most often do their best to serve their own self-interest first and foremost. They raarely try to rectify something if rectifying it is at odds with their self-interest.
Rectifying this situation would likely involve some third category "somewhere in the middle", but that's not what we got.
They would be more like contractors if economies of scale favored open cross compatible ride sharing platforms, instead of proprietary institutions and and oligopoly.
If there were 10 ridesharing apps, and any customer could reach any driver using a different app, would you still consider the driver as having not negotiation power? The driver could uncheck "allow riders from uber" if they didnt want uber provided leads. Ride hailing should be as open as SMS, and then drivers AND passengers would gain power in the relationship. By using government to benefit consumers and shun proprietary lockin, the issues could be solved without creating a new employee class. The root need for that class in the first place is Ubers anti-competitive side.
But then the driver is at the mercy of the aggregator App. It's the same problem as working with Uber or Lyft directly, really.
I'm thinking more like email, ActivityPub, XMPP, or hate to say it, blockchain. There doesnt need to be an aggregator App if its a federated protocol or a shared database. A blockchain would be a central store of truth regarding ride history and reputation. Your reputation would build across access clients. If a client doesnt keep innovating, and there is demand for more features, newer ones would come along, without throwing away the database and starting over.
Setting aside the rider... in my world Uber and lyft would have open apis so third party apps could somehow aggregate the two services.
These apps would be pretty basic and just let the driver accept rides from either service from within the same app.
Dunno if this is actually a problem though...
Aggregation already exists for both riders and drivers. For riders there is Google Maps. For drivers there is Mystro and the like.
> they're not quite employees (you can clearly work or not work whenever you want)
You can work only when the platform routes a job to you, not “whenever you want”. It's on-demand temporary work with a faster “job is available, do you accept it?” cycle than most, but the general idea of such on-demand work as regular W-2 employment has been around for a long time.
You are just repeating the Uber party line that somehow "employment" is antithetical to flexible work hours.
It's frightening to see people just lap that up because it happens to coincide with their day job. But nothing in labor law prevents a company like Uber from "disrupting work" and offering that flexibility to employees.
The current employee model as codified in our tax and legal system definitely has lots of assumptions around only having a single W2 employer. Certaintly not impossible, but definitely not a good fit.
I agree with the OP, and I am not just "repeating the Uber party line". I believe 3 categories of work are needed:
1. Employee (e.g. current W2), where you have a single full-time employer who is primarily responsible for your wages and benefits.
2. Independent Contractor, where the IC has full control over their rates, where they do the work, their tools, etc.
3. "Flexible" employee, where the employee has full control over their hours and availability, and to work for multiple employers, but doesn't have control over rates or how the work is done.
> The current employee model as codified in our tax and legal system definitely has lots of assumptions around only having a single W2 employer.
No, it doesn't; multiple W-2 employees is a common thing and the law has no assumptions that conflict with it.
(Multiple full-time W-2 employers, maybe, are something of an issue, but not merely multiple W-2 employers.)
> "Flexible" employee, where the employee has full control over their hours and availability, and to work for multiple employers, but doesn't have control over rates or how the work is done.
This seems like regular on-demand temp work, where pretty much every feature of that is routine, and has always been W-2. Sure, technology including platforms like Uber, et al., make it practical to have more rapid offer/accept cycles and finer-grained work assignments, but they don't fundamentally change the nature of on-demand temp work in a way which requires any different treatment legally than such work has historically been given.
Many people have multiple jobs (even full-time jobs) and receive multiple W2s in the mail every year. I'm not an expert in employment law but I haven't seen evidence that the current multi-job system isn't workable here. You can have multiple part time jobs, and if one job goes over a certain threshold of hours then they have to provide you benefits. If you have multiple full-time jobs, all of them are required to offer you participation in employer-sponsored benefits, although you typically only pick one. Is that not how it works?
Uber and lyft and DoorDash etc aren’t paid as wall clock hours though. You can be “clocked in” to as many as you want at once. One drive you might be working for Uber and the very next might be some Postmates order. Maybe even both on the same trip.
Focusing on wall clock hours doesn’t make sense for these kinds of jobs.
I have a few parallel objections:
1. It's not like it would be difficult to track all of the little chunks of time worked and add them all up. Everything is automated anyway, and nobody is filing time cards.
2. In the end, the wall clock is how workers experience time when they're out doing work for these companies. They get their bike out and go deliver food for a few hours, or get in their car and drive around the city picking up and dropping off passengers. It's not clear to me that the interstitial minutes between gigs should be considered free time for the workers that goes uncompensated. If they drop off a passenger and pick up a new one within five or ten minutes, they've been working continuously. They haven't had a chance to go home and take their socks off and relax. They're working. It seems like a step backwards for everyone's mental well-being to use technology to clock the exact minutes that they produce value for the company, and cut off their pay the instant they stop producing. It's like a widget assembly line monitored by cameras where workers get automatically clocked in only when they're physically touching the widgets, so that if they sit up to stretch, or walk over to the cabinet to grab a different tool, or even if the conveyor belt is sending the next widget over to be worked on, they stop getting paid. I wouldn't want to work like that.
3. The fact that someone can be doing work for multiple companies at the same time doesn't seem like such a big problem to me. If they're on a segment of a route in which they're simultaneously delivering a passenger and someone's lunch, they should get paid for both. And the same contiguous-time rules I mentioned in #2 above can apply - as long as they're continuously picking up lunches and passengers within a certain interval, they're working two jobs.
in response to 2 and 3: What about the status quo where gig workers are running 2-5 apps at once. If they are payed between trips, do they collect minimum wage from all companies?
"Nothing" you say? It's called market forces that will remove flexibility from employees, because that's less costly.
The simple solution is to ban the use of contractor workers in the taxi industry. It's too precarious of a job, and one that many people rely on for a sole source of income.
This would take the pressure of other industries that use independent contractors, such as tech.
Right now a couple of bad actors like Uber, are ruining the independent contractor category of work. Forcing states to put more laws in place.
I think you might be on to something here.
I think the law will be bad for the people it affects, so this is good news for Uber drivers. Uber isn't operating at a profit, so they don't have extra margin to pass on in the form of extra driver pay or employee benefits. If Uber has to shrink their business in California or exit entirely, that won't be good for drivers either.
It reminds me of before my software engineering career, when I was working at The Gap. The job wasn't great, but a lot of people really needed more hours. Unfortunately, there was a rule that nobody could work more than 29 hours a week. Everyone hated it. Employees hated it the most because if they needed extra money they couldn't take an extra shift. The managers hated it too because it was just more rules for them to deal with.
Apparently, this rule existed because there was a law saying that past 30 hours a week, employees had to get some extra benefits. Gap corporate just changed the job to avoid that law. As a result, that job got worse, and nobody got more benefits. Just unintended consequences.
This line of thinking can be used against almost any form of labor protections. People don't work in sweatshops because they love the job, they do it because they are desperate. That desperation allows their employer to take advantage of them. The government therefore needs to step in to protect the workers from being taken advantage of. In an ideal world that regulation would also come with some type of social safety net to protect the workers in event of any of these negative repercussions. That safety net is much more difficult to get support for politically (because it costs money) so it is usually an afterthought.
I hear this argument a lot, and I wonder, would anyone who has gone through an extended period of poverty agree with it? I went through this myself, and all the worker "protection" laws just made it that much harder to get back on my feet because they limited how much I could work. Or forced me to allocate some of my pay to benefits I didn't need rather than the expensive treatment I desperately needed to stay alive in the short-term.
I drove for Uber and it was seriously the only job I could get and it saved my life. I know of many other drivers who are battling disabling conditions who drive for Uber as well. Jobs that are as flexible as Uber are non-existent.
I find it really disappointing how many people debate this issue without ever actually listening to the people in poverty. That means talking to real people doing the job. Not just the protestors in the streets. And frankly, if you have time to protest, you're probably not that poor. The poorest of the poor work whenever they can and do not spend time on things that don't earn them money.
> if you have time to protest, you're probably not that poor
i dont know what protests you've been attending but the one's ive helped at for laundry and warehouse workers were filled with people that were not only supporting families on minimum wage but also contained people who were here on visas.
in america you're always taking a risk by protesting an employer.
It's all relative. To me anyone who can work full time is not that poor. But I understand why many would view that as poverty.
Minimum wage is not, on its own, enough to afford average rent anywhere in America. If you're making minimum wage and have no other access to support: you're poor.
This is, ultimately the major reason why the status quo never changes here: people dont want to acknowledge their class.
I'm not a fan of the whole "late-stage capitalism" meme, but I think that perfectly describes your complaint here.
The ideal approach is two pronged, you raise the standard which benefits society as a whole and increase the social safety net to take care of those few lost in transition.
