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California Labor Bill, Near Passage, Is Blow to Uber and Lyft (nytimes.com)
167 points by koolba 7 days ago | hide | past | web | favorite | 271 comments





I'm not a fan of all these moves to treat drivers as employees for one simple reason: you can drive for more than one company at the same time.

Here's what I don't want:

- I don't want quotas as NYC is doing. This is just recreating the taxi medallion system.

- I don't want each company to be forced to pay a minimum wage per hour that then means a driver loses the flexibility to drive for multiple companies at once.

- I don't want regulations to keep smaller competitors out of the market. There's a real risk of this.

- I don't want drivers to lose the flexibility to do this on a casual or flexible basis. Quotas and the like will mean the only option is to drive full-time. I'm all for people being able to supplement income. I feel like this is useful to a lot of people.

Note: I do want drivers to earn a sufficient income from this. It's just that quotas and company minimum wages aren't the way to do this.


I worry that you (and me, and others) have bought in to the "flexibility" bullshit that Uber often spouts.

Most people still have the same rough, basic needs. A "supplementary" income is not enough to do this. Every single Uber driver I've ever asked does it as a full-time job, but doesn't get the pay or protections of a full-time worker.

Especially in the UK and other more regulated countries than the US, becoming an Uber driver takes time and money as you require a licence. People aren't doing it as a side-gig. It's their job. And Uber knows it.


> Every single Uber driver I've ever asked does it as a full-time job

There's an interesting statistical effect here.

Let's say there are 50 Uber drivers. 10 of them are doing it full-time; the others are doing it 5 hours a week for some additional income. That's 10 * 40 + 40 * 5 = 600 hours of driving per week, of which 400 is by the full-time drivers. So if you ask your driver whether they are full-time, they will say "yes" with about 2/3 probability, but the number of part-time drivers greatly exceeds the number of full-time drivers.

This effect is even stronger if you typically take Uber at times when part-time drivers are less likely to drive.

To your last point, location does matter a great deal here. Anecdotally, in my suburban area, I know a fair number of stay-at-home parents who do some driving on the side, esp. while the kids are in school. They most emphatically do not want to be driving full-time, or doing anything else full-time: if they wanted a full-time job they would not be stay-at-home parents. I am quite certain that this dynamic does not hold across all Uber markets, by any means.


I meet a lot who are students (eg, nursing). Driving for Uber is their only job, they'll do it as many hours as they can get, approaching FT. But they need the flexibility, they might do it in the short-term when they're between school terms or clinicals, and oftentimes they are free at the points where we need the most drivers on the road.

This is more of a college funding problem.

This is a false dichotomy. There are plenty of employer-employee relationships that are flexible and not full-time. I'd wager to say that the majority of Americans are employed in such an arrangement.

You would lose that wager badly; the vast majority of Americans that are in the workforce at all are employed full-time. See, e.g.,

https://www.bls.gov/cps/cpsaat08.htm


Looks like I was wrong. Thanks for the reference and stats!

'Flexible working' has been sold as 'the gig economy' but the reality is many people have to scrabble around doing multiple jobs to make ends meet and are playing musical chairs with short term jobs suddenly ending. Uber et al have put a glamorous sheen on this as they flaunt the wealth they have raised as middle men around mobile phone apps and enterprise scale back ends.

> I worry that you (and me, and others) have bought in to the "flexibility" bullshit that Uber often spouts.

For as long as I have been taking Uber (which is ~5 years), I almost always make small talk with the driver. In almost every single case, they have mentioned the flexibility as a key factor as to why they drive for Uber (and yes, they also do complain about falling incomes as time has gone by).


I don’t personally care for Uber, but I’ve used it enough for the convenience and heard the same story. For what it’s worth, I don’t think OP has much depth on this or probably has even used the service much at all.

Some folks pick their social justice topic and blow it up 100x. Anyone who disagrees is a monster.


When I'm in NYC, it does seem like most do it as a full time job, but they like the flexible hours. In upstate NY, most Uber/Lyft drivers I talk to treat it as a side hustle, fun thing to do to chat with folks, or a post retirement activity. Based on my experience, denser cities have more drivers treating it as a full time job with multiple apps used to find riders, and in less dense areas (including LA) many drivers seem to have other non-driving jobs.

I definitely find the experience much better than taxis, especially in NYC, on average.


This is very unique to NY and this is because NY regulations have made it unprofitable to be a rideshare driver for anything less than full time. NY basically killed all the part time jobs.

Next time you ride with one, ask them about what they have to do to become a rideshare driver in NY and if the burden of regulations and costs paid to the state would be worth if it they were not doing the work full time.


While I agree in general, in specific, a significant proportion of Uber drivers I've used in Canada were doing it not even for supplementary profit, but for Fun. I've been picked up in $80k vehicles by guys who did it a few hours a week to see the town, meet people, kill time in productive ways.

Of course, I've also seen people who were current or ex taxi drivers, working fulltime on several services.


Anybody doing it for fun is going to be doing it less than 32 hours. So they'd be a part-time employee instead of a contractor. Part-time employees don't get many benefits either.

These people are the exception that Uber uses to push its bullshit narrative. We shouldn't be buying in to it.

People need dependable employment to survive and thrive.


Why do you think this?

This is absurdly regional. Do you live in the region considering the legal change and take uber regularly enough to know if it's their fte?


How do you know it's the exception? You have hard figures?

No, but he has an ax to grind, which is better than data. /s

Taking that at face value, I'd say that "limit drivers doing it 'for fun' in exchange for better pay/protections for drivers doing it to eke out a living" seems like a reasonable trade-off...

No individual has any right to make a living doing anything they want to. If sufficient people are willing to do a job at a reduced wage because they enjoy it, that is their right.

This is like saying that libraries should ban unpaid volunteers in order to justify the hiring of more librarians.


It is illegal in the US to have volunteers do work that would otherwise be done by a paid employee. That's why unpaid internships are, by default, illegal - to be legal they must replace the payment with school credit and valuable experience, basically.

Labour laws set minimum standards that all companies and employees / contractors / whatever should adhere to, because it reduces the likelihood of abuse.

The "right" you mention doesn't exist in e.g. countries with minimum wage laws.


So basically desperate people ruin everything?

Say I use Uber to take advantage of HOV lanes going to and from work (and make a little extra cash). Now because desperate people have commandeered the platform as their sole source of income, I should not be able to do that anymore?

Seems like you can't have nice things at all because of this. If I make an app called "Clean Streets" that pays a dime per piece of litter picked up from local streets, desperate people would try to turn it into a full time living and I would be sued for abusing people, not paying living wage, not giving full benefits, etc. (even though I just wanted to incentivize passively cleaning up of litter, geez)


Yes? Why do you think we need things like minimum wage and OSHA? Because there are desperate people and people who exploit them.

you can’t mix all things together as an argument for some unrelated third thing. Yes, we need OSHA which has nothing to do with the fact that people are choosing on their own to drive for Uber because it is convenient for them. If you classify them as employees, many of them won’t be able to do the thing they are voluntarily choosing to do.

They are all the same category of things - making it illegal for a person to work in a job that they are volunteering to take. Maybe it's illegal because the pay is below minimum wage, maybe it's because they are doing something without following the safety requirements of OSHA. Some people think this is a sign that minimum wage/child labor laws/any such restriction should be removed. Others, like myself, think that it should be possible for everyone to have better options available so that nobody does want to work for scraps.

“The same category of things” still doesn’t make it relevant. It’s obviously not illegal in the US to drive a taxi cab and cab drivers do not make any more money than Uber drivers. The issue is that if someone wants to earn part time income, Uber provides a great option. And these rules would destroy that option. I really don’t know why people cannot be left to make this decision for themselves.

From looking at the condition of the drivers and the cabs they maintained before the arrival of Uber & Lyft, I don't think NYC's medallion system (or its equivalent in other cities) were following any modest safety requirements that were in place back then.

People loved these ride-hailing apps because of how lousy the typical taxi cab experience was for most people.

~ Most of the drivers were not native English speakers and would not put any effort into conducting their business genially.

~ They would refuse to take credit cards despite having card readers or would disable them to take cash.

~ At late hours you were at the mercy of the dispatcher (from the central office) if they would send a taxi at all or if the driver would take your business instead of ditching you to pickup passengers for longer (and more profitable) trips.

~ There was zero accountability in a whole host of areas like that.


There were always computer-dispatched car services in New York, decades before Uber. The reason people prefer Uber is because Computer Car costs $60 to go to the airport and Uber, by contracting with desperate amateurs and their unmaintained jalopies, undercuts their price.

Those services were, and still are, much worse than Uber and the like. They're not bad in any absolute sense; just relatively bad. I'm pretty sure they weren't and aren't "computer-dispatched" in the same way Uber and the like are either. For one, you almost always had and have to speak to a person by phone, and often more than once, e.g. to receive updates about when a driver could be expected to arrive.

A study in 2000 suggested your average low level street dealer made $20-30k/yr [1]. That's no benefits, no OSHA, no minimum wage, no child labor laws, is frequently violent, etc. Surely things have changed, particularly with the spreading decriminalization of marijuana, but I think it's still relevant. When we're talking about restricting poor people from accepting some kinds of work, we must bear in mind that we may like their other options even less.

[1]: http://pricetheory.uchicago.edu/levitt/Papers/LevittVenkates...


Heh, I wonder if a more effective way to wage the War on Drugs would be to stop prosecuting street-level dealers for drugs, but simply enforce employee status on them :-p

> Others, like myself, think that it should be possible for everyone to have better options available so that nobody does want to work for scraps.

It sure seems like a lot of people will have to continue to work , e.g. for less than minimum wage, and without almost any legal protections, until better options are made available to them.

I'm more inclined to welcome incremental improvements, no matter how modest, than to bemoan everything short of some kind of ideal possibly-possible future.

For one, does "everyone", for you, include every person in the world? Should everyone making a living with less than "better" options be forced to stop working as they are now and wait for those better options to materialize? It seems pretty obvious to me that accepting something less than perfect is better than refusing to accept anything that falls short in the interim.


Some of the people on this website are insanely cloistered lol holy cow. Those dang desperate (read: poor) people ruin everything!

You don't actually need a minimum wage, as it's a very recent invention. Things worked fine before that was introduced. And do you really have to assume employers always "exploit" employees? That's the basic idea of communism and it's always a disaster. Employers don't exploit labour. It's a trade that leaves both sides better off.

> Employers don't exploit labour.

lol


Yes, was a problem long before Marx came around. Since recorded history and probably even earlier then that. That’s just human history, I’m pretty sure there are types of both ants and bees that enslave other insects and make them maintain their colonies.

That’s why capitalists love immigration and outsourcing. Desperation lowers operating costs.

> Yes? Why do you think we need things like minimum wage and OSHA? Because there are desperate people and people who exploit them.

Nobody is intentionally exploiting anybody; desperate people exploit themselves.

So the solution is either gatekeeping or rate limiting.

a) only allow people that meet a minimum economic status to make money from the app.

b) limit the amount of money/time that can be spent on the app so it is clear the intent is not to provide full-benefits careers.


> So basically desperate people ruin everything?

What a perfect distillation of the empathy-deficient and contemptuous attitude that a large fraction of rich, fortunate techies have towards everyone else. Qu'ils mangent de la brioche.


That was the trick: the "app" the GP describes already exists! It's called the deposit system on recyclables, and somehow, governments never consider promoting such full time redeemers into employees!

Do you think governments should turn away all such recyclables that the homeless bring in on the grounds that they're not making a living wage? If not, you see the legit problem the GP described.


Let's not infantilize these poor and "desperate" drivers who don't know any better than to be exploited by the technocrats.

