
Uber drivers “employees” for unemployment purposes, NY labor board says - Deinos
https://arstechnica.com/tech-policy/2018/07/uber-drivers-employees-for-unemployment-purposes-ny-labor-board-says/
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hobls
This is important. We’re at risk of the “gig economy” undoing over a century
of hard fought gains in workers rights. Minimum wage laws, unemployment, etc,
these are good things that should be preserved.

Uber has clearly shown that they’re happy to be as exploitative as they’re
allowed to be. (And that even when they’re specifically disallowed they’ll do
everything they can to ignore it and fight the laws.)

~~~
koolba
> This is important. We’re at risk of the “gig economy” undoing over a century
> of hard fought gains in workers rights.

There's definitely work to be done to modernize our employment laws with the
changes to the economy. It's not a clear cut " _Everybody is an employee_ "
though.

If someone drives for Uber for 1-ride per month should Uber pay $1000/mo for
that driver's health insurance? How about 1-ride per week? How about if they
have the app "on" but never accept a ride? Should they be paid for the time
they didn't do any driving?

Clearly the driver isn't an employee in the traditional sense of the word. But
they also aren't a totally independent contractor either as their livelihood
is so closely tied to the platform of a private entity. My gut says to err on
the side of not imposing restrictions or mandates until we figure out the
right balance.

> Minimum wage laws, unemployment, etc, these are good things that should be
> preserved.

Unemployment insurance, as it's implemented in the USA through effectively a
tax collected by a private entity, is a scamola. A better idea would be having
the employee get their own private unemployment insurance. That would also
lead to lower costs of insurance for workers that are less likely to be
discharged.

> Uber has clearly shown that they’re happy to be as exploitative as they’re
> allowed to be. (And that even when they’re specifically disallowed they’ll
> do everything they can to ignore it and fight the laws.)

Nobody is forcing drivers to drive for Uber. An argument may be that they were
enticed with higher rates that were subsequently lowered in some markets.
There's also the argument that a lot of the drivers don't under the total
costs involved (double payroll tax, depreciation, etc) but by itself offering
work in the "gig economy" isn't exploitation. Uber (and Lyft, and ...) should
be lauded for (net) creating thousands of jobs.

~~~
talltimtom
“If someone drives for Uber for 1-ride per month should Uber pay $1000/mo for
that driver's health insurance? How about 1-ride per week?”

Yes! A thousand times yes! Just because Uber is letting everyone i the door
doesn’t mean they should get to dictate new terms of what employment means.
Imagine your employeer removing your healthcare and defending the decision
with the argument “well we’ve now set it up so anyone can just walk in the
door and start working and we’ll pay them per hour worked. I know that’s not
what you are doing but we have to treat everyone the same so we’re also
cutting your pay”.

~~~
malandrew
Your policy would not have the impact of getting Uber to pay the $1000/mo in
unemployment insurance for everyone that wants to drive for them. Instead it
would have the impact of eliminating the offer of jobs to anyone not driving
enough to justify the unemployment insurance.

It's essentially a job destroying policy in a time when we see increasing
automation and therefore very counterproductive.

~~~
s73v3r_
I flat out do not buy this argument. Business is always going to complain
about any kind of worker's rights, claiming they'll "kill jobs". Given the
record low unemployment rate, I do not believe them.

~~~
tomnipotent
No, it's Basic Business 101. It's called managing cash flow and a balance
sheet, and this sort of arrangement would drain them of all their cash without
any benefit to the company. A company with no cash employs 0 people and then
nobody wins.

~~~
s73v3r_
I don't buy this argument. Of course a company doesn't want to spend money on
their employees, and so they will do whatever they can to avoid it. That
doesn't mean they should be able to get away with it. This kind of argument,
that regulations "kill jobs" is not supported by reality, and is just them
threatening to take their ball and go home if they don't get their way, like
the spoiled child on the playground.

~~~
tomnipotent
It's literally financially untenable to have more costs for employees than the
revenue they bring in. This is basic math and no amount of "I don't buy this"
is going to change that reality.

~~~
s73v3r_
And the part I don't buy is that this is the case. I don't buy that Uber can't
afford to treat their employees like people, and if they actually can't, then
they need to go out of business so companies that can are able to grow.

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peacetreefrog
Deciding to drive for Uber is a mutually beneficial transaction between
consenting adults (or an adult and a company). If the driver wasn't
benefiting, they'd do something else.

Well-intentioned (by some people, prob most people on HN) and not so well-
intentioned (anti-competitive lobbying by taxis) efforts to make the
relationship less "exploitative" are likely doing more harm than good.

What happens when the gov mandates all these extra benefits? "Drivers WILL
earn more money!" The answer is some combination of: Uber becomes costlier,
people take fewer rides (or growth is slower than it should be), and some
people who are perfectly willing and able to drive right now are unable to do
so. Or (if demand is more inelastic) a bunch of new drivers decide the new
benefits make it worth entering the market, and not everyone who wants to
drive can/people sit around idle, etc.

