
Uber and Lyft don't have a right to exist - ausbah
https://jalopnik.com/uber-and-lyft-dont-have-a-right-to-exist-1837680434/
======
sokoloff
_[California Assembly Bill 5] would suck Uber, Lyft, and other gig economy
platforms out of their legal vacuum and into well-defined orbits of labor law.
It would be doing so in a way that tracks with the reality of their businesses
and a common-sense definition of what an “employee” is._

I don't think that a common sense definition of what an "employee" is includes
"show up to work whenever you want, take whatever breaks you want, knock off
whenever you want, show up wherever you want, work for another company at the
same instant you're working for us, get paid for jobs completed rather than
hours worked, have a genuine prospect to show a profit or loss, use your own
equipment" and likely several other key elements of the Uber/Lyft driver-
company relationship.

I agree they're not 100% independent either, but I tend to view them as more
independent than employees.

~~~
braythwayt
"Well, actually..."

Lots of companies are very flexible about employees setting their own hours.

Lots of companies in the service business do not care whether an employee has
a second job with another company, even a "competitor."

The issue around getting paid for jobs completed is absolutely a non-issue.
Lots of employees are paid for piece-work, or equivalently have paid-for-
performance structures.

The issue is whether such payment can drop below minimum-wage laws, and the
answer in law is, "no."

So, frankly, while Uber and Lyft are certainly doing their best to act like
their drivers are not employees, the criteria you give here do not disqualify
them from being considered employees, as there are a non-trivial number of
companies that have arrangements like this with their employees.

I'm left to think that it is certainly reasonable for a court to consider all
these issues in aggregate and make a determination. It does not strike me as
"obvious" either way.

~~~
dnautics
> Lots of companies in the service business do not care whether an employee
> has a second job with another company, even a "competitor."

Absolutely none of them will let you be on the clock with a competitor at the
same time you're on the clock with them.

~~~
eugeniub
Neither do Uber or Lyft. No driver performs an Uber ride and a Lyft ride at
the same point in time.

------
jackschultz
There's constant arguments about this, whether a driver for Lyft / Uber, or a
delivery driver of Grubhub, Doordash, UberEats, is either an employee or
contractor. And yet, I haven't seen talk of the creation of a new type of
worker, one for the gig economy.

I get that there's a big difficulty in creating these laws, with politicians
who don't know exactly what the solution is, but someone needs to start by
saying look, these gig economy workers are neither "employees" or
"contractors" with the current law definitions, so we're going to create a new
definition of worker geared towards these cases which makes sure employees
aren't being taken advantage of, but also makes it possible for these
companies to continue.

~~~
Mathnerd314
>also makes it possible for these companies to continue.

Taxi companies have been following worker laws for forever, it's not
impossible at all. These companies are just spreading FUD, like big ISPs did
back when net neutrality was imposed:
[https://www.techdirt.com/articles/20151001/12131332412/hey-r...](https://www.techdirt.com/articles/20151001/12131332412/hey-
remember-how-net-neutrality-was-supposed-to-destroy-internet.shtml)

~~~
makomk
Taxi companies have been treating their drivers as contractors in the state of
California for forever. It seems like some of them have been having legal
trouble lately because of it too:
[https://www.shrm.org/resourcesandtools/legal-and-
compliance/...](https://www.shrm.org/resourcesandtools/legal-and-
compliance/state-and-local-updates/pages/california-cab-driver-was-
independent-contractor.aspx)

------
halamadrid
If you sign the petition be wary of this:

I agree that Uber or its representatives may contact me by email, phone, or
SMS at the email address or number I provide, including for marketing
purposes.

------
tyingq
The official rules[1] are somewhat ambiguous, so this might be an interesting
Court battle. The key bit is probably _" A worker is an employee when the
business has the right to direct and control the work performed by the worker,
even if that right is not exercised."_

[1] [https://www.irs.gov/newsroom/understanding-employee-vs-
contr...](https://www.irs.gov/newsroom/understanding-employee-vs-contractor-
designation)

