Not sure of UK laws, but if they help administrate pension funds and take 0.25% (similar to Wealthfront and Betterment in the US), you won't have much to worry about.
Zenefits (free HR, monetize by being insurance broker) prints money in the US, despite the recent bad PR.
Portion of payroll taxes is ~7.5%, plus an extra 2.5-10% for workers comp/etc depending on your rates.
If they had to reclass as employees, they would just raise prices to end consumer 10-20% to compensate (or fund it via other's money like they're doing now to price out rest of market).
They'd also put a cap on hours per week so drivers couldn't drive more than 30 hours per week. Companies aren't legally required to give benefits to part-time workers (up to 30 hours).
The big draw of independent contractors is that you've just converted labor from a fixed cost to a variable cost. There are tons of Uber/Lyft drivers (namely, anyone not doing it full-time, which is the majority of drivers) who prefer this since they can drive as much or as little as they want.
> If they had to reclass as employees, they would just raise prices to end consumer 10-20% to compensate (or fund it via other's money like they're doing now to price out rest of market).
I think saying that they would "just" raise prices 10-20% is trivializing the problem. One of the reasons that Uber took off was because it was so much cheaper than regular taxis. Would Uber look the same now if it had had 20% higher prices from the beginning? Almost surely not.
If their costs had been 20% higher, they still would have priced others out of the market by using VC money to subsidize (as they still do now). Technically their prices were higher than cabs, since they were only black cars for the first two years.
I personally never take cabs anymore even if they're cheaper, the Uber experience is 10x better IMO. The only time I'll consider it is when I use Flywheel on NYE to avoid surge pricing.
I take Uber almost daily from the train to my office because it's about 30% cheaper than a cab. If it wasn't I'd just grab a cab at the cab line. It's so much easier.
Of course if uber has to raise rates because their employee costs go up, you'd have to expect cab companies to do the same because all their employees aren't getting benefits either.
They are, however, paying their portion of the payroll taxes, disability, unemployment, etc. And perhaps softer benefits that still have costs, like paid time off.
I think what happens in the media is small outfit bias.
Über is big, so what they do must be judged in that light, yellow cab is small, so they get a pass even though they engage in similar practices.
I listen to NPR and they had a bit about über and them being "unfair" to drivers, but never was that compared to how drivers are treated at yellow cab for example. So, because they are big they are looked at more suspiciously, plus they are "tech" so there must be a bad angle there somewhere. People have a thing for underdogs, I do too, but not so much in this case because cabs can often be worse for the drivers, at this time. No telling in the future when automation takes over. The point will be irrelevant then.
You're correct - taxi drivers have been suing for decades to get employee status. You don't hear about it because Uber is the first major national player that everyone recognizes.
For payroll taxes they could also just pay 7.5% less and net take-home pay would be similar for drivers.
The real draw of independent contractors is the reduction in capital expenditures. They don't need to buy and service cars or pay for mileage. Paying for standby time is also probably prohibitively expensive.
> One thing I'd like to know is whether people doing lyft or über full time do on average better or worse than their yellowcab counterpart.
A good indicator is that most cab drivers (at least in SF) have switched over to Uber. The only ones who aren't doing Uber either (a) got low reviews on Uber and kicked off the platform or (b) have some odd loyalty to cab companies (e.g. maybe they're a part owner in a medallion).
Most taxi cab drivers are treated more poorly than Uber/Lyft drivers. They have to drive to a centralized location to pick up / drop off the car, don't have their own car to take care of, have to pay a per day fee that they don't always pay back if they don't get enough business, etc.
It's less than perfect. People could be migrating more because lyft and über are siphoning away fares. So they go where there is money, even if it's less than historically.
Which makes me want to clarify things. Are über lyft drivers better off than yellow cabs where these platforms have not yet disrupted? In other words, are they better off on über now or yellow cab historically? The answer, I suspect, will remain the same, but its far from cut and dried, I think.
This ultimately comes down to the debate between capitalism vs socialism - if people are still driving at lower rates, then we weren't at a market equilibrium. But should they have basic coverages?
I expect the ODE to become a huge topic for the 2016 election, since (at a high level) it's a manifestation of the Republican vs Democratic platforms.
But, what it shows as the "income after op cost" isn't the real truth. That figure ($12.62/hr in Chicago, $34.04/hr in NYC) would be basically 1099 income. You would have to pay self employment tax (not trivial), and forgo whatever benefits a cab company might provide their employees.
