According to the nightly news. [1] Geneva will halt all uber taxis by tomorrow until all drivers have an employment contract as well as all back owed social security payments in the amount around 100-200 million is paid by Uber.
The union estimates the total amount owed to drivers and state is around 500 million to 1 billion Swiss Francs. The Unia union is now urging other Kantons to join Geneva as the courts have ruled with in the next three months.
I wonder what was the previous medallion system like in Switzerland.
Uber came from a very American context where there was an extremely exploitative and shady business model around taxis. Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid).
The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.
And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).
Taxi companies don't have thousands of software engineers to pay. In fact the entire reason why there are so many taxi companies is because there's no benefit to scale. (same reason there's countless of very small or self-employed trucking businesses).
Transport and driving is a high competition, low margin business, similar to say the restaurant industry. Putting a smartphone app on top of that economy doesn't change that fact. (the only thing that would turn it into an actual high margin technology business is full self-driving, which is why Uber itself once considered this it's 'only path to profitability').
Thousands of software engineers are cheap, because software scales. So if they still have a better app than the local taxis, they would still have an edge.
At least in Germany the taxi apps are so crappy that you still need to call for a taxi most of the time, you then don't have a map where they know where to find you and you know where they are.
Uber has that but no/few drivers in my area. I would use Uber if they had drivers, even if it was the same price as the taxis.
I'm rather doubtful about whole self-driving also. At least if there is more than let's say 2 players offering products. That will also be massively capital intensive area with drive to the bottom for lowest possible costs in competing between everyone.
Taxis didn’t employ hundreds if not thousands of people who had nothing to do with physically driving the car. I’m not saying none of the other employees are needed. But they do come with significant overhead.
If you understand how technology and software companies work then you should realize that one engineer supports thousands if not tens of thousands of customers. They could easily trim their R&D and software team if needed while still keeping their services running. It doesn't require significant engineering effort to support the operation of the Uber app in serving rides.
The whole point of tech is that the software scales the ability to serve customers. Engineers exist for R&D, not necessarily to support operations. Take Netflix or Google for example. They can support massive engineer salaries because the fixed costs for every additional customer served does not scale linearly with engineers required to support them.
Taxi companies cannot compete with Uber not just because of subsidies, but because their apps, experience, UI, all suck. They suck because they are doing by hand manually what Uber et al does with software. Look how universally reviled taxi companies are.
Not really. Again you have to look at unit economics. Do you think a taxi company can book a higher profit on a single ride using human dispatchers and radios than say a Go application (what Uber is essentially) and automated routing and an iOS/Android app? I doubt it, plus if the taxi company is to handle more rides they have to get and pay more dispatchers, whereas Uber's software more or less scales for fraction of a penny per extra ride.
If Uber is losing money it's because they are willfully pouring money into unrelated things not part of the unit economics of fulfilling rides (such as R&D into self-driving cars, upgrades to their tech stack or infrastructure, new feature development, etc). Part of raising money means you have to spend it, and actually booking losses is a great tax minimization strategy as well. Better to give out rider and customer incentives and lose money that way than losing it by giving it to Uncle Sam.
It’s only “approaching” cash flow break even and that’s after diluting existing shareholders by offering stock based compensations. Most profitable companies would institute share buybacks to counteract dilution.
You don’t spend more money than you make to avoid taxes. These aren’t accounting losses.
This doesn’t even take into account that there cost for drivers are going to go up as more legislators start insisting on them giving drivers benefits.
You keep ignoring my points about unit economics. Yea they lose money because they invest in engineering and marketing. Neither of those are required to fulfill a ride, and neither of those are fundamental reasons why a traditional taxi cab company can do a ride cheaper than an Uber or Lyft—because they cannot. They are competing against not Uber the cash burning company but Uber the software and automations. Uber’s engineering spend has nothing to do with the costs of fulfilling a ride as it’s mostly an investment into future efficiencies/features.
Uber has been around for 13 years. They aren’t a new company. Uber has higher fixed cost and has the same high marginal costs that taxi companies have. That’s not a tech company. They aren’t spending the money as investment, they are subsidizing rides. They aren’t building a moat. Have any of their investments paid off? If you look at any of the well known profitable tech companies, it didn’t take them 13 years and billions in losses to get there. Even Amazon had better margins than Uber when they were losing money because they were building out assets.