They were doing no better illegally sub-contracting with illegal sub-lessees of taxi medallions who themselves illegally forked out hundreds of thousands of dollars to wealthy medallion owners who hoarded them and prevented anyone else from legally procuring them.

The previous taxi system ( prior to the arrival of ride-hailing apps ) was thoroughly corrupt at every level. I hope thats not up for debate.

Immigrant new-arrival drivers would pay daily fixed amounts to illegally "lease" these cabs (on the daily) to those at the bottom of the chain of operators described above.

They were already "part-time" (well before the arrival of Uber and Lyft) and weren't afforded many of the protections the medallion issuing body put in place.

It was a thoroughly corrupt sham that the governing bodies paid little attention to and hand waived the illegal practices because they were (and are) themselves corrupt rent-seekers who were in bed with those interests they truly protected.

The officials knew it.

The medallion owners knew it.

The sub-vendors knew it.

The immigrant daily-wage-slaves knew it.

This is why Uber, Lyft and others were such life savers when they arrived. Everyone hated taxi cabs.


The CC machine was always broken. Wildly under insured (despite the regulation!) No service in tough neighborhoods late at night when you needed them. Would drive while yelling on the phone. Despite the fares shown (very high) the guys driving looked totally broke. NO WAY were they actually getting the $$.

You cherry picked a part of OPs post. The rest of it is a reasonable argument. You can refute it or otherwise you’re clinging to an emotional argument and not rational one.

Say I use Uber to take advantage of HOV lanes going to and from work

Slugging might be an option.[1] Doesn't help with additional income, or work very well for suburb-to-suburb commutes, but at least in DC, it's a very popular option, especially coming from the south on the I-95 corridor.

1 - https://en.wikipedia.org/wiki/Slugging


There's also scoop, which is explicitly for this kind of activity. You define your route to and from work and then it matches you to people who are going the same place at the same time as you.

It's almost as though...we as a society continually assess whether the harm from some activity exceeds benefit, and react accordingly?

Or maybe we're starting to expect that people building things have responsibility to foresee potential harms arising from their use, whether or not part of the intended use case, and to build in an equitable way?

After all, if "inadvertently deepens abject poverty" is a possible outcome of a tool you're building, maybe the problem is with the design and not the people using it.


I'm pretty sure actually, uniformly enforcing all of the currently existing labor laws would 'inadvertently deepen abject poverty' too. There are a lot of people working black or gray market jobs (i.e. workers for whom the 'employment' relationship is itself illegal, at least in some aspects) already.

There are tens of millions of people in the U.S. that are not legally permitted to reside here, let alone work. Are you also in favor of actually enforcing those laws and either preventing them from working or deporting them?

> It's almost as though...we as a society continually assess whether the harm from some activity exceeds benefit, and react accordingly?

I do not think that U.S. society, or any country really, could be even approximately described like this, accurately. As just one example, minimum wage laws were originally introduced to prevent minorities (e.g. black people) from undercutting the wages of ethnic-majority workers (i.e. 'white' people). As another, a large number of U.S. states require certification or licensing for people to cut or style other's hair. I am extremely skeptical that such laws or regulations were enacted because a fair cost-benefit analysis implied that such were reasonable.


> Say I use Uber to take advantage of HOV lanes going to and from work (and make a little extra cash)

No one does this. This argument exists in a fantasy land.


[flagged]


So you do this, but don't even use Uber to do it.. Hmmmm...

I don’t have a car and don’t drive. My post shared what drivers have always told me over the past couple years. If you’re willing to drive for Scoop, you can also drive for Uber or other ride service.

Then why are you not doing it every day and recouping your costs? Seems kind of stupid to me that you're flushing money down the toilet if it's such an easy thing to do with Uber.

I’m not doing it at all because I don’t have a car - I only ride using this app.

Picking up someone on your way to work could be ideal or a challenge if you need to get to work early. I’m not sure what your point is - it should have zero opportunity cost or it’s a bad deal? Does your current job have any opportunity cost?


> So basically desperate people ruin everything?

This is due to people (non-consciously or not-explicitly) holding or believing something like 'The Copenhagen Interpretation of Ethics'.

In a nutshell, it's often better to ignore a problem than attempt to improve it in any way less than perfect, at least in terms of other third parties' reactions.


Im pretty sure if you made an app that would pay people a dime for every piece of trash they picked up, Delhi would just have even more cobras.

https://en.wikipedia.org/wiki/Cobra_effect


Well, I'm thinking more along the lines of Italki. The app would just be for escrow and connecting people.

Someone posts a trash bounty for their neighborhood. Another person accepts the bounty. They exchange messages, the acceptance criteria is agreed upon, and the transaction is completed after the bounty poster has verified the trash is gone.

I think such an app would work great for cleaning up public places, but would break down as soon as people started tried to turn it into a career.


Who do you imagine is doing these jobs? It's people who need money.

A healthy society is more important than clever technocrats.

This is the mantra of all government regulation (which is really just a legislated grab at power):

“I know it’s bad for you, but it will be better for others. And because we think that’s more important, you have no choice.”

An objectively free society is always better than your subjectively “healthy” society.


The only "free" society is you alone in a large area. In any other place, with other humans nearby, you will not be "free". And this definition of "Freedom" only looks at the impact from other humans, totally ignoring the restrictions the world itself imposes on you (but to human psychology those don't matter nearly as much as the will of other people imposed on yourself).

This sounds cliche, and it is, but for whatever reason I feel kind of forced to reemphasize the obvious in response to your self-centered-universe-outlook comment.

In a human society, the alternative to government is rule of the strongest. That's how we got nobles and kings, later the great capitalist tycoons and their private police and armies.

> An objectively free society

That does not mean anything. Well, it means you are trying to shove your world-view down everybody else's throat while shutting out any discussion and arguments that you dislike.


>In a human society, the alternative to government is rule of the strongest. That's how we got nobles and kings, later the great capitalist tycoons and their private police and armies

If you feel that that's the case then you must realize that what stopped this status quoue wasn't legislation but industrialization and guns. Legislation is always after the fact.


Guns were around for a few hundred years before this alleged democratizing effect.

Also, of note, is that guns were invented in China thousands of years ago and it has been a monarchy or dictatorship since then.


Steam engines have been around since the 1st century, but like guns, they weren't going to be as important as they could be without all the advancements in ideology, planning and sciences that resulted in industrialization.

Which brings me back to my point, the current status of civilization is due much less to legislation than people say it is.


If you specifically mean the existence of an elected group of people writing the laws matters less than people say it does, we agree.

But if you say that the systematic codification of rules (i.e., laws) matters less than people say it does, we disagree completely. Laws literally defined every major civilization back to the dawn of recorded human history.

For more modern examples, CA's employee rights laws are the reason that SV happened in SV rather than New York, Boston, Chicago, or Detroit--all cities with larger scientific and industrial bases than SF or LA. Section 230 of the Communications Decency Act literally made the internet as it exists today possible; without it Youtube, Twitch, Facebook, Twitter, and even Amazon and Google couldn't exist as they do today.


Hmm - or phrased more accurately, your group's (aggregated) choice is less valuable than others' (aggregated) choice.

How many people do you think go through the process of signing up for Uber simply to arbitrage the 5-10 minutes gained on HOV lanes?

Compare vs. Uber/Lyfts actual use case - to displace taxis and public transport while under-paying it's drivers.


How free do you want?

Free enough I can employ anyone at any wage, to do any job?

Free enough I can employ children and send them down mines?

Free enough I can just come around and take your house?


> "I know it’s bad for you, but it will be better for others. And because we think that’s more important, you have no choice.”

If you don't like this logic, why do you support the OPs use of the inverse proposition:

"I know it’s bad for all of you, but it will be better for me. And because I think that’s more important, I'd like everyone to agree without directly justifying it.”

Even if you believe in a society of objective freedom, there are multiple senses of freedom. There are "freedoms from" as well as "freedoms to", and you seem to be carefully and convexly limiting the definition of "objectively free society" fits exactly cognitive cognitive volume you want, without regard to how other people might define that concept.


> If you don't like this logic, why do you support the OPs use of the inverse proposition:

It's really simple, because the inverse doesn't involve legislation, where an individual is forced to do something at risk of life and limb.


But importantly it relies on legislation. It relies on the existence of very specific market conditions that are held in place by the state. It then supposes that these artificial conditions we cal the workplace shouldn't change if they impact the author, who is rich, to benefit the "desperate" (a larger and poorer cohort of people, I read from the OP's post).

Legislation is there either way. It is involved in each case. And as employment (often dangerous) is required for living in the US, it seems pretty weird to view this structural change that only mildly inconvenienced some of the most egregious users of the very broad "contractor" status in existing law, I can't quite work out why this is important.


You vote, I vote, we all vote, and whatever policy wins becomes the law. And it looks like this is going to become law. The people have spoken.

If one takes issue, plenty of other states to choose from to better experience one’s personal idea of “freedom”.


> Every single Uber driver I've ever asked does it as a full-time job

That's odd, because all my Uber drivers are doing it part time. A vast majority work in fields with either odd hours (vet techs, nursing) or with breaks (teachers) and use Lyft/Uber to fill in the gaps and make extra cash. The only driver I've had in the past few months who was full time was a recent immigrant who implied he was missing some documents to be able to get a regular job.


Uber and Lyft drivers fit the definition of independent contractor perfectly. I cannot imagine how they would qualify as employees. Increasing the money required to onboard people inherently reduces the people you can serve.

It would be hilarious if they stopped having Uber drivers in California and just paid Nevada Uber drivers to make the trips instead


> It would be hilarious if they stopped having Uber drivers in California and just paid Nevada Uber drivers to make the trips instead

Do you mean trips that begin in California and end in California? If Uber systematically does this, I'd hope to see a new law that is a "bug fix" that makes Uber CEO eligible for life in prison with no opportunity for parole for doing this.


If they can find a way to do this profitably, it shows how unrealistic California labor laws can be

EDIT: Also, remember that neither Lyft or Uber have ever been profitable


Interesting that there aren't many side-gig drivers in the UK.

I've taken Uber/Lyft in many parts of the US, and side-gig drivers are quite common. Often drivers are students, working around their schedule, part-time parents, semi-retired, or otherwise genuinely looking to supplement income.

I wouldn't be surprised if barriers to entry like licenses kept these folks at bay. I also wouldn't be surprised if a stronger social safety obviated the need for supplemental income.


Yeah, it absolutely does keep these folks at bay. As it should.

I only want to get in a taxi when the driver has been carefully vetted which the licensing system provides. Uber cannot be trusted to vet drivers properly as it has no incentive to do so.


Having been a full-time uber and lyft driver, I think this law is going to be a huge problem. Basically, Lyft and Uber will now force drivers to only work for one at a time. I'm also considering driving during the commute, just for kicks, and I think it would be silly to reclass me as a FTE or PTE.

Remember flexibility takes many forms being just full-time or not.

Consider NYC taxi drivers. They have 4am to 4pm shifts. This creates many problems (eg getting a cab between 3pm and 4pm due to the shift change such that they had to have a special regime for those who still needed to go to the airport).

What if you wanted or needed to pick up your kids after school at 3pm? That's a problem for a taxi driver. But an Uber or Lyft driver has the flexibility to simply stop accepting fares.

So doing it full-time does not make these situations equivalent I guess is my point.


Except that at least some of the uber drivers that I've seen most definitely do this as a side job (ie they have another primary job that has a lot of off days/variable schedule and as a side job they Uber to make some extra money). If the proposed laws allow for this kind of use case then fine.

