
A court ruling that could blow up Uber's business model - jackgavigan
http://www.latimes.com/business/hiltzik/la-fi-mh-uber-s-business-model-20150902-column.html
======
1024core
I admittedly don't take Uber too often. I have taken it maybe 10 times in my
life. After the first time the "employee -vs- contractor" controversy broke
out, I made it a point to ask the drivers: do you like Uber? What do you like
about it? And to a man (all were men) they said they loved the fact that they
could set their own hours, take off for something else whenever they wanted,
etc.

Also, given the presence of cab companies, Lyft, etc., why does everyone think
that Uber is "exploiting" the drivers?

~~~
henrikschroder
I saw an article a few days ago that I just can't seem to find again, that
pointed out that many low-wage employers like Wal-Mart or Starbucks use
sophisticated scheduling software to schedule a large amount of part-time
workers such that they never work more than 29 hours a week (which would make
them entitled to full-stime benefits), while making sure that staffing meets
demand. Schedule changes can be very short notice, and if you as an employee
can't bend yourself to fit the the company's demands, they'll simply fire you.

In contrast, the Uber model also mobilizes a large amount of low-wage workers,
but never _forces_ people to work when they don't want to, they simply use
market incentives to make sure supply and demand gets balanced.

And people who are in these jobs _vastly_ prefer the Uber model, because they
are real people with real schedules, and working when it suits them best gives
them agency and control over their lives, which is worth much, much, more than
an increase in minimum wage.

~~~
henrikschroder
Found it: [https://medium.com/the-wtf-economy/workers-in-a-world-of-
con...](https://medium.com/the-wtf-economy/workers-in-a-world-of-continuous-
partial-employment-4d7b53f18f96)

This must have been posted here?

~~~
henrikschroder
Indeed:
[https://news.ycombinator.com/item?id=10147912](https://news.ycombinator.com/item?id=10147912)

------
noarchy
On a related note, how many IT workers here are working as "independent
contractors", when they'd probably be considered employees if anyone took a
close look? It seems to be very common where I am (Canada), to the extent that
recruiters and the like seem to think nothing of it. You can be working side-
by-side, with full-time employees, working the same hours, and answering to
the same supervisor, but technically be working for yourself.

~~~
jdietrich
In the UK, contracting has some very attractive tax implications for highly-
paid workers. Our tax service has created a complex set of rules that
distinguish a contractor from an employee.

[https://en.wikipedia.org/wiki/IR35](https://en.wikipedia.org/wiki/IR35)

------
jwatte
If I wanted to build a legitimate middle man platform - solve
contractor/customer match up, and intermediate payments, how should that
service be built? Under the theory of this lawsuit, can such a service be
built at all, or would it automatically look like an employer?

~~~
rayiner
It looks more like EBay and less like Uber. The more you exercise control over
prices, quality, and service, the more you offer a service instead of just
being a middleman.

I take Uber several times a week. I think of it as the service. E.g. when the
driver takes a shitty route, it's never been the driver's fault. They're just
blindly follow the company-provided navigation. So I never leave a less than
five star review and whenever I file a request for rate adjustment (maybe once
a month), I take care to point out I'm blaming the app, not the driver.

~~~
tedunangst
Solution for Uber: allow drivers to set prices. I wonder how long that would
last.

------
aaroninsf
I find it entertaining how people seem to have a hard time separating their
personal satisfaction, as customers, from a defense of a business model which
achieves much of its 'efficiency' by sidestepping the hard-won obligations
employers have to their employees.

Calling someone a contractor, and pointing at 'work on demand' as if it were a
silver bullet that slays those obligations, don't make it so.

------
jhartist
The endgame for Uber is replacing their drivers with self-driving cars. The
legal distinction of employee/contractor can only matter for what, 15-20 years
until that happens?

~~~
stvswn
Exactly. The real minimum wage will always be $0, and we will only hasten the
moment when self-driving cars are worthwhile investments if we continue to
insist that labor should cost more.

~~~
0_00_0
Good.

------
pdq
Here is what I don't understand. Uber is not supplying the cars -- the drivers
are.

If you look at virtually any other "employee" field (trucking, taxis, etc),
the company owns and maintains the fleet of vehicles, and the employees
operate them.

Based on this, Uber drivers look more like independent contractors than
employees.

~~~
dakidd28
the vehicle could be considered a tool such as a hammer for a carpenter or a
pipe wrench for a plumber

