
U.S. judge says Uber drivers are not company's employees - Mononokay
https://www.reuters.com/article/us-uber-lawsuit/u-s-judge-says-uber-drivers-are-not-companys-employees-idUSKBN1HJ31I
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aksss
Ride-sharing, like a fry cook, was never meant to be a life’s career ambition.
Jeez people. Folks are complaining that a fry cook can’t afford to buy a house
and an Uber driver doesn’t get a 401(k). Wake up and smell the coffee. Let
these positions continue to function as gap-filling opportunities for the
young and those who need massive flexibility or want side-hustles. We drive up
employment cost massively and wonder why less people get employed. We come up
with creative opportunities like ride-sharing and then try to kneecap it.
Guess what? Driving cars for hire has always been a shit way to make a living,
ask anyone who’s driven cab. Now some dim people are shocked their career
ambitions can’t end with Uber? Let them learn that lesson and move on. We
don’t need to anihilate the awesomeness that is Uber and the benefit it has
for drivers who use it with the proper expectations.

~~~
brightball
What I will never understand is simply this:

1\. A position is advertised as independent contractor

2\. A person chooses to fill the job as an independent contractor while being
compensated EXACTLY as agreed

3\. The person sues to be considered an employee

In situations like that, it’s really difficult for me to side with anyone but
the business.

~~~
Spivak
Because labels don't really matter. If they walk and talk like employees it
doesn't really matter what the company calls them.

Check out Exhibits 2/3 and decide for yourself what side you think Uber
drivers fall on.

[https://www.bls.gov/opub/mlr/2002/01/art1full.pdf](https://www.bls.gov/opub/mlr/2002/01/art1full.pdf)

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ggm
Unsurprising, but luckily only applicable to the US however undoubtedly will
be referred to on other trials in other economies.

We've always had the 'gig' economic problem.

It's maybe me but I don't get it. Treating employment as subcontracting tilts
benefits massively to the employer and reduces unionisation. It's anti worker.
It's retrograde. It's going to increase dependencies on state benefits due to
the lack of savings, depressed lifetime income and absense of 401 self funded
retirement.

~~~
db48x
Being a contractor does not automatically put you in a bad position relative
to your client, because you can negotiate the details of that contract. As a
result it can be both lucrative and extremely rewarding.

Of course I'm sure Uber will simply not agree to any modifications of their
standard contract, but they do have competitors that the drivers could go to.

Oh, and contractors should always set up an individual 401k; it has the same
tax benefits as you'd get as an employee, and then some.

~~~
jon_richards
I think the primary issue is that Uber provides incentives in the contract for
"employee-like" behaviour.

Imagine an extreme case where minimum wage is $8/hour and I'm offering a
contracting job that comes out to $0/hour before incentives. If people work 8
hours a day on the schedule I want and do everything else that employees have
to do, I give them $4/hour. Now most of my workers will be just as good as
employees, but at half minimum wage. They say "I'm working like an employee, I
should get minimum wage." I say "They have all the freedom a contractor has,
they aren't employees."

Sure, in this scenario there are still people happy to work an hour here and
there and earn the $2/hour or whatever it comes out to, but this isn't about
whether those people exist or in what proportion. This is about the people who
feel compelled by Uber's incentives to treat themselves as employees of Uber
without receiving the legally mandated protections and benefits afforded to
employees.

This also isn't about supply/demand, the free market, and whether people want
to work for that $4/hour or not. The fact that we have minimum wage in the
first place is proof that the country has made a decision to not leave
employment terms to natural equilibria.

~~~
roenxi
The situation is an interesting case of economic realities quietly trumping
political ideology.

Uber thinks they are offering a reasonable deal. The people doing the work
obviously think that it is the best deal they have available. The government
is going to need to stamp down pretty heavily to stop that, because the actors
in this situation have no particular incentive to change anything.

~~~
sokoloff
In general, I don't think I want the government to be in the business of
stamping out the best deal that individuals have available.

I know in this case, the assumption is that the deal offered will magically
get substantially better. I don't think that generally works nearly as well as
the abstract arguers argue.

~~~
Slansitartop
> In general, I don't think I want the government to be in the business of
> stamping out the best deal that individuals have available.

That's interesting framing. What if the "best deal that individuals have
available" is objectively bad for them, exploitative, or one more step down in
a "race to the bottom"?

IIRC, _The Grapes of Wrath_ described several "best deal[s] that individuals
[had] available."

~~~
sokoloff
I'd prefer that, to the extent that they get involved, government work to
provide better options rather than attempt to legislate away (what some people
judge to be) bad options. [1]

An analogy that I think fits is the availability of abortions. For an
individual pregnant woman who wishes to terminate the pregnancy, many people
[likely including her] would view the option of having an abortion as an
objectively bad yet best deal available outcome. It would be preferable to a
wide swath of people's opinion had she never become pregnant in the first
place, via education, wider availability of free/trivial cost birth control,
whatever. In aggregate, the world would be a better place if the rate of
abortion was reduced via these means (less physical and emotional stress,
etc).

That doesn't extend to banning abortions, for that doesn't help the particular
individual woman.