Not to mention that almost all Uber drivers I've seen have both Uber and Lyft signs in their windows so obviously they work with both. That's a good thing, gives them more choices and helps keep those companies honest and even if you argue that in practice Uber/Lyft don't seem to provide drivers the benefits of such competition (they may be colluding) then I ask you, isn't the solution to that to promote more competition? So be very careful with enacting laws if you want to create real competition to help the drivers.


Are they better off if Uber and Lyft go out of business and they have no jobs? Presumably if they had a better option they would be doing it.

There are plenty of companies and entrepreneurs that aren't artificially propped up by VC money that are waiting for any opportunity to eat Uber/Lyft's lunch.

In fact, many regional ride-hailing app companies already are.


Uber can afford to pay more and provide more stable employment. They choose not to because it hurts their margins. Fixing this will help drivers and still won't put Uber out of business.

I'm pretty sure Uber are still losing money, and have never shown evidence of positive unit-margin, so I'm not sure they can afford this.

I often come across South Asian women driving for Uber in London while their kids are in nursery / primary school. Uber's flexibility seems to fit perfectly with a more modern view of labour vs child rearing responsibilities.

There aren't anywhere near enough flexible part time jobs that stay at home mums and dads can do while their kids are in school.


Every single Uber driver I've ever asked does it as a full-time job

If we're polling for anecdata, my experience has been quite the opposite. But I suspect this is very dependent on what time you ride - in evenings, I often encountered people driving for a couple hours after work.


  Especially in the UK and other more regulated countries
  than the US, becoming an Uber driver takes time and 
  money as you require a licence. People aren't doing it
  as a side-gig.
What special abilities does London's licensing body require the driver of a black cab have to have over any other civilian driver?

I know black cab drivers need to be able to memorize maps of various neighborhoods but isnt that rather antiquated in the age of advanced GPS & traffic apps that do the same job better?

I'm all for thorough and deep background checks (and regulation to mandate them), to weed out sketchy drivers or those with criminal pasts, who drive for Uber & Lyft but anything beyond that is just bureaucratic over-reach & rent-seeking by the government.


Black cabs are, again, the exception to the rule. The vast majority of Ubers in the UK are licensed to local bodies and not Transport for London. Getting a Black Cab licence in London takes _YEARS_. Becoming a licensed minicab driver takes about 1 year.

> I know black cab drivers need to be able to memorize maps of various neighborhoods.

I assume you're referring to what we call "The Knowledge" and it's an exam that takes literally years to pass. You have to be able to name every single road, junction and corner in the entirety of Greater London from memory. The fact that people still use black cabs (and often pay a premium to do so) shows the value in local knowledge over the Google Maps hive-mind.


Well, or it's because a black cab is often nearby and can be easily flagged on the street, whereas Ubers are technically illegal (or did that get fixed) and cannot be spotted on the street.

The Knowledge is archaic. It exists only because regulation is ossifying and because existing black cab drivers feel "I had to do it, so should they". It's literally hardly changed since the 1800s and doesn't even cover all of London, just a six mile radius from Charing Cross.

Google Maps can do it better, more reliably and faster than any person, without the massive costs and overheads involved in the entire licensing and examination regime required. The amount of labour hours required for these cabbies to memorise the layout of central London alone is a staggering cost and there's no reason for it.


I’ve met plenty of Uber drivers who drive to pay their car payment, insurance, etc.

two members of my family do it on the weekend. one my friend does it on off days from job at costco.

This is a false choice. Drivers can be employees AND retain flexibility.

Being an employee DOES NOT require (1) only full-time work, (2) fixed schedules, or (3) exclusivity with one company.

Being an employee DOES require employers to compensate for all work an employee performs. Drivers shouldn't have spend 20 minutes of every hour off the clock while driving to pick up riders. Drivers shouldn't have to spend 45 minutes off the clock in the airport cell phone lot waiting for their turn at the top of the queue.

If the business model only works by making people work for free, then it's necessary for the state to set minimum standards.


> Being an employee DOES NOT require (1) only full-time work, (2) fixed schedules, or (3) exclusivity with one company.

> Drivers shouldn't have to spend 45 minutes off the clock in the airport cell phone lot waiting for their turn at the top of the queue.

If the driver is driving for more than one company, who pays for that cell phone lot time?


Assuming the post AB 5 system essentially has rideshare workers agree to take 2-4 hour "shifts" (just a guess based on the easiest adaptation and how Amazon's delivery system works), the 45 minutes of idle time would be paid for by the company the driver agreed to work the shift for. Needless to say, such a system would heavily incentivize Uber and Lyft to avoid having drivers sitting in airport lots.

In practice they just won't drive for two companies. With minimum wage / employee status that won't hurt them at all. In practice, Uber and Lyft already don't want you keeping both apps open - they encourage you to only keep their app open with incentives.

Technically that's true but why would Uber/Lyft accept the overhead of workers that are not?

> I don't want quotas as NYC is doing. This is just recreating the taxi medallion system.

The worst part of the medallion system were the title transfers. Quotas and a fair lottery system can be ok, and can even be in the public interest to reduce traffic. However, letting the medallions go to auction for hundreds of thousands of dollars creates perverse incentives that squeezes small players out of the market or force them into crippling debt.


If we really cared about traffic in NYC we'd stop subsidizing private vehicle ownership by giving away half the street space to free parking.

Likewise, the proposed congestion pricing schemes in Manhattan should be punitively taxing private vehicle ownership, not taxis of the equivalent.


"reduces traffic" is an interesting way to say that as a sighted person you can drive your own car whenever you want where ever you want, but as a blind person I will have to have my possible transportation options externally limited.

Trade is an essential ingredient for a functioning society. Just because quantity is fixed and prices are high shouldn't mean the solution to the negative side effects is to just do away with the whole thing.

As a thought exercise, what should we do about land ownership? Should we have quotas and a lottery system as you suggest is appropriate in such scenarios of fixed inventory and high prices?


> I'm not a fan of all these moves to treat drivers as employees for one simple reason: you can drive for more than one company at the same time.

You can be available to drive for more than one company at a time, but that's generally true of W-2 on call temporary work, so I don't see how it is inconsistent with them being employees.


I think in this case many people want being available to drive, as in being in the car with the app running, to count as working.

I think most people want the same ml minimum paid shift and notice rules that apply to on call work generally, which is not exactly the same thing.

It would require changes to how Uber/Lyft operate, becausethey would have to distinguish between available-but-not-yet-on-shift and on-shift workers within the app, and presumably would direct (not “offer”) new rides to available on-shift drivers and only offer shifts to available off-shift drivers if there was unmet demand (not just for a ride, but sufficient projected need to justify the shift.)


>- I don't want each company to be forced to pay a minimum wage per hour that then means a driver loses the flexibility to drive for multiple companies at once.

Those two things do not compute. How does the amount being paid determine where a person can/cannot work? I can hold two jobs now if I wanted (even though I'm being paid way more than minimum wage), and that's as long as I honor the contract I have with my current employer.

>- I don't want drivers to lose the flexibility to do this on a casual or flexible basis. Quotas and the like will mean the only option is to drive full-time. I'm all for people being able to supplement income. I feel like this is useful to a lot of people.

This one too. I get that companies will start to prefer full time drivers, but just like in other industries, there will be temp workers and part time workers.

And depending on how the laws are written, there will also be "contracting" companies that lyft and uber could use to fill up their drivers. Kind of like how Via is doing in NYC - from what I can tell very few drivers actually work for Via, instead they work for all these other car companies, and Via delegates rides down to those companies who then dispatch the vehicle.

These regulations will cause a sea change in how this industry works. Whether it is for the better or not is something time will tell.


> Those two things do not compute. How does the amount being paid determine where a person can/cannot work?

If I can collect 8 minimum wages concurrently from 8 gig companies by being logged to their 8 apps, their business models become unsustainable, and the gig economy dies.

I guess this is the intention of this legislation, but I can't rule out the proponents simply not understanding what they're doing.


Their business model already is unsustainable.

As for driving for multiple companies, under conditions devoid of government interference, you being able to "life hack" your way around low pay in either of the companies you drive for means there's no pressure preventing them from lowering the pay even further.


>>Those two things do not compute. How does the amount being paid determine where a person can/cannot work?

For most other jobs, you do two jobs sequentially. So I'm paid minimum wage working 4 hours for Home Depot, then minimum wage working 2 hours for Home Hardware.

But drivers will be logged in to Uber & Lyft etc in parallel. How do you count, calculate, and enforce minimum wage? There's potential for double-dipping here. Or, if you only calculate minimum wage based on actual driving times, I think that's basically already effectively the case.


Is there really much potential for double-dipping? If you pick up a passenger, you're picking up an Uber customer and getting paid for that, or picking up a Lyft customer and getting paid for that. You can't pick up someone and get paid by Uber and Lyft for the same fare.

If Uber and Lyft have to pay you minimum wage while you're 'available' for rides, you can (and drivers often are) be available in one while taking a fare in the other.

If they only have to pay while you have a fare or are driving to pick up a fare, a driver may accept a fare on one app while finishing up the other.


I don't see a problem with the last point actually -- as a taxi service company you need to pay for the car to go to the customer, then to go where customer wants. If the car is doing something else (delivering a package, driving another customer) while on the first leg of that, why would you expect not to pay for that leg? (assuming the car arrived within acceptable timeframe)

Problem of idling on multiple accounts can be solved by only paying out idle time by the company the driver ends up picking up a customer for or when the 2 or 4 hour shift ends. If you see driver idling on your time a lot and never picking up rides even though they are available, fire them like you would do with any employee.


As the second customer/employer, I wouldn't expect to pay time for the first leg while someone else was paying for it because routing may not be most beneficial to me/my customer. For example, the dropoff may be in the wrong direction -- I shouldn't pay for that, or the resulting extra time to doubleback.

Paying out idle time by the company that provides a fare makes sense, but requires cooperation between the employers.


But you control that by setting expectations, like driver must take a reasonably direct route after accepting request or arrive within a reasonable time. It is up to the driver then to decide if new request is on the route or postpone accepting until first commission is handled (somebody else might pick up that ride then).

I'm sure the devil is in detail though and we might end up with drivers occupied by route juggling when they should focus on safely driving...


You can log into many apps and look for customers from many networks at the same time. This is what majority of full time drivers do here (many part time ones only use Uber for example).

The same way it currently works. You don't get paid while you're logged into the app. You start getting paid once you accept the ride and stop getting paid once you've dropped off the rider.

I don't see how this is a problem unique to uber or lyft. employees can game the system of any employer. This is an employer problem, not a legislation problem.

fwiw, I use Uber or Lyft multiple times a week across multiple cities and generally ask drivers if they drive full time or just during free time. Out of the last 50ish rides, I think two of them were not doing it full time (as in they do 6+ hours a day). I'm fairly confident we're well past the original "gig" only-when-you-want phase of ride sharing.

If someone is driving for ten hours a day, they're ten times more likely to be your driver than someone who drives for five hours a week. So your two represents around twenty part time drivers. That's a significant number of people you're booting out of having a supplemental income.

Someone above mentioned it was less of a by-city split and more of a by-area type. For example, city drivers are more likely to be full time, where suburban drivers are more likely to be part time.

It depends on the region. Here a lot of people drive part time and I am yet to meet a driver who does it full time and doesn't drive for multiple companies.

> It's just that quotas and company minimum wages aren't the way to do this.

And what, in your opinion, is the way to do this?


> - I don't want regulations to keep smaller competitors out of the market. There's a real risk of this.

The market has a giant moat, via the mind blowing amounts of VC and IPO cash that they used to buy market share.

The “risk” of regulation stopping new entrants seems so laughably minor compared to this that it makes one question the impartiality of the whole argument.


> you can drive for more than one company at the same time.