Amazon is actually a great example of a company that looks like it was bleeding money or mot making any. Because the software scales and each additional online customer costs nothing to support in terms of engineering spend, and they were aggressively reinvesting in product and engineering that made it look like they were unprofitable when really they almost had a monopoly.
Arguing that Uber is not profitable because it's been 13 years is not a valid argument. They could spend and invest more than they make indefinitely if they wanted to, and it wouldn't affect their unit economics or their potential profitability. Yes, their investment in Uber eats paid off enormously. They were subsidizing Uber Pool rides because there is still an enormous market that supports multiple big ride sharing companies (Lyft, Uber, Didi, Grab, etc) and because they could afford to spend in marketing and subsidization.
Once the heat turns down they may subsidize less, maybe even wind down engineering / product development spend, and they'd have a fundamental product that has better unit economics than a traditional taxi cab company... because again, as I have pointed out repeatedly, their engineering staff is not required to support the operation of their ride service.
Big question with Uber is that can the live on the margins there is in taxi-business. Is there enough for them to extract as they currently spend money...
What madness is this? Next they'll start saying that companies that offer taxi services via an app are actually taxi companies, that daily lodging rental companies that use apps are actually hotel companies, that companies that offer telephone services over cable or fiber are actually telephone companies, that financial companies that use cryptocurrency are actually financial companies, and that tobacco vaping companies are actually tobacco companies.
It's like when they tried to trick people into thinking that PayPal was actually a bank simply because it offers banking services. Good thing they sorted that out or you'd probably end up with FDIC insurance on your deposits.
I find it interesting that PayPal Europe is actually a bank (because they couldn't do business in EU otherwise) while PayPal in the US is just a "payment processor" or something.
Would be hilarious to see them try American style advertising and lobbying to influence local Swiss politics. They would get thrown out of the country so quick..
May I remind you that the swiss people voted and rejected "guaranteed longer holidays" and also only just recently rejected guaranteed parental leave for fathers in the canton of Zurich. I don't have a lot of confidence in the swiss people when it comes to such things.
Also American style lobbying and advertising definitely exists in Switzerland.
I consider a population that rejects benefits for itself to be immensely confidence inspiring. To have the general population consider overall system productivity and stability and not just blindly vote for your own profit is pretty amazing.
Presumably you're using this comment in support of rejecting "guaranteed longer holidays", but you can just as well use it to support "amending the constitution to treat them as not an employer".
The holiday thing was too greedy. They wanted a mandatory 6 weeks when the current law is 4 weeks and many already have 5 weeks. They should have set it to 5 and it would have passed easily. Get the 6 at a later time.
You are probably right that that's why it was rejected. Still very surprising that this would be rejected by the citizens when unlike in other places every citizen actually has the ability to vote.
they would send push notifications in their own applications to get support for a referendum and then support for a popular vote on it, just like they did in California
Swiss citizens have made really really stupid choices when it comes to their referendums.
Swiss citizens are also not immune to culture war. The burqa ban literally was only going to impact ~50 people in the entire country and they spent that much money and time discussing this.
Switzerland hasn't been targeted by big business interests as much to sway their votes. The second they are it's gonna turn into chaos just like other places.
Having used Uber in Geneva it was already quite difficult to get a driver and I think the only advantage people see in Uber nowadays is that you can use an app to order your drive and pay. It was not so much cheaper compared to regular taxi. I see this trend not only in Switzerland.
In the middle of the country, it actually shows up, unlike taxis. And is pretty competitive price-wise. But the actually showing up part is why it matters, especially in poorer (i.e., Blacker) areas where taxi companies will actively discriminate.
You must have had bad luck, there are usually tons of drivers (not at 3am though), and prices are a bit lower than taxis (20-50%).
Please bear in mind Geneva is tiny, albeit cosmopolitan place - only around 200k people live in Geneva city. So you can't expect same service density as ie NY or London.
The internet back and forth on this topic is interesting because I find it completely removed from how Uber drivers feel. Speaking from an American perspective, I take Uber and Lyft pretty frequently and I ask every single driver I ride with how they feel and almost unaminously they say they prefer being contract because they can just take rides whenever they please.
Most people, including myself, seem to be under the impression that if they are employees then Uber dictates how much they have to drive which drivers seem to not want. At least drivers I've spoken to in the states.
