
U.S. states pass laws backing Uber's view of drivers as contractors - petethomas
http://reuters.com/article/idUSL1N13Z1YP20151210
======
gergles
I don't really understand how a state law declaring something as so can have
any relevant effect on federal determinations of employee/contractor status,
which is far more dangerous to the TNCs business model. This mostly seems like
feel-good legislation purchased by Uber to try to delay the inevitable, but
the drivers are employees by any sort of logical duck test, and it's only a
matter of time before the courts come to that conclusion too.

~~~
morgante
> the drivers are employees by any sort of logical duck test

I strongly disagree and think this is very open for debate. Drivers set their
own hours and use their own equipment. They can even simultaneously use
another app (ex. Lyft).

I really don't see how it constitutes an employment relationship. In fact, it
seems to match all the typical characteristics of contractors.

~~~
gergles
The big example how the relationship is an employment one (IMO) is the
integration test from US v. Silk (1947) -- and yes, it's from 1947 so take
what you will from that but it is still one of the factors. Uber simply
doesn't exist as a product without the drivers. The drivers' "businesses" are
so integrated into Uber's product that there is no meaningful distinction that
can be drawn there. Courts frown on rules lawyers, which is what Uber is
trying to do right now.

There's another 19 prongs that have been used in the past to classify people
who are employees as employees. I estimate Uber can only meet 7 or 8 of them,
and I don't think that's enough to establish that the drivers are bona fide
contractors.

~~~
olalonde
The same argument could be made about a bunch of marketplaces though: Ebay,
Mechanical Turk, Airbnb, etc.

~~~
ape4
Uber drivers are way more cogs then Ebay sellers. They are representing Uber
so they are instructed to offer water to the client, say "how are you today
sir", etc.

~~~
morgante
It's encouraged, but they're not _instructed_ to do so.

Plenty of Uber drivers never offer water or say "sir" but remain on the
platform.

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panzagl
As much as I can see the need for disruption in the taxi industry, I can't
help but feel like we're going to relearn some lesson from a hundred years ago
as to why the regulations formed in the first place.

~~~
dave_sullivan
Possibly. But it's good to check assumptions periodically, and I find the
assumption that the taxi industry before uber was remotely efficient to be
dubious. Very few industries merit protection from open competition (in fact,
I can't think of one off the top of my head).

So far, as a consumer, I prefer uber (or lyft etc, experience is
undifferentiated hence why I'm bearish on uber specifically) over literally
every other transport-for-hire service I've ever used.

The contractor debate should be seen as a first step by the IRS (and soon
enough, other countries' taxmen) to take more from an economy that is moving
to being self employed at greater numbers (and in growing, valuable fields).
Uber and everyone should fight this tooth and nail, both in courts and through
lobbying. As it stands, there are strong legal arguments on both sides.

As to the ultimate fate of Uber: even if they win this, they will lose. Other
competitors will steal their network effect and grow by competing on the
spread between pay to company and pay to driver. In 6-10 years, self driving
cars will replace human drivers, but margins will keep shrinking and
competition will stay fierce. It will remain a huge industry in dollar terms,
but not exceptional from a gross margin perspective.

~~~
walterbell
What about the robotics IP Uber obtained from CMU?

~~~
dave_sullivan
Which gives them what? A monopoly on self driving passenger transport? I find
it unlikely (and without that, they will deal with relentless competition).

------
Bud
Since the article chose to not cover this important detail about the 5 states
in question, allow me: all five have Republican governors and extremely large
Republican majorities in the state legislature. To not cover this detail is to
gloss over the real story here. To wit:

Ohio: Republican governor, Republican state House (65-34), Republican state
Senate (23-10).

Florida: Republican governor, Republican state House (81-39), Republican state
Senate (26-14).

North Carolina: Republican governor, Republican state House (74-45),
Republican state Senate (34-16).

Arkansas: Republican governor, Republican state House (64-35), Republican
state Senate (24-11).

Indiana: Republican governor, Republican state House (71-29), Republican state
senate (40-10).

[https://en.wikipedia.org/wiki/List_of_United_States_state_le...](https://en.wikipedia.org/wiki/List_of_United_States_state_legislatures)

~~~
us0r
and?

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Futurebot
This is one reason some have called for a third category of worker:

[http://nymag.com/daily/intelligencer/2015/07/uber-economy-
re...](http://nymag.com/daily/intelligencer/2015/07/uber-economy-requires-a-
new-category-of-worker.html)

Germany has one already: [http://www.npr.org/2015/06/26/417675866/service-
jobs-like-ub...](http://www.npr.org/2015/06/26/417675866/service-jobs-like-
uber-driver-blur-lines-between-old-job-categories)

Of course, this would be much less of an issue if we had a guaranteed income,
or even a lesser version of it for being between jobs; something like
unemployment insurance, but only for people in this new category (which would
have much less stringent requirements.) A universal health care system would
also lessen their burden; ACA / Freelancer Union rates are still bananas
expensive.

If we accepted that modern workers that flit from job to job and project to
project are here to stay and gave them a real safety net without all the nasty
ideological baggage, we could come closer to achieving the dream of the fluid,
frictionless, task-oriented labor force that some economists have thought we
should have for decades. Instead we have the Precariat.