Either way, you're hurting consumers and many existing drivers.

~~~
britch
Edit: Yeah I'm off the mark, median pay is more like 10-8. I gotta read more
closely

I think the "mutually beneficial" is somewhat debatable. If you take in to
account the cost of upkeep on the vehicle from increased driving some drivers
barely break even or even lose money driving for uber. On median a driver
makes something like 3 dollars an hour
[https://www.theguardian.com/technology/2018/mar/01/uber-
lyft...](https://www.theguardian.com/technology/2018/mar/01/uber-lyft-driver-
wages-median-report)

~~~
peacetreefrog
It has to be mutually beneficial, otherwise drivers would be doing something
else. We don't have slavery in this country anymore.

One of the biggest benefits is working whenever you want. A paper by the NBER
found drivers get twice the consumer (or producer in this case I guess)
surplus they would from less flexible arraignments:

[http://www.nber.org/papers/w23296](http://www.nber.org/papers/w23296)

~~~
britch
>It has to be mutually beneficial, otherwise drivers would be doing something
else. We don't have slavery in this country anymore.

I want to be clear here, and I'd appreciate it if you did not put words in my
mouth. I never claimed rideshare drivers were slaves. I was questioning the
degree to which the arrangement was beneficial to both parties.

If everyone was perfectly rational, I would agree with you. But many of these
additional costs are hidden. Uber advertises ~$8 an hour, which sounds pretty
good. But they don't mention the wear and tear on the car, the increased cost
of mechanics, etc. I'm not convinced most drivers are aware of that or look
into it.

Clearly it is somewhat beneficial for the drivers. $4 an hour is better than
$0 an hour, but I still think it's worth pointing out it's not even minimum
wage in the US.

~~~
peacetreefrog
No worries, not suggesting you think it's slavery. I think that would be a
pretty extreme position to take.

I do agree people aren't always rational, and there are certainly other costs
in terms of wear and tear etc. But I think people are (1) relatively more
rational when it comes to money, (2) get more rational with experience (i.e.
as they observe having to take their cars in more after driving a while).

Uber has > 160k active drivers, I think it's very paternalistic to suggest
they aren't rational enough to realize how screwed they're getting and think
gov or some other third party needs to step in. I think it should also give us
pause that many of the loudest voices saying these things (especially locally)
are associated with the taxi industry.

These researchers say it's $8.55. Some people argue it should be more (like
$13), but -- like I said in another comment -- a job is a bundle of things
including pay but also: flexibility, liking who you work with, feeling like
you accomplished something, etc. Uber provides very high flexibility
(literally can almost work on demand), which economists have estimated gives
drivers twice the surplus over similar paying, less flexible options.

~~~
britch
I agree with your numbers after doing some more reading, i was definitely off
the mark going in.

I would point to the high turnover rate as an indication that people do
realize that maybe they aren't making what they thought they would when they
started. I think people catch on, but that doesn't stop others from signing up
without realizing it. However I'm not convinced the drivers are being
exploited to the degree I originally claimed.

You make good points and have given me much to consider

------
cm2012
And yet Taxis weren't for 100 years? Taxi drivers were even more restricted
and were still not employees.

~~~
ceejayoz
A neighbor of mine is a taxi driver. I can call the number on their cab (or
their business card) and get them, specifically. I can also hail them if I see
them on the street.

That seems like a far more legitimate "independent contractor" relationship
than the one Uber sets up between drivers and riders.

~~~
cm2012
You can do the same thing with Uber. The driver can just turn off the app and
pick you up if you're nearby. Realistically it won't happen often, for the
same reason that people didn't keep folders full of yellow cab business cards.

~~~
dwild
Well they probably can't because of the Taxi cartel. In most place, they need
to be a licensed Taxi driver in a licensed Taxi car to be able to be hailed.

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cwilkes
I can understand filing for benefits if you were terminated by Uber (first one
was for low ratings) but one of the plaintiffs quit because of low pay.
Quitting for non egregious reasons (bad work environment, harassment, etc) is
usually a blocker for filing for claims.

~~~
ceejayoz
A significant drop in wages is generally considered "constructive dismissal"
for unemployment purposes.

~~~
chimeracoder
> A significant drop in wages is generally considered "constructive dismissal"
> for unemployment purposes.

A significant drop in wages _can_ be considered constructive dismissal, but
it's generally difficult to prove without explicit evidence of the intention
behind it. And in this case, it's pretty hard to make the argument that it
constitutes constructive dismissal, since there is zero evidence that Uber
acted in a way to target the driver by intentionally cutting their earnings
specifically, _whether or not_ those actions were intended to target or
retaliate against the driver.

~~~
ceejayoz
My understanding is that wages are a bit of a special case.

You'd have to demonstrate intent/targeting for something like "they made me
shovel elephant poop instead of my usual tasks".

A significant wage drop is inherently constructive dismissal as wage/salary
tends to be most people's single most important criteria for accepting the
job.

~~~
chimeracoder
> A significant wage drop is inherently constructive dismissal as wage/salary
> tends to be most people's single most important criteria for accepting the
> job.

