
California bill could force Uber and Lyft to reclassify drivers as employees - T-A
https://www.businessinsider.com/uber-lyft-fighting-ab5-california-senate-set-to-vote-dynamex-2019-9
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mrosett
<unpopular opinion>

I worry that this bill will ultimately eliminate a unique niche in the job
market. I have several family members who drive for Uber/Lyft and consider it
a great way to make money. One of the aspects they like is how much
independence they have: no manager, no set schedule, no need to work the same
number of hours each week or each day. The pay is fine - not great - but the
flexibility makes working for Uber much more appealing than e.g. working as a
receptionist or taking another service job. Many drivers I've ridden with seem
to value that component as well. If Uber switches to treating drivers as
employees (which makes each driver have higher overhead) then they'll probably
switch to.... well, treating them as employees: stricter rules about when you
have to drive, how much you have to drive, and so on. The tradeoff will
benefit some employees - basically those who are trying to make Uber into a
full-time job - at the expense of others.

~~~
qtplatypus
Why would having a person classified as an employee turn it into a full time
job? Like why would they hire managers and set schedules when it gives no
benifit to Uber?

To me this closes a loophole. As you say these people drive for Uber, uber is
doing the employing. This is not like if a contracted a builder to renovate my
kitchen. That is the class of employment that are real contractors.

~~~
briandear
Uber is a marketing company. The Uber business model is nearly identical to
the taxi business model it is replacing — except taxi drivers don’t have to
lease or rent cars from Uber as they did with the taxi company. You also don’t
have mobster-controlled “Medallions” as a means to artificially constrict
supply.

I think a lot of people have no idea how the old taxi business worked.. it was
far worse than Uber — it was more of a monopoly as well because you were
required to drive a specifically-branded car purchased or leased from the taxi
company. You couldn’t use the same car to drive for other companies. Damage
had to be repaired at the specifically designated repair shop (owned by the
taxi company of course,) and you had to pay for insurance from the specific
taxi company “vendor” (also owned by the taxi company.)

And.. you were an independent contractor; you were the customer of the taxi
company. You got to pay your own self-employment taxes, but your own health
insurance and if you got sick, you still had to pay the taxi company the lease
fee for the car. While you did collect your own cash fares, you had to pay a
very high percentage (8-10%) on credit card fares and you were paid those
fares weekly. If you lost the charge slip paper, you lost the fare, however
the taxi company still had the swipe, so they’d still collect the money but
just not pay any of it to you.

The taxi business is and was an incredibly corrupt and nasty business. There
is a reason that job was popular with fresh off the boat immigrants — anyone
who had done the job more than a minute knew how much of a rip-off it was
(unless you were willing to sleep in your car and drive 16+ hour days in order
to save up money to start your own limo business or convenience store which
was a common goal among many of the south Asian immigrants I drove with.)

The kids hating on Uber really have no idea what they are talking about.
Unless someone has actually worked in the towing, taxi, limousine, hot shot,
or trucking businesses (all extremely nasty and tough businesses,) it’s pretty
hard to have much credibility when complaining about the gig economy, Uber,
etc. Uber/Lift/Doordash is a dream compared to the bad old days. You can have
one car and pretty much drive and deliver as much as you want and make money
proportional to how hard you are willing to work. It isn’t easy-street, but
nobody plans on being a career Uber driver — it’s a stopgap, a transition, or
a supplement. Anyone thinking that this is some kind of full time career is
either of low-IQ and has no prospects of doing anything better, or just lacks
ambition. Being a McDonald’s cashier ought not be a career either, but there
are people working in that position for 15+ years. At that point, that failure
is on them. We shouldn’t be optimizing society around making low wage service
jobs into some kind of permanent career. Even a high school kid gets promoted
at McDonalds if they stick around for more than a few minutes, yet there are
literally people who have been making minimum wage for years. At some point
people ought to be treated as adults and not like exploited children. A person
_chooses_ to drive for Uber/a taxi/whatever. They aren’t Shanghaied or
otherwise indentured. If people don’t want to do those jobs, then that ought
to motivate them to find something slightly better — or start at the bottom
washing dishes somewhere and move up through a restaurant’s ranks. But that
requires hard work and dedication— traits in very short supply in an era where
people that literally sweep floors think that work is worth $15 per hour.

