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California passes bill that classifies gig economy workers as employees (nytimes.com)
721 points by tempsy 33 days ago | hide | past | web | favorite | 720 comments

All these people making Uber money on the side ... the whole thing was possible in part due to the low friction in (and also complete disregard for) the regulatory environment.

I’m in NYC and honestly can’t figure out how to legally hire a studio assistant for a few hours a week without being at risk for any of a number of lawsuit vectors.

So I just coil my own cables. And I don’t mentor people who want to learn some things about the music industry.

Not a crippling loss for me, but I miss the relationship building, I miss passing on things I’ve learned, I miss the creative back and forth, being turned on to new stuff ... and frankly my studio is a mess.

I’m not sure why we can’t figure out a way to protect workers without making everything a legal minefield. One effect of this sort of legislation is it gets harder and harder to be a small player. The big companies always figure out how to deal with the rules.

It’s sad.

The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes. Then there is no risk to hiring a new employee beyond the wages you pay them.

The US public does not want this, though, and the war of words over universal health care has led to incredibly deep entrenchment on the side of those opposed. All this despite the mountain of evidence from other countries, showing the greatly reduced total costs and improved life expectancy as well as a lack of bankruptcy and financial ruin for those caught in an emergency.

In America, you have to work until you die. The major thing the gig economy takes from people is health care. It's insanely expensive, and the Affordable Care Act is a terrible shamble of broken policy. I spent time outside of the US and came back to find health care worse than when I left it:


I have a friend who has been fighting brain cancer for over a year. The small company he was working for let him go (although they wouldn't admit it; it was likely over his condition) and his wife has to constant fight her own company's insurance company/policy to get treatments covered (and she is a lawyer; who literally works for a law firm doing mostly corporate liability cases).

In any EU country, you get a terminal illness, you can take time off and live your life. Will you get the same level of treatment as you would in the US? Who cares. You get treatment, and you can spent time with the people you love and appreciate things until you get better or your friends say goodbye. In America, if you do not have a spouse, you just have to keep working until you can't any more .. and then you die.

This is why I don't understand why people take gig jobs. Think of the opportunity costs. First off, Uber drivers don't make that much. Then you have vehicle depreciation and maintenance costs. You need to carry an insurance rider that covers rideshare driving. You also need to pay for your own health care. When you add up all these expenses, plus the desire for a living wage, there is no way drivers can be making enough with current rates. When people say you're essentially borrowing against the cost of the vehicle, I don't think they're being gratuitous. There may be low friction to entering the rideshare space by being a driver, but there are plenty of hidden costs.

> This is why I don't understand why people take gig jobs.

Sometimes Compared to what? is the most important question.

I've been driving for a few years. Before this I was making minimum wage with no benefits. Before that I had a difficult stretch of unemployment. One of my least favorite questions passengers ask me is What did you do before this? because I don't really like to talk about it. It is a rough job - you take a lot of risk, have a lot of bad days, and you get little reward in return. But at least it's work.

Of course the bottom rungs of the ladder look terrible to people near the top, but for who have fallen off of it the bottom is the most important part. All of these "worker protections" define the bottom of the ladder as exploitation. Let me decide that, my labor is my own to sell for whatever price I can get somebody to pay for it.

So, you'd rather drive without a guaranteed minimum wage, possibility for unemployment benefits, or health care benefits? I fail to see how that leaves the driver in a better position.

Better position compared to what?

> a guaranteed minimum wage

A min-wage guarantee implies Uber and Lyft will tell you when and where to drive because it would demolish the fundamental mechanism we drivers use to allocate ourselves. Otherwise we would all clump up in a parking lot somewhere trying to insulate ourselves from the costs of driving people around while collecting $10/hr.

> possibility for unemployment benefits

I haven't had this option in a decade or more. If you increase the cost of firing somebody, which is exactly what this is, you increase the cost of hiring as well. See above: this is a bottom rung job, the most important thing is to be on the ladder. If you make the bottom four rungs of the ladder illegal it doesn't mean people can magically start jumping to the fifth rung, they just get left out.

> health care benefits

Life's rough. Hopefully I solve this problem with a better job in the near future.

Don't get me wrong, I really dislike the Uber/Lyft model, I cringe every time somebody says "Oh but Lyft treats drivers so much better than Uber, right?" and I would love to see a better competitor prove the flaws of the Uber/Lyft model in the marketplace. I just don't think that minimum wage, employee status, and benefits packages are going to be that great for drivers or passengers. It's probably a mixed bag for both, but not a very good mixed bag.

As an aside, there's part of me that wants to figure out what a slide-deck is, make one, and be that competitor. So don't think I've been drinking the company Kool-Aid or anything, because I would love to put both of them out of business largely because I don't like how they treat drivers. But I'm still extremely thankful that I've had this job and I don't want to see it taken away from others who may value it in the way I have.

> I cringe every time somebody says "Oh but Lyft treats drivers so much better than Uber, right?"

I'm somebody who genuinely thought this was the case. Would you mind elaborating?

Ok, here's the rant I really try not to give to my passengers. I apologize for the length. TL;DR - Do you want to date an emotionally unavailable a-hole, or an emotionally manipulative a-hole? Pick your poison.

Lyft's president once said regarding Uber, "We're not the nice guys. We're a better boyfriend." This statement describes Lyft so much better than I ever could. They don't care about doing the right thing, they probably don't even know what the right thing is anymore, their internal sense of morality is pegged to whether or not they can keep people away from Uber.

As a driver, they have the same business model so the fundamentals of the job are exactly the same. Most of the differences are either window dressing, support quality, or bonus-related.

Uber's just kind of cold. Dealing with support is something you try not to do. It feels like they're cutting costs in their support department and they're not interested in convincing you otherwise. It's kind of like they sent you a picture of a middle finger on your third day of work and from that point on you've known the deal.

Lyft is very touchy-feely, they have events so you can eat donuts and they send a lot of emails talking about how you're a member of a community, etc. They also shame you for doing things detrimental to the community, like if you don't accept a ride. Long-term you start to realize it's all very manipulative, to the extent I've started thinking of their logo as a pink snake.

They kind of move and shift things so it's hard to tell what's going on. Especially with their bonuses, look at this[0], where do these numbers come from? 165 rides a week? That's probably 7 12 hour days. But nobody's hitting that, the middle tier might be doable, but not while driving for Uber, too, so you turn off your Uber app for the week and do 7 10's for Lyft. Next week you'll get different numbers, different goals. It's always shifting, always making you think "well, I might make an extra $50 if I don't drive for Uber this week..." Then after a few months you realize you're driving 30% more and making 20% less. And it just kind of happened while you weren't looking, while you were trying to hit these bonuses.

It also used to be that everybody got the same bonuses, but now they personalize them just for you. Because they care. I have no idea what bonuses other drivers are getting at this point, but for many or most drivers the job doesn't work without them (rental program is $1,000/month) so it ends up being an effective lever for controlling drivers.

Or the treatment of XL drivers, Uber lets the driver turn off regular rides but Lyft says that's just not possible and instead tries to "keep [the driver] busy[1]." The notion of keeping independent contractors busy is a strange one. This seems so clearly anti-competitive I don't know how it's even legal. They don't come out and say they'd rather you didn't drive for UberXL, they just want to keep you busy and if that keeps you off Uber then it's a coincidence that never crossed their mind. Why Uber isn't filing a lawsuit over this is beyond me.

Eventually you get sick of Lyft's games and decide to just drive for Uber full-time and within a day you're shaking your head wondering if Uber is even trying at all. Like, at all. So you drive for both. Then you realize if you just turn off Uber for the rest of the week you can hit this bonus on Lyft....

[0] - https://i2.wp.com/therideshareguy.com/wp-content/uploads/201... [1] - https://help.lyft.com/hc/en-us/articles/115012926367-How-to-...

> The notion of keeping independent contractors busy is a strange one. This seems so clearly anti-competitive I don't know how it's even legal.

If my company is paying contractors, they generally want them to be busy; I'm not sure what you mean by that

WRT the anti-competitive statement, are you suggesting that lyft is intentionally making it harder to drive XL for both uber and lyft? TBH, I'm not sure that'd hit on any competition laws but I'm willing to be convinced

Thank you for your post, it lets me see a lot of things I would have never put together. It's impressive how much thought lyft put into their platform to monetize guilt, and ensure "stickiness" of their platform / drivers

I think keeping contractors busy is only productive and worth it if you are getting their money's worth. You are paying them per hour worked, so if we don't have work and they aren't doing anything, we don't have to pay them. Keeping these people "busy" seems to me (and possibly OP) like a way to keep them from driving for Uber since getting paid for specifically XL (I assume) is much better than getting paid for a regular ride. The whole thing is weird because it forces people to choose between possibly getting Uber XL rides (more $$) OR staying busy with normal rides through Lyft where at least they are getting paid!

That is just what I got from the original post, I do not work for either company so it really is hard for me to relate to the pressure OP is feeling.

> Life's rough. Hopefully I solve this problem with a better job in the near future.

A nation of temporarily embarrassed millionaires.

This isn't related at all. OP just wants a better job, they never stated they wanted to be rolling in it as some CEO somewhere. This is about just living, not striking it rich.

The gig jobs are already not profitable without those things in place. With those in place the gig jobs will be destroyed. People already complain about high prices and those prices don't even cover the costs of trips unless you live in a dense city.

Profitable to Uber, or to the driver? Uber gets a ~30% cut of what the rider pays (though it varies per ride).

I meant profitable to Uber.

I highly doubt this is accurate. There's no reason why drivers can't maintain the same hours but still be considered an employee.

I would love to be the health insurance provider getting Uber as a client. I'd be freaking rich on premiums.

The risk pool could be different. If its people that can't hold full time jobs driving, that may speak to the state of their health.

This is the conclusion people come to naturally when one assumes all the other variables don't change in response to the wage. but they all change

The number of rides change as the price of the ride goes up, which happens when you raise the underlying cost to the rider. (aka supply and demand)

The number of drivers change with the overhead cost-per-driver. If each driver has a fixed healthcare overhead, it makes sense to hire only full time drivers as you can pay the overhead once and get the most hours driven from that sunk cost.

The number of drivers that get hired if you bump the salary also declines for all the reasons above.

It doesn't have to imply a decline in service availability. For example, the spread between Uber Pool and X could grow (since wanting your own vehicle, without sharing it, places more stress on the overall system). So, the popularity of pool could grow.

I think the parent's point is that it's better to have a job, even if it's low-paying and has few protections, than to have no job at all.

Obviously it'd be better if all jobs were reasonably-paying and had protections, and you could directly replace all the bad ones with better ones, but that's not the world we live in.

What if the choice isn't between "driving with a guaranteed minimum wage + benefits" and "driving with no protections" but between "driving with no protections" and "doing nothing"? That's the fear here.

Some benefits, like retirement and health care, can be provided by the government. We already pay FICA taxes -- they could be expanded to include Medicare (for all) and perhaps a more generous retirement package.

But that's not what's going on here, is it? Instead the government is stepping in and trying to force the companies involved to take over that responsibility.

It's the age-old minimum wage debate over again.

I drive Lyft and Uber in the SF Bay Area. I'm a retired computer programmer and I need to supplement my income to have spending money. I'm on MediCal which is a great health insurance program and easy to get on if you are low income. I'm actually making really good money driving. When I am smart about knowing when and where to be I can make a too much money even working part time, by which I mean I will disqualify myself for MediCal. After all expenses including auto depreciation (I paid 6000 for a nice little transport car) I make a profit. Now I doubt Lyft or Uber would hire me because of my age. So it goes.

Hah, that's an interesting trap to be in. It's not dissimilar to pushing wages down in order to qualify for high ACA subsidies. The way the system is set up, there's quite a tax cliff...especially for older people (the difference between $0/month and $1200ish for an individual).

If you have wealth, you can essentially create an income, on paper, to look like whatever you want, to meet ACA subsidy qualifications. Here's an example of a practical application: You could rent, or buy a home with your wealth. If you buy a home outright, you won't have the monthly mortgage or rental payment (you'll have property taxes, but let's assume those are far lower than an ongoing monthly rent check).

Withdrawing from pre-tax retirement accounts counts as income for ACA purposes. You've now lowered your annual expenses (and thus, your income) and can qualify for subsidies, but all you've really done is shift some of your net worth from investment accounts to housing, in order to reduce annual expenses. This example is likely more applicable to a person in retirement, as well.

Another take is to put money in investments with no taxable event (I think that Berkshire Hathaway is one) and live off of savings in the meanwhile. Outright home ownership (as you mention) is another one. Regular and tax deferred savings get treated even more differently than normal.

I don't doubt that for people with some money, it'll be common to countdown using similar strategies for 5-10 years until you hit the magic 65 age. Given the difficulties in staying employed until full retirement age for programmers, it's quite a gift.