The same principle applies to a wide variety of economic changes from increased labor regulations, to housing, to free trade, to automation. Your complaint here is mainly that we haven't followed through on protecting those caught in transition. We shouldn't fall into the trap of mistaking that for a valid criticism against raising the societal standard.
My point is that it's impossible for us to keep up and fix everyone's problem for them. We need to empower people to make their own choices. That's the best way to help.
And my point is that many times a decision made out of desperation is not really a decision at all. We should empower people so that they truly have a choice on some of these issues.
There has to be a line somewhere, though, right? We don’t want people to be able sign away their labor for the next X years and accidentally reinvent indentured servitude, for example.
Yes, definitely. I would view that as restricting choice.
I think the best way to increase wages is more and more jobs so that workers have bargaining power. I've used Uber as a fall-back and it dramatically increases my bargaining power.
> People don't work in sweatshops because they love the job, they do it because they are desperate
People don't work in sweatshops because they love the job, they do it because its better than any of their alternatives
I know at least in some situations it goes like this:
A group of people have been living off the land for centuries. At some point a government comes in and takes the land from them to sell to a factory owner so the government can profit. With no land to farm, working at that factory becomes their best option. But the workers get abused. Women get raped. Their pay is stolen. Still they don’t have a better option. They try to unionize. The government police come in and kill the union leaders. The people keep working there because they have no better option. That does not mean the situation isn’t horrible.
It’s not enough to say they chose this job freely. A lot of coercion goes on. How prevalent is this stuff? I’m not sure. But don’t assume most sweatshop workers just decided this was best with no coercion. People like you and me aren’t paying much attention and a lot of bad stuff happens when we’re not looking. It doesn’t help that corporations benefit greatly from reduced labor prices and so the media and advertisers don’t want to talk about these issues.
Here’s a great documentary on some of these issues: https://youtu.be/PxFwA-jw3X4
There's truth to that story, but it doesn't paint the whole picture.
Rural life is dull, you have a limited social circle and limited access to culture. And you have few opportunities. People today still crowd into overpriced cities with poor living conditions, because they dream of 'making it', and they can't bear the thought of toiling away at agriculture (or at a lesser job).
In China, an entire generation has been uplifted out of poverty by voluntarily relocating off of farms and into manufacturing jobs, and it's been so successful that it's cited as a reason for the popularity of current authoritarian leadership.
I don't get the comparison with China. They still have an incredibly significant agricultural workforce (like 30% of workers are in agriculture) compared to 2% in the US. The US already moved people off farms to factories before WWII and we're in a different stage of economic development.
We're not talking about subsistence farming vs driving for Uber here.
In many countries like India and Indonesia, driving for Uber (or Gojek or Grab or Ola) is a viable alternative to subsistence farming.
That's a tragic story but I don't see how it's relevant to Uber. There's absolutely no coercion going on. People are free to join and leave as they wish. I still believe that having the ability to drive for Uber is always better than not having that opportunity.
I largely agree with that, but with a couple of possible exceptions where it is relevant. 1) Some people bought cars or quit other jobs because Uber offered a much larger pay and bonuses two years ago. 2) Uber also killed the taxi industry, which offered better working conditions to drivers.
I would be curious to hear you expand on your point here. It is in the format of a correction that is refuting my comment, but I honestly see those two statements as nearly identical. People are desperate because they don't have any other better alternatives.
I'm not the poster you replied to, but I can weigh in with my experience. I think the two statements, while similar, are usually employed by those with opposing socioeconomic views.
>People don't work in sweatshops because they love the job, they do it because they are desperate
>People don't work in sweatshops because they love the job, they do it because its better than any of their alternatives
The first statement is often part of a moral argument against exploitation and expressed in conjunction with a an desire or indifference to eliminating the job. The second is usually used in an argument which frames the worker as a rational actor and lacks the moral judgement.
A common, if inflammatory, example is sex work. On one hand, sex workers can be seen a desperate, vulnerable, and forced by circumstances into an inherently exploitative relationship. Those that hold this position often believe that sex work should be made or kept illegal to protect the individuals from this exploitation.
The alternative framing is that sex workers choose the job because it is the least bad of the available options. Removing the option will only push workers into a less preferable occupation.
Not the OC, but I’ve heard that comment line often:
- what appears like sweatshops are actually significantly preferable working conditions for the local population; workshops are hot and crowded sure, but it’s sheltered and beats back-breaking farming, where pests can eat your yearly revenue overnight; (that point you agree with, as far as I can tell)
- so much that, in some conditions “sweatshops” are a positive thing and local people are excited over it: they show up early, some singing, in their best clothes; (I have no evidence of this handy right now, you might disagree but if you read the first point, it shouldn’t be a surprise); example of that is the young rural Chinese workers who were happy to be hosted on bunk beds at Foxconn and others because that meant they could save more money, talking about it like Facebook grads talk about free food; that effect might not last, doesn’t appear to have for Foxconn (or Facebook);
- in the early conditions, “sweatshops” are great and external political forces trying to ban them, or more often regulate them out of profitability i.e. existence, comes off as horribly misguided attempts; an extreme version of “better is the enemy of good” difficult to parse for a population without many options;
- adding expensive controls works against workers’ expressed interests that could be either a. legitimate but conditional (they need the money and the local standards are low, working fast is a tiring but reasonable way to achieve their goal) or b. the capitalist version of Stockholm syndrome. In my experience, it’s nowhere easy to sort the two edge-cases apart. If that’s the case, a market-liberal option is to let bad employers loose their workers by making sure there’s low employment overall, the places with real opportunities can poach them away. Also essential: personal growth needs to happen; I wasn’t super hopeful that “the market” would deliver until Lambda school.
That line of reasoning has been the first criticism of trade and workers’ unions since the XIXth century and the vertiginous growth of the Industrial revolution: they defend current tradesmen and employees against newcomers. I think trade unions can do amazing things to help spread the wealth but I would be wary about that edge.
There are newer arguments in favour of Uber in that sense:
- how easy it is to get a job, fast even: a massive upside of Uber is that you can enrol under a day and get paid within seconds of dropping your passenger; people with stranger schedules, deaf people, with non-violent criminal background have testified in that sense; anyone familiar with “Growth”, especially on a platform would recognise the approach;
- at this point, “unintended” consequences are widely documented; public servants should expect rules like that would back-fire, and adapt their rulings; Uber’s margins or lack thereof are public; other similar companies have left markets, leaving their workers in the dust; it’s easy to confuse the valuation of an IPO with free cash, to mistake Growth for Profit (God knows every reporter covering tech makes that mistake) but I doubt that Uber can afford to raise compensation by a lot;
- there are now many alternatives in the gig-economy: bad employers cannot retain workers; e.g. Amazon’s warehouse would not retain anyone if they were that bad. I’m less familiar with Amazon and convinced by that one, but if you go on money-making/saving forums, you’ll notice how so many contributors have tried and compared dozens of gig-platforms. The common thread? Everyone there started by being excluded from the standard employment market by personal circumstances, unintended consequences of regulation, prejudice or sometimes just being a terrible human begin. But that’s the starting point.
I really don’t think that the gig economy is the solution: banning 29-hour limits, having incentives to accommodate for handicap, family life, etc. for any business that can shift hours also need to be in place. Few people want a series of gigs; for the few who do, what many of those companies have done isn’t worse than the alternative. For the many who want a stable, predictable job, I don’t think the solution is to regulate industries where tasks are, say, very time-specific.
Disclaimer: I’ve worked for Deliveroo (the non-US equivalent to Doordash) and dealt with those questions a lot. I’m overall proud of the work there, from many personal contacts with riders; I also have a litany of complaints handy, mainly because it was my job to prioritise them all (and there were a lot and many were really bad but not as bad as unemployment/dealing drugs/failing to make it as a Grime singer).
I would have a more critical take against Uber Taxi, mainly around how they abused the financial illiteracy of their workers. That’s one aspect I would certainly want to see regulated.
>This line of thinking can be used against almost any form of labor protections
If the government really care about worker well being then the government should directly help them, instead of using company as middleman. For example by providing universal health care or universal basic income.
You seem to be implying a false choice here. Specifically that we (the government is comprised of individuals) can not engage both in labor protections at the same time as we attempt to create a universal health care system.
I'm questioning the current convoluted way government have to do to protect worker.
What is the purpose of the labor protection in the first place ? To help the worker right ? Then why not just directly help the worker.
Instead of forcing company to provide health care to their worker, why not the government itself provide health care directly.
Right, but you're questioning a position that doesn't really exist. Pretty much everyone that is a strong advocate for labour protections would also like universal healthcare, it's just much more likely we can achieve labour protection in the short term than universal healthcare.
