
Refusal to recognize the rise of independent contractors is hurting the economy - endswapper
https://techcrunch.com/2016/10/08/governments-refusal-to-recognize-the-rise-of-independent-contractors-is-hurting-the-economy/
======
lhopki01
The regulation that this article tries to pretend is the problem is actually
what protects so many people. Uber drivers are not harmed because the
government doesn't recognise them as independent contractors, they are harmed
because they aren't recognised as employees. Independent contractors should
hold the power in the relationship not the other way around. As it currently
stands independent contractors are just a way for companies like Uber to avoid
paying taxes, sick pay and any other number of hard fought rights.

~~~
RangerScience
I don't disagree with you that those are problems, but isn't the low friction
to "hiring" an Uber driver, or renting your room on AirBnB, or picking up odd
jobs via Postmate, part of what allows them to function?

~~~
Qworg
Just because it allows them to function doesn't make it correct.

~~~
brightball
Signing up for a job as an independent contractor agreed upon by both the
contractor and the company...and then after the fact being told that they are
actually employees isn't protecting either party involved in the initial
agreement. It's using the government to protect OUTSIDE parties by by
crippling the business with additional expenses.

~~~
wickawic
But the children in the mines contractually agreed to their positions! Who is
the government to interfere with this business partnership?

~~~
brightball
Are the children adults legally able to enter a contract....?

~~~
Spooky23
Before the overreaching government stepped in and got in the way, parents had
the freedom to get gainful employment for their idle children.

Some parents even took it upon themselves to increase their productivity by
having the kids do piecework at home. For example, 6 year olds were able to
roll cigars at home.

~~~
ZoF
What is the premise of your argument here? That bad things happened in the
past so there's now no such thing as too much regulation?

Because child labor existed we should now consider independent contractors
employees...?

Care to actually provide a somewhat coherent response instead of baselessly
denigrating the parents ideology and implying it represents forced child
labor.

I find this kind of cheap, tangentially related strawman so intellectually
lazy it's actually offensive.

~~~
thedufer
Your argument for why Uber's workers should be able to sign themselves up as
independent contractors can be used to show that children should be able to
work in mines, fast food workers should be able to work for minimum wage, and
generally that employees should be able to sign off on giving up any and all
employment rights.

The point is that either you need a new argument, or you actually believe all
of those things.

Keep in mind that I have not actually taken sides on the issue at hand; I'm
just claiming that your particular argument is a bit flawed.

~~~
ZoF
It wasn't my arguement. Care to clarify which argument you're attributing to
me?

>The point is that either you need a new argument, or you actually believe all
of those things.

No. I can't find one arguement in the thread above that requires 'believing
all these things'

-children being able to work in mines(appeal to emotion) is tangentially related we aren't even discussing child labor here.

-fast food workers should absolutely be able to work for minimum wage, I did. Should it be raised? I think so, but again this is a tangentially related appeal to emotion.(seriously what did you mean with this one other than 'feel bad for poor people'? How is minimum wage relevant in this context?)

-Employees should be able to sign off on all employment rights?

Look a relevant point, and generally I agree they shouldn't be able to.

Can you please clarify exactly how this arguement of mine can be used to show
the three things you've outlined?

Edit: The funny thing is I don't even disagree with you or the grandparent on
the underlying issue here, I just find this constant strawman bullshit so
grating.

~~~
thedufer
Apologies for confusing you with brightball; I didn't notice that you jumped
in after the back-and-forth.

The entire argument put forth was that the government can't annul a contract
agreed upon by both parties (even if it is illegal under current law). Which
is how pretty much all labor laws. It is a completely generic argument. Once
we admit that there are exceptions (oh, but children can't form a contract!),
the generic argument has been thrown away.

------
acjohnson55
The biggest problem with Uber & Co to me is that drivers don't get to set
their own rates. That makes it not a marketplace at all. They're so valuable
because they get to run a command driving economy, but without any obligations
to their workers. Not to mention that they're buying market share with
subsidized prices. Basically dumping. That's a lot different than AirBnB to
me.

~~~
coredog64
Taxi drivers don't get to set their own rates either.

~~~
acjohnson55
Yeah, but as far as I can tell, at least in NYC, they are considered
employees:
[http://www.wcb.ny.gov/content/main/onthejob/CoverageSituatio...](http://www.wcb.ny.gov/content/main/onthejob/CoverageSituations/taxiCabs.jsp)

------
matheweis
It's not just independent contractors that need recognition.