In another couple of decades, a lot of people get to do the pay-down fandango where couples split their assets so that one doesn't pauperize the other (via annuities).

All brought to you by the market warping body called government.

What is the additional cost of having an insurance rider to cover when you're rideshare driving? I haven't pulled a quote, but I imagine that could be expensive due to increased liability.

I can only answer for Toronto, Canada but the answer was nothing. Uber has a deal with one of the insurance companies up here so you’re covered at no extra charge. (Intact / Belair Direct).

Uber pays them directly for a big commercial contract to cover you when you’re driving for Uber.

Edit: added "for Uber" on the last sentence

My prior comment may be dated, or regionally-contextual. I assume then you have a personal policy, that covers when you are driving just you, and Uber's takes over when you have rideshare passengers. When I was looking for personal auto policies recently, I recall being asked (in the US) if you plan to do any rideshare driving.

Yes my personal auto policy explicitly covers Uber. I did need to inform them, but my premiums did not change.

"ridesharing drivers operating on the Uber platform in Ontario can now be covered, at no extra cost. All you have to do is call us in order to update your personal auto policy." -- https://www.belairdirect.com/en/partnerships/uber.html

I go thru Geico in CA and commercial ins is affordable. I forget the exact Amy but I'm happy

Off topic but is your last sentence a nod to Vonnegut by any chance? Just curious

Glad you caught that!

This would be solved by universal healthcare.

Many of the costs you list are invisible or avoidable if you don't care about consequences: Vehicle depreciation is invisible. Maintenance costs will hit later. If you haven't heard (or don't care) about the insurance thing, you just don't do it, so zero expense (until you're in an accident).

Once you ignore these costs, and only do "income - fuel", Uber pays "really well". And you can do it at any time, as you wish! Little effort! Own boss!

It's not surprising that Uber finds people to drive for them. Not everyone realizes the hidden costs.

Although there are apparently some who seem to understand them, know how to play the optimization game, and (think that they) make enough that it's worth it. I have no way of checking, of course.

Everyone who I've personally known do these jobs only do it temporarily just to make ends meet between real jobs. It doesn't matter how shitty the benefits are if you're going to get kicked out on the street because you missed the rent/mortgage payment. Maybe some people do it "for a living" but I bet most are between real opportunities or making some money for Christmas/vacation/etc

The reason they don't have a choice is because the system is designed to provide the lowest quality of living possible because we haven't done basic things like raised minimum wage with inflation or institute universal health care.

Instead we've subsidized all these gig corporations so frequently that one of the biggest ones pays 0 in federal taxes. Something I don't even get the choice to do.

It's about time we stop capitulating to desperation.

> Instead we've subsidized all these gig corporations so frequently that one of the biggest ones pays 0 in federal taxes.

which one is this?


how do they get out of paying payroll tax?

They probably mean corporate income tax.

> This is why I don't understand why people take gig jobs. Think of the opportunity costs. First off, Uber drivers don't make that much.

It must be nice to sit in air conditioned office on $800 chair, sipping kombucha, looking at 2x 28" 4k monitors pontificating "Why would anyone want to be driving for uber?"

Because for an Uber driver this job could be the best available. One needs to eat and put a roof over one's head.

I'm actually sitting on a wooden chair at a wobbly table in a space with no air conditioning, but that's beside the point. My original comment does have an air of privilege to it, and for that I apologize. It's my own frustration that we can't do better to people who's best option is something requiring the skill set of a job like rideshare driver. Stated in other (hopefully more fruitful) words, if you can work rideshare you can probably work at In N Out. They start at $13/hour and have none of the external costs of contract ridesharing. That could be more profitable to the worker, but I have not done the math.

> They start at $13/hour and have none of the external costs of contract ridesharing. That could be more profitable to the worker, but I have not done the math.

There are not enough In-and-Out burger places to accomodate all the Uber and Lyft drivers.

It's a single example. Generalize the comment, and you'll take away that there are many employers of low-skilled labor.

It's an example that does not appreciate with a concept of scale.

There are very few employers of non-skilled labor that provide higher take home pay for the same or smaller number of hours worked than Uber.

You should ask anyone who does unskilled labor if they would take a less paying job.

Uber might have the highest take home pay, but subtract vehicle depreciation, maintenance costs, insurance riders for rideshare driving, and the net is more in line with other employers of low-skill labor.

People have to eat, nothing is free in the US. People generally do whatever their best option is. If the best option is below minimum wage, that's what they do. Why is that the best option? Zero-to-no tariffs and, consumer goods produced overseas by slave labor. No reason to hire domestic workers. Even McDonalds has touch-screen ordering now.

> This is why I don't understand why people take gig jobs. That's because those are the available jobs. I'm struggling to understand your question - obviously people will take whatever jobs are available to them so that they can support themselves. I doubt it's the CFA's or AI researches that take these jobs for the fun of it it's likely people who need them to survive.

Single data point checking in, ride share imo was a massive boon to people like me in the self employed lower middle class. Many of us already own cars and pay for our own health insurance. For people like me who make too much to qualify for state benefits but too little to 'climb the ladder' these sorts of jobs have been great because they fit easily into our schedules and the pace of the work is enjoyable to many of us.

From my perspective, and I do realize this is relative, people wonder why the middle class is shrinking while failing to realize that a lot of these pro-worker laws are only good for certain types of workers. I'm not saying people poorer than me don't deserve help because I haven't been helped yet, but the issue is precisely that it seems (again, relative to my experience) that no one except the lowest income bracket actually attract political attention right now.

Last Uber drive that I talked to that did this on the side was in the area for some construction job that required him to be on site some days of the week, others didn't. In those days when they didn't call on him he did Uber for some money. The alternative was to not do anything and not get that money. There are definitely costs (hidden or not, really depends on how deep you are going to look for them) but I can also see how given the alternative of not doing anything they can still help. It's not like the Uber driver doesn't have to pay for insurance, registration and other fixed car costs (food, rent) anyway, whether they Uber or not.

I mean those are all costs you should factor in but don't have to pay or are somewhat opaque (eg: depreciation). Drivers can go without health care and gamble on the insurance rider. Then the only paid costs are vehicle maintenance.

By "gamble on the insurance rider" you mean further externalize the cost that Uber already externalized onto the drivers? Because the people that end up paying when you "gamble on the insurance" are the people that you injure in an accident, or systemically through the need to carry "uninsured coverage" to cover yourself against those gamblers.

I can make very good money driving for Uber up to 25 hours per week in my city. This is after maintenance, gas, and depreciation costs. Lots of breweries here and people who like to have a good time and tip well.

Rideshare insurance is an extra $10/month. Basically nothing.

I have to pay for my own healthcare when I have a regular job too. Buying on the exchange is pretty much the same thing with more choice.

They are supposed to be side jobs to the main job you get benefits from.

"Supposed to be" but the data shows most rideshare drivers drive full time.

Based on the very large revenue from foreign patients who come to America to get cancer treatment on their own dime, those patients and their families care about getting the best treatment.

You can't use the 0.1% cases to justify the 90% who will get wrecked financially because of major surgery, cancer treatment, etc because it's so expensive. Medical treatment shouldn't be a for profit business, there has to be a better way, and other countries have a better system (in the sense of doing the greatest good for the most people, and not just the 0.1%) than we do and we can copy the best of them as we will be doing it from scratch.

I think it can be for profit but it needs regulation on how much you can bleed patients for. Selling pills for thousands of dollars when they cost you a dime to make is simply exploitative.

What was the NRE on that pill or the hundreds (thousands?) that didn't work at all?

OTOH (or the other other hand), I'll bet that you could make a strong argument for stopping new drug development entirely. Simply sell existing drugs for as little as possible. It wouldn't surprise me if most of that research has insanely high marginal cost with little benefit at this point.

I'll bet you'd have a healthier public, on average, if this happened.

The cost of medication is not strongly correlated to research costs. In the US most drug prices are set via a single factor: how much will people pay for it?

Under this rubric, "cheap" lifesaving drugs are viewed as an arbitrage opportunity. If a lifesaving cancer drug costs $20k per month, then why should a comparable MS treatment be "given away" at $15 per pill?

Also a huge percentage of new drug research is not geared toward creating new and interesting treatments: it's based on making small changes to existing molecules to preserve efficacy while making something "new" enough to be patentable.

People do the same in India, Switzerland, Turkey, etc. medical tourism is very common.

Many Americans also head down to Mexico for various treatments that are more affordable. https://www.newsweek.com/thousands-americans-cross-border-me...

> Based on the very large revenue ...

It's really not that simple, even if some political talking heads would like you to think so. People travel to the US for some treatments, and people travel from the US for others. It's not even clear if there is a net inflow or net outflow.

All this really shows you is that people with the resources to do so are willing to travel for care, which shouldn't surprise anyone. Either for "the best treatment" (which depending on disease and treatment could be many places in Europe, US, Canada, etc.) or for more affordable treatment (cf US residents traveling to Canada for drug renewals).

> The US public does not want this

That's far from clear. Polling fairly consistently shows that the US public favors at least some degree of it (particularly shifting the healthcare burden from employers to government, other benefits have less political salience), though any particular plan for the detailed mechanism may have trouble gaining majority support.

Honestly, I really wish people would stop basing so many decisions on Polls. There are so many problems with accurately polling people's opinions because generating a truly random dataset is really hard. Unless people have some sort of financial stake in the outcome you're only going to hear what they want to happen instead of what they think will happen.

> generating a truly random dataset is really hard

IMO it's not just hard but impossible for polls to be unbiased, because people that don't like answering polls are never represented. If the subset of people that don't answer polls isn't itself following the same distribution over all possible opinions as the rest of the population the results are biased, and by definition we can't test for these correlations.

That's an excellent point. You could also add people that aren't contactable into that group.

US public would yell an enthusiastic "hell yes!" if you ask them do they want free healthcare forever but then when you ask - ok, so how we pay for all that actually, that's where "hmmmm" comes in. "Government" means taxes, and US public is not super hot on paying more taxes, and not on US government (BTW, which one? there's federal government, state government, local governments... US has literally thousands of governments, which one you go to?), which is not exactly known by its efficiency and friendliness to the hoi polloi, to run their healthcare. If there was magic solution that allowed to keep those nice doctors and hospitals exactly as they are but somehow it would all be paid for by something, it's be super nice and the US public would love it. And some unicorns too. Unfortunately, neither seems to exist - to rebuild US healthcare system to look like Canadian or any of the European ones would not be as easy as just public agreeing on something - something most of them don't even understand how it actually works.

> to rebuild US healthcare system to look like Canadian or any of the European ones would not be as easy as just public agreeing on something

Why not? Canada didn't always have their healthcare system. Canadians just agreed on something and suddenly they had it.

I think the segment on late night TV that I watched used to be called "street walking with jay lenno", or something along those lines.

The premise was pretty much: take a question that might sensibly appear on a GED test (highschool graduation equivalency, without the class credits), that probably at least 50% of the viewers (so adults that could afford a TV and stay awake until midnight / had just finished watching the news) would probably, if not know, have a good enough idea to say if an answer was obviously wrong. Then go out and film until you got enough bad answers to fill the segment.

I'm under no illusions that the bad examples were cherry picked, but I am also strongly inclined to believe that a "large percent" of the population isn't informed, and doesn't want to be informed, and literally just isn't fit to actually vote.

The US believes everyone should have the right to vote; and I agree with that. However I believe that every voter should be an informed voter that can at least understand the basic impact of their actions and should at least be able to pass an ECON101 test. I would really prefer a local, national, geo-political, basic law, and economics (including some light math) test as a pre-requisite for being able to vote; BUT if the test isn't passed that person would qualify for employment (lit paid) as a student, where attendance in class and academic progress would be part of the pay. If there are medical issues/etc impeding learning that should already be covered by universal health coverage (in a non-broken country).

> every voter should be an informed voter that can at least understand the basic impact of their actions

I get a feeling you think you are one of these voters. But are you, indeed? Are you really sure you can predict the impact of the actions in a system as complex as 300 million people inside trillion dollar economy? Before you answer that, remember that many people with advanced degrees tried and failed to predict things about economy, and even more people with advanced degrees are in constant and complete disagreement about what would be effect of that or this policy and what should be done to achieve this or that effect. And "unintended consequences" appears in virtually every article describing the aftermath of any serious government decision. If all those people aren't really able to figure out how things work, are you confident you are?

> should at least be able to pass an ECON101 test

Why ECON101? That course probably provides very basic knowledge (depending on the curriculum) which is next to useless when dealing with enormous and complex systems because it ignores myriad of details. It's ok for a 101 course, but if after taking this course you think that you know enough to make informed decisions about the whole US economy, then this course actually decreased the amount of your actionable knowledge. And yes, voting is making decisions about the whole US economy, ultimately.