~~~
lisper
This criterion is ridiculously out of touch with reality. I just hired some
people to trim my trees. I told them exactly which trees to trim, in some
cases, which specific limbs to cut off. That doesn't make the tree-trimmers my
employees.

~~~
SllX
It’s more like they agreed to take the job of cutting these trees in a way
that you would like for an agreed upon amount of money and then left. They
don’t work for you, they did some work for you, but they didn’t have to, and
they wouldn’t have gotten paid or been entitled to any compensation if they
hadn’t. They would have been liable if they had killed your trees in the
process.

I think where we’re splitting hairs is whether the drivers have a direct
relationship with Uber and Lyft that entitles them to the rights of a W-2
employee, or whether they are actually working for the passengers and are
therefore 1099 workers merely using Uber and Lyft as a platform to find work.

You see, there’s a decent case for the latter, it’s what they predicated their
original business model on, but given the amount of control that Uber and Lyft
_does_ exercise on the drivers, I think that pushes them into W-2 territory.
Drivers can’t even set their own rates for which they will take a job for
example, Lyft and Uber hands the fee scheduling down from on high. The choice
is binary, work for Uber or Lyft, or don’t work for Uber or Lyft.

There was an interesting but failed startup called Sidecar I think it was.
Never got to use it, but the description I received was you put in your pickup
and drop off points and the amount you would _like_ to pay, and then it
broadcasts this fare out to potential drivers that happen to be available.
They see it, and decide if they want to take the fare or not. If Sidecar were
still around, I think they would have a much easier time proving their case
that their employees are 1099 contractors, not W-2 employees.

EDIT: Some additional thoughts I had after posting this.

As a customer paying for a ride, are you paying to call a Lyft or an Uber? Or
are you paying to call a driver. Lyft gives me no options to call upon
specific drivers that might be available, or to eliminate certain makes of car
that I dislike (damn Prius C drivers), and penalizes me if I cancel. When I’m
calling a car, it certainly feels like my relationship is with Lyft the
company, not the guy who eventually picks me up. I have no idea who that will
be.

~~~
sokoloff
Regarding your last paragraph: when I call AAA for a tow, I have no control
over which tow driver or tow company shows up. That doesn't make the tow truck
driver an employee of AAA.

~~~
SllX
You sir, have brought up a decent point. Not an example I’m overly familiar
with, but I’ve seen it in action.

EDIT: took a moment to look into AAA, they advertise themselves as a
federation of regional clubs and their customers are less customers and more
members. This may not be an Apples to Apples comparison, but lacking
sufficient information and experience, I defer to people with more knowledge
in this case.

------
b_tterc_p
I think the part about financial incentives to work longer shifts is a low
hanging fruit. This should not be allowed. It basically forces an employee
like relationship for an individual to make a practical living (if even). If
this were not allowed, uber would be forced to pay higher wages across the
board.

~~~
test6554
That's my one complaint. Penalizing drivers for rejecting rides. If you could
truly be living your life and set multiple rideshare apps to notify you only
when ride fares exceed X rate, then everyone would just set their minimum rate
on all the apps and just take the most profitable fares that came their way.

------
bdcravens
If they get classified as employees, does that mean the companies will have
more control over how they do their job? I've caught multiple drivers
bypassing toll roads (causing a much longer trip) even though Uber includes
the toll fee in what they charge me.

~~~
justforyou
Uber doesn't really care about your safety, the quality of the ride, or your
drivers behavior unless any of these things cause significant PR disasters and
result in a very large number of users leaving the platform.

This wouldn't change if the drivers were classified as employees.

Also, do you have any proof drivers are actually able to pocket those missed
tolls?

Seems like a win/win, drivers get higher fare due to time, and Uber pockets
toll. Why should Uber care?

~~~
SllX
The driver would have to be the one paying the toll, so any money collected
for a toll road by Uber would have to go to the driver, otherwise it’s just an
arbitrary fee Uber decided to collect, not really a charge for the toll.

------
simonblack
Uber and Lyft are both in the "extractive" business.

Uber and Lyft are a scam to drain both investors and drivers of money which is
skimmed off and goes into the pockets of the CEOs, and other business
managers.

There is no true profit generated by either the company itself or by the
drivers. All business is being permitted by using the investors' money to
undercut taxi companies' prices by subsidising customers.

Once the investors finally wise up, both Uber and Lyft will disappear like
they never existed.