I'm arguing that this kind of labour protections of changing employee classification rule is a weird thing to fight for.
Just because the fix is easier and more likely to achieve but if it doesn't address the core issue, its useless.
Sure, but if that is your position you should go out and advocate for this better thing instead of bemoaning the efforts other people are making as misplaced.
This shows up anytime people try to make some sort of progressive improvement to society, people come out of the woodwork to complain that it's not the right solution, without doing anything (other than complaining I guess) to motivate a better solution.
Well, if not me, at very least maybe someone out there that read this will be inspired to do something about it.
Still better than not saying anything.
While I agree with you that the unintended consequences of this bill will be a net negative, I take particular issue with this statement, "Uber isn't operating at a profit, so they don't have extra margin to pass on in the form of extra driver pay or employee benefits."
That's not how it works. Uber isn't operating at a profit because their current-investor-subsidized-rates are below the cost of their service. But there is a bit of a chicken-and-egg problem there: there rates are low because they want to gain marketshare, which is only enabled by the flood of VC/IPO money.
Eventually, all of the rideshare companies will need to raise their rates to cover the cost of service, and that cost should include reasonable remuneration for their workers. If it turns out the market isn't viable at those costs (i.e. if people just stop taking rideshares altogether because it's too expensive), then it never should have existed in the first place.
I don't think it will be a binary black or white, but rather a reduction. Which means a reduction in pay and a reduction of hours. Subsidy via VC money is an independent modifier.
If it turns out the market isn't viable at those costs (i.e. if people just stop taking rideshares altogether because it's too expensive), then it never should have existed in the first place.
I think we basically agree. The dangerous outcome is that Uber becomes more expensive for end users in California, Uber drivers become employees, but they make exactly minimum wage because that's the minimum Uber can pay them, and Uber's profits in California go to zero. (I doubt the Uber business will cease to exist because taxis are so bad in comparison.) Uber's market shrinks because they became more expensive, so they can hire fewer people.
Is that better for anyone? It sounds worse for both Uber drivers and for Uber users than the status quo. Unless you think that a minimum wage job is superior to the current job of Uber driver, and we really need more minimum wage jobs.
Things that can't go on forever don't go on forever. Uber's business model is unsustainable at its current prices. At some point, the investor money will run out, and it will have to either raise prices or cut costs. It's very hard to see where it can cut costs.
Which means it is inevitable that Uber will become more expensive, or it will fail. It's just a matter of time.
I want to highlight very few Uber drivers make more than minimum wage once the total costs are taken into account.
If Uber shuts down transportation won't disappear. People will have to switch to modes of transportation that may be a little more expensive but actually allow the workers to make a real living without taking on all the risk.
Either that, or people will go back to driving and using public transportation more and the drivers will leave the labor market.
You mean taxis?
I don't think we can be certain that displaced drivers won't find other opportunities. I imagine most of the appeal is the low friction to entering rideshare driving vs. traditional employment (fast food chains, etc). The talking point that people are somehow skilled enough for rideshare driving, yet not other low-skill work, seems to me like a talking point to have discouraged AB5 from happening. I question the factuality of the statement.
This seems like a weird statement. The people driving for Uber presumably looked at their options and decided to drive instead of apply to fast food chains. If they wanted to work in fast food, they could have?
Maybe I misunderstand, but what you're saying sounds vaguely like "I know what's better for you".
What I am saying is, misplaced workers (if Uber does indeed become subject to AB5 and they must be employees) is these folks will find other work. The related point is these people are fully capable of that work.
Finding new work can be painful, but the damages are over-stated because there's low friction to entering work that doesn't demand specialized skills. Do you have two hands and can walk? Great, you can work the french fry fryer at McD's.
But how is it better for the world if all of these Uber drivers, who clearly prefer driving for Uber to McD's, are forced to work at McD's instead?
You're assuming there's unlimited demand for employees by McD's... which, in point of fact, is absolutely not the case.
It was a single example of a low-skilled job. The generalized point is that you can go to any employer looking for low-skilled labor. There's high transferability between these sort of jobs.
My point was that there's not an unlimited supply of low-skilled jobs. The fact that if you're qualified for one, you're qualified for another isn't really relevant when they can be very hard to find in some areas.
There's been a bifurcation in employment: high-skilled and low-skilled employees are most in demand. The service industry is hurting for people. Hotels, restaurants, fast food places, etc. In fact, the NYTimes recent wrote about the hotel industry:
https://www.nytimes.com/2019/09/09/travel/hotel-jobs.html
Doesn't the worker get some say in this?
I, for one, would much rather drive for Uber than run a fryer. To the point of willing to take a significant pay cut to avoid the fast food industry.
You still have a choice where to work. Why do you think AB5 takes that away?
It takes that away with Uber stops "hiring" me because now I am too costly to have because AB5 makes me their employee.
Whether or not it's profitable for Uber or any business to hire you, is that business' decision. It's not yours to make. And there is no evidence that ridesharing companies cannot afford to pay drivers more. What if prices go up 20-30% and the level of service stays exactly the same? Then it was a silly concern with no basis in reality. I don't think evidence shows that Uber will immediately fire all drivers if they must be classified as employees.
Do you genuinely believe that this change will have no effect on the market? That the number of people driving will be the same? That everyone will just be able to continue to drive for Uber/Lyft, on the same schedule that they currently do, but make 20-30% more?
I know that the answer is "no" since you've already said "they can just go work a fast food fryer". But that's hard to reconcile with this last statement of yours.
This is an interesting read about the hotel industry. I don't think it disproves the idea though that there are people who want to low-skilled jobs who can't find them. For instance, from that article:
"The popular Mackinac Island in northern Michigan has only 500 year-round residents but approximately 3,000 jobs in the summer months. Delays on the approval for seasonal worker visas this year forced one resort to temporarily close its restaurant."
When it's their "season", they're probably hurting for staff, but when it's not, all those thousands of people are out of work and need to try to find a new job...
I have fully employed friends who have driven uber during moments when they needed more cash, who would not have gone through hoops to work a second formal job.
But if they really needed the money, they would've gone through the hoops. Making rent and have food to eat tends to motivate people.
How will the law change anything for Uber or it's drivers? As I understand it, this law just codifies existing legal precents under which Uber has already successfully withstood legal challenges. It doesn't really change the nature of the ongoing legal challenges that Uber will continue to face.
IMHO, the whole point of this law is just to weaken the existing precedent by giving exemptions to the Lawmakers' buddies and donors.
Isn't the law sort of protecting people from themselves? My understanding is the majority of Uber drivers don't even make money, they just convert equity from their car into cash. Making them employees might mean forcing it to be an actual viable job, and it might mean that job no longer exists. But these people are probably better off selling their cars (and buying economical ones) than working for Uber anyway.
They're getting off lightly. Uber demonstrates why we need a corporate death penalty. Serial lawbreaker Travis Kalanick should be in prison for the rest of his life, most of his criminal conspirators on the board should be there with him, and the company should be dissolved and forgotten.
Recall that among their hundreds of other crimes, there are actual conspiracies to conceal criminal activities from law enforcement. This is not "breaking things and moving quick", this is a multibilliondollar international conspiracy that has escaped justice for far too long.
Off with his head.
Interesting that this comment is getting poor reception when this has shown, historically, to be a very effective way of dealing with oligarchs. Especially ones that, as you've correctly stated, have a long history of breaking laws and abusing workers and customers.
I challenge anyone reading this thread to really criticize why they believe their own personal interests are aligned in any way with the people who have a controlling share in uber.
I don’t need my personal interests to align with someone to think that they don’t deserve the death penalty.
Also curious as to where you think it’s been “very effective” to deal with any kind of crime?
> their own personal interests are aligned in any way with the people who have a controlling share in CorpX
Is that really the bar we should be using? My interests don't align with the corner store small business owner who sells bread in a small rural town, should I be okay with terminating her business too?
what did kalanick do that's worthy of life in prison? genuinely curious
Broke the law in nearly every major US City for one.
Does he deserve prison for this, that is a complicated question, but I'd have had no problem with destroying Uber as an entity.
As someone who drives Uber on occasion when I'm a little bored and looking for something to do, I think it's great that I'm not an Uber employee.
I can do 10 hours or I can do 0 hours based on nothing but my own whim. I don't have a problem with people organizing to get a better deal for themselves, but I like the way it works now.
I've worked for companies that misclassify workers, and Uber isn't it as far as I understand. I may be convinced otherwise, but I don't see it.
Yeah, in your case it would make perfect sense to consider you an independent contractor instead of an employee.
I guess the issue arises when we got people working full-time hours but still being classified as an independent contractor.
> I guess the issue arises when we got people working full-time hours but still being classified as an independent contractor.