> I would really prefer a local, national, geo-political, basic law, and economics (including some light math) test as a pre-requisite for being able to vote

Are you sure you would pass? What if I will be writing the test and make every effort to make you not pass (you don't think politicians would ignore an opportunity as juicy as disenfranchasing a huge number of their opponents' base?)?

You understand also that making decisions for people that can not vote is the reverse of what representative democracy is, and a just cause for rebellion? If any situation justifies violent overthrowing of a government, it is a situation where the government denies participation in vote to a class of citizens which committed no crime, did nothing wrong but failed to satisfy an arbitrary criteria somebody instituted to not let them vote because they didn't like what they might choose. Who would consider such a government a legitimate one? You probably wouldn't, if you were one of the disenfranchised people. But somehow nobody thinks they will fail the test.

The part of ECON101 that I remember most distinctly is that we kept doing supply and demand curves. We kept doing that until the professor was absolutely sure that everyone knew what happened when supply was infinite, or when demand was inelastic, or when supply was a hard fixed quantity but the needs of the market kept growing.

It's really basic stuff, that's why it's a 101 course. However the realities of that kind of course should be remembered and applied to things like "rent control" that acts as an outside influence on where the curves meet, but doesn't actually change the supply or demand directly. Knowledge that would help with assessing the possible intended and unintended results of different laws.

Your criticism of minimal knowledge is correct. Your analysis that its insufficient to decide complex issues is correct. Your thoughts that its insufficient even to choose among 2 candidates positions on the matter is probably correct.

However you miss a points. It's not always or not even often about picking from 2 complex alternatives. It's often a matter of eliminating options that are stupid, illogical, or inconsistent. Doing so often requires basic literacy in the topic involved.

Unfortunately you are right in that disenfranchising a large number of idiots would upend social order even if it was only eliminating those who literally have no idea what is going on.

> It's often a matter of eliminating options that are stupid, illogical, or inconsistent.

But how do you know which options are stupid? Because they sound stupid to you? Are you confident enough in your powers of detecting stupid that you would base denying people basic rights on it? What gives you that enormous confidence?

> if it was only eliminating those who literally have no idea what is going on.

The number of people who have an idea what is going on, when we're talking about things like whole US economy, might be surprisingly small. In fact, sometimes I am tempted to think that number is zero. Of course, for me it makes me think maybe we need less government involvement, since a blind giant with a sledgehammer is worse than a blind giant without one, but some people think that means we need to abandon democracy. OK, but unless you are an anarchist, how do you propose to choose the government then? By instituting a series of exams? Chinese tried that, actually. Not sure it worked that spectacularly well. Check it out.

While I understand your sentiment, these voter requirements would completely disenfranchise those who literally don't have access to quality education, especially POC who have been subject to systemic oppression (See redlining).

The solution should be to level the playing field (Access to education), not to change the rules of the game from under them.

Did you overlook my second to last sentence?

... "BUT if the test isn't passed that person would qualify for employment (lit paid) as a student, where attendance in class and academic progress would be part of the pay."

Here's an example for you: recent headline from NYT: Which Health Policies Actually Work? We Rarely Find Out https://www.nytimes.com/2019/09/09/upshot/which-health-polic...

Yeah that's right - nobody knows which healthcare programs work. Neither literal idiots, nor uneducated hillbillies, nor ECON101 graduates, nor PHD-bearing professors, nor politicians, nor NYT journalists, nobody has any good information. On a topic as important as which healthcare policies actually work. So what's the point on insisting on ECON101? There's just no information about it, and nobody cares about getting one.

Yeah, more illustrative to say the US insurance industry does not want this.

But it seems like an apathetic kind of want. There are degrees imo; if the people truly wanted something they would exert more effort than this showing. As it stands people may say they want it in polls but won't even vote for politicians that will make it a reality.

Don’t confuse the apathy of the politicians that can run for office (and have the financial backing to do so), with the apathy of voters.

uh, can't agree there. i will absolutely blame voters, myself included, for voting in apathetic politicians. pointing fingers like this is the mindset that gets nothing done in this country.

you have stories in the US of people dying from lack of access to insulin or rationing insulin.I wouldn't question that they "truly wanted" to live. but political organizing in the US around healthcare and other social benefits seems to pale in comparison to European countries. to say nothing of how low voter participation is.

i feel like people take it personally when it's pointed out that political will in the US is, for lack of a better term, pathetically low

The strange thing here is that United States uses more public money to health care than European welfare states. So Americans already now pay more taxes for health than Europeans. Some aspects of the U.S. health care system are incredibly ineffective use of money.


There are reasons for this; some of them good (the best care in the U.S. is very high quality and leading-edge technology, and consumer protection through litigation tries to minimize errors); some are bad (e.g. because of litigation, legal costs are very high, and the system seems to carry a lot of overheads, and many people still lack coverage).

It seems the so-called Obamacare wasn't a very good approach, because so many people felt it was ripping them off. Clearly it is easier to build an efficient public health care system from nothing (like e.g. my country Finland did in 20th century) than transform an existing system (which the U.S. has and where there are lots of incumbent operators that have "assets" that they protect.

I can think of several countries with universal healthcare where hiring is still complicated to say the least. Not arguing it would still help, though!

Welcome to Europe.

> All this despite the mountain of evidence from other countries, showing the greatly reduced total costs and improved life expectancy

Does this account for confounding factors? Such as the US having the highest obesity rates, which has a massive impact on costs and life expectancy.

I'm for universal healthcare, but "X has these results in Y, therefore it'll be the same in Z" is a poor argument and weakens the overall case.

There are lots of confounding factors, so predicting outcomes is a dodgy business.

One thing that is easier to evaluate is the cost of delivering equivalent care - the US system turns out to be quite inefficient that way, which implies the potential for significant cost savings at least.

> The US public does not want this, though

Actually a majority of Americans support the idea of single payer healthcare [1], and the number goes up depending on how the question is asked. The problem is the political obstacles, which are enormous given the power of the health insurance, pharma, and hospital industries.


>"The US public does not want this, though"

Could you share some data that supports this? Polls I have seen show that a majority of Americans support expanded health care coverage.[1][2][3] There is some division howwever on whether that is best done via Medicare For All or a regular single payer system.

[1] https://www.pewresearch.org/fact-tank/2018/10/03/most-contin...

[2] https://www.kff.org/slideshow/public-opinion-on-single-payer...

[3] https://www.pewresearch.org/fact-tank/2017/01/13/more-americ...

It makes me sick that so many Americans are willing to keep their taxes lower and pay their own healthcare insurance (which are absurdly high, and you still have premiums to pay, etc) instead of having the peace of mind that if they become seriously sick, that it won't ruin them and their close relatives.

Sure, you might be healthy now but do you really want to take a gamble like this and keep more money in your wallet now, and potentially lose everything due to bad luck later? I guess it's the American way?

It blows my mind that deathbed divorces are a thing here, for fear of burdening families with medical bills. And that that is socially, in any way, acceptable, or even tolerable.

>The US public does not want this

I don't think this is true. I think what the US public doesn't want is the higher taxes to pay for it. We are already swimming in debt and wages haven't kept up with inflation. My daughter is making exactly the same wages now that I made when I was her age 25 years ago, in comparable jobs.

I pay $421/month for health insurance that has a 20% deductible, meaning that I could still be bankrupted by a major surgery or a couple of weeks in the hospital. I would much rather put that $421/month into taxes and have Medicaid or something similar A) keep costs down, and B) ensure an acceptable quality of treatment.

You're likely paying something similar whether you realize it or not. When I quit my job the COBRA cost of the insurance was like $600 or $700/month. It's just that your employer is hiding that cost from you and giving you "free" medical insurance. And when you quit your job, you lose your medical insurance after 6 months. That means you lose access to your doctor and you may have to change who you see. Sometimes the new doctor is way worse, and there is a very real cost to you in terms of their standard of care.

So it's pretty disingenuous to argue that this would be a new tax. And making it illegal for employers to offer health insurance while also expanding Medicaid to all Americans would actually remove a major barrier to quitting your job and EG starting a company or working for a small company.

I think the US public doesn't want to lose more of their money to healthcare than it currently is - and this is the attack that's most commonly leveraged against universal healthcare... "Your taxes will go up!" well yes, they will, but my out of pocket will go down as I'll no longer be shoveling so much money from my salary (either pre- or post- collection) to health insurance.

You hit the nail on the head. I have written answers on Quora that show numbers to support your thoughts.

I used to paste links to these posts here but people felt I was spamming, so I don't do that anymore.

Feel free to look at my other comments and posts on Quora as well as reach out to me. We need more people like you to bring prosperity.

The status quo will not bring us prosperity.

I'm Canadian and I don't pay substantially more income tax that Americans do in high tax states such as California. So what do you get for your high taxes? Not health care thats for sure.

I guess what you mostly get is a very expensive military.

I honestly would like to see the military eliminated. It's not like Canada or Mexico are going to invade us. We could keep the missile defense to protect from anyone trying to attack us over the oceans. As for protecting commerce, let shipping companies weaponize their boats and pass on the cost to consumers. I'm sure the defense contractors not selling to the US military anymore would be happy to design systems for the shipping companies.

> Then there is no risk to hiring a new employee beyond the wages you pay them.

This is a gross oversimplification. Two risks that immediately come to mind, increases to the Employer’s Disability Insurance and Unemployment Insurance either through fraud(speaking from experience), or, in the scenario mentioned by gp, when you lay the worker off at the end of the need.

My comment also is a gross oversimplification.

> The US public does not want this, though

evidence? from 2017 shows more support than not.


And I think a lot of the people who don't support it also don't fully understand it, or have a misconception about how it will negatively impact them based on a few anecdotes they've heard from countries that do have universal healthcare (some of which are true, and many of which are false).

> Then there is no risk to hiring a new employee beyond the wages you pay them.

but you must not forget the additional administrative/accounting overhead, the risk from the wide variety of lawsuits one is vulnerable to as an employer, the risks of employee injury on the job, and costs associated with the possibility of laying off employees in the future. surely there are more costs than just wages.

Sure. But this is the responsibility an employer must take on in order to hire someone’s labor.

> The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes. Then there is no risk to hiring a new employee beyond the wages you pay them.

That's still the same problem. If the taxes that fund the health care are paid by employees then a living wage would have to be higher to account for having to pay the taxes. If they're paid by the employer, there goes the money they were going to use to hire the employee, or they have to raise prices and we're back to causing a higher cost of living.

Taxes aren't magic. The money still has to come from somewhere. The actual problem is that housing and health care cost too much. It's necessary to solve that regardless of who is paying for them, at which point there is no longer a pressing need to try to shift the burden somewhere else, because the burden is no longer so onerous.

> The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes. Then there is no risk to hiring a new employee beyond the wages you pay them.

All that is needed is to undo employers providing health-care. The government could provide it, but it could also work akin to auto or home insurance where you the individual choose the company yourself. (I do think we need other reforms, principally price transparency, in order to manage the current cost problems w/ health care. There is no sane way for any person to evaluate anything about any insurance setup if they cannot gauge what it will cost them!)

Tax-based universal healthcare would accomplish this, but I do not think it is necessarily the only option. It does need to stop being attached to the employer. Losing my job should not cost me my healthcare, too.

> The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes.

Or just disconnect this stuff from the employer. It seems strange that employers are involved in something like health insurance. It creates friction changing jobs, and much of the population isn't employed.

>The US public does not want this

Yes, they do.

If they want it why do they keep voting in representatives who actively fight it the whole way?

This is kind of a pointless question, because the answer is complex and includes things like 'gerrymandering' and 'vote suppression', but it's still a fact that many elected representatives from both parties actively fight public health care.

It depends on how you phrase the question. "Do you want the US government to pay your health care bills" is a yes for most people. "Do you want to only have the choice of Veterans Affairs medical care" isn't quite as popular, and IMO that's what we'd end up with. (And considering the number of people who commit suicide by self-immolation to protest the VA's care... I really don't want that)

Alternatively, incentivize companies to offer more pay rather than healthcare. For example, by disallowing group bargaining for healthcare by an employer.

> The US public does not want this

A majority does, in fact, want this.


> The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes

Yes, it's clear that our prosperity hinges on how quickly we decouple health care from our employers.

Employers don't want to be in the business of providing healthcare to their employees and its painfully obvious.

I just don't understand why smart people think it's a good idea for anyone other than me decide what my healthcare needs are!

I would like to have a separate discussion whether the government is the best party to handle this. If you look for my writing here and on Quora, you will see that I have for over a decade being campaigning the government was the best party, but after having really worked on it (thanks to people getting in touch with me from my writing), I no longer believe the government is the best partner.

Instead, I think the government managed marketplace where people choose private insurance is actually a brilliant solution and ACA already provides that, so we already have that in place.