------
nemothekid
> _To classify someone as an independent contractor, the court said,
> businesses must show that the worker is free from the control and direction
> of the employer; performs work that is outside the hirer’s core business;
> and customarily engages in “an independently established trade, occupation
> or business.”_

This is a bit unrelated, but how would this affect software contractors?

~~~
bdcravens
It will impact fewer software contractors than we'd think: many contractors
really aren't. You're a W2 employee of the placing agency, and they are
sending you, their employee, to their client.

------
paulsutter
While it’s true that it’s bad for Uber it drivers are classified as employees,
it’s also going to be bad for drivers. Why so much energy directed at punitive
measures?

Employee classification only benefits tax authorities who get to collect more
money. Why we penalize hiring employees I have no idea but that’s how it
works.

~~~
Barrin92
> it’s also going to be bad for drivers

how does this follow? Regular employees are entitled to minimum wage, overtime
pay and reimbursements for work expenses. The latter in particular would
finally put an end to Uber's business model of outsourcing maintenance and
risk to drivers, costs which many drivers are very likely not fully aware of.

Being treated as a regular employee, possible unionizing and being entitled to
full benefits is a huge boon for working people.

~~~
paulsutter
Reclassification doesn’t create new money.

Things that would actually help drivers:

\- Limit Uber's share of the fare to 10%. Or 5%. And the driver gets the rest

\- Let drivers set strict limits on where they are willing to pick up/drop
off, etc

\- Let drivers set their price/terms

Give drivers more control, not less. Making them employees gives them less
control

~~~
Barrin92
a ridesharing service without drivers doesn't exist. Of course
reclassification doesn't create new money, if the companies want to be able to
operate they'll need to find it somewhere else. Maybe we could start with not
making developers millionaires in their 20s and hiring 1k+ sales people for a
company that makes a smartphone app.

Literal price fixing might seem simple but seems like a bad market
intervention in comparison to giving workers reasonable negotiating power and
representation.

~~~
paulsutter
Is this what's really bothering you? Personally I'd prioritize helping drivers
over punishing tech bros. Limiting the app's share isn't a price control, and
the most direct way to prevent all the value accruing to a handful of people.

> Maybe we could start with not making developers millionaires in their 20s
> and hiring 1k+ sales people for a company that makes a smartphone app.

------
stevenjgarner
This would be a powerful promoter of autonomous vehicle technologies in
ridehail companies. Interesting that if passed, Assembly Bill 5 would become
law at about the time the Tesla Network might be implemented. Might actually
have a very positive effect on Uber, Lyft et al, just not on their drivers.

------
kerng
They aren't contractors, and they are not employees.

That's why its called "gig economy".

------
einpoklum
Uber and Lyft are gaming labor laws in order to get a cheap flexible
workforce. To the extent that their business depends on doing so, then, yes,
they don't have a right to exist.

I wish drivers could organize and set up ride-hailing collectives, so that we
would just cut out Uber and Lyft as the middle-men; prices might be higher
because of wages, but it won't all feel like an anti-social scam - and drivers
will be able to participate in managing their own lives and put in their
professional input (together with consumer groups / regulators) into standard
of conduct, service and safety.

------
matz1
everyone should be a contractor anyway. Health care should be decoupled from
employer.

~~~
dehrmann
In theory, I'm ok with this, but we also need a stronger social safety net.
There's still a certain amount of social responsibility that comes with
employing someone full-time, even though it's not required by law. As long as
the government can step in to fill the gap, this can work.

What's tricky is that while there are benefits to business because now their
business is business, not retaining workers longer than they should, it makes
them cold and heartless. But we're humans, we don't respond will to that, and
we want to be treated with dignity, even in business transactions.