~~~
douche
Unless you are an independent contractor, your employer should be providing
your tools, if for no other reason than liability, should the employee be
injured using substandard tools, which the employer would then be on the hook
for.

~~~
tedunangst
But you don't stop being an employee just because you don't get those things.
If I work at Google and one day they take away my work computer, I don't
magically become a contractor just like that.

------
oconnore
from
[http://www.dir.ca.gov/dlse/faq_independentcontractor.htm](http://www.dir.ca.gov/dlse/faq_independentcontractor.htm)
: "an employer-employee relationship will be found if (1) the principal
retains pervasive control over the operation as a whole, (2) the worker’s
duties are an integral part of the operation, and (3) the nature of the work
makes detailed control unnecessary"

1: Yes. They run the app, jobs come in through the app, progress is tracked
through the app, payment is made through the app.

2: Yes. No drivers, no Uber.

3: Yes. Did you get from A -> B, and was the customer satisfied?

------
harryh
Here's the thing that never seems to get mentioned in these stories. Aren't
almost all yellow cab drivers contractors? And hasn't it been that way for
decades? Isn't it kind of weird that Uber comes along and all of a sudden the
rules (might) change?

------
douche
I welcome any expansion of Uber service and availability, and oppose anything
that supports the entrenched and terrible existing taxi services. I've only
taken a handful of Ubers, but the quality of service is far higher. Moreover,
it's the convenience that really wins out. Being able to see the GPS locations
and ETA of an incoming Uber is far superior than calling a taxi and hoping
they show up sometime close to when the dispatcher said they would. Not to
mention that it's a completely friction-free experience - the driver arrives,
you jump in, chit-chat a little on the way (Uber drivers are, in my
experience, far more pleasant human beings that taxi drivers...), then you
jump out, and they charge your card. No frigging around with change, or having
to make sure you hit an ATM before you call the cab so you have cash on hand,
or getting the evil eye because you didn't volunteer the unstated but expected
tip on top of the exorbitant fare.

Taxi companies can die in a fire, for all I care. The last trip I took, I had
to get about 10 miles from a train station to where I was going. The first
leg, I caught an Uber, and it cost me about $13, in a clean vehicle, with a
very pleasant driver. The way back, I had to take a taxi, and I spent $40 to
ride with a driver who was kind of a dink, swerved all over the road, and
drove a dirty, rattle-trap old Crown Vic. Uber uber alles.

~~~
chrismcb
Uber is a taxi company... So it can die in a fire?

------
ClintFix
"Uber almost certainly can thrive even if it pays its drivers more, and even
if it picks up their expenses and pays them benefits like a genuine employer.
It won't make as much money per trip, but its service may become more reliable
instead, which could expand its market."

Well, if that's the case then forcing the change need not happen. If there is
a financial or competitive benefit (better service and more reliable) to the
company, it will either make the change voluntarily or a competitor will
figure that out and eventually grow larger. If not, then your assumption is
wrong.

Oh - nobody forces anyone to work with uber. They know what they're signing up
for. They're not entitled to anything from uber except for what they agreed
upon in the contract to work.

~~~
awa
"Oh - nobody forces anyone to work with uber. They know what they're signing
up for. They're not entitled to anything from uber except for what they agreed
upon in the contract to work."

You can make the same argument against minimum wage, or any other abusive
contracts (payday/predatory loans). A lot of time one of the party signing the
contract has no other option depending on his situation, that doesn't mean a
company/individual should be able to take advantage of his situation and get
him in a tough bargain.

Also, not all contract signings are created equal, that's how a lot of
companies sneak no-compete's which have been deemed unenforceable many times.

~~~
dragonwriter
> You can make the same argument against minimum wage, or any other abusive
> contracts (payday/predatory loans).

The people who make the argument against labor laws like the ones at issue
with Uber often _do_ make the same argument against minimum wage laws, or
other laws restricting "abusive" contracts.

~~~
masterleep
Indeed they do, and they are right to do so.

~~~
hwstar
Employers have too much power in the asymmetrical employer/employee
relationship. In order to counteract this and level the playing field, there
must be minimum labor standards enforced by the state.

I know that a lot of right-leaning Americans think that government should stay
out of private contracts, but they'd be dead wrong. If the employee was just
as powerful as the employer, then the situation would be different.

~~~
stvswn
I think you're giving yourself the ability to reason along the spectrum, but
assuming that more libertarian leaning people are incapable of admitting that
some standards are OK. Of course some standards are OK, it's these standards
that we object to. Workers need to be protected from unsafe working
conditions, sure. Minimum standards aside, there's no reason to cast Uber vs.
drivers as a Marxist class struggle when the Uber drivers themselves seem to
be satisfied with the arrangement.

~~~
dragonwriter
> Minimum standards aside, there's no reason to cast Uber vs. drivers as a
> Marxist class struggle when the Uber drivers themselves seem to be satisfied
> with the arrangement.

(1) The existence of the lawsuit means that the generalization serving as the
explicit premise here is incorrect.

(2) Without defending Marxist class struggle as a valid or correct framework
for addressing reality, the idea that the drivers seem generally satisfied
with the arrangement is relevant to whether characterizing it as a Marxist
class struggle is necessary may reveal a poor understanding of the entire idea
of Marxist class struggle and particularly the role of class consciousness
within such a struggle.

------
AndyNemmity
I'm interested in how this could affect other business models that use
independent contractors due to less responsibility.

Even more, what are all the benefits a company receives by using independent
contractors vs. employees? Does anyone know that can list them? I realized I
am not aware, I've been a salaried employee for 15 years.

~~~
nness
It going to vary from state to state, and country to country, but usually it's
a combination of reduced labor rights and decreased liability. Contractors
often don't have union or collective bargaining rights, they aren't entitled
to healthcare or superannuation (for countries with such a thing), and often
have to handle all of their own personal liability insurance and payroll tax.
They also have no sick, parental or annual leave entitlements (again, for
countries with such things), overtime/weekend/award rates or other kinds of
employment protection. The cost of a labor force the size of Uber's would be
huge if they did it on an employee basis.