If you look for average salary for cab drivers, and compare to the above, you would gather that cab drivers do better than Uber drivers in Chicago, but worse in NYC.
I can't find any credible sources where it seems 100% clear that the comparison is thorough, and apples to apples.
I'm a former CPA and founder of Zen99, which built tax tools for independent contractors like Uber drivers. So this is my forte :)
You're right that it's not cut and dry, and can't be. There are too many specifics to take into account. For example, if you're a part time worker at Whole Foods, you don't get to write off your commute to and from work. But as an Uber driver, there are ways you can do this so you pay less in taxes, which can make your take home more than the WF worker. Neither of them get benefits bc part time employees don't have to be given benefits (note: not sure on what WF policies are, but that's a true statement for part time employees in general).
Home care givers are a special case under US tax code that requires them to be employees [1]. As honorable (yuk yuk) as it is that Honor is making them employees, they would have the worst case out of all the on-demand companies.
Uber, for example, can point to nearly all taxi drivers being independent contractors. Honor would have to point to other home care individuals, who are either employees of a staffing agency or employees of the family (note: there are surely families who aren't complying).
Based on IRS code + the reasons brought against Uber/etc, Honor would have a very low chance of winning the lawsuit.
Overall, I do think making on-demand workers employees is a potentially smart move to differentiate. Having the best workers will be the key to winning longer term, because these are service companies enabled by tech, not tech companies. Code has no feelings; people do. Right now Uber is winning ridesharing because it has the most volume and hence most money making opportunities for drivers; but Lyft is putting up a fight almost purely because they treat their drivers better.
Same Day ACH has been in the works for a while; however, a payments expert I spoke with said all the big banks are opposing it since (a) they make more on wires, as mentioned, and (b) most of them have in-house same day transfers, so it's an argument for opening multiple accounts with them vs at different institutions.
The electronic financial system in the US is an embarrassment, to be honest. Instant transfers have existed in other countries for years. The only platforms that allow instant payments require (a) holding money in their bank account (e.g. your Venmo balance) and (b) the companies to comply with incredibly stringent money transmitter laws.
From what I've heard, Stripe doesn't make much from CC transactions (hence why almost all providers are at the same pricing). ACH costs fractions of a penny, so even if they only make $5 it's nearly 100% profit.
[Note: I'm not a payments expert so would love if someone who is could (in)validate all the above.]
Large banks aren't opposing faster payments anymore. It's my understanding that the NACHA membership voted to approve Same Day ACH and it will be phased in over the course of 2016-2018. In addition, the largest FIs are creating an actual real-time ACH system through The Clearing House, which has licensed technology from VocaLink (the developer/operator of the UK's Faster Payments system) and FIS to do so.
there's also the problem that it's a bit vague as to who can actually enforce faster payments. The effort is currently led by the FED, but they technically don't have enforcement power, the CFPB could do something but that'd be a bit of a stretch.
Additionally, the large banks are trying to influence the rules and requirements; for example, clearXchange + early warning system merging under a (large) bank consortium
1099 classification is not very defensible - see FedEx $228M settlement in just CA. Obama said that he thinks a third class of workers is just a watered down version of W-2 protections. Since we're likely going to see a Democratic president, they're going to be more W-2 friendly than 1099 friendly (though hopefully also technology friendly).
Point being...under existing regulations, Uber/Lyft drivers are probably W-2s. But Uber/Lyft are lobbying hard for an alternative, and will probably succeed in changing minds about it faster than the government can move to crack down.
I don't think FedEx very similar. For example, FedEx employees required to show up for work, wear uniforms, etc. I think "casual" drivers are definitely not W2s. And more serious drivers still probably are not. They have far too much lee-way in what to do including not show up at all.
Founder had previous exit, could be why they didn't capitalize as much (though that's pure speculation). They're probably just restructuring and using existing technology for another company.
Sidecar doesn't get enough credit for starting the rideshare movement. (Uber started the mobile-calling movement, but were black cars and TNC compliant until they started UberX.)
Sidecar was often were piloting products a half year before Uber and Lyft implemented them (ridesharing, Shared Rides, etc). I think Uber and Lyft won since (a) Uber was first and had an extra 2 years of brand recognition already, and (b) Lyft had superior marketing in their early days (bright pink mustaches, mandatory fist bumps). As Uber/Lyft raised more money, they caught up more - though Sidecar was still first in a lot of products (Sidecar Deliveries, having HIPAA compliant drivers, etc.)
