
São Paulo Labor Judge Rules Uber Must Pay Full Employee Benefits to Drivers - donsupreme
https://riotimesonline.com/brazil-news/brazil/politics-brazil/uber-to-pay-13th-month-and-vacation-to-drivers-rules-sao-paulo-labor-court/
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hugocbp
Just to put this in context, this is a first instance ruling. There were
dozens of those already in Brazil, but they are all reverted in upper
instances because the supreme Labour Court has already decided they are not
employees (Brazilian labour laws have very specific requirements to be
considered so and Uber drivers definitely fail a couple of those objective
requirements).

I understand that there is a need to protect those drivers (and other gig
economy workers), but trying to bend the law's definition is not the right way
to do it. This will get reversed as all other cases did.

~~~
jacquesm
Bending the law's definition is exactly how Uber and other companies avoid
employee benefits and taxes.

~~~
hugocbp
In Brazil's case, they don't need to do that.

The law establishes that to be considered an employee/employer relationship,
there needs to be a level of control from the employee's journey/hours, etc.

That control simply does not exist between Uber and Uber drivers and that is
why it is considered that they fail the legal employee definition.

Obviously there is disagreement, as with everything in Law, but in this case
you really need to bend the definition to make it fit the requirement.

As I said before, I fully agree that Uber drivers and other gig workers need
some protection, but I also fully agree with the ruling that they do not fit
the current legal objective definition of a employee/employer relationship. It
simply does not.

We need new laws for those cases, or to change the legal definition (which is
unlikely). Judges giving those rulings is basically having judges creating
laws, which is not how it is supposed to be (by the way, Brazil does not have
Common Law, so other rulings do not have the same power as in US/UK and other
Common Law states).

------
mrfusion
Would a good compromise be if you work less than say 15 hours a week you don’t
get all the employee benefits and if you work closer to a full time schedule
you do?

I hate the idea of closing it off to people that just want to side income.

~~~
_jal
By adding a boundary with financial implications, you also incentivize
businesses to ensure employees don't cross it.

I don't have a good replacement mechanism that keeps benefits tied to
employment and isn't complex and likely prone to other perverse incentives.
But at the very least, we should be clear about what the incentives end up
being.

Which is why I think the right answer is to decouple things like healthcare
from employment.

~~~
dgoldstein0
A possible solution is to have no hard cutoff. Work 5 hours a week? Get
5/40ths of full time benefits. Or something like that. Obviously it's tricky
with benefits that are all or nothing, though some of that could be adjusted -
for health insurance, this could mean Uber offers to pay a variable portion of
the cost based on how much you worked in the last ~3 months. With anything on
a strictly proportional scale, there's no obvious financial incentive to keep
workers from working the number of hours they want.

Though I agree healthcare is the one thing that would probably be better off
not tied to employment.

~~~
AnthonyMouse
Even better, just stop having non-cash benefits for employees whatsoever,
which would allow them to command higher compensation in cash and then buy
whatever "benefits" they want or with it or not.

The entire concept of "benefits" came out of regulatory arbitrage to avoid
20th century wage controls or because of differential tax treatment. It's an
anachronism that should cease to exist.

~~~
TylerE
That is very dangerous.

People are, in the large, morons. That goes double when it comes to money and
health.

~~~
AnthonyMouse
> People are, in the large, morons.

They're not, and constantly assuming they are is incredibly patronizing.

And if they are, aren't the people deciding all of these things for everybody
also "people"? Clearly then we shouldn't rely on their decisions because
people are morons.

> That goes double when it comes to money and health.

So give a tax credit to individuals for having a minimum amount of high
deductible health insurance but structure it as a "tax" for not doing so,
which triggers loss aversion and causes people to buy it to avoid the "tax".
It changes nothing for the people who were already doing the math and it
catches the "morons" you were worried about.

------
haolez
I'm from São Paulo and I'm embarrassed about this decision. Brazil's labor
laws treat the "workers" as stupid people, unable to negotiate good terms by
themselves. It's much better for them to have an intermediary - the
government! - to handle this, and then pay 50% of everything that you make in
taxes for this wonderful protection. It's ridiculous.

~~~
gnulinux
What a strange comment.