Self employed individuals who rely on near monopolies for their businesses
also need protection - at least in the form of better due process.

PayPal eBay Etsy Apple Google

All these and more have banned people from their marketplaces without any
serious form of due process. This might be fine if there are competing
alternatives in place, but there are not.

------
sedachv
> And worst of all, extraneous lawsuits targeting companies attempting to
> share helpful information with workers regarding taxes, insurance, and
> retirement accounts, are punishing the very individuals these groups falsely
> espouse.

David Loeper's book has a few citations of surveys about how "helpful" the
information about 401k plans actually is:
[https://www.amazon.com/Stop-401-Rip-Off-Eliminate-
Improve/dp...](https://www.amazon.com/Stop-401-Rip-Off-Eliminate-
Improve/dp/1934454079) tl;dr - 401k plans are a Reagan-era privatization scam;
almost no one understands what to choose, which makes it easier for plan
management companies and funds to charge ridiculous fees.

David Belk lectures on medical insurance plans
([https://www.youtube.com/user/davidbelk46/videos](https://www.youtube.com/user/davidbelk46/videos)
I recommend starting at
[https://www.youtube.com/watch?v=jkAY15p2DN4](https://www.youtube.com/watch?v=jkAY15p2DN4)).
Same deal - deductible, copays, caps, lifetime caps, what to choose? A lot of
these plan details deliberately obfuscate the fact that you would spend less
paying for medication and procedures directly than the insurance co-pay!

This article is privatization scam propaganda disguised in free-market jargon.
Not surprising when you consider the author:
[https://en.wikipedia.org/wiki/David_Schweikert](https://en.wikipedia.org/wiki/David_Schweikert)

~~~
NotSammyHagar
I think you are completely wrong about medical insurance being cheaper to pay
out of pocket than get the insurance. Perhaps this is true for some horrible
100$/month insurance. But my bills all come with:

list price, plan discount (usually 30-60% off), next what the ins comp. covers
= usually 80% of discounted price, then what I pay, that is a small amount,
20% * 60% * original price. I recently had a drug that wasn't covered by my
insurance, they wanted me to use the generic. The non-generic was $288/month
out of pocket, the generic cost nothing after the insurance paid their part.

on 401ks, i think you might have more of an argument about costs, but since we
don't have an alternative, it would lead to many people having no retirement.
there's no law that makes people use 401ks instead of private retirement.

~~~
jknskjndf
On the whole medical insurance is more expensive than paying out of pocket,
otherwise the insurance companies would be losing money and wouldn't exist.

~~~
endswapper
That's not true.

"Float, or available reserve, is the amount of money on hand at any given
moment that an insurer has collected in insurance premiums but has not paid
out in claims. Insurers start investing insurance premiums as soon as they are
collected and continue to earn interest or other income on them until claims
are paid out."
[https://en.wikipedia.org/wiki/Insurance](https://en.wikipedia.org/wiki/Insurance)

Additionally, Warren Buffet discusses this in fascinating detail over the
course of almost 40 years.
[http://www.berkshirehathaway.com/letters/letters.html](http://www.berkshirehathaway.com/letters/letters.html)

~~~
jknskjndf
Nothing you said makes my statement untrue.

~~~
endswapper
Pardon if I misunderstood, or misinterpreted your post, but you seemed to be
saying that premiums must be more than the claims or they wouldn't/couldn't be
in business. That is not true.

Even if an insurance company has claims greater than its premiums it could
exist, and even be profitable, because of its ability to earn additional
revenue through investing its float. You seemed to omit this consideration,
which is significant because investment returns on billions of dollars can be
significant.

~~~
thedufer
This argument hinges on counting the time value of money for insurers but not
their customers. The investment money made on float would instead have been
made by the customers if they didn't buy insurance.

I think you're correct in a very specific technical sense (measuring in
nominal dollars, that is), but not in the sense that matters in the real
world.

~~~
makomk
Not really. Each individual customer requires much higher liquidity than the
insurance company does - it's fairly likely that you'll have to spend your
entire medical fund unexpectedly, but incredibly unlikely that every single
insurance customer will need to claim at once. Also, investing is a lot more
inefficient at small scales.

------
ScottBurson
I'm not sure you can make a good case that regulation opposed to the interests
of AirBnB/Uber/etc. is a bad thing for the economy _from the point of view of
the workers_. From that angle, it's zero-sum: the more people who use AirBnB,
the fewer stay in hotels; the more who use Uber/Lyft, the fewer take taxis.

Rather, it's from the point of view of the _customers_ that you can make this
case: people have transportation and travel options they didn't have before.
That effect doesn't necessarily show up in GDP, but it does mean that life is
a little bit better on the whole.