If I were them, I would explore the niche of regulation-friendly drivers - e.g. HIPAA certified drivers. They've already started doing this, but I'm sure their consumer facing product has bogged down product development and such. The Medium post isn't clear on if they're laying off team and such, does anyone know?
Edit: I would also explore using their logistics infrastructure and making it available to any businesses that have their own delivery fleets, but don't know how to optimize them. There was a Techstars co doing this (https://routific.com/) but I imagine Sidecar is much further along.
Most medical offices won't let you use regular taxis (or Uber, etc) after major procedures. They require a personal driver (family member, friend) that they can provide after-care instructions ("if his face starts bleeding, turn around immediately"). There are dedicated medical taxi services that serve this niche, typically drivers have some basic training, have easily accessible vehicles, etc.
Huh, I've never heard of that. At every ER I've ever worked at we just called a cab from the nurses station. We also hand out bus tickets to low income patients.
For liability reasons, they release you to the family member or friend who then escorts you.
You are still legally allowed to 'check yourself out' which would be considered 'against medical advice', and god knows what you'd have to sign, but the point is that's not typically the way it works. You are under their care until a responsible party comes in to retrieve you.
This is a common meme, that your insurance might not pay for a procedure if you do something against medical advice. I've had a number of doctors claim it. It's false, thankfully.
A lot of times, you can't. They literally will not discharge you until you can prove you have a viable form of transportation, in the form of a friend or family member who can look after you, or a medically-trained taxi. Until you've set one up and they have released you into their care, they will not let you leave.
I don't think they'll physically stop you from walking out the door, though (that's kidnapping, in fact). But as rconti said, they'll make it very clear to you that you're leaving "against medical advice".
(I suppose they might physically restrain you if they have reason to think that you aren't mentally competent at the moment...)
HIPAA basically requires a bunch of safeguards to be in place if you fall under its regulations. So if a prescription delivery company (like ScriptDash, NimbleRX, etc) want to send a delivery person with a prescription, the driver needs to be HIPAA certified. Otherwise the company would be in massive trouble for violating HIPAA requirements.
It's not a common enough use case for Uber/Lyft's consumer facing services, so I don't think it's wise for them to get into it; they're better going after UberEATS/etc opportunities. The idea would be ridesharing for businesses who have more strict requirements, kind of like Box vs Dropbox.
FWIW, you still deal with the difficult people operations aspect of ridesharing in that case (drivers are hard to recruit and manage, and are city specific), so I'd probably go after outsourcing the logistics platform for businesses with existing delivery mechanisms. E.g. bring UPS's 'no left turns' technology to companies that can't develop it internally.
Not handicap accessible - Uber/Lyft are legally required to have those options so will have them as an option. Wouldn't be a big enough market for that otherwise, and would probably be illegal due to illegal price discrimination.
I'd like to mention that Onfleet provides delivery infrastructure today, spanning operational components (realtime dashboard, logistics backend, driver apps) through the end-customer experience (SMS notifications, ETA, driver tracking) and more (disclosure: I am Co-founder & CTO at Onfleet). https://onfleet.com
How do you keep a small charismatic group from totally dominating the common spaces. In other words, how do you keep them "common," so that even the introverts can feel comfortable using them?
That's great to hear. It's hard for me to over emphasize how extremely interested I am in the social and physical architecture of human thriving. I'll be watching Common with wrapped interest.
I hate to be exclusionary but wouldn't you think that if you were so introverted that you had a hard time sharing a space with other people then maybe you shouldn't live in a shared situation like this?
Even if everyone in the house is an extrovert compared to the wider world, someone is still going to be the most introverted person in the house. And the most charismatic and extroverted person in the house is going to relatively dominate the common space.
It's a recipe for conflict, and if they don't have a formal way to precess that conflict, there's going to be either bloody noses or hurt feeling.
Lots of things - mostly that we have the entire buildings rather than single units, which is particularly important in NYC where we're operating right now.
We also partner with real estate funds and investors to purchase vacant buildings rather than leasing units off the market.
What is the demographic makeup of your residents? Crown Heights is a diverse neighborhood, but I'm betting Common is skewed white, young, and wealthy? I can easily imagine this being a place for start up people who do nothing but work, and only want to live with people like themselves.
Zenefits (free HR, monetize by being insurance broker) prints money in the US, despite the recent bad PR.