Contracting rules are very much on your side, being able to work the hours you want. Being an employee would give the employer more control over you. I don't understand why people don't get this. Contractors really valuable this flexibility.
> I take Uber and Lyft pretty frequently and I ask every single driver I ride with how they feel and almost unaminously they say they prefer being contract because they can just take rides whenever they please.
You're...really naive. They're telling you that because they need as close to a perfect rating as they can get or they risk being booted. Or they fear you're a 'mystery shopper.'
Do you ask service workers "So, your boss a good boss?" or "Is this a good place to work?"? If so, please don't. It was easily the most infuriating thing customers did when I was working a service job.
Edit: just to add on:
One, every person answers the same, which should be a warning sign on its own. It just so happens to be Uber's line. Warning sign.
Two, the nicest thing they can find to say is "flexible hours." Another warning sign.
Three (related): guess what is the hallmark of a shitty job listing? "Flexible hours."
My two cents. Got injured. I couldn't work a 9-5.
Uber Eats and AirBNB paid the bills until I was able to work again.
Constant doctor appointments, pain, and medication side effects made a normal schedule impossible. Family would have gone homeless without the flexibility.
Whatever else can be said about them. I am grateful.
Pro tip. If you get injured. Get a lawyer right away to deal with disability companies. They will lie and screw you over.
My two cents: Drove for Lyft. Got T-boned by a red-light runner while on my way to pick up a passenger. Lyft wouldn't cover my repair bill.
Companies have been fighting since time immemorial to push risk and costs onto their workers — it's why hard-won employment law exists in the first place. The gig economy is in large part fueled by employer backlash to employment law.
In fairness, should they? It was your vehicle, insured by the carrier of your choice, with the coverage and cost tradeoffs of your choice. I would certainly expect Lyft to pay enough to make it worthwhile after all costs, including fuel and insurance. But should they be on the hook for the actual repair costs? If so, for how much? Should they repair a brand new Mercedes the same as a 20 year old Honda?
I get some of the drawbacks to gig-based work, but I think you have to realize that it does enable options that wouldn't exist in traditional employment scenarios, and SOME of the risk does remain with the contractor. No, I'm not saying Lyft has no responsibility in any situation, but getting into a garden-variety accident while on the road definitely sounds like a situation that's within the envelope of known risks when you decide to do this kind of thing on a gig basis.
And the workers get flexible hours. You're only telling part of the story, making it seem as if there are no benefits whatsoever to being a contractor.
> Got injured. I couldn't work a 9-5. Uber Eats and AirBNB paid the bills until I was able to work again.
That sounds terrible, I'm sorry you had to go through this. In normal countries ( like the ones saying Uber should treat their employees as employees) you'd get sick leave/disability to leave you focusing on getting better, not worrying about putting food on the table.
the idea that flexibility of employment is a binary is a tool Uber are using to shape the perception of the issue. Nothing stops Uber from offering security and flexibility, except the economics — which is Ubers burden to carry, not drivers.
I’m not sure what you mean. Uber could immediately offer flexible employment in almost all jurisdictions within which they operate, the reason they don’t is because it’s substantially more expensive to have employees than it is to have contractors. There’s no legal reasons why Uber don’t have drivers as employees (with flexible schedules): they don’t because it would be too expensive, benefits are expensive, guaranteed earnings are expensive.
There are plenty of drivers willing to drive under the current arrangement because they don’t have a choice: if you offered them the same flexibility but with the benefits of employment, they would of course take it.
> There are plenty of drivers willing to drive under the current arrangement because they don’t have a choice: if you offered them the same flexibility but with the benefits of employment, they would of course take it.
This is of course absurd. Every driver has a choice to work for Uber, or to do something else. And they chose to work for Uber.
It’s not economic because these people are willing to work for Uber under this arrangement, despite having alternatives, and Uber is willing to pay them for services rendered under this arrangement. The economic problem is solved. The government has decided to step in and say that two consenting parties should not be able to engage in this.
It would have to be codified into law. It's funny that on the one hand they're vilified for taking advantage of drivers, yet are to be entrusted with offering a flexible work schedule for employees.
>The internet back and forth on this topic is interesting because I find it completely removed from how Uber drivers feel. Speaking from an American perspective, I take Uber and Lyft pretty frequently and I ask every single driver I ride with how they feel and almost unaminously they say they prefer being contract because they can just take rides whenever they please.