The value the government brings here is extreme negotiating ability with the private insurance providers that individual citizens lack.

> The US public does not want this

I strongly disagree.

I have spoken with far too many (thousands) of people to know that majority of the U.S. hate their employer provided insurance and are worse off for it. I can give you specific instances where an employee was worse off due to the employer provided insurance and had to declare bankruptcy due to medical bills than if they were unemployed to begin with and were on welfare instead!

I seriously believe:

1. the tax incentives to provide employer provided insurance should be abolished. They made sense at a time that's past us now.

2. employers instead should be required to pay a premium for choosing to provide primary insurance to employees instead of letting employees continue with the coverage they have or get one from the marketplace

3. Employers are free to provide secondary and supplementary care insurance if they chose to, not due to regulation.

This leaves behind only those employers who genuinely care about their employees instead of pretending to do something because someone forces them to.

I support the individual mandate in the ACA because it ensures negative self selection in the marketplace.

This will allow people to gain control of their own healthcare, get a benefit package that's more transparent and gain better control of their own lives.

As software engineers, we are in the top tier of employment. We earn in the top tier of the population and handle levels of complexity in the top tier of the population.

Our personal experiences don't reflect that of the general population.

Even then, the engineer making $180k/yr at Microsoft might have a very different healthcare experience compared to the engineer making $180k/yr at Google depending on the choices that the benefits administrators at Microsoft and Google have made!

That's just insane and a level of complexity that's just unnecessary.

> The value the government brings here is extreme negotiating ability with the private insurance providers that individual citizens lack.

This is not good, it distorts the market too much. Look at the negotiating power Spotify and Pandora have over musicians. Pandora negotiates rock-bottom prices with musicians on behalf of its consumers and the consumers think it's great because low prices. Long-term you've decreased compensation for becoming a musician, sound engineer, etc. and harmed the entire music ecosystem.

It's a trade-off between clear short-term gains and diffuse long-term costs.

Yes, you make a good argument and that was one of the good arguments made to support the regulation that ties down the government.

However, when I see people being unable to afford medication or losing a significant amount of their wealth to afford medication, I start to have second thoughts.

It seems to me, that in a developed and advanced society, one ought to be able to live a quality and comfortable life enabling them to contribute to the good of society as a whole.

Drug prices in the U.S. are at a completely different level compared to any other developed nation.

If our drug prices are higher than in other countries it can only be because of how things are regulated. Otherwise we could buy the same thing from their market for the cost of shipping.

If the government has "extreme negotiating ability" that citizens lack, then why does it continue to allow price gouging on drugs?

> If the government has "extreme negotiating ability" that citizens lack, then why does it continue to allow price gouging on drugs?

Because regulations have been put in place to disallow the U.S. government from negotiating with pharma companies on drug pricing.

The regulations were put in with good intentions (and some healthy doses of lobbying) in ensuring pharma companies would have financial incentives to carry out R&D but hindsight is, as they say, 20/20.

Even in the face of these drug price regulations, though, the government still has a much higher negotiating ability than you or I do.

Check the drug prices one pays with Medicare Part D vs. the prices on "free market" Amazon or eBay.

If the regs were put in place due to "good intentions", and a "healthy[sic] dose of lobbying", then functionally this "negotiating ability" does not exist, because the government is not acting in the best interest of consumers, nor does it currently have the capability: its hands are tied.

I can see you are getting too tied up in the existing perspective you have, so I recommend you step back and revisit our discussion with a third person's perspective.

If you have a point to make instead, say it.

I don't know what you're thinking but it feels like you seem to believe that only direct actions have effect.

That's not true. Indirect actions have effect too.

Just because the government's hands are tied in drug pricing does not mean the drug companies can charge the government whatever they want (like they can charge you or I).

For one, it has sheer size and it's pretty powerful overall.

It will take an extremely risk seeking drug company to try and exploit the government and drug companies are extremely risk averse.

Let me give another example - if you interviewed for a front end job this week at either of the coasts and refused to negotiate or name a number, most companies, if not all, would still offer a six figure number because that's the market. I WOULD be surprised if anyone offered you a minimum wage even if you were actually willing to take it!

Another example - say you are driving properly on the freeway following all rules like a perfect citizen and a cop car drives by - in general you're likely to take notice of that and be more careful in the way you drive even if the cop car in no way signalled to you or otherwise expressed any interest. Even if you knew this cop was not allowed to pull you over, you still would modify your behavior. In general for the better.

Compare your change in response to all other cars driving by you - one even might have flashed its lights at you and you showed them your middle finger. You probably wont do that to this specific car though.

Or if you went to an fancy event where the organizers explicitly asked you not to bring any gifts because they knew you were going through a tough time but you saw everyone else bring in expensive gifts, you would probably go out and try and get something reasonable, despite being explicity directed otherwise.

Just because one does not actively signal, or might even be obstructed from signalling, does not mean there is a complete lack of signal.

Drug companies have more to gain from keeping the government happy than making it unhappy.

To that end, they are willing to forgo some profit.

They dont have any reason to do so for you or I.

We are at a natural disadvantage: If you needed drug "GiveLife" to not die tomorrow, you would probably give up a significant amount of your worth or even go into debt to pay for GiveLife.

Ad hominems really don't help any arguments you have to make. Nor do a handful of tenuous analogies.

The government is not a singular entity, but it does exercise some semblance of self-consistent control. The drug/insurance companies have no interest in minimizing their profits aside from following regulations so as to limit potential liability. If the drug companies can successfully lobby for less control then the government's bargaining power is impaired de facto.

I repeat: if you have a point to make, prioritize it over pointing out my grammar or qualifying the way I present my comment.

Really, say it because I have no idea what your position is and we have been communicating a bit at this point.

You have repeated twice now that the government's bargaining power, is impaired. Yes, that's what I said in my parent comment 2 days ago. Why are you repeating what I said, to me?

No, my previous comment was not ad hominem because I didn't know the position you were taking and I still dont know what position you have on the matter. I noticed tunnel vision on your part that was imparing the quality of the conversation and I suggested a technique I often follow myself. If you want to argue the semantics of an ad hominem, I am out of time.

Is your point that the government's bargaining power, which is impaired, less than the bargaining power citizens like you and I possess?

To clarify: My point, with the tenuous analogies included, is: the government's bargaining power, even after being severly impaired, is still superior to the bargaining power citizens like you and I possess when it comes to negotiating the prices of drugs that we need to get and be better.

Other developed countries recognize this and exploit it to the benefit of their citizens. Perhaps we should think of something similar but outside government.

Neither of us have the need to get further bogged down on this. My point of course is that functionally the government only has this bargaining power if 1: the majority of the people in the government see a change in the status quo as desirable, and 2: The will of those same people can't be subverted through means such as excessive lobbying. If both of those conditions aren't met, then saying that this bargaining power exists is essentially meaningless. If that wasn't clear from context, well maybe no amount of clarification can help.

On a side note, questioning someone's motivation and/or ability to comprehend the relevant information and form opinions based on it is definitely a form of ad hominem, and definitely not the right way to start an attempt to clarify.

When an individual creates an enterprise it's expected to fail in 2 years. It does not mean death of the individual, but often it makes 'em go broke. Only one company in a hundred is successful. Other are doomed. Government-run projects do not live in alternative dimension. It is affected by the same things any private organization is affected. It is expected that a country would exist longer than an individual company. But want to bind the whole country to some huge bureaucratic organizations. Say, the one managing healthcare and the one managing pension founds. You won't stop at that, of course, but let's simplify to just that. There would be only two ways for them to survive in a long run. Bloating their budget, eating all other parts of the gov budget. After there is no where to "expand" (keeping the same quality of services), they would had to cut out some of their "clients". For a pension fund it would be to increase the age when people would be able to retire. For healthcare it would be to limit free services reject people who would be able to have certain services for free in certain cases, decrease quality of services. Then it would be inevitable death. As people are not immortal, organizations are not as well. If you had several private companies, the death of one of them would make others stronger. It would get rid of the weakest companies, keeping the strongest alive and in addition they would have opportunity to learn on errors of others. But you have one single company for each sector that manage the whole country. It results in country's collapse. There is no "mountain of evidence from other countries, showing the greatly reduced total costs and improved life expectancy as well as a lack of bankruptcy and financial ruin for those caught in an emergency". The idea of universal health care hasn't been tested by time yet (and in principal it will fail due to things I described above), so it's very reasonable that the US public rejects it.

The idea of universal health care hasn't been tested by time yet (and in principal it will fail due to things I described above), so it's very reasonable that the US public rejects it.

Uhhh... nearly every other country other than the US has had some form of national health service for decades and they spend less on healthcare per capita for comparable quality.

What you're spouting is nonsense.

> for decades You are retelling what happens in a very short period of time, ignoring dynamics. Decades is nothing for a country. You could look at second-world countries which were pioneers in universal healthcare and universal pension funds. For most of them it didn't last long. Even though the "universality" was questionable. These systems won't survive 100 year run in countries with tens of millions. Then, private healthcare is not the reason why Americans pay for it that much. There are lots of factors that drastically worsen the situation. People in the US are the ones who finance medical R&D, results of which are used by other countries relatively for free as individual American companies are forced to negotiate their contracts with governments. Which could be mitigated if American government would enforce for these countries to pay for their share in R&D. Then, perhaps I am mistaken, but the US is the only place (or one of the few places) where doctors have to study twice to become doctors: first at regular colleges then in medical schools. It cuts out lots of people who could've been doctors, not to mention education costs. Other thing that affects the costs is the fact that medical debts of individuals could be reimbursed by the government (the same applies to education). It creates incentives to actually make people go broke as insurers have nothing to loose in this case, but gain much more from the government which play along.

Your already-flawed logic leaves out the fact that single-payer and other universal healthcare systems run by governments around the world work far better than the US system and don’t make the choice of who gets what care when to who has the most money like the US does but rather who has the most need given the resources available.

This sounds very ideologically, rather than evidence based.

- sovereign governments (which fund many government projects) can literally create money; individuals cannot

- government projects often have multi-year funding commitments legally bound by legislation; virtually no private enterprises have such guaranteed runways

- goals of government projects are often not "survive then maximize profit at all costs"; in fact, the idea behind infrastructure projects is for extreme long term payoffs, virtually impossible for from-scratch private projects due to lack of capital whereas .gov projects don't have the survival component

- because of things like infrastructure and overhead, there is evidence that public utilities with monopoly-like properties make more sense than rampant theoretical capitalism (imagine 100 sewer companies with 100 sets of pipes, ...)

>sovereign governments (which fund many government projects) can literally create money; individuals cannot The only government that can "literally create money" is the American one. >government projects often have multi-year funding commitments legally bound by legislation That was my point. When it breaks, everyone would pay for it, and not in money. >goals of government projects are often not "survive then maximize profit at all costs"; in fact, the idea behind infrastructure projects is for extreme long term payoffs, virtually impossible for from-scratch private projects due to lack of capital whereas .gov projects don't have the survival component That what I meant when I said that governments don't live in alternative dimensions where they have unlimited resources. It just looks for an individual that omnipotent governments can do anything, but they have the same limitations as anyone of us. If there are X of something and government would print X*3 equivalent of paper to pay for it, it would denominate the value of the paper the government call money, but won't make more of X. What they can do (the same goes with corporations) is to expand their spending at expensive of individuals and business, present and future. You don't see it in static. But that what helps most government projects to survive. I already described what happens when they have no space to expand. >(imagine 100 sewer companies with 100 sets of pipes, ...) Sewers, pipes, wires and similar entities are physically bound. Pension funds and healthcare organizations do not provide anything that are bound to specific place. I am not preaching "rampant theoretical capitalism". I am telling that these things, "alternatives" are doomed from their start as governments exist in the same world as individuals and companies. There is no magic behind it. They are fine now and here, but that won't last forever.

Government departments are turned over like businesses, with new administrations.

If anything there is more changing, and stricter controls on (if you don't include departments like defense)

Wow. I hope you don't build models for a living.

That "flexibility" means precarity as the majority of gig employees do this full-time:

>In California, the legislation will affect at least one million workers who have been on the receiving end of a decades-long trend of outsourcing and franchising work, making employer-worker relationships more arm’s-length. Many people have been pushed into contractor status with no access to basic protections like a minimum wage and unemployment insurance. Ride-hailing drivers, food-delivery couriers, janitors, nail salon workers, construction workers and franchise owners could now all be reclassified as employees.

Also, classifying them as employees doesn't mean that flexibility is gone:

>Uber and Lyft have repeatedly warned that they will have to start scheduling drivers in advance if they are employees, reducing drivers’ ability to work when and where they want.

>Experts said that there is nothing in the bill that requires employees to work set shifts, and that Uber and Lyft are legally entitled to continue allowing drivers to make their own scheduling decisions.