Why though? There's plenty of contractors in other industries that work exclusively for a single client, often for 40+ hours per week. In technology in particular it's more common than having multiple concurrent clients (per person, not per consultancy).
And some of those probably should be classified as employees.
In some countries there are limits on how long a company can employ a contractor. I can't find it at the moment but I think that here (Norway) it is something like four years. After that the contractor is supposed to be either let go or offered permanent employment. Perhaps someone more familiar with the rules could chip in, I've only been contracting for a short period.
I think the situation is somewhat similar in the US except that instead of a legal maximum the contract must specify an explicit end date after which there must be a break in employment.
Why not just provide both options to drivers? They can choose to be full-time employees, with whatever conditions that demands (e.g. exclusivity, hours, wages), or they can choose to take the independent contractor route, choosing their own hours, having control but being subject to whatever fares Uber wants to levy.
There is very little downside for the employee to be classified as such rather than as a contractor. The vast majority of the downside is for the employer.
I'm a W-2 employee at the company I work for, and they don't dictate my hours.
That's because your employer is choosing not to dictate your hours on their own volition. But an employer has every right to exercise that and that's the talking point.
Don’t forget the “exempt” vs “non-exempt” status for W-2 workers though.
That impacts whether you're eligible for overtime pay. Given that contractors are never mandated to receive overtime pay, a contractor position can never be superior in this regard.
Exempt status also impacts whether your hours are fixed or not. If they tell you that you must be in the office from 9AM to 5 PM, then you aren’t exempt.
> If they tell you that you must be in the office from 9AM to 5 PM, then you aren’t exempt.
That's not correct; the difference is that failure to fulfill such a requirement is a discipline issue (which can be dealt with by discipline up to an including termination), but not a pay issue based on hours worked as it would be for a non-exempt hourly employee.
https://www.lexology.com/library/detail.aspx?g=1b7b6851-8415...
They can have “core business hours” though - but they can’t dock your salary if you don’t comply with those hours.
If you decide to not work for 2 months without telling anyone do you think you would still be employed? Because neither Uber nor Lyft would stop you from doing that.
The bill is intended to protect people for whom driving is one of their primary sources of income. Not to be callous, but most people aren't particularly worried about how this affects those who drive for Uber on occasion when they're "a little bored and looking for something to do".
90% are not full time .
I’m not sure what your point is? Part time employment is a thing.
Genuine question: Why would classification as employee automatically mean an end to the flexible work times?
To my knowledge, there are numerous business areas where it's possible to negotiate flexible work hours, so wouldn't this be here possible as well?
It wouldn't be an end to flexible work times, but due to per-employee overhead costs, the cost/benefit to the employer from the number of hours an employee works clearly spikes at a few different points due to overheads. At 0hrs/week, there is no overhead. At 20hrs, this is another ideal point since while you do have to give your labor a lot of rights, you don't need to offer certain benefits (vacation, sick pay, disability, health insurance) in many states (notably this works differently in california). At 40hrs, this is another good point since you don't have to pay overtime rates (but at least this cost isn't a big spike).
Basically there's a bunch of laws that spike certain expensive costs for employees if they work different amounts. Therefore its not very profitable to allow completely flexible work times. Otherwise many of their Hawaii drivers would drive for 21 hours for benefits, and the labor costs would be higher than if you were required to either drive for 20 hours or 40 hours.
I think ideally employees wouldn't be mandated to provide any expensive benefits to full-time employees and benefits would be centralized and funded through more taxation instead.
But mostly, uber is complaining because labor laws are complex
Not to nitpick in your post, but for CA this would be at 30 hours for the benefit of healthcare. CA Industrial Relations still classifies 40 as full-time, so unclear on what benefits are tied to that
Mandated wage guarantees and the costs of benefits would force Uber/Lyft to implement supply controls, which would result it a large fraction of drivers not being allowed to go online and drive.
The thing is, I would rather you are more restricted or stop driving for Uber, and full-time drivers get decent terms, then you get to keep your (seemingly) unnecessary side money and full-time people, for whom it is the main job, have substandard conditions and rights.
Ideally there wouldn't be a tradeoff, but in practice it seems like there is one.
A majority of drivers are part-timers (80% in this study [1]) would lose their ability to work for side money...
Who are we really subsidizing here?
[1] https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hou... (FWIW, I don't agree with all the math on their earnings, but there are a lot of other reports out there on that)
The more important group that loses without flexible hours are people who get by on a combination of part time jobs, or are training/educating themselves and need extra money to support themselves.
Being employed and having flexible working hours are not exclusive.
What's wrong with being a temp employee with flex hours?
You raise a good point that labor law has an ugly bimodality regarding employee and independent contractor, where it might be better to refactor the law so that different protections apply based on some particulars of the arrangement. Working <10hrs/wk vs >20hrs/wk is one good place to draw a distinction.
I have considered driving for Uber very casually, but a few things keep me from doing it. First, I cannot drive the car I would prefer to drive (a two-seat sports car). Second, I would have to file a bunch of extra paperwork at tax time. Third, Uber doesn't allow drivers any control over the areas they wish to serve (so I could ensure that I'm just making short trips, etc). And, I guess the final nail in the coffin is that I wouldn't have much control at all over my preferred service area (say I wanted to just do a quick trip that ends no more than 5 miles from my house).
A right to employment for those relying on Uber for income wouldn’t mean you or Uber would be prohibited of working like you are today.
Well if you know the pains and struggles of rideshare drivers don't whitewash their issues, you have other sources of income and do not rely on making an average rate to pay the rent, you don't weigh buying gasoline against food. I think you are a shill, Uber is very active in this regard.
Edit: Removed my comment as it conflicted with the guidelines
This is against Hacker News guidelines:
"Please don't make insinuations about astroturfing. It degrades discussion and is usually mistaken. If you're worried, email us and we'll look at the data."
https://news.ycombinator.com/newsguidelines.html
Thanks, I'm new to commenting here, I don't see a delete but so I just edited my comment away.
Do you think the author is fake? Go read his comment history: https://news.ycombinator.com/threads?id=npmaile
The question is simply posed but unfortunately is rather difficult to answer because it depends what you mean by fake.
Accounts with a history are very valuable to companies in the business of "creating organic public support".
Also an author can be part of a community bit have a motivation to drive a discussion in a certain direction.
In either case it doesn't mean the post, the author, or the history are "fake" but it can mean there is some level of astroturfing going on.
Anyway I've been informed the guidelines prohibit such insinuations and I can understand why as they are an easy accusation but don't lend towards evidence based or productive discussions so I've removed my comment.
Certainly it's an annoying trait to claim that a statement you disagree with is disingenuous/insincere.
For those interested in understanding the underlying case law that AB5 codifies (a decision called Dynamex Operations West, Inc. v. Superior Court), my company, Judicata, published a visual (and tech-enabled) explanation of the decision when it was first published: https://blog.judicata.com/understanding-dynamex-the-californ...
Whether or not Uber drivers are employees or contractors under Dynamex and the ABC test is an open question, but the Uber explanation of the bill's impact is more or less correct.
One of the tests is: “that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact”
Since Uber rates drivers, does background checks, sets the routes, leases cars, etc., how does Uber plan to avoid this check? Do ratings sort drivers, or is Uber effectively creating a credential that governs the driver? What does the distribution of driver activity look like?
It’s hard to believe an all-or-nothing determination will hold. Surely some fraction of most-active drivers will end up getting called employees.
It’s one thing to explain the law (and case law) and yet another to provide an explanation with evidence. The latter is what we need (especially as voters), yet the former is what lawyers like to peddle because it makes them money. Uber’s post is almost 100% legalese. CEO Dara had an opportunity to make a grounded statement here, but didn’t.
IIUC, AB5 might end up making Uber a monopoly in California (and US if other states follow suit) via regulatory capture.
Currently, most drivers seem to drive for both Uber and Lyft (based on their cars having stickers for both). But if classified as employees, and being guaranteed a minimum wage, then Uber/Lyft might require them to be exclusively available. As a result, the drivers will have to choose either Uber and Lyft and since Uber has more market share, they will likely choose Uber and Lyft will be squeezed out.
What am I missing/misunderstanding above?
I am very curious to see how this will be implemented.
Will drivers be entitled to minimum wages from all of the apps they have active, or only when they have a fare?
Will there be a single union to bargain with all of the apps, or individual unions?
Not that many people will agree to exclusivity for minimal wages, certainly not for hours they aren't scheduled and paid.
True, but the majority opinion driving AB5 seems to be that most drivers are doing this as their full time jobs. Yes, there are those who drive a few hours occasionally as a hobby or for extra side income, but they don't count much. If the number of Lyft drivers falls significantly, consumers will have to wait longer to get a Lyft ride and they will start abandoning Lyft. Hastening the spiral.