~~~
morgante
> I'm not sure you can make a good case that regulation opposed to the
> interests of AirBnB/Uber/etc. is a bad thing for the economy from the point
> of view of the workers.

Sure you can. If I'm a part-time Uber driver, forcing me to be classified as
an employee might very well remove a side income stream from me.

It's even more farcical for AirBnB: people renting out their spare bedroom
would not otherwise be working in hotels.

> From that angle, it's zero-sum: the more people who use AirBnB, the fewer
> stay in hotels

Actually, I'm not sure this is true. If AirBnB reduces the cost of temporary
accommodation, you might very well see increased travel overall without
hurting hotels. In fact, I strongly believe this is true: look at things like
the digital nomad movement, which heavily uses AirBnB and would be much less
common without modern technology. Right now I'm staying in an AirBnB—if this
option weren't available, I wouldn't have stayed in a hotel.

~~~
anexprogrammer
Unless the you're one of the 80% of drivers having another job not because you
want one, but because being a driver doesn't pay enough. Part time work is
allowed, why would reclassification take away the other income stream?

Or if you're one of the many delivery drivers who are only self-employed
because the organisation insists. It gives the organisation a means to evade
employee regulations and pay despite a 40 hour week, but nothing to the
worker.

~~~
pitaj
Because the cost to Uber of reclassifying these contractors as employees would
end their business.

------
skybrian
It's a plausible argument, but citations are definitely needed. How do we
_know_ these things?

------
werdna123
This is a great idea. We should definitely undo the 40 hour work week and
other progressive-era trifles, serfdom was way better. Who wants to own things
anyway

------
hall_999
Well, over-regulation and taxing of small business owners is the result of
Democrats in power.

What you want is less-government control. Most small business owners have been
screaming about this for years.

It seems to only get attention because of new Trendy startups like Uber and
Lyft.

~~~
ajmurmann
John Cochrane made the best statement about this I've heard so far on Econtalk
a few weeks ago:
[http://www.econtalk.org/archives/2016/09/john_cochrane_o.htm...](http://www.econtalk.org/archives/2016/09/john_cochrane_o.html)

His point is that it's not about the quantity of regulation, but the type of
regulation. In short he sees two types: 1\. Regulation that I can read and now
I know what to do and not do. 2\. Regulation that requires me to consult an
expert and apply to some government agency who then tells me if I am allowed
to do something or not.

Obviously the second type is the bad one. You cannot properly plan. There
often is no guaranteed time frame, you have no proper recourse and ideally
have some kind of fixer. This type of regulation also tends to give large
businesses an edge over small ones, creates large overhead for the system as a
whole and ultimately hurts innovation.

I think it would help any discussion about regulation to carefully
differentiate between these two types of regulation.

~~~
jomamaxx
Masses of regulations are complex and require lawyers - even small business
tax is a mess.

~~~
ajmurmann
He makes a ton of suggestions on how to simplify regulations. Among other
things he wants to do taxing corporations altogether because according to him
they eithe avoid them or pass them on anyways.

Listen to it! You will enjoy it!

~~~
danieltillett
The problem with not taxing corporations is the rich can use corporations as a
tax free saving vehicle.

There is a great need to simplify regulations, but until the political system
is reformed it will be hard to prevent the political class conspiring with
vested interests to create regulations. Fix the cause not the symptoms.

~~~
coredog64
> The problem with not taxing corporations is the rich can use corporations as
> a tax free saving vehicle.

I think this is more myth than reality. The IRS has a very good nose for
finding people who are attempting this particular tax avoidance strategy.

~~~
danieltillett
Yes they do now, but if you stopped taxing corporations then it would be a lot
harder.

The system we use in Australia is quite good. Corporations pay income tax, but
any tax paid is passed onto the shareholders in the form of a tax credit
(franking credits).

------
walshemj
Uber et all are not "Independent contactors" and for those of us that could
fall into that status" the tax authorities don't like the idea that non
lawyers/doctors (aka greasy engineers) get the advantages of self employment.