>In practice, Uber and Lyft might choose to limit the number of drivers who can work during slow hours or in less busy markets, where drivers may not generate enough in fares to justify their payroll costs as employees. That could lead to a reduced need for drivers over all.

>But Veena Dubal, a professor at the University of California Hastings College of the Law, said it would still generally be advantageous for Uber and Lyft to rely on incentives like bonus pay to ensure they had enough drivers on the road to adjust to customer demand much more nimbly than if they scheduled drivers in advance.

>Experts said that there is nothing in the bill that requires employees to work set shifts, and that Uber and Lyft are legally entitled to continue allowing drivers to make their own scheduling decisions.

Well yeah, it doesn't force them to. Who are these "experts"? If Uber takes on 100,000 new employees and all of the costs that go along with them, why wouldn't they also manage them like... employees? You can't have it both ways.

There are plenty of companies who have successfully figured out the whole part-time flexible employee thing. I quit my last company, but they didn't want to lose me, so they wanted to keep me on as a flexible-part-timer and I didn't even have a set amount of hours I needed to work every week. As long as I was working less then something like 30 hours a week then they didn't need to provide me additional benefits like insurance and what not. This isn't rocket science. If Uber and Lyft are using public utilities/infrastructure for profit(like roads), then they should be obligated to pay the government to use that infrastructure to get their jobs done. If you don't work for Uber or are a shareholder, do you want to subsidize their business with tax payer money?

Every single business uses the roads or benefits from them, and we pay for them mostly through gas/diesel tax, tolls, property taxes, and vehicle registration fees.

You aren’t subsidizing Uber/Lyft just by letting them use the roads like everyone else.

>If Uber and Lyft are using public utilities/infrastructure for profit(like roads), then they should be obligated to pay the government to use that infrastructure to get their jobs done. If you don't work for Uber or are a shareholder, do you want to subsidize their business with tax payer money?

Can you quantify (ballpark) the amount of money we're losing out on currently as far as roads and associated infrastructure goes? I imagine it's near zero as payroll taxes don't fund those, and the contractors are still paying taxes.

> payroll taxes don't fund those

It's kind of silly to make the distinction between which taxes fund which programs. It's completely arbitrary. Dollar bills are dollar bills

But for the fact that those dollars literally do not pay for roads and, when roads need to be built, those dollars will not be appropriated to do so. Other than that you're right of course, totally silly, what was I thinking.

This is like if I portion out my income and say "money from gig A goes to bills, money from gig B goes to savings"

At the end of the day if bills get bigger I can always pull money from gig B because I own the income stream. Just because I can currently accurately apply these arbitrary labels doesn't mean those labels aren't arbitrary, and it doesn't dictate what I will do with that money in the future.

It would be a bad idea for the owner of the income streams to actually make spending decisions based on the size of each income stream. You should always choose the expenditure with the highest expected value.

If they're doing it because it makes them more efficient or profitable, it makes sense. If they're just doing it to punish the state for changing the rules... well, that's their prerogative, but if it makes them less efficient they will lose ground to competitors.

They're doing it because their current business model will no longer be legal and they now have to optimize to a new set of laws. They aren't doing this to be more efficient, this will be less efficient than their existing system. But it very well may be the most efficient way to handle it under the new regulations.

Increased pay and more time off!

I think, really, progress often comes when a side of a contested issue gets it two ways.

Which of course, I don't mean that one side getting it both ways is always progress, just that it's not a real argument.

Because Uber has been arguing that people work for them because of the flexibility? So when they don't offer it, people won't work for them, employed or not?

This is such a weird response. Like Uber would institute some schedule out of spite, and why even.

It's not out of spite. Healthcare is a fixed cost for employees. Overtime costs more per hour in pay. Undertime costs more per hour because the same fixed costs are divided over fewer hours. If Uber has to pay fixed costs, they have a greater incentive to minimize undertime.

It's not 'weird' at all; if Uber is employing you you will need to maintain a certain number of hours / week. They will likely reduce the number of drivers that they have, but now they also need to ensure that the schedule is covered. Seems like common sense really, has nothing to do with spite, not sure where you came up with that.

because then those drivers would go work for lyft or some other company that doesn't do it? I mean this is why we want competition.

It wont be possible for any taxi company to provide minimum hourly wages without enforcing peoples schedules. I mean, a group of drivers could choose to drive only between 22-06 during weekdays and thus get paid minimum wage for basically sleeping in their car.

> It wont be possible for any taxi company to provide minimum hourly wages without enforcing peoples schedules.

Sure, they have to control how many people are on-pay at any given time. That doesn't require preset schedule; you can have a combination of:

(1) Minimum hourly wage,

(2) Dynamic, demand-based minimum targets and maximum on-payroll quota, where additional drivers aren't permitted to come on-shift of the current quota is reached.

(3) Dynamic, automatic, first-come first-served offers of above-minimum pay if current local staffing is below the minimum target.

No set shifts are required.

Lyft would likely do the same thing, since they’re already employees...

Absent that flexibility many people wouldn't be working at all. Both because their life situations don't allow them to take another job as employees, and because the companies' labor needs do not justify the cost of adding additional employees.

> Uber and Lyft have repeatedly warned that they will have to start scheduling drivers in advance if they are employees, reducing drivers’ ability to work when and where they want.

>Experts said that there is nothing in the bill that requires employees to work set shifts, and that Uber and Lyft are legally entitled to continue allowing drivers to make their own scheduling decisions.

>In practice, Uber and Lyft might choose to limit the number of drivers who can work during slow hours or in less busy markets, where drivers may not generate enough in fares to justify their payroll costs as employees. That could lead to a reduced need for drivers over all.

>But Veena Dubal, a professor at the University of California Hastings College of the Law, said it would still generally be advantageous for Uber and Lyft to rely on incentives like bonus pay to ensure they had enough drivers on the road to adjust to customer demand much more nimbly than if they scheduled drivers in advance.

I think the experts cited in this article are not getting at the crux of the problem. Offering employee benefits means that each driver has an overhead cost to the rideshare company. Drivers need to generate a minimum amount of revenue for rideshare company, otherwise the driver is a net loss for the company. So Uber and Lyft are going to have to start scheduling drivers to generate a certain threshold of revenue, and if drivers don't meet that they'll be let go.

If you want to encourage drivers to drive enough to offset overhead costs, there are other ways besides traditional advance time-slot based scheduling. For example: (these are not mutually exclusive)

- Setup incentives (e.g. bonuses) so that drivers get paid better after they have offset the overhead costs for a month. Perhaps this could be setup as a sliding scale or threshold system.

- Reward (but do not mandate) drivers for scheduling certain times/dates in advance (e.g. to optimize driver supply)

> Setup incentives (e.g. bonuses) so that drivers get paid better after they have offset the overhead costs for a month.

A bonus increases cost, meaning the drivers need to work even more hours.

> Reward (but do not mandate) drivers for scheduling certain times/dates in advance (e.g. to optimize driver supply)

Again, offering rewards to drivers for driving in certain scheduled times means that drivers need to bring in even more revenue to break even to offset the price of these rewards. Either that, or the overall average pay is reduced during non-peak hours to offset the cost of rewards.

I think it's more likely is that this takes the form of Uber and Lyft giving drivers blocks of time during which they need to drive, and quotas to meet. Paying drivers during non-peak hours, and giving benefits to drivers that are not bringing in much money are things that ride share companies are going to have to take steps to avoid. If drivers start getting employee benefits, then it's a largely inevitable consequence that they'll lose the flexibility provided by contract work.

Re: "I think it's more likely is that..."

I'm struck by how many times you refer to rather blunt instruments (e.g. "scheduling drivers in advance" / "blocks of time in which they need to drive" / "quotas to meet"). There is a much wider canvas of tools available to guide and shape behavior, as I would guess you understand. (You seem to use language like an economist or business analyst, so you likely know about various incentive structures.)

Given how cutting-edge and innovative the ride-sharing companies claim to be, I don't think they can also authentically claim that they cannot find smart, incentive-based ways to work within slight adjustments to the business and regulatory environment. Market-making and matching algorithms are powerful, interesting, and applicable here, in a wide variety of regulatory configurations. In my view, the "ride-sharing" companies (after all, the driver is "sharing" her car with the passenger... right!) should leverage their people and infrastructure as a competitive advantage and, well, innovate.

They are employees now they don't like the shift they get fired.

Well, that's one (unnecessarily rigid) way to structure it, one that (in the language of economics), is inefficient, meaning that it misses out on possibilities for gains for both sides.

To be clear, I don't necessarily advocate for classical libertarian views of economics. [1] I also think in terms of balancing economic power (i.e. leverage) with goals of promoting human prosperity. Just because a company finds market success (temporarily [2]) in no way gives them moral or political authority to define ethical concerns. They exist in a broader context of social expectations, which must include norms around how people are treated.

[1] I like the quote by Ralph Waldo Emerson: "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines." To put a point on it, don't blindly follow the tenants of an overly simplistic theory of economics (libertarianism) when it clearly doesn't ring true to your own conscience.

[2] I say "temporarily" because let's remember that most businesses only last a small number of years relative to the length of written history.

Of course they don't have to schedule them. But if Uber has to take them on as employees, then Uber might reasonably want to take advantage of their right as an employer to force them to work certain shifts.

They may take a path of having employees be scheduled who opt in to have their hours/time be scheduled and get guaranteed hours/rides.

If you don't opt in to be scheduled you may be lower on the priority list and not have as many rides, but your flexibility still is in your own hands.

It would give incentive on the individual to want to opt in for the hours at the loss of personal freedom if that is what they want to choose.

What do you expect from your studio assistant that you think might put you at risk of a number of lawsuits?

Honestly, if you want to hire someone to do some work a few hours a week then you are basically hiring a part time employee. There's nothing dangerous around doing this and it's certainly not a minefield if you treat them with the respect that any employee deserves.

Well, other than the minor hassle that they need to know how to issue a W2 and get enrolled for workers comp insurance and pay their estimated taxes for them. None are super hard, but they are barriers for people who aren't used to hiring people, which is the case for I think a lot of self-employed people.

I only finally bothered to learn how to do it all last year when I needed some extra help with projects for my consulting company. Prior to that I just paid a contract CFO to deal with it because it's what you don't know you don't know that gets you sued. So either it's expensive to hire a CFO just for that, or expensive in your time to learn it all when your main goal is to actually get work done that produces revenue.

ADP does this all for you for the low price of about $20/month/employee. It's even cheaper once you have more employees.

There are dozens of other major competing payroll services providers.

Why do people on HN expect others to learn PC or Internet security but themselves throw in the towel trying to learn relatively simple tasks?

I'm not complaining, it's just a barrier. I support regulation of things like this and am aware of ADP and Gusto. I am also glad that Uber and Lyft drivers will be compensated as employees if they are treated like employees.

But it's a mental leap to move from "just need to find enough clients to pay my bills" to "need to make sure the paperwork is right so I can pay someone to help me out".

I don't personally find it intimidating, but I've also done it before.

These (incredibly small) requirements you list for having a small number of part time employees have been legal obligations for more than 50 years.

So yes, you have to fill out 5 forms, and write 4 checks, every year for withheld taxes.

But none of this qualifies for “it’s sad, it’s getting hard to be a small business”. They’re just things everyone in the US has been legally obligated to do for part time employees for an exceedingly long time.

So I don’t get the tone of this thread.

People with business degrees get a ton of crap in tech circles (god knows I've sent my share of snark their way over the years ;) ) ... but at the end of the day, there is value to someone learning those things, and people have been successfully thriving for decades as you mention under the exact same obligations. I think tech generally seeks to reduce friction as much as possible, even to its detriment ... like someone removing some log from a worksite while cleaning up, only to realize it was holding up something else. The original intent of the thing is lost over time

I could be wrong, but I don't think my friends who got business degrees were learning how to fill out W-4s. They were learning things like "strategy" and "organisational behaviour" and apparently doing presentations every other week.

This, 100% this. It makes the move from a single person company to a 2 person company terrifyingly complex, particularly for those of us without a background in business.

It’s a literal chilling action on small business.

> company terrifyingly complex,

And yet, somehow hundreds of thousands of small businesses, most of them in non technical fields whose owners I would surmise don't have nearly the average educational and/or technical skills that HN readership does, somehow managed to navigate it.

This isn't terrifyingly complex. You can work it out yourself, or pay a reasonable fee to someone to set you up. It's a business expense that any actually viable small business should be able to easily justify.

Terrifyingly complex?

We're talking about a Google search and a few forms...

...and completing all of those forms flawlessly, as a layperson, lest you open yourself to any number of lawsuits. Just the thought of it makes me nervous. It's why large companies have dedicated staff to dealing with such issues.

This is the weirdest thread I've seen on HN, just pay a little money to Gusto or similar to do this. You are talking about barely any cost to have someone else do it who does it all the time.