Another comment mentioned that Lyft might pay drivers more to keep them, but given that both Uber and Lyft are hemorrhaging money, it seems unlikely that either will be willing to pay drivers more. Also, Uber just needs to pay the same as Lyft for a little while, and just wait out the decline of Lyft due to AB5.
> Yes, there are those who drive a few hours occasionally as a hobby or for extra side income, but they don't count much.
The post from Uber clearly states "In the US, 92% of drivers drive less than 40 hours per week, and 45% of drivers drive less than 10 hours per week."
How are they counting? Would not be surprised if those numbers were only including time driving to pick up and driving to drop off.
Curious where you are getting that most drivers are full-time. Every time I make conversation with my Uber/Lyft driver, I often learn it's just a side hustle for them that supplements their 9-5 (n > 20).
Lyft can simply offer more money and accept lower margins.
So can Uber, that's just a race to the bottom.
Assuming that Uber has a competitive advantage because of their brand, and both Uber and Lyft are rational actors who want to maximize their profits, they will end up in a state where Uber has higher margins than Lyft.
> Assuming that Uber has a competitive advantage because of their brand
Woah - I see Lyft as the one with the competitive advantage due to Uber's brand. Uber is toxic while Lyft is seen as friendly.
I think the proper classification of drivers is likely an existential threat to Uber, and they are responding as such. I find it highly unlikely that a court would find transportation to be outside the scope of Uber's business. Although you have to almost admire the sheer brazenness in their admission that they will not adhere to the law.
> you have to admire the sheer brazenness in their admission that they will not adhere to the law
I mean, that has been Uber's MO since they started. AirBnB too, nothing new about this
Yeah, I'm not surprised they intend to violate the law. I'm surprised that they're broadcasting their intention in advance.
There's some nuance being lost here - they aren't saying they will violate the law, they are saying that their lawyers will advance an argument that the law (ABC test) does not apply to them.
I think the legislature and many on HN believe that courts will think it's absurd that Uber's drivers are doing work "outside the usual course" of Uber's business. I'm inclined to agree, but I'm not a lawyer and I don't know how well written the law was or whether California courts will include legislative intent in applying that language.
The article pretty clearly states that Uber believes it will continue to pass the ABC test.
You're right about the article, I was responding to people in this thread: "broadcasting their intention [to break the law] in advance", "[admitting] that they will not adhere to the law" and so on. Those are the statements I am responding to.
I was responding to your incorrect assertion about the argument ABC's lawyers would advance (as indicated by the article.)
Perhaps you should have indicated that's what your disagreement was, I think we agree but you misrepresent what I mean by "apply". Since it's not clear what it means to "pass" or "fail" the ABC test, and Uber is using the term "pass" to indicate that condition of the test is false (i.e.: failed), I used the term apply.
For example, when the Lemon test applies to something, it's because all of its three prongs are true. Is that a "pass" or a "fail"? That distinction I think is irrelevant to the law, but I'm sure the litigants on both sides would argue that their argument is good ("pass"), and the opposing argument is bad ("fail").
A city putting up decorations for a religious event and denying others would argue that they have "passed" the Lemon test, while articulating that one of its conditions "fails".
A litigant against such a city would argue the city "fails" the test.
I did not want to use Uber's language ("But just because the [ABC] test is hard does not mean we will not be able to pass it") because their job is to frame things positively for their client. Passing the ABC test is trivial - I'm doing it right now! So are you! What we care about is whether or not the test applies to something, that is, it entails some consequences, and Uber is going to argue that one of the specific prongs of the test will fail. From their view, this is a win, and this is them "passing" the test.
So, I used the word apply.
They are a public company. Not doing so could be a securities law violation.
> I find it highly unlikely that a court would find transportation to be outside the scope of Uber's business
TBH considering the language of the bill, it s very plausible to say that driving people around is not "their usual course". The same way that google is not an advertiser, and airbnb is not a hotel chain.
That's like saying Yellow Cab is not a taxi company because the drivers are independent contractors who lease their cars from the company, and it doesn't actually drive anyone around.
And yes, Uber does lease cars to its drivers.
Source on uber leasing cars? I was only able to find this: https://www.uber.com/us/en/drive/vehicle-solutions/ which talks about paying for a rental car to uber people in
Try this one: https://www.uber.com/gb/en/drive/vehicle-solutions/
Or that e-bay is not a fashion store. (I think u re referring to a probably tiny part of uber that leases cars to drivers)
Ebay matches sellers (who choose what to sell) with buyers (who choose what to buy).
Uber tells drivers where to go, and when, if the driver agrees to do the work. Uber regulates the kind of cars acceptable, and regulates who does the work. Your Uber driver can't subcontract the drive to another driver.
> Your Uber driver can't subcontract the drive to another driver.
Drivers can absolutely sub-contract. most choose not to in the US but it's the core of how the Uber Black business functions (a limosine company with a number of employee drivers) and is still how it meets demand in developing markets or in developing economies.
https://help.uber.com/partners/article/i-want-to-become-a-fl...
Uber doesn't tell drivers where to go or when, drivers are free to go whereever they like (but Uber does provide incentives and information on where demand is)
Uber regulates what cars are acceptable the same way an Ebay seller has to maintain some standards in their store. Similarly Ebay also verifies that you can even be a seller on their platform, just like Uber does with background checks, DMV checks, etc.
To your last point on subcontracting...I'm not even sure thats part of being a contractor or employee so its neither here nor there.
uber has in the past successfully claimed that its customers are its drivers and its users are .. its users. They classify both as clients, and it seems to have worked so far.
> Your Uber driver can't subcontract the drive to another driver.
Even if their ToS does not allow it , it's not the law
Depends on where you are. Some places, it is the law. Or at least part of the terms of your ride hailing license.
The only existential threat to Uber is how long it takes self driving cars to become a reality. Human drivers are a speed bump in their business model. It only affects the length of their runway and thus when they intersect with self driving cars.
When the ACA passed, mandating that large employers offer health insurance to all full time employees, there was a massive push by large employers in retail and food service to cap people's hours and make sure very few qualified as full time. This was because health insurance costs employers about $10k per employee per year, and if you are paying someone $10/hr ($20k/yr at 40hrs a week), raising labor costs 50% is a nonstarter.
An outcome like that may be possible here as an unintended consequence, with Uber and Lyft capping most drivers at 20hrs a week, and full time drivers splitting their time between the two (20hrs for each).
Yes, that needs to prorate based on hours worked, rather than being a threshold.
Real solution is universal healthcare.
The problem is that health care is attached to employment. The solution might take the form of universal health care, it might be not-so-universal private health care, it might be some hybrid. But don't gloss over what the problem is because you'll lose common ground with people and end up arguing over the solution and not agreeing that there's a problem.
>raising labor costs 50% is a nonstarter.
This is where one can say sure. But in reality with the lack of public healthcare, it's just hiding an large cost on society when the person ends up running up medical bills and is unable to pay.
I think there is more truth to their argument than people are giving them credit for. It seems like an in bad faith perspective to not give their claim some credence. It makes YOUR argument stronger to first make the best version of Ubers argument before rebutting it.
Does it make me a Microsoft employee if I use Outlook to conduct business? Does it make me an Ebay employee if I sell things through ebay? Until Uber eliminates the ability for drivers to drive Uber and Lyft simultaneously, and bounce between the services at will, I DO view it as drivers paying for 1) a dispatch and messaging service 2) payment processing 3) insurance 4) a resume host 5) a customer funnel. Thats more than just a technology or software company, Uber sells transportation services to drivers. The fact alone that they can have two messaging/dispatch apps open at once, on two phones, makes me question, which company do you think the driver works for? Both simultaneously? Just the one that the passenger is from? Is having both Uber and Lyft open looking for passengers any different than listing something I have for sale on Etsy, Ebay and Amazon, and pulling the listing once it sells out?
Ebay doesn't control how much you sell your product for. Ebay doesn't police how you sell, package, or ship your product. It's mostly hands off. Compare this with the level of control Uber exerts on its drivers.
Similarly, Ebay's service is less dependent on how well you provide your commerce services, it pretty much lets the market determine your prospects on its platform. On the other hand, Uber is highly reliant on the conduct of its drivers and the service the provide.
That's a difference that arises out of a goods market (with some services attached) vs. a more pure-play labor/services market, but it's not a fundamental distinction about control or what is core to the platform provider. The whole gig economy is a new phenomenon, because it is enabled by the ease of communication that is only recently possible to create a liquid labor market, something that should be applauded.