> the flexibility to drive for multiple companies at once

A point of clarification: Lyft effectively prevents XL drivers from dual-platforming. They "keep you busy"* with regular and shared rides which you're not supposed to turn down. Accepting these rides renders you unavailable for UberXL rides when Lyft has no XL rides to offer.

* - https://help.lyft.com/hc/en-us/articles/115012926367-How-to-...


Let's say the bill is amended with a 10-hour or less "side hustle" carve-out. Do app-based taxi companies start gaming the system?

For example in the Bay Area Uber could start five shell companies for the East Bay, SF, Peninsula, South Bay and North Bay. Then each driver is restricted or algorithmically encouraged to work in a different zone for each 10-hour segment.

The TNCs already (or at least used to) operate different companies for different markets. This scenario doesn't seem to far fetched.


Does American law really fall for that sort of cheap scheme? In most other places that would be an additional law broken.

Yes we fall for it. We have people setting up LLCs (essentially"disposable" shell companies) to buy up real estate. Then to avoid real estate taxes they sell the LLC, which avoids triggering a "sale" of the real estate property. This is perfectly legal. Every landlord I've rented from in California has done this.

This is the whole word vs spirit of the law thing.

A reasonable court could easily spot this scheme, the law shouldn't be enforced by a series of if statements.


Like software engineers, lawyers make big bucks because they can spot problems in complex logic. A smart legislator is going to do everything to make sure the courts interpret the law as intended. Othetwise, what's the point of passing laws?

Uber / Lyft already have really strong incentives/disincentives to discourage driving for two companies at once. I can't remember the last time my driver had both apps open on separate phones.

Also, a minimum wage per hour is going to probably be much better than driving for both companies in practice, since you'll still be getting paid even if Lyft alone dispatches fewer rides. You're even saving money there since that idle time isn't burning up gas.


> I'm not a fan of all these moves to treat drivers as employees for one simple reason: you can drive for more than one company at the same time.

This is a non-point. People often have more than one job, and they're considered employees at each of their employers.


What would be an example (even if unrealistic) for drivers to earn sufficient income if there's no limit placed on the number of companies and drivers?

There's no reason they should lose flexibility in terms of hours. That's just made up stuff that Uber puts out to try to make their argument.

If you drive more than 30 hours per week or 120 per month for one company and meet the 5 criteria, you should get benefits and be taxed as an employee for that period from that company, unless you are already receiving benefits from another company.

There is no reason to prevent them from logging in and out when they want.


How long have you been driving for Uber/Lyft to support your family?

You use the phrase, "I don't..." quite a bit. I'm curious, are you a driver?

What about “I don’t” signals that he’s a driver?

Discussing Uber and Lyft is boring because the companies are so reviled, but this bill is much bigger than Uber and Lyft.

It seems the ABC contracting test is pretty detrimental to any kind of contract hiring that is done in an area which is closely related to a company’s core business.

Software development contracting in particular seems like it would be particularly problematic under this test.

I contract out work all the time which I closely manage many aspects of how the work is done, and for work which is core to my business operations, and within my core competency.

Mostly this is to be able to quickly scale up development capacity during a project where there are isolated pieces that can be worked on concurrently. It’s often work that I could do, but for scheduling purposes, would rather hire out.

I’ve also done “micro-contracting” where I break out specific problems which I could eventually figure out a solution but it’s easier to find an expert who can spend 5 hours on it while I keep moving on other pieces of the puzzle.

What I’m doing seems like it’s exceptionally common, and because of how ABC test is a logical AND I’m not seeing the “escape hatch” where it wouldn’t be basically preventing software contracting work for software companies.


A lot of people on HN seem to think that this bill mandates (a) full-time employees and (b) fully independent contractors without anything in-between.

There is such a thing as a temporary, part-time job (as an employee). See, e.g., every single Walmart ever. Most major fast food chains. Most retail stores during the holiday season. Etc.

The primary change is that companies will start having to handle payroll taxes for part-time workers rather than pushing these administrative costs onto the workers by claiming that the workers are actually their own businesses.


Temp workers and contractors are very different types of employees...

Yes, they are.

Temp workers are part-time employees that can be performing any task your business requires, including your primary business activity. While working for you, they aren't working for someone else (though they might be working for someone else when their shift ends for the day).

A contractor is someone with their own client base who handles a specific project that is not your primary business activity (though the project may support that activity). While working for you, they could be working for someone else as well (as long as they're not billing both clients for that time if the contractor bills on a period-basis).

These distinctions above are generally how the difference between employees and contractors are laid out internationally, and especially when dealing with cross-border worker classification issues. These distinctions have also been part of US jurisprudence for many decades, though they've only been formally or informally codified relatively recently.


There's an irony that laws set up to protect workers at the low end mess with workers at the high end. As a SW contractor, I never much cared about insurance/time off/sick leave/etc. and was well paid to not care.

From another article:

" b) is doing work that isn’t central to the company’s business, "

Bam. How many contractors lose their jobs from that sentence? Ridiculous.

a quick edit: Now that I think of it, does FTE imply an hourly rate? If so, how do you reconcile an Uber model of piecework with that? Perhaps they could simply rent out an Uber medallion.


Employees cannot be paid a fixed rate per deliverable. They must be paid an hourly rate, or be paid a fixed salary per time interval, regardless of the number of hours worked.

But the employer can mandate when and where an employee works. So, for example, they can require that you are on the road a certain number of high demand (surge) hours. They can also require that you respond to a call to pickup a specific passenger within a certain time period, etc.

So the result will be their algorithm will ensure the hourly rate they are paying a driver is covered in the long term by the rides they are serving, or they could simply fire that driver.

In a complex system, you could specify time slots which you would promise to be available, their system would determine a subset of those slots where they wanted to hire that driver which would work out to be profitable enough for them. Their system could suggest an alternate set of (partially overlapping) times to make a counter-offer of when they could hire you. If the driver didn't show up for work on the peak hours they really needed you enough times, the driver would be terminated.


I think hiring short-term contractors for a quick scale up is the practice most at risk. Let’s take an even more constrained role like customer support - say a company wants to hire more support reps over a period of busy sales like Christmas. Since these people are heavily directed and are just adding capacity to the existing business, it seems likely that would fail the ABC test.

So what are companies going to do in this case? Well, California is an at-will employment state, so maybe they’ll get really good at onboarding and then hire and fire FTEs within one month to cover the busy season.

That doesn’t seem desirable to workers either.


There are temporary or limited term part-time jobs, though. There is no real need to hire and then fire folks. Simply hire as a seasonal employee. This is what retailers do around Christmas, for example. Sometimes they'll hire an employees a permanent employee afterwards, but not always. There are folks that take these jobs year after year - both around holidays and during summer breaks. Sometimes this isn't ideal and sometimes it is pretty perfect for the employee.

But these are not contractors. They are employees. The company pays all of the applicable taxes and handles payroll. The company is responsible for workplace injuries and so on. I don't see where this is really a big issue - and hiring these folks as contractors seems more a thing to take advantage of folks.


I think if you hire another software engineer to help you it could potentially fail criteria C: "The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.".

Looking at https://www.thebalancesmb.com/what-is-the-abc-test-for-indep... it appears the intent is to handle trades like construction subcontracting, which is very similar to what you want to do.


Yes, that is one of the three requirements. If it was logical "OR" this wouldn't be an issue, but you need to satisfy all 3 criteria, not just one.

In general you'll very likely have to let go of the "closely control" piece to be able to contract the kind of work you refer to out safely. Contracting to experts would probably be pretty safe. Note that nothing will happen unless someone complains but it's a business risk you're taking.

The reason for these types of regulations is basically that society benefits from people having secure jobs and benefits and the security translates into higher investment back into economy (ie people save, buy houses etc)

I'd suggest to consult a lawyer.


Contractors send 1099 they receive from a company to FTB. They don't need to complain.

This means that a bootstrapped start-up cannot temporarily hire a graphics designer or a coder in California anymore, without the budget to make him an employee. But non-VC entrepreneurship has been hardly possible here for other reasons: building and rent control regulations driving the housing and office space costs. Since the 2006's "web2.0", progressive California regulators are at it for real, pitching entrepreneurship as an enemy of labor: it's no longer a place for small business and non-VC startups. Those have been fleeing.


This means that a bootstrapped start-up cannot temporarily hire a graphics designer or a coder in California anymore, without the budget to make him an employee.

This is so completely wrong.

You know what the difference between a temporary, part-time employee and an independent contractor is, from the business' financial point of view? They have to pay payroll taxes (and in some states unemployment insurance levies) for the part-time worker instead of forcing the worker to handle those costs themselves. And that's it. They aren't required to provide benefits or anything else until they exceed a threshold size in terms of employees (generally 50) or annual income (usually >$10 million/year).

In your specific example, the startup could hire both the designer and the coder as employees or as contractors, so long as both were allowed to work on other gigs while they were temporarily contracting with you and your startup wasn't in the business of graphics design or software. (If your business is a software business, the analysis is more granular: is the coder working on the revenue-generating part of your software, or on a supporting part of the software like the networking code?)

Since the 2006's "web2.0", progressive California regulators are at it for real, pitching entrepreneurship as an enemy of labor: it's no longer a place for small business and non-VC startups. Those have been fleeing.

California went from being the world's 8th largest economy to the world's 5th largest economy over this time. Has lead the nation in small business growth for the past decade. California's regulations basically just filter out all of the fake businesses that don't have enough backing to at least attempt existence.


They have to pay payroll tax and administer payroll. I ran a bootstrapped business, that initially had several contractors, till a day I could afford to replace (in several cases, promote) them to employees, so I know this intimately. Additionally, there are payroll costs and the accounting costs, and the payroll administration burden. For a tiny growing business with no outside capital it matters more than you know.

The 5th largest economy figures come from semi monopolies like Google and Facebook. In the beginning, they get a VC investment, a comfortable office, a payroll admin and Wilson and Sonsini from day one. In the meantime, San Francisco restaurants cannot afford cooks.


I think the delta between "contractor" and "part-time or temporary employee" is a bit steeper than you are claiming.

The tax issues are not minor, to begin with. If I have no property and no employees in a given State, I likely do not pay all sorts of taxes to that state which I otherwise might have to. I likely do not even file an income tax return with that State. As soon as I have an employee living in a State, then I definitely have to file taxes there. I also have to register with their labor department, there are probably state-specific labor laws which I could run afoul of, maybe state-specific postings and notices, etc. It's not simply a matter of the payroll company making the correct deductions.

I have to follow a different hiring practice to hire an employee than a contractor. There are likely to be more requirements on how I must make the job posting, and how I can conduct the interview process. There are additional government forms that must be filled out during the hiring process, and after the candidate is hired. The legal rights of a temporary employee are different from the legal rights of a contractor in important ways that I might not fully understand.

Once an employee is hired, I either have to pay them hourly, or a guaranteed monthly salary. I cannot offer to pay the employee a fixed amount for a certain deliverable. I have to pay the employee on a set time schedule, and not based on deliverables. I cannot withhold payment based on deliverables not being met.

I will have to update my worker's compensation policy. Depending on the size of my company and the state, I may have to enroll this person (and their family) to provide health benefits, life insurance, disability, etc. Also, certain states impose family and medical leave requirements on employees which would not apply to contractors. Federal discrimination regulations only apply to employees. I'm sure the list goes on and on...

And here I was, just wanting to get some help mocking up this new UI screen, or porting some code from one language to another, or making a new logo for my site, or updating the CSS to work with latest device X, or...

Over the last decade I've spent mid-6-figures on sites from Rent-a-Coder to Upwork and it's been a game changer for being able to quickly tackle big problems which arise due to a new R&D effort, or closing a new customer contract which our current feature set doesn't quite support, or just getting logos and wireframes because I'm not a designer and don't have nearly enough work to justify hiring one.