It's similar to the role of tips in the US. According to everyone on Reddit, tips are evil and a way for restaurants to get away with underpaying servers. Everyone says this ... except the actual servers themselves, who prefer the current system because they end up making more than they would from a straight salary.
This is a bandaid over the core issue: benefits shouldn't be tied to employers. Employees should be free to work wherever and however they please without the worry that they'll have to pay for health insurance, sick leave, or social security schemes themselves.
Wasn't one argument that Uber micromanages the drivers to a considerable degree, specifically putting up rules how cars have to look, which branding to use, etc?
Not a lawyer, but I imagine things like that might make it hard or impossible for drivers to work with other "customers" apart from Uber. This condition - being self-employed on paper but in practice being completely dependent on a single corporate customer - was termed Scheinselbstständigkeit in Germany and made illegal. Maybe Swiss are using a similar approach here.
To my knowledge, Ryanair tried a similar businesses model about a decade ago, basically saying their pilots were independent contractors when in practice they were unable to work for anyone else but Ryanair.
Edit: What I would find interesting is if Uber could claim they are operating a franchise. After all, the degree of micromanagement that is tolerated between franchisers and franchisees seems to be higher than between contractors and customers - see e.g. fast-food chains. (Not that i'd like Uber to use that loophole though, just curious if this would work)
Franchise is to my mind quite different. They are a business and setup those and usually hire their own workers as real employees. Now I wonder how well it would go if someone attempted to hire line cooks as contractors with some piece rate or something as pay...
Uber drivers face repercussions for rejecting riders or destinations. A contractor is free to work as their own boss and choose or reject their contracts. That is the basis of contract work.
Upwork freelancers have almost total freedom in deciding whether to accept a job or not, the contract terms, rate, and lots more. There's very little in common between them and Uber drivers.
But Uber drivers can see the pay rate, drive duration, destination, customer, and more before accepting the ride. It is true that in many places, Uber's algorithms set the price, but if Uber drivers set their own prices in the app, would everyone be satisfied?
No point discussing hypotheticals. Uber drivers cannot set their own price. They cannot negotiate the destination. They cannot choose to reject certain customers. They have to follow strict guidelines for what car they can drive and how it should look. If they don't accept (or cancel after accepting) too many rides, they get penalized or even kicked off the service entirely. There may be a future where Uber alters its service enough to satisfy regulators, but it clearly isn't interested in going that route.
The city drift was really something with Uber.
I would slowly end up on the other side of the Metro after a few hours.
At one point I became the only driver in a city, and the only place accepting orders was McDonalds. So every 20 minutes I was back again for another pickup. Both me and workers found it hilarious.
Being able to put no-go zones would have been awesome. Some Country clubs and many apartments take way to long.
You contradict the parent statement, that Uber drivers can see the rate before accepting the ride. Sounds like the ability to set their own price to me.
I can't speak to Swiss courts, but in the US, Uber is losing many of these battles, while Upwork is not.
It seems clear to me that using Upwork doesn't change whether a particular job you farm out is a contract job or employee job. Your primary relationship as a buyer is with the seller (the freelancer).
It's more murky with Uber but it would be nice to have a clearer "test" to understand what makes Uber an employer vs a contract facilitator.
how is Uber losing battles in the US? in the last big ballot measure in California they successfully passed a prop that shielded them from identifying drivers as employees
Genuine question, not snark. What if someone wants to be a contractor. In this case the govt wouldn't allow them to be? Say if someone doesn't want to commit to this as anemployment and wants to drive only when he feels like it?
The government ruled that in the way Uber operates, in its one size fits all agreement with drivers, its drivers fit the definition of employee. If a driver wants to be a contractor with Uber, they'd have to have a different agreement with Uber and Uber would have to create special rules for that contractor that meet the standards for contractor under local law. I don't think Uber is interested in managing individual (or even multiple boilerplate) contracts, and that's not even to say whether or not it would be beneficial economically for them.
Nothing actually stops that. Employers and employees are free to negotiate shifts and hours to work, this can even have mostly automated approval from employer.
The issue is that employer can't just ignore the taxes, pensions, fees and such in relationship where employer clearly isn't in contractor like position.