The obvious Duck test is staring you in the face, that here is a new type of thing that only half looks like a duck, and should be treated as such, which is what rideshare companies have been arguing for forever, including at the legislative level. Instead of forcing a non-duck into a duck because of stupidity, lack of imagination, or pure emotional hatred for certain companies, the level-headed thing to do is to look at how such a new type of market really should work for the benefit of all participants. The race-to-the-bottom thing that drivers complain about is a consequence of ideological cock-blocking by pandering politicians unable to come up with a real solution between fucked-up taxi medallions and raw market forces. AB5's madness lies in pretending it's the 1950's and takes the cake in making it worse not just for gig companies but a shit load of other industries as collateral damage.
Uber and lyft have to dictate the price the end user pays. Nobody would use the service if they had to collect bids from a bunch of drivers each time they wanted to go somewhere. As a result they wouldn’t have an effective pool of customers needed to attract drivers.
I agree with others. These “gig economy” jobs are a different classification of worker that doesn’t currently exist. Dunno what the details should be but they aren’t quite contractors and they aren’t quite employees.
California could have taken the lead and helped define this new classification...
Whether they need to do it for their business to work isn't that relevant, they are still doing those things.
In the UK we have two classifications that are different from self employed (contractors). We have worker and employee. They're similar but differ in the level of control the employer has and the responsibilities of the employer.
The case in the UK decided that the drivers were workers but not employees.
More info: https://www.gov.uk/employment-status
A corporation's illegal business practices don't become legal just because they're required to sustain its business model.
I don't think your post makes a strong statement to this effect, but it suggests it, and it's good to be clear on this point.
Can you explain how what they do is illegal?
Making it illegal is the the whole point of AB5. Contractor status was once for a very specific kind of worker: independent professionals who were basically solo businesses. It has turned into a giant loophole, where worker have the downsides of employment along with the downsides of being a contractor. AB5 aims to return to the status quo, where if you want to hire a bunch of employees, you really have to treat them like employees.
Except they aren’t employees. They are something else. Make a new classification for them.
They were arguably employees before (and outside of CA) and unarguably employees under AB5. That’s why Uber is making this ridiculous claim that it’s not a transportation company: otherwise, its drivers are employees.
If the law says they're employees, they're employees until the law changes. In the same vein as my earlier post, the fact that a corporation wants to "employ" (in the basic dictionary sense) workers under certain arbitrary terms doesn't make said arbitrary terms legal, nor does it create a mandate to make them legal.
I made a general statement about illegality. Do you disagree with it?
If you can't figure out why the general statement I made is relevant in this context, no amount of explanation from me is going to solve that problem.
> These “gig economy” jobs are a different classification of worker that doesn’t currently exist.
This isn't necessarily wrong, but if you want to make the claim, you'll have to say what that new classification is.
Current employment law has a well-evolved set of protections that help prevent employees getting too badly screwed. Traditional contractor relationships, on the other hand, use the power of the market (that is, the contractor ability to either easily switch clients or maintain multiple clients) to keep things fair.
If there's something in between, it can't be the status quo (we treat you like employees when it's convenient but call you contractors so we can screw you over). And it also can't be some midpoint, like an employee-lite, where Uber, etc, just exploit people 50% less than now but 50% more than they could with real employees.
> Traditional contractor relationships, on the other hand, use the power of the market (that is, the contractor ability to either easily switch clients or maintain multiple clients) to keep things fair.
There's a lot fewer clients to choose from but doesn't driving for Uber and Lyft simultaneously satisfy this to some extent?
> Does it make me a Microsoft employee if I use Outlook to conduct business?
If Microsoft is the one paying you, and dictating how you use Outlook, what you can say, who you talk to you - then yes, it does.
Except Uber doesn't dictate how you use the app, they set parameters on how you can use it. They also don't tell you that you HAVE to take all rides, but if you do not meet a quality bar or are abusing their product then they can kick you off it / revoke your access...
The only difference here is the payment. And to that end, if Outlook supported the ability to transfer money then it still wouldn't make Microsoft your employer...
> Except Uber doesn't dictate how you use the app, they set parameters on how you can use it.
a distinction without a difference. if you don't follow their parameters they kick you off, which feels a lot like dictating how its used to me
> The fact alone that they can have two messaging/dispatch apps open at once, on two phones, makes me question, which company do you think the driver works for? Both simultaneously?
I'm not saying you are guilty of this, but I think many of us with full-time, salaried jobs tend to not be able to grasp that yes, you can be an employee of multiple companies simultaneously.
You can't necessarily be paid by more than one employer for the same unit of time -- but that's not what's happening here.
If a driver who is an employee of both platforms accepts a Lyft ride, they are working as an employee for that one company for the duration of the ride. If they then accept an Uber ride, they are working as an employee for that one company for the duration of the ride.
Keep in mind there's no minimum amount of time you have to work to be considered working as an employee. Even if you're clocking in for just 5 minutes, you're still a working employee for those 5 minutes and should get paid for those 5 minutes.
The only difference between this type of employment relationship and traditional employment relationships is that at least in theory, the drivers can set their own working hours. Although the degree to which Uber and Lyft exert influence over drivers' working hours makes me wonder just how freely chosen they are.
But even if Uber, Lyft, and the like are able to argue that drivers can freely chose their working hours, that's NOT the only criterion necessary to be considered contractors. It is possible to be able to freely chose your own working hours yet still be classified properly as an employee, provided other factors point toward an employment relationship.
What if you accept a Lyft ride before youve completed your Uber ride?
Im not even making the argument that they are employees or contractors, I am more saying that drivers are consumers of Ubers matching service, and that there is some accuracy in viewing Uber as a matchmaking service and payment facilitator.
Why aren't other industries up in arms about this? I work for Intel and we have a ton of contractors, so does Google. Under 'A' of the 'ABC' test, it seems to me that most contractors for these companies would now be employees.
I'm not familiar with the details of the bill, but in this letter from the uber CLO it mentions:
> due to eleventh-hour amendments to the bill, many industries are now exempt from the new ABC test that AB5 will codify into state law
Anyone have information on the exemptions added to the bill, specifically if it exempts most of the big tech companies?
The bill specifically excepts a bunch of professions (doctors, lawyers, engineers...) Secondly the contractors for most of these Intel/Google, etc are employed by someone else.
Aren't most contractors for major tech companies employees of another company though? This specifically refers to independent contractors.
Uber's former mission statement:
> "Transportation as reliable as running water, everywhere for everyone"
Sounds like transportation is their core business to me.
A mission statement is not a product or service offering. Google doesn’t sell “the world’s information”, for example.
Sure it does, it just doesn't sell it to you. You are not the purchaser of the information, you are providing the information that's being sold.
Google does not sell information to anyone. Please don't spread outright falsehoods.
> Google doesn’t sell “the world’s information”
No, it exchanges it for attention, which it sells, but an exchange of the world's information for other valuable commodities is key to it's business model.
> Our proposal avoids the potential harm of forcing drivers to be employees, whether or not they want to—and the vast majority tell us they don’t want to be.
> Contrary to some of the rhetoric we’ve heard, AB5 does not automatically reclassify any rideshare drivers from independent contractors to employees.
This may seem like an immediate contradiction, but I guess they've reframed it so their proposal is actually in line with AB5?
great pr-speak
> But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces.
Also seems like they will continue to thwart where they can (which I can't blame them for really) but seems aggressive to note. This reads more like a shareholder update, which makes sense.
I read it differently:
> Governor Newsom has already committed to sign AB5, which would go into effect in January 2020. Because we continue to believe drivers are properly classified as independent... drivers will not be automatically reclassified as employees, even after January of next year...
> Uber and Lyft together have already transferred $60 million into a campaign committee account, and we are open to investing more to put us in the strongest position possible to run a winning campaign... We are confident that California voters and the millions of riders and drivers who use Uber will step up to protect these important work opportunities.
Translation: "We're betting that we can get a ballot initiative passed legalizing what we do faster than the State of California can bust us for violating AB5."
You may have missed this part:
> Importantly, our ballot measure will not ask voters to exempt us from AB5, even though nearly every other industry in California that works with independent contractors received an exemption from the ABC test through special amendments I mentioned earlier. Instead, we will ask voters to support the pro-driver policies we have advocated for: giving drivers access to benefits and an earnings floor and retaining the flexible access to on-demand work they enjoy today.
It doesn't sound like the proposal is intended avoid compliance with AB5 but to create conditions where new bills that make the ABC test harder pass will have less support.
> drivers’ work is outside the usual course of Uber’s business
What... how... I don't even know where to begin with this.
Uber's argument is that the core of their business is the technology which allows them to act as a two-sided marketplace and logistics company, connecting and routing physical goods and people.
Connecting riders and drivers is one thing which takes advantage of their technology but their are others. Connecting riders and scooters, connecting couriers to restaurants and hungry people, connecting people who want to go to the Hamptons with helicopters, etc.
