An attorney suing Uber, Lyft, GrubHub and a dozen California tech firms
latimes.com
latimes.com
http://www.motherjones.com/politics/2015/12/uber-lawsuit-dri...
Uber said, "drivers get this percent from the fee, Uber gets this much". Uber claimed "tip's included". Modern philosophers claimed this makes a difference because the law prohibits taking a cut of tips.
But there is no difference! Any allocation of the fee can be rephrased as being "with" or "without' a tip in such a way that the money flows are all the same. There is no "fact of the matter" as to what part of the fee is a tip! Any phrasing can be correct!
Let's say Uber took 25%. You can say that the fee breaks down as:
1) 25% to Uber, 50% driver payment, 25% driver tip
2) 25% to Uber, 75% driver payment, no tip
3) 25% driver payment, 75% tip to driver, which Uber takes a 1/3 cut off (illegal).
If the law treats observationally equivalent situations differently because of how they're labeled, that law is meaningless, and basically just taxing you on angel pinheads. (I call the property of passing this test "nominal invariance".)
(The exception of course is when a customer gives a cash tip on top of the fee directly to the driver. But Uber definitely doesn't take a cut of that!
It's how class-action lawsuits usually work. I wonder if they do for her lawsuits as well.
Uber and Lyft would need to pay hourly wages, along with all of the associated taxes due.
> Would Uber and Lyft make more if they had their drivers on a similar model to a pizza delivery driver ($4.50/h + tips)?
Uber and Lyft's entire business model is built on the independent contractor model. I don't believe they could reach profitability in any scenario with human drivers if they have to pay them as stipulated by IRS regulations.
Not true. You can be an employee with a non-hourly pay structure. Just one of many misconceptions batted around about the implications of driver reclassification, along with (these aren't all false per se, just not-necessarily-true):
- Drivers would have to get the Uber-paid lavish health care plan that developers there get.
- Driver cash payments would remain the same and not be reduced.
- Drivers would get fixed work schedules.
- Drivers would value the compensation package that includes employee benefits but has lower cash pay, over the compensation they get now.
- Uber would have to provide the vehicles.
- The economic incidence of FICA taxes would shift to Uber (not how economic incidence works[1]).
Again, the employee/contractor distinction depends on a number of factors; you can be classified as an employee without meeting all of criteria.
[1] Good explanation: https://www.reddit.com/r/badeconomics/comments/422av5/some_g...
You can't just assume that the change would achieve this state where workers get strictly more benefits and Uber's profits are sucked out. You need to take into account how much they can cut driver cash payments in that circumstance (i.e. paying them via benefits), where the economic incidence of car costs and FICA taxes currently lies, what the law says about piecework, etc.
Mileage was paid in cash at the end of each shift, and of course tips were cash. Wages were paid every two weeks.
The only test I'm aware of refers to things like set hours, dictated methods of working, company equipment, payment, and so on[1].
Just by that those tests alone, I don't see how an Uber driver is realistically anything other than a contractor.
So either a judge screwed up somewhere, or I'm really missing something. Would anyone have some more information on the particulars?
[1]: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...
https://en.wikipedia.org/wiki/Permatemp#Vizcaino_v._Microsof...
http://www.reuters.com/article/businesspropicks-us-findlaw-d...
This is parasitic legal rent seeking at its worst, let's call a spade a spade.
Here is an WSJ article that calls for change in labor laws.[1]
[1] http://www.wsj.com/articles/what-if-there-were-a-new-type-of...
Or, its someone fighting organizations profiting illegally by flouting labour laws that have protected workers from corporate exploitation for decades.
But potato, potahto, right?
The reality today is that there is a large lobby of litigators actively trying to keep any change in labour/Patent laws from happening. [1]
I own no shares of Uber Inc. and any other companies involved in these litigations. But the reality is that by framing this incorrectly as David (The attorney) vs Goliath (Uber et. al.) fight the article is just pushing your emotional buttons. At end of the day litigation is not going to magically create jobs out of thin air. Uber will eventually shift to autonomous cars or will go bankrupt or might end having chinese drive the cars via video conference. It's easy to blame Uber for the mess that is the employer provided insurance.
Its not the Uber which created that problem, its the legislative gridlock which is at fault. But its cooler these days to hate Uber for all that ills the hapless middle class in USA.
[1] http://www.usnews.com/news/articles/2014/09/16/how-the-tech-...
But we don't have that. What we have is an awkward balance where employer provided benefits are a big part of the safety net. While that remains the case, it's really important to make sure that companies follow the rules.
Would forcing Uber to pay into state disability and worker's comp fix all of the problems our country has with labor / insurance / etc? Absolutely not. But at an absolute minimum, would it improve life somewhat in the short term for current Uber drivers? Probably.