If you don't have the money to pay $50 bucks then do it yourself and just worry less. The chance you mess up is so low it isn't even a thing.

It's funny because all of these comments are ignoring the thousands of small businesses run by average people that have already solved this problem for over 30 years

Most of them never solved it they just did "good enough" and haven't had any issues. Most people are open to solving things without involving the government or just drop the issue and walk away. Everything will be fine for until they get someone who's not ok with it then they get raked over the coals for what they thought was "good enough".

All of the (objectively) stupid people I know who successfully own and run businesses with employees, and the people on this site clutching their pearls at the thought of having to fill out ~5 forms.

If you're unable to grow your business because you are scared about a step required to grow your business you aren't going to grow your business. Nobody owes you this. Risk aversion isn't anyone else's fault.

My partner entered into head of operations at a small company and had to learn all of this stuff on the fly [in Canada].

She's managed just fine as well. I've managed a department previously and had to deal with worker's comp matters and same thing. It's not very difficult to learn. It's a bit of overhead, sure. It's just part of the job of overseeing others.

> literal chilling action on small business.

Well, I’m super libertarian and generally opposed to any and all government regulation, but… if labor laws are stifling small businesses, why have labor laws in the first place? The reason for this law is explicitly, specifically, stop businesses (small and large alike) from doing business this way; it’s not an unintended consequence, it’s entirely the point.

Gusto will handle it all. Though I’m not a fan and we’re looking to switch. The never gave us our referral credits and while it’s NBD, it definitely left a bad taste.

been looking into gusto myself. what are the alternatives in this space?

Well, yeah, because if we don't have these rules, part time employers won't pay taxes, their employees will have to pay tax penalties if they try, and they won't get insurance for workplace injuries. And these are bad things, so we make rules about them.

Now, maybe you'll argue that these are all steps that the government should be doing instead of the employer. And I agree, but they're done this way because there's a whole political aisle in this country dedicated to the proposition that the government shouldn't ever do anything. So someone has to do it, and in our scheme it's the employer.

> So either it's expensive to hire a CFO just for that, or expensive in your time to learn it all when your main goal is to actually get work done that produces revenue.

This attitute is exactly why those laws are needed. As a business owner if you want to hire some other human being to work for your company then it should be your natural instinct that wants you to learn everything that makes the life of that other human being easy to work for you, but because you have no intrinsic interest in actually educating yourself what someone might need if they work for you, that is why you have to be forced into learning that by law.

It's sad that all you care about is someone getting your work done, because it's still a human being and that legislation is there for a reason.

Wow! He just spoke of how what he actually misses is the relationships and th mentoring. He clearly is thinkin of the potential employees as people first. Your attacks seem emotionally motivated. Not all jobs are slave and master relationships. I cant imagine anyone is motivated to learn and keep up to date on the current labor laws regardless of their level of compassion for those they employ. At the small end of the business spectrum hiring events are much more often "my sister knows a guy who could do this for you and he needs a job right now, wouldn't you like to work 50hrs a week instead of 70?"

> As a business owner if you want to hire some other human being to work for your company then it should be your natural instinct that wants you to learn everything that makes the life of that other human being easy to work for you

Everything? That'd be thousands of pages of regulations to sift through and understand. So, no, there's no "natural instinct" to do that.

Kind of going overboard on the rest of it. They just want to hire some part time help, not staff a coal mine.

And that attitude is the reason we have so much overhead and useless garbage being produced instead of valuable labor. Just because I don't want to learn the intricacies of labor and tax law doesn't mean I won't pay my employees well and do right by them.

Just because you say you will pay your employees and do right by them, doesn't mean someone else will do the same ... for every one of you, there's someone who will happily exploit someone else, and whether it can be attributed to malice, or ignorance is irrelevant.

And now the people who were hired previously aren't going to have a job.

I hope that's what you wanted.

New York State just overhauled farm labor in a similar manner that will prevent most small farms from hiring by season... and in agriculture seasons can be 2 weeks to 2 months... but now you have to cover FT, benefits, plus unemployment insurance.

So in theory you can hire someone... they can work for 2 months and then collect unemployment after you run out of work for them because the earth's position changed and it's now winter.

New York State already pays about 4% above the national average for farm labor. All costs will just be passed on to consumers. Industry groups estimate that consumers will need to eat $300m in additional food costs per year.

The State Senator (from Queens) that authored the bill visited approximately 14 farms in NYS prior to writing the bill... and signed it in Manhattan... where farm labor money is now set to flow in the form of union fees being managed by hedge funds and banks.

Farming kinda relies on exploiting under-payed workers. Historically those were sharecroppers (who created the myth of family farms), but lately they are undocumented immigrants.

Why do "consumers" have a right to underpay for somebody's labor?

"employee protection" lawmaking is popular and makes lawmakers seem caring and thus reelectable. Did uber drivers in the past leave uber to flock to taxi companies who do hire them? AFAIK no, and they know that legislation like this will probably cause them to lose their chances at a job/gig. Different people different motives

Taxi companies don't hire you, you're just another contractor for them as well.

It doesn't have to be black or white. Why don't regulators make a third category of worker between employee and contractor? Such a policy could reflect what people are already doing and give them some protection against abuse.

I feel as though that ire ought to be directed at the companies who knowingly walk in the gray areas to make profits where simpler laws might suffice for common sense. It's the same arms race that plays out in many other instances, if abuses didn't happen then we wouldn't need to codify into the law that those things are indeed abuses.

With every round of this game we play, it gets harder for smaller businesses to step around the collateral damage, but it's not as though the right answer is to give up on worker protections. The worst part of it all in my opinion is that after a gray area is ruled on after years of extracting profits, there's literally no consequences for a business forcing that gray area to get codified into law. Of course these vague in-between areas will be exploited and eventually refined into more and more meticulous law, there's a bounty on every one of these areas. The system we have will trend towards this unless we give up on worker protections (obviously not good) or reorganize this system so the winning move isn't to force more legislation

Even though it does not look this way now, I think this is a seminal legislation that in time will move small startup scene out of California for good, due to what you have described. I have the same experience, bootstrapping a software company that initially could not afford an employee payroll and administrative/legal burden. Where do we go next to start non-VC companies? Oregon? Texas?

What if you just incorporate in Delaware and contract remotely out of less restrictive states in the US? I think this will only apply to employees working within CA

Here's a quick guide to employer regulation in NYC. With one part-time employee you would be exempt from many statutes:


Also, part of the purpose of incorporation is to provide a personal liability shield as a catch-all.

Any policy has benefits and drawbacks. Yes, somebody is losing out on beneficial employment with you. But somebody else is being saved from being paid $5/hr under dangerous conditions without workers comp.

> I’m in NYC and honestly can’t figure out how to legally hire a studio assistant for a few hours a week without being at risk for any of a number of lawsuit vectors.

To my understanding (not a lawyer / accountant) if you hire someone part time like that you're not obligated to pay for their insurance or anything like that.

You just write off what you paid them as a business expense and send them a 1099 at the end of the year (this is the official document stating how much money you gave them during the year -- your accountant will generate the form for you).

Then it's up to them to file their taxes for that income, but this is out of scope for you. As long as you've sent them their 1099 you've done your job.

Also not an accountant or lawyer, but I think that if you're paying someone by the hour, and directing them as to how they should do they job, they need to be classified as an employee, not a contractor.

This means a W2 instead of a 1099, plus you need to pay them on a fixed schedule, pay social security and medicare taxes (and likely other taxes depending on jurisdiction) on their wages, deduct income taxes, do an I-9 verification at the beginning of employment, change your own liability insurance, etc.

There is software as a service companies that help out with setting this up correctly, but I do see many ways you could do this incorrectly, and land yourself in trouble.

We had some employees in NYC earlier this year. They make California employment laws look simple in comparison.

Definitely, Definitely get a service there that knows how to handle all of the fine details.


NY posts all of the requirements for hiring a new employee on a single page. It's a simple process, and even simpler if you use a payroll service provider.

> Also not an accountant or lawyer, but I think that if you're paying someone by the hour, and directing them as to how they should do they job, they need to be classified as an employee, not a contractor.

> This means a W2 instead of a 1099 [...]

I'm a freelance developer in NY and this isn't the case. When someone requests me to do work for them they tell me what they want done, we scope out the project and then I either bill them by the hour or by the project depending on what's going on. Sometimes I work 50 hours a week on that project, sometimes 5.

But in all cases, they send me a 1099 at the end of the year. I might be considered some type of contractor in their software since most of the companies I work for auto-bill me through some software but in no case have I ever been declared as a W2 employee. Everything you wrote is true if they were a W2 employee, but that means being officially hired and defined as a full time employee.

Also I've paid out a lot of people for contract work as a freelancer and my accountant said it's no problem. I just give the numbers and he provides me the 1099 to send out. It's been working like this without issues for years.

This is partly why freelance or contract workers need to and can get away with charging more per hour. They get no perks of being an employee. Health care is super expensive and we essentially pay double the social security taxes since we're both our own employer and employee. There's also no free lunches or other employee status perks like matching retirement funds, etc..

But on the flip side, getting hired as a freelancer is a huge win for business owners because now they don't mind paying higher rates for a freelancer since they are off the hook to provide all of those W2 benefits and also avoid paying a consistent salary even if there's not much work to do (typical scenario where you're clocking 8 hours a day but only 2 of those hours are productive things). A freelancer might get 5 productive hours in for that day, charge for 5 hours and after a week they clocked 25 hours but a salary worker would have clocked 40 and was productive for less than half (not due to laziness but there's just not enough "real" work to do).

After factoring in everything, if the freelancer is technically 4x or even 5x the salary worker's hourly rate the business still comes out ahead.

It will probably come as a surprise to you (it did me several years ago), that it’s not simply up to you and the company hiring you if you are considered a freelancer.

This is not a matter of billable vs guaranteed hours. It’s a classification based on employee control over the person in question.

In fact, if you were micro directing the people you paid 1099, you may have had what the state of NY would consider an employee. Yes you’ll probably never get found out, but that doesn’t negate the fact.

> It will probably come as a surprise to you (it did me several years ago), that it’s not simply up to you and the company hiring you if you are considered a freelancer.

Where do you draw the line?

Let's say you hire someone for 3 hours to help you out for a specific task. A "I would like X done with Y" type of scenario. Are they now considered an employee?

What if you asked someone to do a code review for 5 hours where you precisely told them what to do, but it's on them to determine the state of the code? Also an employee? Does your answer change if you asked them to do this 1 hour a week for a year?

Here's another example. A company hired me to do X. This ended up being a ~100 hour project. They gave me a checklist of deliverables and a pretty decent break down on how to implement everything. They let me choose the tech (but had suggestions on what to use) and how the application functioned was defined by them. Am I an employee and if so, what if I worked 20 hours a week until it was done vs 50 hours a week -- does that change anything?

Scenarios like the above are really common in the freelance world. You get a super wide range of work thrown at you (as you know).

I've talked with a number of accountants over the years and always told them everything I've been up to. I was never once recommended to classify myself as a W2 employee, or be on the hook for hiring a W2 employee for short term contract work that I provided someone. It's always been 1099s in and 1099s out.

Not legal advice but...

Usually in your situation you will have your own computer, your own workspace (except for meetings with the client), and deliver things based on a predefined scope (or predefined set of expectations). That's good enough to make you a freelancer.

On the other hand, if the company told you to use their laptop, show up in their office, work using their methods—effectively manage how you work... that becomes W2 territory.

Taking a step back, you're respecting the spirit of things. The company has a need, you have a solution, y'all have a transaction. On the other hand, if they were to integrate you as part of a team, within their processes, that's a W2.

Of course in practice there's a third way that is common: large company A makes use of an intermediary contracting company B that they can pay as needed[0], and the contractors are W2 salaried of B, while A maintains all their flexibility.

[0] Generally for all the crappy work that they don't want to do themselves. If you find yourself working for B, make it a learning experience and a personal goal to move beyond it.

Using company equipment gets complicated pretty fast. Some 'contractors' have to use company equipment because the company won't allow proprietary or regulated data on machines they don't own. Is that enough to make someone an employee?

Yeah and it gets even more grey because what if you're using your own computer but you have to connect to hardware that the company owns such as a server, or even servers on the cloud that the company is renting and paying for.

Technically you're using something that belongs to them. Then there's the case of connecting through their VPN too.

Then it's like, why would using a company laptop to SSH into a company owned server be any different than using your own laptop to connect to a company SSH server.

And of course, what if you did great work for that company as a contract worker and they decided to give you a laptop as a bonus / gift. Or more realistically the thing you're developing requires a lot more hardware than your current machine so as part of the contract you signed, they will provide you an extra $1,500 up front to purchase a computer upgrade. Technically you bought the computer so it's not the company's. The greyness never ends haha.