Depends on employment contract, but I would estimate in case of relationship like Uber the leverage on driver side is zero. So really not much to lose.
There would be no logical reason to be a contractor. B2B is also a model of cooperation Uber utilizes, but then you're basically running a company on your own.
You're right. But this post's flag and 2 points show that this is a view shared by several people here. Not so much the Swiss part, but the fact that Uber needs a swift kick in the democracy.
Sure, but the point of HN is to be interesting (specifically, to gratify intellectual curiosity), and unsubstantive comments undermine that no matter how many people agree with them. Actually, the larger that number is, the worse the effect they have.
Your argument seems to be in bad faith, but I'll bite. As a Swiss, OKAY! Whatever, so my life sucks 0.1% more in order for thousands of potential employees in the taxi service to get better living conditions as demanded by Swiss employment laws. What a proud "hurt" Swiss consumer I am. I make > $110k with just a single year of experience as a software developer, I can live super nicely and safe a ton of money. I'm also super happy and proud that retail and service workers get > 40k in this country, so they can live a decent life as well even if they didn't have the privileges to become highly educated and specialized.
Also it is not like having essentially private driver is human right. It is always a trade-off and such work should be reasonably compensated in a way that one doing it can afford reasonable living. Hard concept for many in USA...
Having basically no overhead for customer service, human resources, benefits etc will certainly cut costs for all parties. It's also the definition of a race to the bottom.
Cutting costs in shipping and having your drivers entirely managed by algorithms might result in an anxious person throwing your packages on your doorstep or scraping your driveway with their truck. You can return packages at least.
Cutting costs on a taxi service get a bit frightening when you think about it. The person you're trusting your life to could be anyone that convinced an algorithm to hire them for the least amount of money possible.
Not having a certain section of society live below the poverty line and rely on government handouts to survive actually helps consumers in the long run even if you have to pay a couple dollars more for your taxi ride. Go walk the streets of Zurich and then San Francisco to see the difference in quality of life that these oppressed citizens enjoy.
One thing that should temper your Swiss pride (or anti-American bias) is that homeless and hopeless people don’t flood into Zurich, or Switzerland, for that matter.
They do into SF.
Most get back on their feet and leave after a couple of years. Those with more serious issues, continue to struggle, stay and aggregate. It's definitely not a good situation, but it's far bigger than SF, let alone the classification of Uber drivers as gig workers.
The evil companies are paying low wages, let's expel the companies where they'll take their capital to some other country and leave all employes unemployed, that'll show them!
This is a possible outcome of increased regulation but not a necessary one. It can also lead to a redistribution of economic rents, in this case from Uber shareholders to drivers, while the market equilibrium (number of people offering car rides) stays the same.
It's not a fine. It's what Uber owes in social security back payments as well as other obligations to their drivers, for instance, compulsory accident insurance.
Agreed on principle, but...there's a lot of other factors:
* a fuckton of gold/money dripping in Jewish blood (like Nazi gold sourced from the ashes of incinerated Jews, or Jewish-owned accounts that could not be accessed by relatives of those exterminated by Nazis because of "our very strict banking privacy laws".) After the war, the allies let them keep two thirds of the money/gold they had banked for the Nazis.
* serving as a tax shelter for the world's wealthy
* providing banking services to dictators, drug lords, and weapons traffickers (among other things they tend to have poor life expectancy or otherwise become unable to access their funds...which is convenient, again, with strict banking privacy laws.)
* keeping out all those poor, smelly immigrants and refugees that other countries accept because unlike the Swiss, they actually believe in humanitarian duties and obligations to humanity. Never contributing to peacekeeping operations. Never providing foreign aide to poorer/less developed countries.
Well, if not being allowed to exploit your workers hurts consumers, then either consumers have to pay more, or your business shouldn't exist. In fact, no business should exist that has "exploit your workers" as a necessary part of the business model.
And OSHA... Why do employers need to pay for protective gear? Or for health-care, or for many other things... Just how much cheaper things could be if we did out all of that pesky regulation.
The union estimates the total amount owed to drivers and state is around 500 million to 1 billion Swiss Francs. The Unia union is now urging other Kantons to join Geneva as the courts have ruled with in the next three months.
[1] https://www.srf.ch/play/tv/redirect/detail/fcd14ac8-d82e-45d...