"Legislative gridlock" is a weak excuse. Plenty of legislation gets through, from PPACA (which had, and continues to have, widespread objection) to USA FREEDOM (even if you claim PATRIOT's expiration was the result of "deadlock", the replacement came a day later) to JOBS (specifically legalizing things that startups wanted to do!) to allowing people to unlock their cell phones (not really a Big Foo priority). If the people really want Uber and Airbnb -- which they seem to -- why can't they just get a law passed? And why can't all these innovative, well-funded startups figure out how to disrupt and fix something as obviously dysfunctional as our political system?
My worry is not so much with these particular ways they're breaking the law; it seems like this is probably reasonable (though I'd still like someone other than Uber to consider it). My worry is with the loss of the rule of law, and the precedent that we're not going to care about whether the law is followed. It's certainly true that Uber et al. aren't the first companies to break laws, but this seems like a qualitative change in what laws are being broken and what the impact on society is, and a democratic society should be able to have an opinion on it.
Fixed a lot of inappropriate laws, have you?
I know how a plane flies without being a pilot.
Obvious troll is obvious.
If you work as a driver for Uber you're a contractor, they could give a fuck whether you drive for them lyft, whatever, they don't care. Want to only work from 2am to 3am on Saturday nights? Knock yourself out. Didn't show up on time at 9am? Don't care. Oh, you're in South Africa this week and aren't taking any shifts? That's fine too. If there's work, work if not, fuck you.
To Uber you are the 'self' in the self driving car a machine to be replaced by a slightly cheaper model. That smells an awful lot like contractor and not a lot like employee. The only reason developers are employees is because contract developers are more expensive than employees who don't realize sodas aren't actually that expensive for adults with real skills.
Uh, no. Being an employee has a lot of rights that a 1099 person doesn't have, like the right to unionize, the ability to collect unemployment insurance if the company you're working for goes under, being a part of a health insurance pool for lower medical costs, access to the Family and Medical Leave Act rights, etc. There are a lot of things that employees get that aren't just "free sodas".
More generally, just because new technology exists doesn't mean that the law needs to change. Technology in this case has made engaging in certain work relationships easier, but hasn't created new work relationships. People have been freelancing as maids or drivers long before you could use an app to hire them to do those jobs. And the factors that fact typically used to figure out the treatment of workers still make perfect sense in the Uber context. E.g., Uber's drivers do have a lot of schedule flexibility. On the other hand, they impose tight service standards and tie them to their brand. How Uber's employees should be treated can thus be decided by applying the existing principles and factors.
The labor protection versus employment freedom debate is much older than Silicon Valley, and the debate today doesn't really involve any new concepts. The WSJ was pushing for weaker labor laws decades ago, for the same reasons as it is now. Of course they're donning the mantle of disruption now--that's standard procedure when you're trying to relitigate a settled debate. But that's just a rhetorical device.
Don't know why you're getting voted down so hard.
As an employee I can walk away from my job any time I want and just get another. If I had my own business that would be way harder.
Because of that I feel actually more free and independent as an employee. You just need to make sure to have a good financial buffer so that losing/switching a job won't hurt very much. Then your employer also can't pressure you too much.
You're 100% right about having a buffer, though. That's a pretty immovable prerequisite no matter what your professional situation is.
That's not quite how the law works. Whether you enjoy being subjugated or not doesn't effect if the law can be enforced against the entity violating the law.
Counting the downvotes on comments, HN has sharply taken a socialist turn and lawyers are the new superheroes saving people from Evil startups. In other news Bernie Sanders hates Uber despite using it nearly 100% of time.[1]
[1] http://thehill.com/policy/technology/250480-bernie-sanders-s...
You misspelled "labor regulations" at the end of you sentence. Labor rights > corporate rights.
Industrialists or Libertarians.
Drivers are being paid as independent contractors. Under the current Uber model, they are not independent contractors as defined by labor law (nor the IRS). Ergo, Uber is in violation of both labor law and tax regulations; if they are found to have violated IRS employee classification rules, they'll be liable for back taxes, penalties, and officers of the company can be held personally liable.
> What evidence is there that they are actually employees besides the fact that lawyers and union activists want them to be?
You must be blinded by some sort of belief that Uber is the victim here; my apologies. Employee vs independent contractor classifications can sometimes be difficult, but the gist of it is:
If you tell someone how to do the work, and you set the price, they're an employee; if you give someone the work, they set their prices, and they have control over how the work is performed, they're a contractor.
Guess which model Uber uses?
I think it is you that are blinded by your beliefs. They are not told how to do the work. Each driver chooses when they want to work and how long they work. They are free to work with whomever else they want, including other ride sharing companies at the same time.
Uber is a marketplace that brings drivers and riders together. It's not an employer because drivers have complete freedom.
I suspect Uber does not conform to either employee or contractor arrangements under current law. The employee/contractor line is blurry enough as it is.
"she alleges that these firms exert the kind of control that employers would have over employees — without providing any of the benefits employees, by law, are entitled to."
But it doesn't explain what specific benefits are being withheld from employees, so I don't know what bad thing she is trying to prevent, or the magnitude of the problem, if there really is one.
of course not that is why contractors get paid more than salary employees. If contractors dont ask for more money per hour then its their own fault.