Source: I drove for Yellow Cab Houston in the summer of 2001. I also drove hot
shot deliveries in Houston in 2008 and a good friend of mine owned a bike
courier business. I also worked a string of shitty restaurant and bar jobs,
lived on the street a short time and now I work as a software engineering
project manager for one of those FANG companies.

~~~
michaelmrose
>...traits in very short supply in an era where people that literally sweep
floors think that work is worth $15 per hour.

The move to increase the minimum wage to 15 is presented by the uninformed as
a cash grab by the lazy. The truth is 15 dollars just isn't much nowadays. The
old often have a hard time forgetting about the nominal value and considering
the actual buying power.

Lets ignore the fact that minimum wage workers can't actually buy houses and
compare the minimum wage of $1 in 1960 to the cost of a median house at
11,900. So 11,900 hours of work 1.35 years of labor hours worth.

In 2018 it was 210k divided by 7.25 is 3.3 years of labor hours. Divide by 10
and its 2.4 years of labor hours. Divide by 15 and its 1.6 years worth of
labor hours.

Alternatively we could discuss tuition at a 4 year public university where our
1965 counterpart now making 1.25 could expect to pay 240 labor hours for a
year of instruction vs 1380 hours to pay the 10k it costs now at 7.25 1000 at
10 or 667.

How about a loaf of bread 22c or 13 minutes of work at 1960s $1. Now 2.50 vs
7.25 about 21 minutes of work at 10 its 15 minutes at 15 its now 10 minutes.

In real terms people wanting $15 to sweep the floor want $15 to sweep the
floor because that is what it now costs to have a barely acceptable life. Not
a good or a healthy one but one which is spent sleeping indoors and eating
decent food.

In fact the fact is those agitating hardest for a better minimum wage are
overwhelmingly have a disproportionate share of the jobs AND above average
rent.

Essentially if this minimum wage looks too high you might just be too old.

Not everyone has the same options as everyone else. Some of us are just stuck
trying to get by.

~~~
stochastic_monk
More concisely, while wages have stagnated wrt inflation, they’ve fallen
significantly once the consumer price index (CPI) is accounted for.

~~~
michaelmrose
The CPI doesn't even take into account the cost of health care and housing you
know what people often spend most of their money on.

------
d1zzy
There are many serious issues around how Lyft/Uber (and many others) treat
their "employees" and I'm happy if things are moving in a direction to help
them out. However, as a customer, Lyft/Uber has been HUGELY better than any
previous taxi experience, in the San Francisco Bay Area.

Before Uber was a thing, I tried getting a taxi in the Bay Area at 3 different
times. Months apart. Calling different companies (that I found by searching
"Bay Area taxi"). In ALL cases there were issues, huge issues:

* the first one I called said he'll be there in 20 minutes(!!) but 30 minutes later he didn't show nor called. I call back and someone else answers and says they'll be there in 20 minutes, ofc 30 minutes later nobody showed up...

* the second time I needed a taxi I called, said they will be there in 30 minutes and never showed or answered any subsequent calls

* third time I think someone DID show up, after about 30 minutes (15 minutes later than they said they will)

Absolutely horrible, unacceptable experience. With Lyft/Uber I never had any
such issues and I took many more rides with those. Not to mention it was much
cheaper (the latter likely has something to do with the main complains being
raised now by their employees).

Look, I fully support cab riders to get a living wage, even if that means
significantly increasing my fare, but I do hope the new legislation doesn't
result in going back to the pre-Lyft/Uber taxi experience because that was
just insanely bad. Also, at least some of the drivers I talked to were doing
this as an aside so it makes total sense for them to be contractors (one guy
was temporarily in the Bay Area doing some construction work so he was Uber-
ing on the side for extra money) so that is another issue that needs to be
considered in legislation to still enable this type of use case.

~~~
dreamcompiler
Before Uber and Lyft cabs were terrible everywhere except maybe London and
Tokyo. Competition was sorely needed in this industry. I hope the competition
continues even if the prices go up.

~~~
pmart123
London cabs were brutally expensive though. The minivan service was typically
very good compared to other cities.

------
post_break
Personally I'd rather them devastate Airbnb. Uber and Lyft haven't caused the
car market to price people out of corollas and camrys. I know it's a tongue in
cheek comment but driving for uber or lyft is a choice, the housing market
getting turned into hotel development isn't for a lot of people.