------
jimmaswell
Maybe CA doing stuff like sending itself back into the dark ages of taxis will
prompt tech to take up root in other states more. I can only hope.

~~~
zzzeek
the problem is that in order for you to have your convenient uber/lyft car,
people are forced into poverty and homelessness as these jobs do not pay
enough.

background on homeless Uber drivers: [https://www.theguardian.com/us-
news/2017/jun/17/uber-drivers...](https://www.theguardian.com/us-
news/2017/jun/17/uber-drivers-homeless-assault-travis-kalanick)

~~~
jimmaswell
If these labor laws prevent that, then these people allegedly being forced
into poverty and homelessness by uber/lyft would just get traditional minimum
wage jobs instead which are plentiful at the moment. CA is at its lowest
unemployment rate right now. Yet people are still taking these jobs over more
traditional ones. So apparently the problem exists in both cases and a more
general solution is in order than trying to get rid of contracting-like jobs
which other comments point out uber/lyft certainly are (work for competitors
simultaneously, no set hours, etc).

~~~
zzzeek
> would just get traditional minimum wage jobs instead which are plentiful at
> the moment.

in which case they would not be Uber/lyft drivers and you would not have the
convenience of these services available to you, back into the "dark ages of
taxis" .

> Yet people are still taking these jobs over more traditional ones.

yes, and they are living below the poverty level by doing so. The fact remains
that your experience of convenient uber/lyft rides depends upon people who
willingly or not place themselves into poverty-level wages. For the moment,
your convenience requires that people suffer in poverty.

OTOH, if regulations were imposed such that Uber/Lyft had to raise their
prices, then you can have the convenience of these services, at a higher cost
(more likely though, it would be simply be a regular low-margin business like
taxis and supermarkets and no longer profitable to investors), and it would
not require poverty-level workers in order to achieve it. This is the purpose
of the minimum wage - so that the job market isn't crowded with jobs that do
not provide a living wage.

~~~
jimmaswell
My point is gig jobs must not be the real problem here, so the solution to the
general problem isn't tanking the gig economy. If uber and lyft were so bad
then people would be taking those regulated jobs that are available instead.

I wouldn't mind if uber/lyft prices went up some to pay the employees better
but I don't see it as a moral evil to make side jobs available where you're
not paid for time doing nothing because there's not a job yet. Re: healthcare
it should just be single payer and not tied to employment.

------
dagnysdildo
So close and yet so far. No business or corporation has an inherent right to
exist, and if you can only turn a profit by shafting the people who work for
you then you have no business in business.

~~~
test6554
If someone performs a voluntary job without a gun to their heads, the
assumption is that they are not being shafted.

Or they are being shafted by life so hard that this represents less shafting
that all their other options. Otherwise, if they had better options, why would
they take the job?

~~~
dagnysdildo
There's no such thing as a voluntary job when the "alternative" is poverty,
homelessness, and slow death by starvation or preventable disease.

~~~
kortilla
So your proposal is to drive these corporations out of existence and push the
people back into poverty?

~~~
dagnysdildo
Not all of them. Just the ones that shaft workers. If your business has
nothing to hide it has nothing to fear.

------
Kapura
I think this bill passing would be a good thing, because gig workers need
legal protections, and in America most people are also dependent on their
employer to help cover the cost of health insurance (another issue itself;
healthcare should be free). I know people who are regular uber drivers in LA,
and they certainly treat driving for uber like a "real" job. They try to work
regular hours; they need to to be able to make rent.

I believe the real issue is the distinct lack of investment in public transit
infrastructure in the US. Uber and Lyft claim they're providing a valuable
service. In developed nations cities build subways and bus routes to meet the
needs of residents. America's philosophy seems to be to never provide a
necessary service for free when somebody could be making a buck off it.

------
carapace
I tend to bring this up on Uber/Lyft/etc threads, but it seems especially
relevant here:

"The Market Fairy Will Not Solve the Problems of Uber and Lyft" (2016)

[https://www.ianwelsh.net/the-market-fairy-will-not-solve-
the...](https://www.ianwelsh.net/the-market-fairy-will-not-solve-the-problems-
of-uber-and-lyft/)

> Here is the thing about Uber and Lyft (and much of the “sharing economy”).

> They don’t pay the cost of their capital.

> The wages they pay to their drivers are less than the depreciation of the
> cars and the expense of keeping the drivers fed, housed, and healthy. They
> pay less than minimum wage in most markets, and, in most markets, that is
> not enough to pay the costs of a car plus a human.

> These business models are ways of draining capital from the economy and
> putting them into the hands of a few investors and executives. ...

From the drivers' POV these companies are parasites.