[1] - It is chiefly for this reason that I prefer something like a UBI over a
minimum wage law. If someone's labor is only able to create $4 of value per
hour, I would rather let them choose to do that than not be allowed or be
forced to do that only as an entrepreneur. To reduce the amount of desperation
that might "force" someone to do that, UBI takes some of the economic pressure
off.

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the_mitsuhiko
> The drivers work when they want to and are free to nap, run personal
> errands, or smoke cigarettes in between rides, Baylson said.

Interesting. If that makes you not an employee then half the flexible working
time companies don't have employees :)

~~~
chrischen
What are flexible working time companies?

~~~
gizmo686
You don't have set hours.

In my experience (as a software engineer) most companies take a hybrid
approach, where they define a few core hours a day when you are supposed to be
working (to assure that everyone is in at the same time for at least part of
the day), but let you decide when to put in the majority of your hours.

~~~
walshemj
Which is the basis of all salaried jobs ie you don't have fixed hours of work

~~~
toddBarkus
A salaried structure is not the same thing as unset hours. This is a pretty
standard misconception of people new to the workforce.

~~~
walshemj
It is in the UK and my last contract it explicity said "no fixed hours of
work".

You can't be unprofessional about it and take the piss an not get sacked for
cause but you cant micro mange and try and fire some one for being 5 mins
late.

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tom_mellior
> The case is Razak v. Uber Technologies Inc, U.S. District Court for the
> Eastern District of Pennsylvania, No. 2:16-cv-00573.

I would just like to commend Reuters for giving an explicit, concrete citation
of the case in question.

We should really hold journalists to the minimal standard of actually pointing
us the the primary source. It's not hard; they know what it is they are
referring to. All they need to do is to put it into the article, as was done
here. Good job.

(The same goes not just for "some court has ruled that X", but also for "a new
study found that Y".)

~~~
jiveturkey
I don’t think they leave out citations due to laziness or difficulty. It’s
because the general public glazes over as more of the detail is presented.
Which hurts revenue.

~~~
tom_mellior
The "general public" that reads an article about a specific court case until
the very end would be too scared by a case number appearing in the last
sentence or in an end note? I don't quite believe that.

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jmull
Not surprising, and probably the right decision.

But...

If you’re fighting for the ability to _not pay your front-line people minimum
wage_ , I have to wonder if you’ve got a viable business.

These are the people who interact directly with your paying customers and the
ones who actually provide the service your customers value.

Keeping costs down is great, but you cannot squeeze the life-blood out of your
business.

~~~
gowld
Uber works by suckering drivers into a huge up front investment so they have
to work for a "decent" wage to pay back the sunk cost, so the overall average
pay is terrible. It's a simple scam akin to Groupon and MLMs (but not
multilevel). Eventually they will run out of suckers and flop like Groupon
did. That's why they are so desperate to fake self driving tech to prop up
their valuation.

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gnicholas
Note that this is just for the purposes of one federal law, and it is not
dispositive for the question of taxation.

> _U.S. District Judge Michael Baylson on Wednesday said San Francisco-based
> Uber does not exert enough control over drivers for its limo service,
> UberBLACK, to be considered their employer under the federal Fair Labor
> Standards Act._

The factors for the FLSA determination are not identical to the factors that
the IRS considers for the purposes of making their employee/contractor
determination. [1]

Also, of course, this is just one US District Court judge, so it's not binding
on other District Courts or Courts of Appeal. Basically, we're still in the
early days.

1:
[https://www.lexology.com/library/detail.aspx?g=062eba8d-8fad...](https://www.lexology.com/library/detail.aspx?g=062eba8d-8fad-4bbf-9cf7-86df34b9dcf0)

~~~
flukus
Wouldn't that screw drivers both ways? Not an employee IR purposes but not a
contractor for tax purposes? We have two different definitions?

~~~
HenryBemis
I was thinking the exact same thing.

In the eyes of the State you are ONE or the OTHER. Can't have only the good
halves of the bad halves. If the State hasn't figured out what 'Uber drivers'
are, then this discussion will lead only to more confusion and pain.

~~~
gowld
Don't confuse what makes sense with what the law says.

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lerax
They are users too, what's the surprise?

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lokopodium
You'd think minimum wage should be observed even if you're allowed a nap.

~~~
chrischen
Recent studies released show Rideshare drivers do make more than minimum wage
(per hour).

~~~
bkor
A Dutch journalist drove for Uber for various months. They advertise that
drivers can make loads of money. After expenses, the journalist barely made
more than minimum wage.

He also found that drivers often handed out business cards to encourage repeat
customers to pay them directly (avoid taxes+Uber, etc). Further, customers
abused drivers various times (e.g. it's used as a cheap moving service incl
expecting you to carry boxes), etc.

Entire article (use Google Translate):
[https://www.volkskrant.nl/kijkverder/2017/uber/](https://www.volkskrant.nl/kijkverder/2017/uber/)

~~~
HenryBemis
I like Dutch people. I really do. They have this sense of honesty, that if
they don't like something, they'll blatanly tell you "that sucks, throw it
away and make a new one". No sugar-coating involved.

That said, Dutch people tend to be (let me say it nicely) 'very considerate on
their spending patterns'.

The biggest object I've moved with Uber was a 40" TV which I carried and
placed in/removed from the trunk.

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SoulMan
Yes like, Amazon/eBay sellers are not their employees.

~~~
lerax
Exactly