Uber will argue that it has nothing to do with the driving part and the driving is just one of the many uses of their technology.
The difficult part of that argument will be that they have so many rules and regulations that they place on drivers and rides that's it's hard to argue they're just providing a hands-off matching & logistics service.
> which is serving as a technology platform for several different types of digital marketplaces.
Pretty clever wording by Uber here, I'd say. Although does not make sense to me.
Uber's position here seems to be that they are a technology company that connects drivers with things that need to be driven from A to B (people, restaurant orders, etc.). Not sure I buy that but it sounds like they're willing to ask the courts to decide on that if this goes into law.
i'm guessing they would claim they are an ridsharing platform, with the purpose of allowing drivers and riders to find each other and facilitate the transaction, rather than a taxi service.
the problem with that argument is that they have a lot of control of the driver side of the platform, directly through pricing and indirectly through ratings and access.
Cool I look forward to Uber drivers showing up with a rickshaw or giving piggy back rides.
Uber in India offers autorickshaws. And I've got a vague memory of seeing rickshaws/pedicabs in Seattle (but this could be a false memory).
Paging rayiner for an "actually this is good" take
Because we continue to believe drivers are properly classified as independent, and because we’ll continue to be responsive to what the vast majority of drivers tell us they want most—flexibility—drivers will not be automatically reclassified as employees, even after January of next year.
We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now. But we will also continue to advocate for the independence and choice that drivers tell us again and again in surveys, polls, focus groups, and personal conversations that they value most.
Uber management is not going to get the message until top management goes to jail for contempt of court.
There is nothing about providing benefits to people who meet the criteria for employment that prevents Uber from allowing drivers choice.
They will not be able to keep as many drivers or allow infinite drivers to sign up, and they will not be able to pay benefits to people who only work a very small amount per week (I assume this is in the law). But beyond that, there is absolutely no reason they cannot or should not continue to let drivers sign in and out when they want.
What should they do to drivers who don't meet their minimum hours needed to pay for the benefits in a given week? Fire them? Immediately? Should it be a warning? How many warnings do you get? Meanwhile is Uber/Lyft still on the hook for all the benefits? How can they avoid these flaky drivers? Better screening upfront such as an interview? How will drivers feel when they get a notification they have to drive 8 hours today or they'll get a warning because it's the end of the week and they are short. What if it's a slow day and Uber doesn't need more drivers today? It would make more sense to spread drivers hours out of over the week. The relationship starts to sound drastically different for both parties. Especially for the 45% of drivers working less than 10 hours currently who will have to find other side jobs or go without.
There would need to be a grace period and there would be a warning. There is no reason someone needs to be immediately fired just because they have a light week.
Uber: AB5 doesn't affect us. Also Uber: We are prepared to spend $60M to stop it.
What I have a hard time understanding is the 3rd of the 3 tests that determine if a person can be classified as independent contractor. [1]
I understand A & B, but as for C, why does someone's normal job have to be in that same line of work to be considered an independent contractor? What does whether a person is a driver professionally, or a teacher making money on the side, determine whether they're performing work as a contractor?
Maybe someone more expert can explain.
-------
[1] ABC Test that all 3 conditions must be satisfied for worker to be considered a contractor:
"... (a) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; and (b) that the worker performs work that is outside the usual course of the hiring entity’s business; and (c) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”
Could someone knowledgeable about employment law explain what will change for Uber/Lyft drivers if the companies are forced to reclassify them as employees?
The post talks about "potential harm" and says that how many hours drivers have to work and whether they can work for competitors at the same time "would all change." Is that right?
This is just a PR post by Uber. Don't take any of it as fact.
No one knows the true impact of this. Companies will find lots of interesting ways to follow the letter of the law but not the spirit of it. As they always do.
If you really want speculation on it then find someone who's actually a lawyer and not directly affected by it (so they aren't biased). Which I haven't seen yet.
(Detailed writeup on why speculation on things like this is almost always wrong http://larvatus.com/michael-crichton-why-speculate/ )
There are some other excellent explanations in this thread, but it boils down to the idea that if drivers are employees, the company starts to care about how much they work. For example, if they work more than 40 hours in a single week, they need overtime pay. That means that a driver today who decides to work 80 hours one week and take a vacation the next would (if classified as an employee) be costing Uber a lot of money, so they will probably need to ban that behavior to stay competitive. From an employees perspective, this means they have less flexibility in their work schedule.
I like how they both claim that the law does not actually apply to them, and that they are exploring working with Lyft and others on a statewide ballot measure in response to the law (clearly, implicitly, a referendum to reverse it.) They are careful to avoid making the self-contradiction explicit, but the implication is clear.
That is a clever argument that they are in business of lead generation. But if that was true then the consumer wouldn’t know Uber, they would know x ride share service. The problem with Uber is they also control the end user experience and pricing, so it’s a real stretch to argue they are not in the business of providing rides to customers.
Honestly I think their argument could be bolstered a lot if they made a simple change. Imagine you call an Uber, then your app tells you billy wants your job. You can see he is 4.5 star rated with 1000 rides, he is est 3 min away, and he wants $15. Do you accept? If so Uber connects you. If not Uber goes back to finding someone else.
With that change Uber removes itself from being in the business of rideshare, and now is in business of connecting drivers with riders (as they’ve claimed all along). They need to let drivers dictate prices and ask users to choose.
It could work. Airbnb does that and still kind of manages to control prices by favouring listings which conform to Pricing Tips in the search results.
Uber’s disrespect for the law is astonishing. I hope California cracks down on them hard for not complying.
Would love to see source data that Uber is referencing (I know it's not possible, as it's highly guarded secret) - I suspect they cherry pick it a lot.
"In the US, 92% of drivers drive less than 40 hours per week, and 45% of drivers drive less than 10 hours per week. [...] We will continue to defend the innovation that makes that kind of choice, flexibility, and independence a reality for over 200,000 drivers in California".
1. Does this distribution looks in California, not across whole US? Why talk about two different cases, unless you cherry pick? 2. How does this % look like, when we look at drivers that work for more than few months?
A very clever thing they're doing is conflating being an employee with not having flexible hours, as if part time jobs don't exist. Fast food chains don't hire independent contractors and yet lots of people have flexible shifts.
Not exactly...consider the following problem:
Fast food chain is busy from 12 AM - 2 AM, 5 PM - 7 PM. These shifts may be desirable or undesirable because of the time they occur. To be able to get the "easy" shifts (slow ones) at 10 PM or something, they can make it so that you HAVE to take a part of the other shifts... If you can't, you don't meet their eligibility and you lose your job.
If you are an employee in a shift based business, you definitely give up some rights to having completely flexible work hours.
This is percentage of drivers, not percentage of hours worked.
It would make sense that there are lot of drivers that don't drive very often. They might even have stopped driving altogether, but didn't cancel their account.
It's like a website talking about total users that ever signed up, instead of 7-day active users.
It doesn't clearly state if those durations are during an active ride, also including time to pickup, or including time active waiting for a pickup task.
This subtlety could drastically change the data interpretation.
The reporting around this law is absurd.
Despite how it is covered, the law notably fails to do ANYTHING to help gig employees as it just codifies existing case law.
What this law does do is carve out exceptions in that case law so that gig employees have LESS protection.
This law could have been paired with other real protections for gig employees but that did not happen. No minimum wage guarantee extensions, no rights to organize, no improvements in access to the safety net...etc
How do people let our politicians get away with claiming they are protecting people with a bill that does nothing but erode those protections?
I guess it might be considered a protection in that it won out against bills like AB71 that would have reversed the Dynamex precedent.
So basically their tactic is to eke out a few more years out of their business model as their fight with California over the classification slowly snakes its way through the courts to the California supreme court, and hope that in the meantime they can come up with a better business model?
It is actually not a terribly bad idea. They have the money to pay for the slow court battle, and it is strictly cheaper than complying.
They already lost in the California Supreme Court.
Dynamex lost (Dynamex Operations West, Inc. v. Superior Court), which caused AB5 to be written. Uber did not yet lose (or even get sued) over this yet IIRC
I would be interested in hearing a principled defense of the exception that was granted to other industries. Would anyone care to try?
Some of the exceptions were for professions like Lawyers, Accountants, and Professional Engineers. There are already well established protocols for interacting with these people, so let's not complicate things with AB-5.
I'm sure some of the exemptions are not so cool though.
What have established protocols got to do with anything? The question at hand is, is Dynamex a good, widely applicable test or not? Yes or no? If it is, then use it. If it isn't, something is severely broken, which you plainly see with so many exemptions, and it should not be used.
They continue to use the term "rideshare", which just boggles my mind. So, I guess "share" in this case means that Uber is "sharing" a "cut" of the proceeds with the driver. Maybe they should call it, "fareshare" (but then that would be a play on words that turns out to be an oxymoron).