For a job in which pay directly correlates to job performance (such as tipped
labor, or number of passengers driven, as in this case), you would have to
demonstrate a number of things, including:

(a) the low pay represented a change (if the pay was consistently and
comparably low since the beginning, nothing was constructed)

(b) the change in pay did not stem from a change in performance or the
drivers' choice of hours worked

In this case, it's not clear that (a) applies, and it's almost certain that
(b) does not, because there's no evidence that Uber made decisions that
changed the take-home pay of the driver directly (such as reducing the
driver's share, except insofar as any initial signup promotions expired, which
would not constitute constructive dismissal).

~~~
ceejayoz
Uber has cut compensation a number of times.
[https://www.thedailybeast.com/uber-cuts-pricesand-
kneecaps-d...](https://www.thedailybeast.com/uber-cuts-pricesand-kneecaps-
drivers)

> A crowd of 600 drivers gathered outside the Uber office in Long Island City,
> Queens, to protest a 15 percent reduction in fares last month, which also
> means 15 percent lower wages. That pay cut is on top of Uber’s 20 percent
> slashing of fares in 2014. All things being equal, drivers who began less
> than two years ago have seen their pay tumble a whopping 35 percent.

~~~
chimeracoder
None of that constitutes constructive dismissal, because it doesn't constitute
discrimination against the complainant (quite the opposite, in fact).

~~~
ceejayoz
I think you're mixing up concepts. Discrimination is not required for
constructive dismissal. A 35% wage cut is de-factor "you're fired, but we'll
re-hire you at this lower rate" and is likely to make you eligible for
unemployment as a result, as it's clearly a substantial modification to the
employment contract between the two parties.

~~~
chimeracoder
> A 35% wage cut is de-factor "you're fired, but we'll re-hire you at this
> lower rate" and is likely to make you eligible for unemployment as a result,
> as it's clearly a substantial modification to the employment contract
> between the two parties.

It's not so cut-and-dry, and in fact, there's already case law in New York
holding that pay cuts of about one-third are not inherently constructive
dismissal, and that it depends on the particulars of the individual's case.

With that on top of everything else, it's a _really_ far stretch to read the
one-line description from the article that the driver quit because of "low
pay" and infer that constructive dismissal is applicable here.

~~~
ceejayoz
If you're still talking about "I was discriminated against and want my job
back and back pay as recompense", sure.

If you want unemployment benefits, the question is "will the state labor
department accept it?" There's going to be a lower threshold there.

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SamReidHughes
How does this work if they drive for both Uber and Lyft?

~~~
e1ven
I would presume it would work the same as if you had two other part-time jobs,
such as working at both Walmart and Best Buy.

~~~
thanatropism
It's different though. Part-time retail workers pledge their loyalty to
Walmart from 9-13 and to Best Buy from 18-22. They're not instantly choosing
which boss is paying better for the next 15 mins. You actually have to get
someone to cover your shift if you need a mental health break or something --
otherwise, your relationship with Bestmart is strained and you might be out of
work.

For all of the phoniness behind phrases like "ride-sharing" and "gig economy",
workers have never had a more horizontal relationship with their bosses --
except, perhaps, in higher pay-grade service sectors where "bosses" are
referred to as "clients".

~~~
TillE
> Part-time retail workers pledge their loyalty to Walmart from 9-13 and to
> Best Buy from 18-22.

It's extremely common to not have fixed shifts. You ask for hours, and you get
what you get. It's really not that different from accepting individual driving
jobs.

~~~
woolvalley
There is also a dynamic where you are assigned shifts and if you don't make it
your fired. Gets pretty dicy when you have two of them.

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pitaj
This is absolutely ridiculous and just more cronyism on behalf of the taxi
companies. Uber and Lyft drivers are definitively independent contractors.
There is no legitimate argument otherwise, and pretending like they are is
just showing the bias of these bureaucrats.

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YoyoyoPCP
I find it so funny when the state/government requires businesses to compensate
people in some minimal way. If you think people need X dollars or Y benefits
to live a comfortable life, why don't _you_ give it to them?

/rant

~~~
ball_of_lint
They do it precisely because of people who share that idea with you. Minimum
wage may increase unemployment a small amount but the positive effects are
ensuring that those people who have the lowest paying jobs are able to afford
to live. Similarly with unemployment and welfare. For many people losing their
jobs or taking a pay cut would mean becoming homeless or being unable to feed
themselves.

If you think that there are enough charitable people in the world to
voluntarily sustain you through the end of your natural life, I invite you to
try it out.

~~~
YoyoyoPCP
Apologies, I must have worded that too vaguely. I meant the state should
minimally pay people the amount they believe to be a livable wage.

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potlee
How is this not going to result in even lower take home pay for drivers? Uber
does not have the margins to absorb the cost. They will certainly pass it on
the drivers. They could increase pricing, but that dampens demand, which given
how many drivers are out there, could be really bad for driver utilization and
hourly earnings.

------
rayvd
Score one for Big Taxi!