> Brazil's labor laws treat the "workers" as stupid people

This has nothing to do with stupidity, intelligence or anything like that.
This has to do with _leverage_. A multi-national giant corporation like Uber
has a lot of leverage over Brazilian workers. If Uber treats them like
figurative slaves and gives them too little money, workers have very little
they can do against this. It is government's responsibility to _protect_
people from this power imbalance. Yes Uber should have a freedom to charge/pay
whatever market accepts and workers should have freedom to negotiate their own
benefits. But at the same time Uber needs to implement a minimum care for
their workers, and if not government should be able to enforce them to do so.

~~~
devtul
Drivers are not bound in any way to Uber, Uber won't send slave hunters if
they leave the app.

If people continue to drive for Uber, doesn't that mean the app is still a net
positive for them, or do you believe people would pay to work?

Your comment is a great example of what the parent comment is saying, the
belief that people are too damn dumb and they need protection.

~~~
karpierz
I believe that people will take deals that don't benefit them. But that's not
the point here. The numbers are made up, but say Uber makes 10$ per ride and
the driver makes 10$ per ride.

If the drivers get together, they might be able to negotiate 15$ per ride,
leaving 5$ per ride for Uber. However, it might be hard for the people to do
that, so the government can step in to improve conditions for riders by
negotiating for them as a block.

~~~
AnthonyMouse
All of this labor theory only applies when you're negotiating with a
monopolist. Otherwise the company already has thin margins as a result of
needing to compete with other companies -- remember all that stuff about Uber
losing money? -- and there is little more they can give you without trading it
against something else you want, like flexibility or number of hours.

The primary way they could pay drivers more is by charging higher fares. But
then there is lower demand for rides, so they need fewer drivers, so some of
the drivers lose their jobs. If you think that's a good trade off then take it
now -- quit and go do something else. It will cause the remaining drivers to
be able to command higher compensation.

Everybody wants to be the one to get paid more and not the one who loses their
job, but some of them will necessarily be wrong.

------
Abishek_Muthian
Is Uber asking for donations to help drivers during COVID-19 lockdown in your
country?

It does so via push notifications in India, so does its rival Ola but news
report says that funds weren't distributed to the drivers properly[1].

[1][https://www.huffingtonpost.in/entry/uber-ola-hyped-relief-
fu...](https://www.huffingtonpost.in/entry/uber-ola-hyped-relief-
fund_in_5eb40f7ac5b652c56473c954)

------
sschueller
Good.

Uber is trying to weasel out of this in Switzerland by letting drivers set
price but it won't fly.

~~~
hn_throwaway_99
I don't think of that as "weaseling out of" at all. If anything, I've been
arguing that the single primary thing that nullifies Uber's "they're all just
contractors!!" argument is that drivers have no involvement in setting the
price. If drivers _can_ set the price though, and actually put in fair bids
that they believe are necessary to pay their costs and make an acceptable
profit, then it does become much more of a true marketplace and the "all
drivers are employees" argument holds a lot less water IMO.

~~~
Klinky
Then why isn't this the policy across all territories? Weaseling out sounds
correct if they are only doing it to get around local laws.

~~~
manquer
If the laws are not strong enough for them to be forced to do this in bigger
markets, then perhaps the laws should be changed?

Depending on companies to self govern is not sustainable even if Uber does not
exploit this, the next company will. Such loopholes need to be closed, putting
on pressure on some companies is just band aid if they actually change, if not
just effort wasted on the wrong thing.

I don't buy regulatory capture as a valid argument either.

To make sure companies do the right thing strong regulations and laws need to
be in place, to make sure regulatory bodies and lawmakers are not influenced,
people should have more power in government than money does.

~~~
Klinky
I agree with pretty much all you said.

Mainly, I do not find it very genuine that they only implemented this policy,
likely with extra effort, in one territory. This feels like a play to capture
market share and increase growth, even if it doesn't match their existing
business model.

------
gjvnq
This is almost surely going to be reversed on appeal because the Superior
Labour Court has already decided that Uber drivers are not employees

~~~
hugocbp
This is very important. I also posted my own comment about this.

There were dozens of rulings like this in Brazil already. They all got
reversed in upper instances.

------
rafaelturk
This is preliminary decision and goes agains previous legal battles that where
favorable to Uber.