In short, contractors are super fucking important, and the "ABC" test seems to fundamentally mischaracterize a lot of tried and true contract work. Someone that I am hiring to perform a specific task, who is working remotely, who I will not be on-boarding, who will not be working closely with many employees, and who is paid upon completion of that task and then goes away, should be a contractor, even if they are doing work that is central to my business, and even if I closely monitor or specify how the work is to be completed.


Someone that I am hiring to perform a specific task, who is working remotely, who I will not be on-boarding, who will not be working closely with many employees, and who is paid upon completion of that task and then goes away, should be a contractor, even if they are doing work that is central to my business, and even if I closely monitor or specify how the work is to be completed.

Right, they would probably be treated as a contractor under the ABC test and the new law.

You're hung up on the "central to business" part of the test without paying attention to the nuance. Laws aren't black and white, they're many shades of grey.

If you're in the business of doing X, say programming widgets, then if you hire someone to do X (i.e, program widgets) for you, then that person will be an employee for all purposes of this law. Because they should be. They're literally doing your business activity for you, and there are plenty of legal reasons that you should be liable for their work--you're passing off their work as your own to the end customer.

OTOH, if you hire a contractor to program your back end, that guy wouldn't become an employee under the test, because you're not in the business of programming back ends. That back end may still be central to your business, but it's not your primary business activity (i.e., it's not your revenue-generating activity).

even if I closely monitor or specify how the work is to be completed.

This is the most misunderstood part of the ABC test. The ABC test doesn't require that the contractors have free reign to do whatever. It simply provides that a contractor should have free reign to accomplish the work unless the manner in which the project is completed is a relevant part of the contractual requirements. For example, specifying that a contractor program your backend in Node, with spaces instead of tabs, use git, and make use of specific AWS APIs, to match your standard coding practices in the rest of the project would be fine. Another example: telling a designer they must use Illustrator and specific design tools within Illustrator to match the processes or products of other designer work is also fine.

Monitoring work for purposes of quality assurance or quality control is also acceptable under the ABC test and is indeed even expected by the courts--not conducting QA/QC has been used as a factor indicating that the worker is an employee.


> OTOH, if you hire a contractor to program your back end, that guy wouldn't become an employee under the test, because you're not in the business of programming back ends.

I have zero faith in the courts’ ability to distinguish this. In the case of Uber, their business is providing the back-end, and their revenue is a commission for doing all the back-end work. They are not in the business of driving cars — no Uber employee drives a car — and yet this bill would make the car drivers employees.

Similarly, I would have to expect someone working on any instrumental part of the product which generates revenue will fail the ABC Test.

If my product is a web API and I hire contractors to port my library to 17 different languages, pretty sure that is failing the ABC test.

If my product is food ordering, and I hire contractors to key in local restaurants’ menus into my database...


"I have zero faith in the courts’ ability to distinguish this. In the case of Uber, their business is providing the back-end, and their revenue is a commission for doing all the back-end work. They are not in the business of driving cars — no Uber employee drives a car — and yet this bill would make the car drivers employees."

I find this an interesting interpretation of how Uber defines their business. If Uber only provided the back-end for their work, the common consumer wouldn't know about Uber, you would know the driver directly and reach a deal with the driver directly. I would relate this most closely to things like in China where you can pay via WeChat or elsewhere with Square where they just facilitate the transfer of funds. They would be a distant party to the work actually being done.

Instead the average consumer knows Uber, goes to Uber with the goal of fulfilling their need of getting personal transport door-to-door, and the act is delivered by their contracted driver. They expect Uber to handle the complaint escalations, money handling, route planning, and basically everything related to that goal. If Uber provided only backend you could create your own frontend/theme to Uber for your local town (like you would a wordpress for a SMB) and create a business around just that. While there may be some back and forth on interpretation I think the real test is that based on all those steps that have to happen if the ride itself was omitted from all the services they created would Uber still be able to function and the answer is no which would make it part of the "usual course of the hiring entity's business." If Uber (not counting their other lines of business) didn't actually arrange rides for people, they aren't a company providing a marketable service anymore.


If the CSS was omitted from my website it wouldn’t function very well either.... But I still think I should be able to hire a web designer on a contract basis to setup my CSS.

This is exactly why I think the ABC test is so disingenuous. It papers over the whole reason contracts are great — providing a single well defined service for a fixed price, and then moving on with life without worrying about a million regulations and forms and paperwork and insurance and hiring practices and workplace blahbity blah.


What do you mean “society” benefits from people having secure jobs? The people with the jobs are the only ones that benefit.

But that’s only as long as companies have customers.


Economic growth usually depends on (1) increase in consumption (2) increase in investment in long term assets (housing, markets) which lowers cost of borrowing for new businesses.

Both happen more when people have somewhat secure earnings.


> Mostly this is to be able to quickly scale up development capacity during a project where there are isolated pieces that can be worked on concurrently.

Hasn't this been proven to rarely ever actually work? I've been on multiple corporate projects with strict deadlines / late penalties approaching where management from every angle wanted to "just throw as many contractor bodies as possible" at the problem. How did we get the product shipped without missing the deadline? A handful of really high level, non-contractor full time engineers swooped in and saved the day.

Another use case at the same company:

Stuff is blowing up all of the time in prod. Who is around to fix it? Contractors who have no clue what is going on and only make the code worse. The stuff is blowing up in prod in the first place because of pure lack of competency.

That's my contractor experience at least. Probably worked with 1-2 good contractors out of 100-200. Most couldn't pass FizzBuzz, knew nothing about the concept of consistent style / linting. $75/hr+ to just got tossed from project to project/fire to fire, on average making things worse.


I see your logical out being close to (IANAL):

1. with a contractor you are creating a contract around the deliverables and the time frame for those deliverables. You do not have the ability to reach into the contractor and have any say in how the work gets done (e.g. can Bob work on this task Tuesday instead of Thursday even though it's not related to interfacing with me). To me this satisfies the "person is free from the control and direction of the hiring entity in connection with the performance of the work" part.

2. "the person performs work that is outside the usual course of the hiring entity’s business" is the tricky one, but I think it more has to do of what you explain your business to be. If you are running a SaaS platform and enter into a contract with someone who provides software development expertise the relationship between your business and the contractor is different. In the cleaner case in one of the other trajectories there is a difference between someone providing supplemental cleaning services for existing cleaning businesses and someone who provides cleaning services. The relation is probably distinct enough to be interpreted this way, as someone pursuing to sell their capacity to someone else is different than a business acquiring a contractor to deliver the goals of their business.

In the Uber case a driver who works for Uber to deliver their core business is different than a company formed to provide taxi service capacity to other companies who are running a taxi service.

3. Then the last clause "the person is customarily engaged in an independently established trade, occupation or business" I think for software development this is easy to say when someone is trying to demonstrate themselves as a contractor vs. someone who is 'hired' as a contractor.

I think if you are worried about really the first case that is just something that should enter your contract language as a deliverable of the other entity. The relation between you and the entity you are contracting is different than discussions with the downstream contractors. Since the smaller contractors inevitably have this end up being the same person this could be confusing. Based on the writing of this rule I feel like you would be able to ask the entity for updates, information related to the deliverables, schedule meetings, and so on. You may be able to ask for accurate accounting for hours worked but you can't have any say when those hours were because the entity would be billing you the number of hours.

For the second case I think you would be fine if you were soliciting someone to contract some hours to work for you because the other person would be representing themselves as a consultant who has hours to sell. You would be buying hours of work in expertise X which is different than your goal of selling Y. If the relationships were built this way then I think this satisfies the third clause as well as because then this contractor would be in an independent business who could satisfy the terms of a contract between entities.

I feel like as long as you treat the other party as a business and not a person, and the other party understands this you are able to operate normally. You may have to emphasize this nature more to be compliant with this rule and focus on milestones and deliverables and contractual obligations (it is still fair to say to enter a contract that says it has to be delivered by 2pm Friday), but you have to keep your hands off defining hours to be available/hours on call/punch in and punch out times, etc. I would stick with buying and selling hours of work for some contractual outcome.


>"the person performs work that is outside the usual course of the hiring entity’s business" is the tricky one, but I think it more has to do of what you explain your business to be. If you are running a SaaS platform and enter into a contract with someone who provides software development expertise the relationship between your business and the contractor is different.

This argument seems too general. One way of looking at Uber is that it's a taxi service. Therefore, Uber and an Uber drivers are engaged in the same line of business. Another way of looking at Uber is that it's a platform to connect drivers and passengers. Therefore, Uber and Uber drivers are engaged in different kinds of business.

If you need to explain what your business is in a particular way, then you're on thin ice.


I'm okay with this.

Software development contracting, as it is right now, is intensely problematic at pretty much every level.

Hiring closely-managed contractors to work on-prem basically creates an underclass in the industry: they're just like employees, except they get no insurance or PTO, and they're excluded from most company functions, and it looks bad on a resume because they're rarely at one company for long. Hell, they tend to get treated differently because they typically wear guest badges instead of employee badges. This is simply harmful, and while a lot of companies may feel like they're financially pressured into doing so, society has a vested interest in stopping this practice.

On the other hand, hiring a remote consulting company where you give them a requirements sheet and say "do your thing and get back to me with something that fulfills this"—i.e., actual, proper contractors—inevitably turns into a nightmare. I've seen these consultants go incommunicado for weeks at a time, find every excuse to push deadlines back, and when they do turn something in, they turn in a pile of awful code that needs to be rewritten by the actual engineering staff. My experience with these people has lead me to start referring to them as "dairy farmers" because they just milk their clients, and every one of my colleagues who I've introduced the term to has fallen in love with it.

Honestly, I think software engineering contracting should just go away. Either you create and exploit an underclass or you get screwed by dairy farmers.

The only way I can see to save this situation is to legally delineate "temp employees" as a class. Temps would be employees in every way except that they have a fixed term of employment stated up front (where "fixed" can mean either a set amount of time or until a specified project is delivered). They would have benefits and PTO, just like other employees. They would be employees for the purposes of who can attend company events, what kind of badges they wear, etc. It still wouldn't be perfect because the short length of employment would look bad on a resume, but it's a far cry better than the current situation. And if it costs companies more to hire them, then that's just the cost of doing business in a society. I've seen the same arguments used to demean basic dignities such as minimum wage, overtime laws, mandatory sick leave, paid vacation time, etc., and they're all spurious.


I worked as a contractor for many years, and the opposite was true. We were brought in to help the in house devs improve their systems and frankly clean up their code.

In a lot of places, the hiring company had counterproductive requirements placed on their devs, stuff like mandatory CS degree, mandatory clock in and out time, and not paying enough to get the best talent. We were able to come in and not subject to those requirements, do better work.

It sounds like you've worked at some bad companies who were not able to make effective use of contractors, and due to this limited experience you are advocating for a law which would make many mutually beneficial business relationships illegal. You want the state to come in and use an extremely blunt law to help you grind an axe about your boss or something.


> to help you grind an axe about your boss or something.

I like my boss just fine. Please refrain from personal swipes on Hacker News.


Sorry, you’re right. I meant to say that some employees who have had a bad experience with bad management of contractors at their workplace want the state to come in with a really blunt law that harms contractors who have nothing to do with their badly managed workplace. This strikes me as short sighted and unnecessary.

In my case, the situation is hiring a remote contractor (an individual contributor, not a company) to perform a well defined task at a fixed price within a specified timeframe.

The job will be closely monitored and controlled to ensure progress is being made, and the job is being done in a way that the final product can be successfully integrated into the code base. The work is central to the company, but may be outside an area of expertise, or an added work item beyond the scheduled capacity.