That's an interesting point, actually. Uber and Lyft do both support shared rides (which they call Uber Pool and Lyft Line, respectively), but my understanding is that the vast majority of their rides are not actually "shared".
Honestly, would the, "three important points" have even been a remote consideration of Uber, Lyft, etc., if this legislation was was not even proposed (let alone passed) in the first place?
This sounds a lot like someone apologizing and saying they are deeply sorry, only after they are caught doing something wrong.
Uber always positions itself to be whatever is most advantageous for it given the current situation. Just a "technology-based platform", no, they are a just a modern taxi company that uses a tech platform.
I think for many "big tech" companies there needs to be a paradigm shift in how society views them, not as pure tech companies that produce technology solely for technology's sake, but like Uber - companies that use tech as a means to an end of a another business (in most cases). Facebook as a news company, Amazon as a retailer, Airbnb as a short term rental unit provider, etc. (these aren't all necessarily accurate descriptions).
I can read between the lines an assumption that Uber will do the bare minimum required by law while exercising all restrictions on drivers they are legally allowed to.
How can they be for self-organization of drivers (as states in the release) while battling in other state courts for prohibiting unions?
If they want to allow drivers to also drive for other platforms (again, from the text), just don’t enforce such clauses in employment contracts.
They’re talking about all the changes they supposedly want to see while the only thing stopping it from happening is Uber deciding not to.
As if being an employee must mean a rigid schedule and inflexible working hours.
> Our current offer represents a new progressive framework that includes:
> Establishing — for the first time ever — a guaranteed minimum earnings standard
> So as you can see, we are not arguing for the status quo.
Well, ok. The real question though is why.
Only companies with massive investments can afford to burn cash to keep the price to the final user as low as Uber's.
Such regulation would reduce the number of competitors appearing on the market.
Seems like it will bring uber & lyft's cost basis in line with cab drivers, making the latter group competitive again.
> We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now.
Translation: "We want to help our workers by fighting against their own attempts to assert their legal rights. We will do so in special courts where we hire and pay the judges. This will be perfectly fair."
>Bringing drivers access to robust portable benefits like sick leave and injury protection;
What? Those are embarassing offers.
> Our proposal avoids the potential harm of forcing drivers to be employees, whether or not they want to—and the vast majority tell us they don’t want to be
I would love to see the data behind the 'vast majority'
I'd bet the huge percentage of drivers that simultaneously do Lyft and Uber would not like being an employee of one or the other, as their employer would prevent that.
I wonder what'd the courts would say if Uber decided to charge a nominal fee (say $1/year) for the driver app in the App Store? That would make it more obvious that it's a piece of software that is being licensed by drivers for lead generation.
It seems Wall Street is not all that worried about AB5.
https://finance.yahoo.com/quote/UBER/
Looking at the 5 day stock trends, it seems up compared to last week.
AB5 didn't appear out of nowhere, and its passage didn't come as a surprise. The potential impact of AB5 on Uber's business would have been priced into the stock as the bill progressed through the legislature.
Newsom hints a deal - https://www.marketwatch.com/story/uber-lyft-stocks-surge-aft...
this is probably going to be labeled as a naive view, but to me it's clear that no one cares about the spirit of the sharing economy (not even corps like uber or airbnb): no one should be dedicating 100% of their "work time" to ubering... nor buying up properties to rent it out as airbnb permanently... I thought it was about unused/wasted time/resources that could be shared (for some profit).
Corps likely airbnb and uber should probably go back to building their platforms to promote occasional resource assignment rather than permanent.
> I thought it was about unused/wasted time/resources that could be shared (for some profit).
This is the fiction sold by AirBnB, Uber, etc. You just can’t grow forever (as these companies require) by “sharing.” Do you think investors would continue to happily light billions on fire if Uber didn’t have huge ambitions?
This is very similar to Etsy. Founded as a handmade marketplace until they realized not enough people make stuff by hand to keep growing. Now it’s just a mass-produced shit shop just like every other place.
That's because these companies have purposefully misrepresented themselves as part of the sharing economy despite the fact that their core business models are nothing like Freecycle or Couchsurfer, or even like casual carpooling.
Are they really trying to claim that Uber is not a transportation company but instead "a technology platform for several different types of digital marketplaces"?
I guess we do live in a post-truth era.
This is how they've always been. Uber's "customers" are the drivers. They are buying access to the platform, thats how they categorize driver bonuses and incentives to "marketing" expenses apparently
The post was written by their CLO. They are not trying to claim as such, they are succeeding. I am not a lawyer, but I don't think this legal interpretation of the company is a lie. It seems like the classification is constantly under scrutiny. A legal falsehood like you claim it is would've fallen apart by now.
Lawyers argue all the time. It's not a legal truth because their chief attorney says so. They are entitled to claim (within reason) as much as anyone else is.
And, of course, they will claim the most favorable definition. In other situations, notably when they are arguing against entrenched transit/transport interests, they "become" a transport company. It's a question of which hat fits the day.
FTA:
> But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces.
Previous rulings have found his statement to be accurate. So you don't have to take his word for it, you can take a judge's.
Those rulings were made without the context of the new law, though, so the results may be different.
AB5 just codifies the precedent under which those rulings were made.
> I guess we do live in a post-truth era.
Lawyers and representatives have been making stretch arguments for the entities they represent for centuries. Did you really expect the company's legal group to not try and argue around this? Why do you think they have jobs?
I don't think any of Ubers claims are changed in this post. This post just claims that AB5 changes nothing for Uber because Uber is already operating under the Dynamex precedent.
The post truth era is people claiming this bill adds protections for gig workers when it's actual effect is to limit those protections from applying to the lawmakers buddies and donors.
I have no idea how they're going to get past the 3rd part of Dynamex. Was it not encoded into AB5?
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Given how many drivers drive for both Lyft and Uber, I feel like that is not a particularly hard case to make, but IANAL
eBay is a marketplace because people have always bought and sold stuff. There was no pre-existing marketplace of drivers looking to drive people around for money before Uber came along.
Summary: "This bill does absolutely nothing to affect us. But please don't pass it, or at least let us compromise, since it would affect us so much."
Seems a little bit contradictory?
The government seems to be solving the wrong issue. Shouldn't the government instead fix the Whatever it is that makes being classified as contractor suck in the first place?
As regards to the hour claim, if the law goes into effects, what would happen to those drivers who can't drive 40 hours per week?
If the court rules that Uber drivers are employees per the AB5, my guess is there will be no more drivers with 40 hours a week. Ride sharing companies will just do what fast food has done and cap working hours at 29 per week to avoid healthcare benefits. This will also mean that neither uber or lyft can capture the market, because they will need each-other to supplement hours to the drivers.
It’s nuts for Uber to talk about their “offer.” They don’t make the offer, the voters do.
What's the defense of a business model that loses bucketloads of money despite not treating their drivers with the dignity they deserve? Both Uber and Lyft are not going to be killed by regulation, they're going to be killed for being shitty businesses.
Perfect way to eliminate the competition via regulatory lock out
It's not really sharing anyway.
Yeah, the term really got me when I first heard about Uber... my thoughts was it was more like a near-demand carpool service to pull together extra passengers for where you were going anyway (for a small fee). Reality it's more like a Taxi service with private vehicles.
Still wouldn't mind seeing another ride share app with carpooling as the focus.
Yes, calling it "ride-sharing" has always been disingenuous at best. I suspect the idea was to make it sound more small-scale and personal, less formal and commercial, so that people wouldn't feel it needs regulation or oversight as much as a commercial transportation service.
Waze Carpool
No, AB5 simply requires that they compete fairly with all other transit systems that recognize their employees as employees.
The reality is that all these “gig economy” companies are only able to compete by unfairly claiming that their employees are somehow not their employees.
They're not even able to compete. Neither Uber nor Lyft are profitable.
tl;dr "Bill clearly aimed specifically at us doesn't apply to us."
Wow, just .. wow. I thought it was going to be Uber's plan of coming under compliance of AB5 and sugar coating the entire thing to made them sound like some honorable people. But no, they're still scum. You get half way through and you realize it's just business as usual. We're going to ignore, fight and not give a shit about the law.
The build up to this legislation was that it was specifically around companies like Lyft, Uber, Dolly, etc. To argue against this just shows how desperate the company is to not give up anything.
Personally I stopped using Uber in 2016 and never looked back. I'd rather pay more for a Lyft. If both of them disappear tomorrow, there will always be Taxis; and maybe cities will finally start building out real mass transit like America has needed for decades, instead of hanging on to the brain-dead dream of a self-driving cab.
Honestly, how much did you use taxis before Uber/Lyft came around?