~~~
conanbatt
What's driving housing prices up are bad city/state level policies, not
airbnb. Airbnb makes housing more effective, by housing more people for longer
periods of time.

Housing utilization goes up with Airbnb, not down.

~~~
Skunkleton
I have left my house empty every time I have stayed in an AirBnB. Anecdotal?
Sure, but I am not the only one.

~~~
conanbatt
But the other side hasn't, so in your case its 50% increase in utilization
(1/2 parties uses Airbnb). If you had use Airbnb, it would have been 2 more
houses per 2 vacation trips.

~~~
Skunkleton
Most of the time I end up in a spare room, or in a property specially bought
to rent out as an AirBnB. Neither of these help with housing shortages.

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noego
> _ride-hailing companies would be responsible for half (6.2%) of employees '
> Social Security and Medicare (1.45%) tax, as well as the costs for
> administering any employee benefits (e.g., health care and 401ks)_

The changes described in the bill seem surprisingly minor. As long as Uber
isn't expected to pay its drivers a fixed salary, or control their work hours,
I don't see how "better benefits" will fundamentally destroy their business
model. It is fundamentally no different than raising the rates paid by riders,
and passing those increased rates along to drivers in the form of better
benefits.

As long as it is applied consistently to both Uber and Lyft, neither of them
will lose market share. Ridership will decline incrementally when rates are
raised incrementally, but the majority of Uber riders aren't going to take
buses instead just because prices went up 15%.

I've long been a fan of the gig economy and of companies like Uber/Lyft, but
the new regulations described above sound pretty reasonable. Saying they will
devastate Uber's business model sounds like clickbait on the part of BI, and
FUD on the part of Uber.

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wetpaws
Fun fact - Austin is a peculiar example of a city that banned uber and
basically created a black market for makeshift ridesharing service based on
facebook groups, google docs, craigslist adds and only god knows what else.

People think that once uber is dead ridesharing will disappear, but reality
shows that once idea is in the wild it's almost impossible to stop it.

~~~
api
This is particularly the case when taxis are so painfully awful. Every time I
ride one I vow "never again." Its always a horrible experience and costs 2X as
much as anything else.

~~~
notfromhere
Taxis cost as much as uber's if you're traveling in a major city under about
1.5 miles. I prefer taxi's to uber's if im next to a hotspot and you can just
give directions by cross-street.

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HALtheWise
Does anyone know how this works for drivers that today drive for both Uber and
Lyft at the same time? I see many cars with both stickers on the windshield,
and it seems like a very powerful force preventing one or the other from
gaining a monopoly status in the city. When a driver using both apps is
waiting for a ride, whose time are they clocking under? Does that create legal
incentives for drivers to drive for one company, and in doing so make it very
hard to sustain minority competitor in the ride sharing space?

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tidenly
Where I live you're automatically granted certain benefits and your company is
required to provide you with health insurance, pension and unemployment
insurance based upon factors like the number of hours you actually work a week
and the like - regardless of what your contact says. Does America have things
like that? Seems like it would include a lot of Uber drivers if they did.

------
berbec
If your business requires a consistently high amount of labor hours worked and
the survival of that business depends on none of those labor hours being
filled by employees, I'm not sure you have a profitable (in any term: short-
to long- inclusive) business model. You have a VC ponzi scheme that inevitably
collapse.

~~~
darkwizard42
What? Have you considered that most hairdressers, plumbers, construction
workers are all contractors that do just this?

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dmode
I am curious about the choice of the word “devastate” in the headline. Should
we have a business where it is only viable when paying workers less than
minimum wages ? Should we have a business where your core work has to be
performed by “contractors” ? That is not a business model at all.

------
CryptoPunk
What supporters of these kind of bills don't understand is that if you
increase the risks and liabilities that companies providing these jobs carry,
they will stop providing these jobs.

Classifying the people working these jobs as employees increases the risks and
liabilities for the platform providers.

And those claiming we'd be better off with those jobs not existing are lying
to the public. It's against the worker's interest to remove any employment (or
self-employment) opportunity from the job marketplace. Now of course they will
accuse opponents of the bill of lying, so the public has to investigate and
decide for itself.