In otherwords... pretty much any software-related contracted task, done by any bootstrapped startup, ever.


From the bill:

> a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation or business.

Under these conditions, what position would qualify as a contractor?

The first clause

> free from control and direction of the hiring entity in connection with the performance of the work

seems awfully broad. If I contract someone to clean my house, I would hope I have some control and direction of the person in connection to them cleaning my house. Or am I reading this wrong.

The second clause

> the person performs work that is outside the usual course of the hiring entity’s business

means I can't contract out work that I normally do? So if I'm a cleaner, I can't contract out other cleaners if I'm swamped.

The third clause

> person is customarily engaged in an independently established trade, occupation or business

I don't really know what that means

Can someone shed some light on the text?

[0] https://legiscan.com/CA/text/AB5/2019


This problem of legally differentiating between employees and contractors has been around for a while and relates to multiple factors so it is informative to look at this in contextual terms. This arrangement has become known as the "ABC Test". There is a good summary of what it means at The Balance Small Business: https://www.thebalancesmb.com/what-is-the-abc-test-for-indep... and discussion of adoption of this test by the California Supreme Court at the California Public Agency Blog: https://www.calpublicagencylaboremploymentblog.com/wage-and-....

To attempt to summarize in a way that answers your questions: First do you know how to do the work and use your own expertise to adapt to circumstances or do you follow specific direction, training, and escalation procedures as dictated by management? If you are following a script as trained and have someone overseeing you as you work then you are an employee. If you know what to do and get only summary instructions then you are likely a contractor. Second, if you are hired by a cleaning company to extend their cleaning capacity using their methods and equipment then you are likely an employee, but if you are hired by a software company to sweep their floors whenever they get really dirty then you are probably a contractor. Finally, if you do cleaning on your own for various clients and are hired to do cleaning then you are likely a contractor, but if you clean for one client by their instruction and with their oversight and support then you are probably an employee. Note that each of these criteria has substantial wiggle room and the idea is they all work together to support a decision one way or the other.


If that's true, then I would argue that Uber and Lyft are contractors not workers:

> First do you know how to do the work and use your own expertise to adapt to circumstances or do you follow specific direction, training, and escalation procedures as dictated by management? ... If you know what to do and get only summary instructions then you are likely a contractor

Surely Uber drivers already know how to drive. I'm not sure whether they're under obligation to follow GPS instructions.

> Second, if you are hired by a cleaning company to extend their cleaning capacity using their methods and equipment then you are likely an employee, but if you are hired by a software company to sweep their floors whenever they get really dirty then you are probably a contractor.

The Uber driver uses her own equipment although you could argue that they use Uber's methods.

> if you do cleaning on your own for various clients and are hired to do cleaning then you are likely a contractor, but if you clean for one client by their instruction and with their oversight and support then you are probably an employee

In my experience, almost every single Uber I've been in drives for Lyft as well.


> I'm not sure whether they're under obligation to follow GPS instructions.

UberX, no, the GPS is a suggested route. UberPool, yes, you have to follow the GPS as instructed.

> The Uber driver uses her own equipment although you could argue that they use Uber's methods.

This is where I tend to agree, with caveats. A rideshare driver is a contractor. But when it comes to compensation Uber and Lyft want to act as an employer. Currently, compensation has been trending down to the point it's becoming a unprofitable for the driver. A contractor would be able to negotiate a rate saying, "I'll drive for $0.55/mile." What we currently have is an email to all "contractors" stating the rate starting today is X/mile. That sounds more like an employer notice than a contract negotiation.


Do contractors always really get to negotiate? All the contractor jobs I’ve seen have had take it or leave it fixed rates. I think negotiation is only possible at the high end, not for low end devs or cleaners or construction workers.

Every contract job I've ever done had a negotiable rate. Obviously in some cases they say 'I can't go higher than this', and then you say no. That's part of any negotiation: The implicit assumption that either party will just decide to end negotiations. That is not part of driving for Uber or Lyft because everyone gets offered the same rate, there's no negotiating up/down. It becomes 'take it or leave it', just like being an employee where once you're hired there is no negotiation involved.

In a few cases my contract negotiations actually involved choosing between hourly or weekly, with differences in effective pay based on overhead for both me and the employer.


I thought that both Uber and Lyft change their rates (surge pricing) when they want to attract more drivers? Then it seems more like a task auction related to supply and demand (drive now for X, drive later for X+).

> What we currently have is an email to all "contractors" stating the rate starting today is X/mile.

By that logic all taxi drivers are employees of the cities of their medallion, because cities set the taxi driver rates.


Actually it goes beyond just setting the rates. The state sets the rules. The state can "fire" drivers. Managing transportation is core to what government does. According to the ABC criteria, they should qualify as state employees with all the ensuring benefits and it would be hilarious if all taxi drivers in California sued the state to become state employees just like bus drivers and train operators.

I don't know about other states but in mine there is no medallion. You can start a T&L company today if you wanted to. You only need to read up on the state and local certifications, rates, livery, and vehicle requirements. Most of the taxi drivers I've used are actually employees of a T&L company.

I think the sticking point for Uber is

> the person performs work that is outside the usual course of the hiring entity’s business

It’s hard to say that offering rides is not Uber’s core business. There might be an argument that Uber is just a matching service, but that’s an argument to make, not self-evident.

This sort of stuff is happening a lot in construction and cleaning services as well. If you run a business, the people that do the core part of your business should be considered employees, or else all of labor law becomes pointless.


This seems like it will affect government and corporate "on-site" contractors more than software-routred cabs.

Unintended Consequences, arriving.


Individual government on-site “contractors” are almost entirely W-2 employees of firms that are contracted by government. That's often, though perhaps not as consistently true, of BigCorp onsite contractors, as well.

There will be no impact to those at all.


So if one wanted to drive flexibly for a software-routed cab company under the proposed California regume, could one set up an LLC and then contract through the LLC?

Yes, probably.

That is actually how most (sub)contractors in the construction world currently have things set up for legal reasons.


If anyone is looking for a startup idea, there's probably some merit in setting up an LLC-as-a-service business so those individuals impacted by AB5 that do want the flexible work can continue to do so without much headache.

> To attempt to summarize

Correct me if I'm wrong, but you're summarizing the ABC Test. The question here is, what does the new labor bill mean?

Or is it the case that the new labor bill is "just" an embodiment of the ABC Test. If so, please state that clearly. I don't get that right now from your comment.


The new labor bill puts the ABC test, which is currently in case law, into statute.

From your second example... that sounds like it’s going to affect construction workers too... a lot of contractors just hire construction workers day to day to expand their workforce. Would that become illegal or is it different in construction?

If yes, is this not a good a thing? Part-time employees are not significantly different than contractors in terms of benefits owed so it's not a major cost for that use case. And if you're working full-time for somebody, don't you deserve the benefits everybody else gets?

> And if you're working full-time for somebody, don't you deserve the benefits everybody else gets?

I'd argue that if you deserve benefits like everyone else.

Especially ridiculous is the situation some people I know of are in. They are working two or three part-time jobs because they can't find a full-time position. The places that employ them have many part-time positions, and fewer full-time positions. And these people don't get benefits.

So you've got people who are working 40+ hours a week, for employers who have enough hours to work to have full-time employees, but instead have part-time job openings instead.

All so that the employers don't have to pay for benefits.


I would guess it's because their labor is not worth minimum wage plus all the extra overhead costs of a full time employee. It's people trying to get by despite stupid price controls that don't reflect reality.

And because we've tied health care to employment directly. If only we wanted to have affordable health care for everyone...

Yes and no.

This will force companies to hire more employees, true, but at the cost of a much smaller overall workforce. Remember that cost is a constraint for businesses.

Depends what is more valuable from a human + capitalism perspective, fewer work opportunities that pay better or more competition and “starter/flexible” work overall.


> but at the cost of a much smaller overall workforce.

That's what people predict about minimum wage increases too. Yet the effect has always been smaller than predicted, sometimes even non-existent.


A general contractor's area of business isn't exactly doing construction, it's the project management aspects. Talking to vendors, organizing work crews, acquiring specialized labor from various trades, communicating project information to various stakeholders, etc.

It's a subtle distinction, but one that I suspect would survive legal scrutiny.


A lot of what contractors do in hiring day labor and paying them cash under the table is already illegal. I don't think this bill would change that.

So you can't subcontract? That's often within the same industry

In my country, if you earn 80%+ of your income as a contractor from a single company (with some limitations), you're labeled as dependant contractor, and special rules apply (eg: they can't just break a contract, they must give notice first, etc).

This is a good distinction that more countries should adopt. As usual, technology and business has changed faster than the law. Seems like the employee/IC dichotomy is too blunt of a distinction nowadays.

This sounds like a good classification, and I would hope along with it would come corresponding taxation policies. Here in Canada there are many "small businesses" which are incorporated single persons getting paying the miniscule corporate tax rate, with various tricks to avoid income tax (paying spouses, drawing dividends, investing in 'corporate' assets which aren't, etc.) while drawing their income primarily from a single source (often a corporation or charity they are personally associated with.)

When the gov't made noises about small business tax reform people screamed bloody murder and they had to climb down. Which only shows you how pervasive this kind of 'contracting' as tax avoidance actually is.


Similar thing seems to be going on here in the UK.

I must admit that I don't know enough of both situations to say much.

There seems to be quite a bit of vitriol online about the rule changes in the UK though.

I do remember reading the rules when I became a contractor a few years back and thinking: Ok, so I'm inside IR35, going to use an umbrella company as it's simpler. Was told that i was a fool and contract was outside IR35. As far as I could tell, nobody meet, or indeed, could meet the substitution clause.


I think it means that contracting can't be a part of a company core business model - as is in the case for uber, lyft, or cleaning services.

Examples of a contractor here would be: hiring a third-party graphic designer for a few months while you ramp up hiring at a startup.


The law says AND. You need to comply with all three conditions.

So, you would also need to be sure that they were:

>free from control and direction of the hiring entity in connection with the performance of the work

And:

>person is customarily engaged in an independently established trade, occupation or business


i am not a lawyer but ive been a hiring manager for a while so ill give you my understanding.

> free from control and direction of the hiring entity in connection with the performance of the work

An independent contractor should be free to work when, where, and how they want. IE, you can't demand a contractor show up from 9-5 at your office, wearing a company uniform, and following employee policy.

> the person performs work that is outside the usual course of the hiring entity’s business

for example, a company that sells software, might hire a contractor to update their online advertising. The company doesn't sell online advertising or have any expertise in it, and they don't have a need for a full time position for online advertiser.

this one is going to be interesting for uber and lyft. right now, they identify and brand themselves as a ride sharing company. So rides ARE their business model. They might, for example, be able to pivot into a software company that licenses their ride-hailing software to drivers (who are license the software to help run their own independent businesses), then maybe they can get around this after some work. but right now its appears that drivers work for uber and lyft to deliver services to Uber/Lyft customers.

> person is customarily engaged in an independently established trade, occupation or business

this is the most straight forward of them all. If an IC provides their services, the same service, to more than one company, that's a good indication that they are running their own business and not working as an employee for another. Here, Uber and Lyft actually benefit from each other because a lot of drivers drive for both Uber and Lyft. Thats why we've seen both uber and lyft drop their exclusivity arrangements with drivers in recent years.


As far as controlling and directing the performance of work, that means how they do the work itself. Requiring them to use certain tools, resources, or techniques, for instance.

You can ask them to dust, but can’t order them to dust a certain way. Of course you can make requests - don’t use cleaning product XYZ because I’m allergic, don’t dust the China because it’s too fragile, etc. But I suppose at some point it could be argued that too many such requests cross over into essentially supervising how they dust.