~~~
losteric
> If we accepted that modern workers that flit from job to job and project to
> project are here to stay and gave them a real safety net without all the
> nasty ideological baggage, we could come closer to achieving the dream of
> the fluid, frictionless, task-oriented labor force that some economists have
> thought we should have for decades. Instead we have the Precariat.'

In many cases, a student's chosen major dictates their career options for the
rest of their employed lives. The costs of switching knowledge-based jobs is
hurting job market responsiveness and driving social inequality.

Fundamentally, the model of "learn as a kid - do as an adult" is obsolete. The
world is far too complicated and moving far too fast. We need to strip down
basic childhood education and publicly support adults learning throughout
life. It doesn't have to be _easy_... it will still take years to switch
domains. But that's a lag of 1-2 years for adults to retrain vs encouraging a
new generation in highschool and waiting for them to pass through college.

~~~
Futurebot
I agree completely. Tuition free higher education with living stipends a la
Denmark is a way to get there.

------
untog
Another reason for Uber to delay going public - so they don't have to show the
world how much they spend on lobbyists.

~~~
whoiskevin
Exactly. "At one point, Uber sent five representatives to a meeting with
members of the insurance industry to negotiate language in the bill"

Just makes you feel warm and fuzzy doesn't it?

~~~
e28eta
I think it's interesting watching Uber become politically savvy. When the
company started, it simply ignored regulations that weren't convenient. Now
they seem to lean on lobbying, as well as campaigns to drive the public to
contact local politicians. But that only works because they're large enough
now.

------
rem7
If I remember correctly, wasn't one of the main reasons they weren't
considered contractors is because they don't set their rates? How would this
affect other industries... Like the tech industry... I mean I guess the
contractor can always just say no if they don't like the rate being set.

------
littletimmy
It is weird to see that despite all the lessons from the past century and the
financial crisis, some people in this thread still argue that the market is
going to regulate itself and the government should just stay out of it.

What's it going to take before you accept that public accountability is
important? An end of civilization?

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godzillabrennus
The federal government derives 89% of its funding from income tax and payroll
tax.

[https://www.nationalpriorities.org/budget-basics/federal-
bud...](https://www.nationalpriorities.org/budget-basics/federal-
budget-101/revenues/)

With contractors instead of employees the onus of paying taxes shifts to the
unreliable individual. There is no way that this continues to grow unabated by
legislation. Either these people will end up employees or they have to pay
taxes using some kind of automated system special for the sharing economy.

------
xenihn
Uber is eventually going to be fully automated. Lots of people ITT seem to be
ignoring the fact that Uber will eventually have no need for human drivers. I
can't help but feel that the parties driving legislation that harms Uber as a
company have this in mind.

------
debacle
Uber is paving the way for another company to make a ton of money in their
space.

~~~
brainflake
Exactly. Uber is doing all of the work on the regulation front, which benefits
any company wanting to do the same thing. And I would imagine the barrier to
entry is already fairly low.

~~~
kuschku
Not really.

Uber is behaving extremely anti-competitive, as far as directly calling Lyft
rides and then cancelling as soon as the car arrives during important days
(like Christmas) hundreds of times.

Uber has been fighting against other competitors, too, with predatory pricing,
or by directly trying to use the regulations (that uber itself breaks) against
competitors.

The barrier to entry for uber competitors is only going up since uber exists
in several countries.

~~~
morgante
> Uber is behaving extremely anti-competitive, as far as directly calling Lyft
> rides and then cancelling as soon as the car arrives during important days
> (like Christmas) hundreds of times.

I heard about the recruitment tactics, but I've never heard about holiday
cancellations.

Do you have any evidence of this?

~~~
kuschku
[http://money.cnn.com/2014/08/11/technology/uber-fake-ride-
re...](http://money.cnn.com/2014/08/11/technology/uber-fake-ride-requests-
lyft/)

And there are many more sources, this is just the first one can find on
Google.

~~~
morgante
I've seen that before, but it's what I was referring to as "recruitment
tactics." It seems pretty clear that the primary thing these people were
trying to was to recruit drivers (and canceling drivers they'd already spoken
to), not systematically disrupting Lyft service. For one thing, the scale is
just too minuscule to matter. In a market where Uber is doing a million rides
per day, 5,000 rides over months is nothing.[1]

That being said, disrupting availability on sensitive days (ex. holidays)
could make a lot more sense in terms of sabotaging a competitor, which is why
I was keen to see evidence of that. Unfortunately the link you provided has no
evidence of holiday cancellations.

[1] [http://expandedramblings.com/index.php/uber-
statistics/](http://expandedramblings.com/index.php/uber-statistics/)

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s73v3r
Why on earth would a state do this? It makes absolutely no sense.