------
vikinghckr
One thing not mentioned here is how it will impact customers, and who these
customers are. These regulations will result in higher fares for customers and
those customers overwhelmingly tend to be people who can't afford to buy and
maintain a car. Affluent people already have cars and those on the fence will
choose to drive more if fares go up. So the main impact would be on people in
the service industry who rely on Uber/Lyft for their daily commutes.

~~~
jerrre
How can owning a car be more expensive than having someone else own a car and
paying them for it, while also paying them to drive it, while also the app
gets a share? Is the base cost of owning a car so high? Do the apps subsidize
so much?

~~~
vikinghckr
Well, if you own a car just for commute, it's sitting idle for 23 hours out of
24. Whereas the Uber/Lyft driver is using it for 8-12 hours a day, and the
overall ownership/maintenance cost is not linear with usage. On top of that,
add UberPool, and the cost for ride hailing goes even lower. So essentially,
ride hailing can be thought of as a form of public transport.

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username90
The main point of driving for Uber is that you can get a job without a job
interview. I don't know of many other jobs where you can do that. Will
classifying them as employees force Uber to vet their drivers more with things
like interviews to offset the extra overhead of employee classification?

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jpster
Seems Part C would be beneficial to professional drivers and serve to lock
non-pros out. Do I have the right interpretation?

------
hndamien
Why is there no supply side software for Uber drivers like in ad tech?

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gok
Do they seriously think this will lead to anything except Uber and Lyft
leaving California, putting hundreds of thousands of drivers out of work?

------
cybersnowflake
What other job can you think of where you can work as much as you want,
anytime you want? Need a break? Click a button anytime you feel like it. Take
as long or as little time as you wish. Want more work? Click a button anytime
you feel like it. No timecards to punch. No boss breathing down your ass for
being late. Its freedom on a level beyond practically any other major job
category you can think of. What more could you ask for?

Sure you're probably not going to be raising a whole family with a white
picket fence on Uber alone. They NEVER claimed you could AFAIK. Its never been
portrayed as anything more than supplemental income. PROTIP: Uber is a job for
the bored college student looking for a little extra spending money not the
main means of survival for a struggling single mother of 10 kids. If you're at
the point where you're relying on CA to force Uber to pay you more so you can
put food on the table or get kidney surgery you're doing it wrong and you have
far bigger problems than a company that has done you no wrong other than
existing and not paying very much.

Now we're going to destroy this unique business model forever because of the
greed of the taxis and people who can't understand that not every single job
on earth is meant to earn you a solid middle class income.

------
mlwhiz
I think this initiative should be welcomed and Indian govt should also do
this.

I was just talking to an Uber driver in India just the other day. In India
Uber got its dominant market share by offering incentives to the drivers when
they joined. Something like if you do n number of trips you will get more
money. The incentives were great and so a lot of people got into driving.
Bought their own cars. Got cars financed from Uber. And then as supply
increased Uber pulled off the incentives with nowhere to go for the drivers.

Now a driver who got 800 rs for an airport trip by himself has to make do with
400 rs in his pocket and Uber gets a 200 rs commision.

------
saimiam
Now for a truly unpopular opinion:

Uber, Lyft (on basically all other on-demand/delivery services) are making
urban living qualitatively far worse on average than the benefit of extra
commerce facilitated by them. They should be banned outright. Give us our
streets back.

Back when ride-share and on-demand/delivery services were not so ubiquitous,
you could either get out and do a chore yourself or do without. For example,
one recent weekend I casually mentioned to my wife that I was craving a
specific sweet popular in my hometown in Eastern India. She surreptitiously
looked up a vendor selling that sweet where I now live and had it delivered. I
loved the gesture but it made me think that without delivery, I wouldn't have
caused a bike messenger to pick up my snack and bring it a few kilometers to
my house. Ergo, no environmental impact, no added traffic, less use of plastic
and packaging, and all manner of downstream impacts attributable to me.

Yes, there are positives - less skilled/more entrepreneurial people are able
to support themselves as drivers, money flows around from consumer to producer
as it should in a healthy economy, my cravings are being met and my wife is
able to exercise her love language, and so on but IMO, the negatives outweigh
the positives.

The extra traffic introduced by delivery is untenable, at least in urban
India. Delivery persons drive often don't obey traffic laws with minimal
consequences. Becoming a driver provides MVE - minimal viable employment - for
someone facing economic pressures so instead of upskilling to earn more, they
stagnate. The environmental impact of delivery alone should make us worry
about their usefulness.

~~~
elindbe2
Seems like you should argue for the outright banning of cars if your argument
is that cars make things too easy and have a negative environmental impact.