I think you’re right about contracting out for help. If you have employees already, and then you expect another person to join in and operate just as an employee would, why wouldn’t they also be considered an employee? I’m sure there could be some loopholes however.


I think an example would be for companies like Google who hire a lot of contractors from hiring agencies who do work at Google, but these people don't technically work FOR Google and therefore don't get the good Google salary or good Google benefits. I guess that is counter to Uber who hires their own people and basically contracts them out to themselves? I don't know if that means the easy loophole for Uber and Lyft is just to now hire all drivers from a separate company and then call them contractors.

I feel like both sides of the “are they contractors or employees” arguments feel like they are trying to jam puzzle pieces that don’t fit together to make an argument.

Clearly drivers are not employees in that they pick their own hours, and they can drive for as long and for whomever they want - and these are all things that make Uber/Lyft a great option for people between jobs, substitute teachers, actors, etc.

At the same time it is pretty clear that your inability set prices, control which requests/routes you accept/decline and lack of differentiated work makes you an employee, especially if you drive 40+ hours a week.

The law needs a way of handling this type of job, without forcing it into one camp or another because there are downsides for everyone by doing so. Let’s call them semi-contractors for the sake of differentiation. There should ways of getting health insurance pro-rated by multiple companies if you work X hours a week. There should be requirements around the workers insurance provided to these semi-contractors while on and off the clock. There should be guaranteed minimum wages after expenses. There should be strict rules about building out complex and accurate payout reporting for both regulators and semi-contractors including complex bonus payouts. It should be 100% illegal to steal tips from an app. Semi-contractors should have the right to tell Uber they don’t want to drive to east bay without penalty if they’re contractors that can have autonomy over their work.

But none of these issues get solved by calling driver employees


The insurance issue is a defect in the US insurance system and is not Uber or Lyft’s fault IMO. Insurance should either be purchased exclusively by individuals or should be a government service. Employers should not be involved.

As I understand it, the US is essentially unique in the idea that jobs come with insurance.


This looks a lot like rent control to me — optically it’s perfect, help the little guy; but in practice supply is restricted, prices rise, competition decreases, service gets worse. the poorest suffer the most (fewer driving jobs, higher prices).

“Of all tyrannies, a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

— C.S. Lewis


Just let them vote for the bill that causes them more unemployment. California needs more homeless.

The ultimate issue here for Lyft, Uber and such is not contractors vs employees but the amount of subsidy these companies need to give to get people to buy their product. Making people employees is only a big issue for these companies because it further increases the subsidy required to get people to buy.

There’s an old saying that’s its easy to grow fast if you’re selling $2 bills for $1 and the Uber, Lyft, (and WeWorks) and such of the world are simply following that model. The market is finally smelling the BS on this strategy for long established “startups.”

If such companies don’t have a viable path to profitability then the whole 1099 vs W-2 argument is moot.


I haven't read the bill, how does it effect other companies that have traditionally used sub contractors? Like for example, General Contractors? This bill is being touted as a poison pill to harm Uber and Lyft, but based on the articles I have read about it, it sounds more like a bomb with a much larger blast radius.

I was the CEO/cofounder of Bloc, an online coding bootcamp. Our mentors started out as tutors but we eventually converted them all to employees and learned a lot about California labor law in the process.

What was frustrating about the labor laws is that there were never any clear rules about what constitutes a contractor versus employee, there are just some "smell tests" and guidelines but it's ultimately deferred to the judgement of California's labor bureau.

> a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation or business

The new laws being proposed here don't look much different from the guidelines that already exist, they're just more black and white leave less room for interpretation. I think the most troublesome one for startups is "the person performs work that is outside the usual course of the hiring entity’s business", but it shouldn't affect general contractors unless they're working for a general contracting company.


How does the law define the hiring entities business? A general contractor is in the business of building things. Uber is in the business of transportation. The GC contracts out the actual building tasks to sub contractors. Uber contracts out the actual driving to sub contractors.

I wonder when companies will just stop starting up in CA. It seems like they could just operate in another state and everything would be fine. You'd find plenty of programmers in a place like the NC research triangle.

As they do that, NC will become what CA is today.

It's pretty clear that NC has become a different state already compared to the one that used to send Jesse Helms to the Senate not too long ago, just as CA changed from the home state of Richard Nixon and Ronald Reagan to what it is today.


>It seems like they could just operate in another state and everything would be fine

I've heard this for a long time, and yet the most profitable companies continue to be concentrated in a select few HCOL areas that have comparatively better rights for workers.


> ... the most profitable companies continue to be concentrated in a select few HCOL areas that have comparatively better rights for workers.

It's rather odd, then, that these profitable companies keep reusing the same playbook—create companies whose value depends on undermining and/or ignoring workers' rights/protections, particularly by depending overwhelmingly upon placing workers in positions where they have to choose between exercising and enjoying these better rights or earning an income. It's almost like the people creating these companies don't think they have any sort of legal, social, or ethical obligation to respect and perhaps improve workers' rights and conditions, as well as avoid shifting the burdens of their business model onto their "contractors".

It'd be pretty awesome if these profitable companies would make it part of their core mission to be better than their competitors and peers where their labor practices and outlooks are concerned. Of course, they probably wouldn't even be profitable/highly valued in the first place if they were actually employing people at fair wages and treating them as first-class members of the companies.

I'll be the first to recognize the incredible convenience of Uber, Lyft, et al. And as a person who has never even paid attention to the cost of a ride—or when I have, summarily forgotten about it minutes later—I would feel infinitely happier being a customer if I knew the driver wasn't feeling obligated to drive for both companies just to maximize their income potential for whichever one has the next ride—because that is the typical answer I get from drivers on the few occasions I use either service and directly ask them about it when I notice they drive for both services.


>It's almost like the people creating these companies don't think they have any sort of legal, social, or ethical obligation to respect and perhaps improve workers' rights and conditions

How can a private company accomplish this? Haven't consumers proven that they choose to purchase from a competitor that offers the same services/products at a lower price due to not offering the same benefits or conditions at work? If Uber took on this responsibility, then why wouldn't people just switch to using Lyft?

The only way it makes sense to me is if the government mandates certain work conditions/benefits/quality of life to everyone.


This is a question of ethics, not domicile. Any company founded on the premise of an unethical and harmful business model that externalizes all of its costs deserves to be put down the same way.

How is Uber unethical? They aren't forcing anyone to do anything. Maybe you could say they are fraudulent because the contractors don't understand the true costs/benefits of providing their own car, but isn't that a bit paternalistic and treating people as dumber than they really are?

Releasing all of these drivers in to the general workforce could reduce wage pressure employers are feeling right now. While that might be the more ethical thing to do, no one else is going to benefit besides employers who want cheap employees.

Simply shutting down the business isn’t the only possible outcome, nor the most desirable. The mere fact that Uber’s current business model is unethical doesn’t imply that it’s also incorrigible. Hire drivers as employees, pay Uber management roughly what a SV software engineer makes, and raise prices to compensate for the difference in order to become somewhat profitable, like a real business. The presumption that customers will simply stop using Uber is either naive or purposefully misleading, I really can’t tell which.

It's a common assertion that worker's rights (most notably the illegality of non-compete agreements) are the reason that Silicon Valley beat out Boston and other likely candidates.

Beat out Boston for what?

SV, NYC, Boston, DC and other HCOL metros are places you go to make large amounts money (in varying industries depending on the city) while hating every second of it. Some people have an exit plan. Many more go "oh crap, we need to move somewhere with good schools" and then wind up in the suburbs.


never.

California is the 5th largest economy in the world so choosing not to operate in California would be like giving up on a huge piece of the market.

All that will happen is that the cost of goods will increase to cover the cost of increased regulation. This may increase competition somewhat but the size of the CA market will almost certainly make up for it.


CA is not only a beautiful place to live, but the single place around which tech gravitates.

There are many companies now starting up in places around the US. The funny thing is that nowadays you don't even need a real physical presence to get things done.


Not all tech companies rely on exploitative labor practices.

I don’t think these drivers are independent contractors. These people don’t negotiate prices they charge for their services. How’s that independent if the rates they’re paid are fixed by some other parties?

While I agree with you, the counter argument is that they're not forced to take a fare offered - Uber/Lyft are basically posting the option to take a fare and the driver has to choose to accept it. It's similar to if you posted a project on Upwork for a fixed dollar amount - it's up to the workers on there to decide if it's enough or not without negotiating.

This is why the whole ABC test of the new proposed law came into being.


What you're missing is drivers are specifically not told the value of a ride before accepting it.

You often find out after you've driven 5-15 minutes to a pickup that you're about to spend 10-20 minutes in traffic and of the $9 they're paying you're only getting $3.75.

The bad rides are essentially bundled with the good.


I thought this was supposed to be good for uber and lyft since it would choke out any smaller companies with less cash to burn in contrast to uber/lyft who have deep pockets.

Uber and Lyft will probably respond by directing the drivers more closely ( http://coyoteblog.com/coyote_blog/2019/09/why-california-for... ). They’re in a position to do so. You are correct that smaller companies probably couldn’t pull that off.

It is, but a headline mentioning some small-time Uber competitor wouldn't get any clicks.

Maybe a start would be having universal healthcare so we don't have to worry so much about someone having a full-time job.

I have to imagine a large part of this argument is rideshare drivers just want some healthcare without it costing a fortune. They are already making a lowish wage driving people around, how the hell can they afford healthcare on their own?

Yes there are other workers rights that might be nice, and things like vacation time etc. But I have to imagine a large part of this conversation is directly related to healthcare...


A gentle reminder to every one that Uber and Lyft (though mostly uber) broke the monopoly that was considered un-breakable. Such companies aren't supposed to provide a "living wage", they're supposed to be "gigs" on the side. Some people to live off them because they don't have jobs at the moment, but I'm not sure that makes it incumbent upon the services to change their models. You can have a day-job and also drive a bit for a ride-hailing service. They've provided more opportunities for people to pick up some extra work, in an industry where the previous option was zero dollars for any one trying to drive a taxi on the side.

Bear also in mind that cities may have an ulterior motive of their own. Always ask, "Qui bono?" They sell expensive licenses, and don't like a revenue stream being lost (even if it's better for constituents). Maybe this is for the better, maybe not; but the motive of the cities is likely self-interest.

On the other hand, Uber's long-term play is quite possibly self-driving cars. I'm guessing that this is the route all taxis will go eventually, but it's also worth considering that Uber is not sustainable without continuing investment as it stands today.


Driver here. Several years full/part-time.

This looks like a situation where the solution is worse than the problem. And there is definitely a problem which is that Uber and Lyft (especially Lyft[0]) want to treat drivers like employees. I don't think the solution is to classify us drivers as employees but for them to stop treating us as such.

[0] - the most egregious example of Lyft controlling drivers is the treatment of XL drivers. Uber gives XL drivers a toggle switch where you can turn off regular and carpool rides as desired, this allows you to dual-platform. Lyft does not. In an effort to "keep you busy"[1] Lyft tries to strong-arm you into accepting regular and carpool rides regularly.

If you decide that, as an independent contractor running a small business, you would like to only give XL rides on both Lyft and Uber's XL tiers it's impossible to remain in good standing with Lyft and at all times you will live with the threat of deactivation hanging over your head.

[1] - https://help.lyft.com/hc/en-us/articles/115012926367-How-to-...


Now Uber and Lyft will force a ballot measure, as they promised and we will probably learn that Sacramento is out of step with the average voter in California.

That's not a given, I'm sure that labor will paint the big corps as taking advantage of the little guy in the name of their stock price. It's easier for riders to empathise with their drivers than rich tech guys and VCs.