>> it’s not simply up to you and the company hiring you if you are considered a freelancer.

> Where do you draw the line?

From the IRS[1]:

> The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done. Small businesses should consider all evidence of the degree of control and independence in the employer/worker relationship. Whether a worker is an independent contractor or employee depends on the facts in each situation.


> Written contracts which describe the relationship the parties intend to create. Although a contract stating the worker is an employee or an independent contractor is not sufficient to determine the worker’s status. ___

1. https://www.irs.gov/newsroom/understanding-employee-vs-contr...

> The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done

Using this IRS logic then I wonder if most employees are really contractors.

If you're hired as an employee to work on project X, a manager would likely not even know how it will be done. They aren't going to write out the programming code logic for you (that's your job as the employee). They might give you business rules such as "it needs to do XYZ", but that's much different than "how it will be done".

"Where do you draw the line?"

That's the ting, there is no exact science here. It's an interpretation by the relevant state agency (like most taxes really).

For example, CA has been cracking down hard lately, dunno about NYS. Obviously enforcement is selective - better for the state to go after someone big like Lyft/Uber rather than you. Does not mean that you're in the right just because you didn't get your election scrutinized.

And FWIW - your accountants are right in that it's beneficial and probably totally fine to 1099. But ask them to guarantee that the state won't go after you for it and watch them squirm :D

> relevant state agency

the federal govt as well (the irs has a 20 point checklist to help make the determination)

every contract i've ever gotten in the last 10 years has required that i indemnify the company against being classified as a worker, and then given instructions that violate that checklist, and been upset when i pushed back

started looking for a w2 on tuesday :(


It's not really that complicated. If it's a short term engagement (3 hours literally once), then 1099. If you need them for 3 hours every week, then consider hiring them as a part time employee ... it's a long term relationship at that point. If you need 3 hours every week and engage a temp agency, then chances are you'll get a different person (even if they send the same person a few times in a row). If you engage a "temp agency" that's literally just a front for one person ... that's an employee and should be treated as such.

The difference is that the company that contracted you isn't managing your day-to-day work.

Company hires you and says "we need a website that does X" and leaves you to do it. You might be a contractor/free-lancer.

Company hires you and says "we need a website that does X, you need to work in the office and/or use our hardware, and we want it written in React, and you'll be working closely with JimBob the Manager." You are probably not a contractor/freelancer.

Yes, there's some grey area in there. It's a combination of the three factors in the ABC test that determines employee vs contractor.

"Yes, there's some grey area in there."

From my experience, I've never seen a software contractor that could avoid being considered an employee if the eyes of the state government fell upon them closely.

  I've never seen a software contractor that could avoid being considered an employee...
There are lots of them. Consider a company that doesn't produce software at all hiring you to build an app for them. or a company that has no expertise in your area, etc.

If you are embedded in a team and could swap roles with any of them, you probably aren't a really a contractor though.

> and directing them as to how they should do they job

This is, to me, a very puzzling take. If you hire a contractor, you don't direct how they do the job, only what the job output is like. Hourly contractors are certainly a thing.

I'm still confused how you can avoid tell someone how to do their job. A SW contractor can't be told which language to use or be connected to company source control or use existing company software libraries? A carpenter can't be directed in some fashion beyond: 'YOU, GO BUILD HOUSE FRAME'.

I did software contracting for a while. It’s certainly appropriate to define parameters like “use language x, code these features, by this deadline and keep a synchronized copy of the code in this repo.”

You can’t set hours and direct particular tasks day to day.

Having personally been through the employee vs contractor maelstrom when, for some unknown reason, the state government got a bug up it's ass, I'd have to say that the state requirements become quite arbitrary.

What you might think is appropriate is sort of besides the point.

I too have been through the maelstrom. What I think is appropriate for me as it all boils down to interpreting the IRS regs and hiring a good lawyer who successfully avoids and navigates lawsuits for me. Just because I navigated it successfully doesn’t mean I’m right or my interpretation is appropriate for all.

But I think it’s pretty useful and certainly disproves that it’s not possible to hire software contractors.

> You can’t set hours and direct particular tasks day to day.

What if this is part of the requirement of doing the contract work?

For example, your job is to pair program with one of their employees and they are only available from 10am to noon.

Technically the person paying you for your time is setting your hours.

This gets into a big grey area and I’m not sure there’s an absolute rule. If I were writing the contract I would say “must pair program with employees” and let the contractor figure iut how to meet the req.

You can tell someone to "do this work". You can only tell an employee to "do this work, at this desk, using this computer, for 8 hours between 8 AM and 6 PM every weekday".

You can tell someone to "get it done by the first of the month or suffer a penalty". You can only tell an employee to "get 5% of it done every workday and send me your status metrics by 10AM every morning or you're fired".

You can tell the carpenter what the work is that must be done, and provide detailed specifications, but if there are multiple ways to get that work done, you can only mandate those details for an employee. To some extent, building codes establish a minimum standard that everyone should be satisfied with, and you could tell an employee to do the minimum amount of work required by the building codes to get the job done, but you can't stop a contractor from carving Mayan-inspired engravings into every stud if they feel like that's what the job requires, or from using glue and joinery where most people would just put framing nails. As long as the work meets the specs, the contractor can get there by any route they please, no matter how much or how little actual effort is required.

Uber can tell its driver to "to collect this fare, get this passenger to this location". When they start saying what kind of vehicle they have to use to do that, they are starting to move into employee territory. Clearly, a passenger can be moved from A to B by a restored and retrofitted tie-dye-painted 1970 VW minibus as effectively as a nearly-new factory-stock black 2018 Toyota Corolla, so when Uber is making requirements that speak more to their company's brand identity than to the reasonable requirements of the job, those are employee-like requirements.

It isn't always clear whether a requirement is directed more towards the means or the ends, because specifying an end result precisely enough may dictate that the only practical means to that end be used. So California has decided to resolve this exploitable ambiguity in favor of assuming certain types of worker are employees unless a minimum degree of autonomy can be demonstrated.

See: https://www.irs.gov/publications/p15a#en_US_2019_publink1000...

>To determine whether an individual is an employee or an independent contractor under the common-law, the relationship of the worker and the business must be examined. In any employee-independent contractor determination, all information that provides evidence of the degree of control and the degree of independence must be considered.

>Facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. These facts are discussed next.

>Behavioral control.

>Facts that show whether the business has a right to direct and control how the worker does the task for which the worker is hired include the type and degree of:

>Instructions that the business gives to the worker.

>An employee is generally subject to the business' instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work.

> - When and where to do the work.

> - What tools or equipment to use.

> - What workers to hire or to assist with the work.

> - Where to purchase supplies and services.

> - What work must be performed by a specified individual.

> - What order or sequence to follow.

>The amount of instruction needed varies among different jobs. Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. The key consideration is whether the business has retained the right to control the details of a worker's performance or instead has given up that right.

>Training that the business gives to the worker.

>An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods.

>Financial control.

>Facts that show whether the business has a right to control the business aspects of the worker's job include:

>The extent to which the worker has unreimbursed business expenses.

>Independent contractors are more likely to have unreimbursed expenses than are employees. Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. However, employees may also incur unreimbursed expenses in connection with the services that they perform for their employer.

>The extent of the worker's investment.

>An independent contractor often has a significant investment in the facilities or tools he or she uses in performing services for someone else. However, a significant investment isn't necessary for independent contractor status.

>The extent to which the worker makes his or her services available to the relevant market.

>An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market.

>How the business pays the worker.

>An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. An independent contractor is often paid a flat fee or on a time and materials basis for the job. However, it is common in some professions, such as law, to pay independent contractors hourly.

>The extent to which the worker can realize a profit or loss.

>An independent contractor can make a profit or loss.

>Type of relationship.

>Facts that show the parties' type of relationship include:

> - Written contracts describing the relationship the parties intended to create.

> - Whether or not the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay.

> - The permanency of the relationship. If you engage a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that your intent was to create an employer-employee relationship.

> - The extent to which services performed by the worker are a key aspect of the regular business of the company. If a worker provides services that are a key aspect of your regular business activity, it is more likely that you’ll have the right to direct and control his or her activities. For example, if a law firm hires an attorney, it is likely that it will present the attorney's work as its own and would have the right to control or direct that work. This would indicate an employer-employee relationship.

>IRS help.

>If you want the IRS to determine whether or not a worker is an employee, file Form SS-8 with the IRS.

That is one heck of a link, thanks.

But it's too bad that so many of those points are ambiguous due to lack of information.

For example, the "Computer Industry" example (CTRL + F for it). It's pretty clear cut that a huge amount of software freelance work falls under this example.

But then this sentence ruins everything: "Steve works at home and isn't expected or allowed to attend meetings of the software development group".

What if you have to goto 1 or more meetings to get a clarification on the specifications because part of what you're developing is related to 3 other people who are employees of that company.

It seems ridiculous to me that if you sit in on a 30 minute remote meeting, suddenly you're a W2 employee instead of a contract worker. Likewise it's ridiculous if you happen to go on site once or twice for whatever reasons. The examples are also left up in the air. If a single condition fails, is it an automatic W2 employee, or are you still able to be a 1099 employee and it just so happens the example didn't go into enough detail.

Then it's like, well, if you try to follow the rules but the rules aren't clear then how are you supposed to follow them. Surely you can't get in trouble (read: pay fines) due to the rules being incomplete?

Don't forget a W4 form!

This is a common misconception, but terribly incorrect. Talk to a lawyer.

I guess it depends? Multiple accountants have told me that over the years (I'm a freelance developer btw).

Yes, it depends. I mean, there are independent contractors, and they get 1099s.

But I'd find it miraculous if the job you just described was upheld as an independent contractor.

Why don't you just hire people part time? That still exists and it exists for a reason.

I would highly recommend you reach out to local educational institutions to see if they have intern/co-op programs. You might be able to get some help with the administrative parts of the process.

Life goes in a cycle. A new tech, invention ( e.g. Bitcoin ) comes and blooms until it starting to affect government revenue, from that point onwards people in power find a way to regulate it for greater good. The tech becomes boring, intelligence search for more novel solutions. History repeats itself.

One option is a temp agency.

I'm a student at a music school in NYC, I wonder if I could help? send me an email at robert.diack [at] gmail if you're interested.

Hire a paid "intern".

Few hours a week? How would anyone, other than students, make that work?

You could 1099 them but considering the likelihood of someone who's taking an entry level music job claiming the income on their taxes seems like a recipe for an audit for both parties.

Realistically you should probably do what everyone else does in this situations and pay under the table. Think of the lost taxes as billing the government for making stupid laws that can't reasonably be followed even when you want to follow them.

The fact is, there's a lot of people paying under the table, for these very reasons. One estimate from 2012 of the underground economy in the U.S., i.e. transactions of goods and services other than illegal drug trade, was around $2 trillion[1]. That was during a severe recession; it's not clear whether the subsequent recovery has exacerbated the situation or encouraged more people to work "above ground".

One thing is certain: as long as there is friction & obstacles to hiring part time help, there will be people trying to work/hire under the table.

1. https://www.investopedia.com/articles/markets/032916/how-big...

Or instead, if you're really not willing to learn something you'll do with every future hire, you could just use a small business payroll service provider that specializes in this sort of stuff to do it for you so that you don't risk prison time.

Payroll might be complicated to learn the first time. But it's like riding a bike, once you learn it's trivial to do.

It's not about the complexity, it's the cost and risk exposure. Employees come with costs (workers comp being the big one) and risk exposure that 1099 workers do not have (and what the employer gets in the trade-off is more direct control). For someone doing menial work and getting industry experience on the side (most trades have entry level jobs like this) that additional cost/risk could be the difference between their position existing and just tacking the responsibility onto some other existing employee.

Your sob story has a number of holes:

1. An employee working, in your words, "a few hours a week" has literally nothing to do with an Uber driver working full time.

2. As a society, do we need more cable-coiling jobs? I don't think we do. With respect to your experience, there are a lot of people in the music industry (and most industries) willing to mentor people without also expecting them to do menial labor for minimum wage. You're not being benevolent or providing some integral service to the community.

3. There are a large variety of services which make it easy to hire an employee, which cost a small fraction of what the employee is going to cost. If you actually wanted to do what you say you want to do, I'm sure you could figure out how to do it.

Is there any reason to believe the ride sharing companies won't reorganize their drivers using a similar model to what Amazon uses for their delivery drivers: contract to external firms that employ drivers so the parent entity is absolved of responsibility?


This is an important point, as many times these laws claim to do one thing and end up doing another.

Does this fix a problem? Or does it keep the old problem, just in a new configuration, and add barriers to entry for new participants?

I think the answer may be "yes" effectively if it leads to establishing companies of contractors but not without side effects in themselves - like most regulations really.