Given that São Paulo is a key City for Uber, according their prospectus Sampa
is the second most active city This will be a long ongoing legal battle.

~~~
toomuchtodo
I wouldn't hold out hope considering the other key cities Uber operates in (SF
and LA in California, NYC in New York, New Jersey, and London [1], which
account for 1/4 of their bookings) have made similar determinations. São Paulo
was the holdout.

[1]
[https://news.ycombinator.com/item?id=23713582](https://news.ycombinator.com/item?id=23713582)

~~~
remote_phone
It’s too early to say that they were determined as employees in any of those
cities. The cities WANT them to be employees because it takes the burden off
them to get jobs for them, but the legality of those ruling haven’t been
finalized. There are plenty of reasons why they shouldn’t be considered
employees and there was a study released by Cornell this week that showed more
than 75% of drivers are part-time anyway and want freedom, not full time
employment.

~~~
michaelt
You mean this one? [1]

 _> "Uber and Lyft covered the costs of the study [...] The study was priced
as cost-plus, which covered the costs of the research plus overhead to the
university. In total, study costs came to $120,000. [...] Driver earnings for
all of our analyses came directly from Lyft and Uber. "_

Yeah, real convincing.

[1]
[https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?a...](https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1070&context=reports)

~~~
josinalvo
And, anyway, this would only argue for giving them an option, not for giving
nobody the option of working full time. 25% is not a small number

------
sna1l
All of these laws leading to full employment/benefits seem like a good thing
on paper, but I wonder if it will lead to regulatory capture by the existing
ride sharing companies, making it impossible for new entrants to join? Also
what will be the long term consequences?

Also let's say you didn't want Uber/Lyft/whoever to dictate your working
hours, could you reject the full benefits for flexibility?

~~~
MiroF
Not all regulations lead to regulatory capture, and this is not generally the
pathway to capture.

------
syshum
I dont know what people think the result this will be, but I can tell you what
will not happen, they will not just magically make all the drivers full time
employee's

one or more these things will happen if this stands

1\. Hours will be limited to part time only

2\. Rates for rides will explode, which will likely cause a reduction in
revenue probably to the point to mass layoffs

3\. Drivers will have to sign Exclusivity and not be allowed to work for any
other RideShare service

4\. Drivers will have to work a set schedule, set by uber

I am not saying any of these are necessary bad but it seems to me that many of
the people "fighting for employee status" seem to think that a change in that
status means everything about the service stays the same but now they get
vacation, paid sick time and health insurance.

That is very very unlikely to be the result

~~~
MiroF
Non-competes in Brazil require employees to be paid salary for the duration of
the non-compete clause, so doubt that's what Uber would turn to.

> 4\. Drivers will have to work a set schedule, set by uber

> 1\. Hours will be limited to part time only

This undermines Uber's contractor argument, I also doubt they would do this.

~~~
syshum
If they are classified as employee's then they are by definition not
contractors

So yes today Uber, as contractors, will not do that, the second the law
requires them to be classified as employees then they will

------
mrfusion
I’m all for employee protections but I also worry we are nipping the emerging
gig economy in the bud.

~~~
ebiester
If the gig economy relies on the suffering of others, then it should be nipped
in the bud.

If the gig economy cannot compete on a level playing field, keeping the
benefits stable, it is just a race to the bottom.

~~~
username90
There is huge demand for easy to get unstable jobs, lots of people want these.
Not having them removes options from people, they aren't worse than other jobs
just different.

~~~
fzeroracer
I mean, depending on the country in question they are worse than other jobs
(namely by not offering healthcare benefits). People trade long-term benefits
for short-term profits and the end result is that the tax payer is on the hook
for those that slip through the system and need medical care.

At least that's how it functions in the US.

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megaman821
Doesn't this move hurt ride seekers in under-served areas? If every driver now
has fixed cost for Uber, each driver needs to be scheduled and positioned to
maximize Uber's revenue. A driver's health insurance costs the same whether
the driver is driving during prime hours or at 3 in the morning. Uber has
every incentive to not schedule many drivers off hours. For riders this mean
either no ride or a very high-cost ride, whereas before Uber had no problem
with letting as many drivers who wanted drive whenever they wanted.

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WalterBright
Employer paid benefits always wind up coming out of the employee's pocket.

The advantage, though, to the employer paying them is they are paid out of the
employee's pre-tax income.

~~~
klyrs
There's another advantage: large employers have huge bargaining power compared
to individual employees, so a dollar just goes farther when the employer
spends it.