Ah. I now understand a bumper sticker I saw 2 days ago, to the effect of:

"No on AB5.

I own this truck.

AB5 will put me out of work."

It was on a heavy double trailer dump truck, the kind that hauls dirt and debris to/from construction sites. I guess his thought is that AB5 will limit the ability to subcontract, forcing independent haulers of this type "out of business". As the services are still actually required, why the hiring company can't employ these folks rather than sub them out, I don't know. It might be fear of change.

In my own (limited) 10 minute reading, and from https://www.mulfil.com/dynamex-borello-prepare-umbrella-stor..., ISTM that the existing law governing this is based on "Borello", and I guess that for uber/lyft, "Dynamex" (ABC) would apply instead. AB5 has an explicit carve-out for the construction industry, where the existing Borello test would continue to apply.

If that reading is accurate, I don't know why this dump truck driver would have such a sticker on his trailer. The law doesn't change for him.


My guess what will happen with the bill

- drivers cant deduct car expenses, and uber /lyft wouldn’t be able to do so easily, which will increase prices and thus decrease total revenue and thus the total amount of people employed by uber / lyft

- drivers wont be allowed to drive full time to avoid benefit requirements like many places

- uber / lyft will insist on exclusivity when you are driving, complete with shifts, locations and last minute schedule changes to compensate and because they can because they are employees. Just like working at walmart or mcdonalds. Working at both will be hard to juggle.


Can someone more informed than myself explain if this applies to AirBnB?

I'm a host in Seattle. The city now requires short-term rental operators to register as their own businesses.* If I'm a contractor for AirBnb, this makes sense.

However, if I'm an employee of AirBnb, then the Washington State income tax law would prohibit Seattle from collecting taxes on short-term operators.

Note that 30+ day stays are not* required to register, which doesn't make any sense since you're still operating a business.


Because Uber and Lyft drivers are not employees, perverting the law to define them as such will have unintended consequences. Then again, it seems California is the land of unintended consequences.

They're definitely employees. I hope the scam ends.

By what measure? Most I've seen contract through two or more systems at once, or use it as a way to make a bit of money off carpooling to work. No employee does that.

If you're going to post comments like this, please at least make an effort to read some of the content of the thing you are arguing against. In this case it is very clearly explained in multiple places that the proposed bill utilizes the ABC test to determine whether a person is a contractor or employee.

Furthermore, working for multiple companies has absolutely nothing at all to do with whether you are an employee or not. There is nothing preventing a normal W2 FTE from working for two companies, provided their employee contracts allow it and they're able to sustain the hours.

You also seem to be making the argument that since some rideshare drivers only work a few hours a week, the ones who drive full time should just suck it up for less than minimum wage and no benefits.


This may actually kill Uber.

I hope to see some popular decentralized alternatives (like Arcade City, but better or more popular?) within the next couple of years.

Beyond 1-2 years I expect Waymo, Tesla and others to start deploying on a fairly large scale. At that point people may be discussing "basic income" etc. very seriously.

Meanwhile, the US still will not have much manufacturing and our leads in other areas will be diminishing.

China will be over dollars. Cryptocurrency will be threatening all fiat.

There may be a war at first between China and the US, primarily driven by AGI invented in China.

Then an international group of cyborgs and AIs may decide to end both China and the US and create a new global paradigm.

We may only have another 10 years until the Singularity.


This headline could easily have been written, “California Labor Bill, Near Passage, is Boon to Drivers.” It’s worth contemplating why it wasn’t written that way.

This reeks of regulatory capture in the making. I don't understand at all.

How we got here: 1. Taxis are various forms of monopoly everywhere they exist 2. Startups Lyft/Uber capture market share because riders want an option 3. Drivers _flock_ to use this system voluntarily that didn't exist at all before and make money if they want to 4. ??? 5. Drivers are being taken advantage of by evil corporations

Lyft and Uber are already operating at a loss. If this forces upward wage pressure in CA, do they just stop existing there?


two things:

1) Equating Uber and Lyft to taxis in the sense of employment rights isn't a fair comparison.

2) All that's going to happen is that Lyft and Uber are going to increase their prices to cover the cost of the overhead. The market will determine if the increased cost is worth the convenience.


If your business model entirely relies on paying your employees poverty wages, maybe it's not a very good business model.

That's true, but yet people still want to drive for Uber/Lyft. Perhaps people are just stupid and don't understand what they are getting into (though, that's a _lot_ of people)... or maybe they truly don't mind/don't care about the wages. I'm sure there are 3rd and 4th options, but regardless--you can piss on people's business models all you want, but they don't force anyone to work for them.

The issue behind Uber and Lyft is not compulsory work. The problem is that the depreciation, injury risk, and opportunity cost of the job is misunderstood and people are being taken advantage of. In your argument, no one is forcing them to be taken advantage of and our society should eat the cost.

You could use your same argument to say that businesses don’t need to legally pay minimum wage since someone is willing to take less.

These conditions are bad for everybody and create a depressing effect on earnings for workers.


Couldn't you simply require Uberlyft to run potential drivers through a quick course on depreciation, injury risk, opportunity cost?

That's really not a bad idea generally. Give them full information and then treat them like adults.


Why would they tell the truth?

https://thinkprogress.org/mcdonalds-tells-workers-to-budget-...

>McDonalds has partnered with Visa to launch a website to help its low-wage workers making an average $8.25 an hour to budget. But while the site is clearly meant to illustrate that McDonalds workers should be able to live on their meager wages, it actually underscores exactly how hard it is for a low-paid fast food worker to get by.

>The site includes a sample “budget journal” for McDonalds’ employees that offers a laughably inaccurate view of what it’s like to budget on a minimum wage job. Not only does the budget leave a spot open for “second job,” it also gives wholly unreasonable estimates for employees’ costs: $20 a month for health care, $0 for heating, and $600 a month for rent. It does not include any budgeted money for food or clothing.


Well, they maybe aren't forced to work for Uber/Lyft specifically, but they are forced to work for someone. I guess for most Uber/Lyft is preferable to other options, but that doesn't mean that Uber/Lyft aren't bad, it's just that other jobs are worse.

But I'm sure there's many who really only have Uber/Lyft as an option. They are forced to work for them. They need a 2nd job, and they need a job that provides the flexibility in schedule that Uber/Lyft does. There's really not any other options if that's what is needed.


This discussion is only orthogonal to the point about nobody being forced to work for Uber/Lyft/whatever else. Nobody is contending that people are being forced - therefore the discussion focuses around other questions, i.e. the core tenets of liberal egalitarianism, the nature of consent (also a metaphysical question), domination and subsumption under capital.

For example, this book review was posted on HN a few weeks ago: https://ndpr.nd.edu/news/private-government-how-employers-ru...


>That's true, but yet people still want to drive for Uber/Lyft.

Well if you leave people out in the desert with nothing but a bottle of urine, they will drink it...that doesn't mean they want to drink urine.

There is a reason we have safety standard, minimum wages and child labor laws. From the sound of it you seem to argue those regulations are to protect workers from themselves, after all no one forced children to work for penny's a day in dangerous environments...but the reality is corporations make the markets not workers and so regulations are to curb those in power whose base instinct is to exploit others for their gains.


The extremely low barrier to entry for their workforce is a part of their business model, and what by extension forces those of no other choice to subject themselves to it.

Some of the drivers that I’ve spoken with have shared that they have no other choice of job.

Though I’m rather annoyed at all this anecdotal data. If the bill is seriously being considered then surely there will be data to clarify what the reality is for the drivers.


Walmart is a very profitable company, and its wages are not high. Any new company must hire people who aren't working or hire them away from other jobs, by offering a job that is more attractive than other options.

The American taxpayer subsidizes Walmart to an incredible degree by outsourcing security to local police departments and by relying on welfare programs to make up for unlivable wages:

https://www.bloomberg.com/features/2016-walmart-crime/

>There’s nothing inevitable about the level of crime at Walmart. It’s the direct, if unintended, result of corporate policy. Beginning as far back as 2000, when former CEO Lee Scott took over, an aggressive cost-cutting crusade led many stores to deteriorate. The famed greeters were removed, taking away a deterrent to theft at the porous entrances and exits. Self-checkout scanners replaced many cashiers. Walmart added stores faster than it hired employees. The company has one worker for every 524 square feet of retail space, a 19 percent increase in space per employee from a decade ago.

http://www.citypages.com/news/twin-cities-legislators-say-wa...

>Rather than hiring their own security to deal with petty crimes, they say, Walmart is forcing taxpayers to subsidize security for its stores.

https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...

>"It found that a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815 on average for each of 300 workers."


Walmart has profit margins in the low single digits. Not what I would call a very profitable company.

https://ycharts.com/companies/WMT/profit_margin


I don't understand why profit margin is being conflated with profits?

https://beta.washingtonpost.com/business/economy/walmarts-4t...

Indicates Walmart $3.69 billion, or $1.27 per share in the 4th quarter. By comparison Apple made 11.5 Bil in the 2nd quarter last year.

https://money.cnn.com/2018/07/31/technology/apple-q3-earning...

That doesn't seem like a non-profitable company


Profit margin, or profit per employee, indicates how much room the company has to pay more to its employees if they wanted. User minikites commented that business models that have to pay poverty wages aren't good business models, to which Bostonian responded that "Walmart is a very profitable company, and its wages are not high."

I inferred Bostonian to mean that because Walmart is very profitable, and it has low wages, then it shows that minikites' comment of "business models having to pay poverty wages are not good business models" to be wrong.

To which I am responding that because Walmart's profit margins are tiny, implying that they have to pay poverty wages in order to stay in business, which in my opinion is not a good business model as it doesn't leave much slack or moat.

Of course, "good business model" is subjective, and some could consider Walmart's efficiency to be a good business model, but I am looking at it from the perspective of an equity owner looking for returns.


That's a pretty disingenuous presentation of Walmart's profit. The margin matters little when referring to them as a very profitable company. They reported $3.6 billion in their most recent quarter[0]. I'm unsure of what kind of world we're living in when $3.6 billion in profit is not very profitable. The prior quarter was $3.8 billion in profit. And another $3.7 billion in Q1 2019.

So ... $11.1 billion in profit so far this year. Sounds very profitable to me.

[0]: https://ycharts.com/companies/WMT/net_income


If you get rich from doing so, it seems to be a great business model. Maybe our society shouldn't judge solely based on wealth, but for now that is near enough how success and even good and bad are determined.

Uber and Lyft were never purported to be fulltime jobs to make a living off of. They were always meant to be supplemental income for people who had a car at low utilization and free time.

Uber and Lyft could not feasibly maintain the scale of operations if everyone driving for Uber worked only for supplemental income.

That is in fact the only way they could maintain it. They are used burstily and have very little use for a standing fleet doing nothing for most of the day.

That would only work if supply and demand spiked at the same time, and I doubt that would be the case.

I suppose surge pricing and whatnot address that to a point, but if every Uber driver is scheduling their day around Uber demand, then that's hardly a sidegig.


Uber and Lyft purport themselves to be "ride sharing" and "supplemental income", but that isn't what they are. They're underregulated taxi companies who's employees need to work nearly full time to meet ends meet.

These companies know what they're doing. Their words, like the words of so many corporations in America, are lies and deceit. Their image is a facade meant to deceive.


> but that isn't what they are

They very clearly are just that.

> employees need to work nearly full time to meet ends meet

Which is exactly why they're supplemental income and not full-time jobs.

Uber and Lyft tell you exactly what you're going to make before you start driving for them. If you willingly work full-time hours for them, that's your problem, not theirs.


Maybe we should tip to make up the difference

hah!

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