If gig economies lead to working with companies instead of individuals that would lead to two distinct branches. * A self established one would give more regulatory surface for things like training and background check requirements. Not as easy to sign up before any added regulations. Constituents would get more of a pure cut. The barriers to entry would make their labor slightly more valuable. * A traditional company which hires employees. They would have a middleman to make signing up easier but likely less flexibility - which doesn't matter as much to fulltimers anyway.

It likely result in a less flexible market with more barriers to entry but it would solve some problems and act as a framework to add more solutions and problems for better or worse. It could be abused to create cartels again or responsibly handle externalities without unduly privileging - it depends on how the tool is used.

Second order effects are likely a labor pool that cannot rise and fall as quickly which would stabilize prices for the labor supply and turn instability into a company liability as they may be left with a choice of paying for idle labor for availability and meeting demand for sure or risking being unable to fulfill demand.

That said I wouldn't be surprised if widespread roll out of these sorts of laws caused a gig economy bubble to burst - especially given how many are doing a VC dumping strategy of losing money on transactions.

I don't really have strong feelings as to what would be the best nor consider myself above an amateur commentator.

Does it matter who the employees are employed by? All rules for an employer apply just as well for the employing company as they would for Amazon if they employed them directly.

It does matter. Here's why:

Uber agrees to pay X rate currently to drivers. A law is passed that makes X rate even more unprofitable.

Uber then engages the services of an external company which provides labor at a lower rate, fires all of the current Uber drivers, and encourages them to work for the new external company.

The external company, if sued, does not have the resources that Uber has, and simply goes bankrupt. The drivers are encouraged to work for yet another new company.

This process continues for a while as ride quality and driver satisfaction all suffers. Uber gets to lengthen the runway a bit longer, and either a miracle happens and the company continues operations or some other competitor swallows the market.

Interesting, in Brazil all the companies in the chain are liable in a labor-related law suit. Before the 2017 Labor Reform[1], frivolous law suits by former employees were a billionaire market because it used to be a risk-free gamble - after the reform the litigant is liable for exaggerated claims and there was a 46% drop in labor cases[2].

When I look at any market where the labor code is excessively protective, I see high unemployment rates specially among the young - Brazil, Spain, France[3]... I don't know about causation but clearly there is a correlation between employee over-protection and unemployment rates. I think it is the law of unintended consequences[4] in action: the legislator intention was good (protecting employee) but the net result is negative.

[1] https://www.jonesday.com/en/insights/2017/12/brazilian-labor...

[2] https://www.capital-ges.com/an-insider-view-of-the-brazilian...

[3] https://countryeconomy.com/unemployment

[4] https://en.wikipedia.org/wiki/Unintended_consequences

There is definitely a causation for high unemployment by such laws. But it actually goes even deeper.

In France for example, it is difficult for a company to fire an employee once they are legally hired.

Oracle, for example, has a policy of initiating an "intra-country transfer" where the employee is mandated to relocate from Paris to Montpellier. Not everyone wants to uproot their family like that. And then if they do accept the move, next year Oracle will relocate them to Bordeaux...

Interesting, so in France you can't fire someone but can legally make his life miserable through constant relocation? Brutal...

Correct, it is insane!! It is "legal" in the sense of "the law didn't specifically plan for this workaround that a particularly greedy company found"

I guess it’s more like in France, instead of being fired with no recourse, you can opt to be relocated instead (at least that’s what it works out to).

As I understood, once you hire someone in France the labor code makes it virtually impossible to terminate the contract.

In Brazil employers have to pay a fine if they fire a worker without a "fair cause" (~ 3.2% over the sum of all compensation paid to the employee while they worked for you), so the longer someone worked for you the more expensive it gets to fire them.

The law allows for veil piercing in situations like that, meaning they could skip the temporary intermediaries and just treat Uber as the employer.

Believe it or not, they did think of issues like this when drafting the law. Especially since almost all of these other issues brought up in the comments are decades old and already addressed by existing labor laws.

That was not immediately known to me, because in New York where my family member is a lawyer, something like the following will happen:

Company X owns Company Y. Company Y builds an apartment building of low quality and hides the defects. They sell the apartments to individual buyers.

The individual buyers sue Company X years later upon finding the defects. The judge throws out the lawsuit and says "you can only sue Company Y, because that is the legal entity who built the building."

The only issue is that Company Y is several million dollars in debt to Company X and has absolutely no way of repaying anyone who sues Company Y.

Others are pointing out the problem with staffing companies too, but this reminds me of my experience (different countries, so YMMV). This means that even though "The law allows for veil piercing" there's a huge maybe there, companies unloading their liability know this and have great lawyers. So IF a lawsuit gets to the real employer it's only after a LONG legal process, so not worth as much.

There is also another reason: If Uber employs the driver and he/she acts unprofessionally, then it's a lot of work to fire him/her before they can hire someone else. (Uber does not want to drag passengers into any type of litigation)

If Uber deals with many companies, they can just reduce demand at the company with the bad driver and increase demand at another one. The company with the bad driver can then retrench him, saying they need to cut someone.

(Disclaimer, I know very little about Uber and the US and it may not work for them specifically. But the idea certainly applies to other companies)

yup it does, just like contractor employees at amazon/google/tech company of choice don't get any of the nice benefits or perks of working at the client company, these guys won't get anything.

Those employees can't sue the client company, they can only sue contractor company - that suddenly goes poof and doesn't pay out anything when a dispute happens. Good luck forming a union coz then the company will go poof too

It basically just moves the onus onto the employee willing to sign up for a shit job with no perks and absolves the govt/client company.

> Good luck forming a union coz then the company will go poof too

The answer to this is to form a bigger union so that only the bigger contracting companies can survive, and then have high-paid union executives who can negotiate large industry-wide contracts between employer and labor provider that provide some minimal level of protections but largely protect the status quo.

Then, those in the employer camp can donate to conservative causes complaining about unions and regulation, and those in the labor provider camp can donate to progressive causes complaining about evil corporations and lack of worker rights.

From here, the leaders in the two factions will variously ping pong and vacillate and make various and sundry unfruitful negotiations while taking the advice from various lobbyists about how they might improve the state of affairs and generally enrich themselves through back channel dealings with their benefactors from either camp.

That’s partially true. The contract company can’t fully go poof every time there is a minor lawsuit and the company needs to still pay the state all the fees for unemployment and insurance that all companies have to pay. In the end the employees get workman’s comp, min wage and unemployment insurance but the state gets to collect a bunch of fees that they are owed.

Was Uber beholden to any of that before this? Did they get benefits or perks? Could they form a union? What was their odds of suing Uber?

Uber has no USP except the network effect. They are just a taxi company with an app essentially (givent that their self driving efforts havn't fruited at all yet). If they outsource the competency of drivers to an external provider then they are just a taxi company with an app and not even their own driver network, making them even more vulnerable to someone else coming with a better app and using the same driver provider. Customers are the fastest to migrate when price is the main factor and the barrier to switch to a different app is literally just a few clicks in the app store.

He's just talking about a legal reorganization. "Uber Drivers LLC" contracts the employees which is wholly owned by Uber. I don't see how this would actually help them though. Under the new law, Amazon Flex drivers are also categorized as full time employees and the child company would still bear the costs of that

They’re actually talking about Amazon’s delivery service partner program. It’s where Amazon helps people setup independently owned delivery businesses. https://logistics.amazon.com/

But in those instances, the company contracted by Amazon will now, no longer, be able to use contractors, they would be employees.

don't most drivers already work for their competitor as well? they have no "driver network". It was actually one of the good parts of gig work.

Somebody like WorkforceLogic, ManPower or other temp agency would just handle employment, background verification, compliance and 1099s, they're unlikely to start building apps around their own networks.


Uber doesn't want drivers classified as employees so they don't have to pay minimum wage, provide employee benefits, pay payroll taxes, or otherwise comply with the law vis-a-vis employees.

Yet, it is one thing for Uber to hire drivers as contractors individually where Uber has full control over the terms, in other words no driver is in a position to negotiate their contract with Uber...it is an entirely different thing for the drivers to be organized and those organized drivers now be in a position to negotiate (almost like a union).

I think the last thing Uber would do is assist the drivers in organizing...its not just the ability for them to negotiate with Uber collectively either, at that point said driver contracting firm(s) would then be in a position to launch their own ride-share app to compete, unlike say these Amazon driver firms would can't just launch an Amazon competitor.

In my country, working as an Uber driver gets you a good salary. I think it's around 1000€ (minimum wage being less than 500€). Is it different in USA? Do they get less than minimum wage for 8 hours?

According to one analysis [1], working for Uber pays $8.80-$11 per hour (after subtracting car related expenses).

The federal minimum wage is $7.25/hr. But certain cities are much higher, for example New York City is $15.00. In San Francisco, it’s $15.59.

Also worth mentioning that most of these averages are not taken from drivers working full-time (40 hours per week). So while they may be able to make near minimum wage on an hourly basis, they may not be able to achieve that hourly rate for a full 40 hours per week due to fluctuating demand for rides.

[1] https://www.ridester.com/how-much-do-uber-drivers-make

Do minimum wage workers typically get the option to get health care?

It depends if they’re part-time or full-time.

Companies are not required to offer health insurance to part-time employees. Employers with more than 50 employees are required to offer health insurance to full time employees.


The crux of the interpretation is what constitutes an hour of work.

Once the ride starts with a paying client in the car, the hourly earnings are easily above minimum wage.

But what about the time spent logged into the app waiting for a ride? If you take a standpoint that's friendly to Uber, that is not billable time - the driver could potentially be working in other capacity (including doing gigs for direct and indirect competitors, like Lyft, Postmates, TaskRabbit, etc.) If you take a standpoint that's employee-friendly, this is similar to a store register clerk being by the register with no customers in the store - they're still present to perform their duties when necessary and therefore must be compensated.

How are you measuring the hours exactly? Just time when a passenger is in the car? Time on the way to pick up the passenger until you drop them off? All the time logged in and looking for a rides?

How do you factor in the car related expenses? And what about depreciation and other expenses beyond the direct out of pocket costs?

It is certainly possible to spend more than 8 hours trying to get rides, and end up with less than 8 hours worth of minimum wage pay after subtracting vehicle costs.

Depends on where. New York for example guarantees an hourly wage. But yes, in general they often make less than minimum wage: https://www.theguardian.com/technology/2018/mar/01/uber-lyft...

Seems fair to me no one wants to deal with the bureaucracy of employing people or being employed why not out source that to a third party?

The main problem Americans seem to face with gig economy is the lack of health care but thats americas problem you can't blame employers or employees for it.

Where I live the gig works make about or a little less than the minimum wage after expenses for vehicles. This doesn't include saving for retirement, healthcare, workmans comp, disability insurance, or a bunch of other things.

Basically, even if healthcare were taken care of the amount they make would not be a living wage.

Where did people get this idea that every job must supply a living wage?

I would argue that every job designed to be ones full time job while they are at a life phase where they have to be roughly self sufficient should have a wage that enables them to do so. Or, they need to go do something else.

This is not every job. It is the situation for many in the gig economy.

The reason people don't go do something else more often is something I would love to see studied.

Why shouldn't every job supply a living wage? You realize what your proposing is a net societal negative, right?

If a person has X amount in their savings and their job is not a living wage, then by definition they are likely going to have to rely on their savings to make up the wage differences. This is kind of a bad thing for capitalistic-based societies because you need people to consume, and if you have a large amount of people unable to consume then that negatively impacts the free market.

It's also bad because it places stress on other parts of society. No healthcare means when you eventually get sick or injured the hospital has to take on those costs, which means people pay more while destroying the lives of said injured or sick person.

People will have to make up the wage differential somehow, which also means that underclass of workers is more easily exploitable and/or pushed into illegal behaviors in order to survive.


Good luck getting anyone to mow your lawn, then. Simple economics.

Simple economics, you can't sell pounded sand and you can't sprinkle VC money or use Google's profits to subsidize the world.

School and society both teach that you should work hard at a job to make a living. It's the fundamental of economics.

Healthcare, Insurance, Repairs to machinery, Discrimination - There a TON of problems with the gig economy that are being "subsidized" by investors right now.

Then that makes them too much (or exactly like) a taxi outfit, which would not go down too well.

So perhaps each Uber Driver could be given the tools to form their own LLC, where they are an employee of that LLC, and that LLC contracts with Uber and potentially other gig services. It could be completely automated for them.

Even if it is automated, that is an $800 out of pocket expense every year for LLC fees, and more complex accounting requirements. It's not worth the effort unless you are making significant money or are serious about your business

Labor law jurisprudence allows for piercing the veil when a company outsources its primary revenue generating function.

Drivers themselves will probably do that, so they can work for multiple riding companies

I've seen Uber or Lyft in-app receipts suggest the driver is actually an LLC.

That's what they do now.

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