Uber and Lyft ordered by California judge to classify drivers as employees | Hacker News Reader

Uber and Lyft ordered by California judge to classify drivers as employees

theverge.com

769 pointsuptown747 comments

Lots of HN comments are here like "I know people who prefer to be contractors", "My sister's neighbours little brother actually doesn't want to be treated with respect by Uber", blah

This is utter nonsense. Being a contractor means being self employed. You don't get paid leave or sick pay. It's a risk taking and doesn't make any sense in the gig economy where the wages are close to minimum rates.

If you are truly self employed then you have a skill which you can market, you can charge fees which allows one to put money aside for things like unpaid leave or sick days.

If you are truly self employed then part of your job is building customer relationship, building up recurring customers, increasing your business through marketing, word of mouth, etc.

You actually have to do entrepreneurial shit.

Uber drivers are NONE of this.

They clock into an app which belongs to someone else and they have no share in. They can't hand out business cards to customers or market their services on a board somewhere. They sit and wait until their master (Uber/Lyft) assigns a ride to them. Then they have merely the chance to accept/decline it. They can't even negotiate their own fees. That itself is fucked up. It's complete nonsense in extremely disingenuous by anyone here to suggest that an Uber driver is a self employed contractor and that this is good for them. They get paid shit and can't save up like a real self employed person, because they also have no say in the ride prices.

Fuck the gig economy. All gig workers are slaves and we should treat each other with more dignity and upgrade them to employees. It's our bloody duty as a decent human being.

My guess is that the full story is this:

Most Uber/Lyft drivers say they don't want to be considered employees because, for most of them, this isn't actually their job. It's just a side gig. I can't really speak to larger urban areas because I tend to prefer public transit when it's a viable option, but, in the smaller cities where I take most my rideshare rides, a pretty large percentage of the drivers I chat with end up mentioning their day job somewhere in the course of the conversation. I agree that these folks, by virtue of lacking any viable way to independently contract work, cannot reasonably be described as independent contractors. But they don't quite fit the mold of "employee", either.

Then there is another portion of drivers who really are doing this full time. I am guessing that they are a small minority of individual drivers, but that, in larger cities, they may account for a majority of rideshare capacity.

Anyway, if this is how it shakes out, then, regardless of the ratios, it doesn't really make sense to speak about "ridehsare drivers" as if they're a homogeneous unit whose needs can reasonably be met with a one-size-fits-all classification. Perhaps there needs to be a tiered designation, comparable to the various employee sub-designations such as "full time", "part time", "exempt", "non-exempt", etc., that states codify.

> Most Uber/Lyft drivers say they don't want to be considered employees because, for most of them, this isn't actually their job. It's just a side gig

For some, sure. Most of my rides have been with Indian/African/East European drivers who do it basically full time. Easily 90% or more.

A small number have been part-timers, mostly stay-at-home moms and retired people. One was a retired bartender and he did Uber mostly because his joints gave out which made standing hard, and Uber allowed him to make some petty cash while talking to people. But hands-down, these were the exceptions, not the rule.

This also heavily implies that online discourse skews away from the full-timers, because:

1. They tend to be from less-online demographics

2. If 90% of rides come from drivers working 50 hours a week, and 10% come from drivers working 5 hours a week, then more than half of the drivers work 5 hours a week. Those 5-hour drivers also probably have a lot more time and energy to discuss things on the internet.

Non-full time employees often do not receive significant benefits. However, being classified as a contractor means paying the employer side of income taxes (yes, "self-employed" contractors essentially pay double the tax rate of employees). On your taxes your gross income compared to take home after taxes is a much larger margin for contractors as a result, disqualifying people for assistance programs and health insurance subsidies at a much lower take home pay than traditional employees.

What Uber and Lyft have essentially done here is to make their employees pay a substantial portion of what would otherwise be corporate taxes, and pocket that difference as profits while their drivers actually meet the legal criteria to require classification as employees. They shouldn't just be getting ordered to begin complying with the law, this should have resulted in a class action law suite for damages and a felony tax evasion case brought against them.

>... we should treat each other with more dignity...

You mean like respecting their decision to engage in gig work despite every other available option? That kind of dignity?

The whole issue is pretty rich coming from California. If people are struggling the answer is never that the cost of living is too high due to rediculous zoning and environmental regulations, clearly it's the greedy companies that are the problem. The whole living wage issue in California reeks of doing every gymnastic available to avoid political introspection that might lead to admitting a lot of well intentioned things aren't working.

Never mind that the state suddenly becomes mute about living wages when discussing its many illegal immigrants who work for /below/ the minimum wage. We apparently don't talk about that because leeching off desperate individuals "is complicated" and something that only companies do. If a large number of workers prefer gig work the problem isn't that they aren't making enough money the problem is that catering to them would undermine all of the previous "benefits" that they obviously don't view as a priority in their current situation. Heaven forbid that we let the actual workers decide how they want to associate.

Do people do gig work out of choice or necessity?

Just because people choose or are forced to do a job doesn’t mean they do not deserve respect

I had a long rambling reply to this that in retrospect I think missed the forest for the trees. Put simply, most jobs are worked out of necessity because we don't live in a post scarcity society. It's a very privileged position to have a real choice between interesting jobs that aren't just two terrible competing options.

Removing labor options by force weakens the position of low skill workers because it limits how many interests are competing for their attention (labor demand). There is nothing inherently disrespectful about independent contractor work, it's simply another option in a wider pool of choices. What is disrespectful is suggesting that these people are just to dim to see that they're being exploited rather than acknowledging that perhaps the reason they don't care about the benefits of regular work is because a job that fits into their current life situation is more valuable than the other options they looked at.

The medium is probably just coincidence, but I found the "what do you want to be when you grow up" onesie an excellent meta-comment on class mobility:

https://www.teepublic.com/onesie/328209-what-do-you-want-to-...

If it’s out of necessity, it’s often because it’s their second job to some other job that _actually has a schedule_ but doesn’t schedule them full time to avoid giving them the typical benefits of full time workers. Or at least that’s what I’m hearing from business owners and part time workers... right?

I tend to think a work-as-you-want service like Uber or Lyft that pay above minimum wage couldn’t be more fitting to a self-employed / contractor description.

I don't see the ‘respect’ and ‘dignity’ in being prohibited from taking work because it is aesthetically displeasing to the 1%.

I wasn't aware that people working in Uber/Lyft advocate for not being employees? Do you have a source for that?

Are people engaging in gig work because it has several advantages over "every other available option"? What other options do people who drive for Lyft/Uber as a day job have? And what are the advantages Uber/Lyft & working as a contractor offer?

Maybe zoning effects should be part of a discussion on the cost of living in California, exploitation of immigrants is deplorable and awareness should be raised and actions taken, but does that make Uber/Lyft exploiting workers a non-issue?

I'm not from the US and am not aware of the specifics in California, but being from a country which has faced severe economic crises I've seen people "choosing" a shitty option despite every other shitty option.

I can't say I understand where you're going with most of what you're saying, or how informed you are of gig workers situation.

I saw a pretty good movie by Ken Loach: _Sorry We Missed You_, that thought was really spot on on the issues of gig work:

https://www.wikipedia.org/wiki/Sorry_We_Missed_You

There is labor that is generally understood to be unhealthy to participate in. It’s generally considered unethical to hire children outside of ones own to labor. It’s generally considered unethical to labor in the business of knowingly selling highly addictive drugs, or killing people, or robbing people, or stalking people, or scamming people.

Should we also respect and have no guardrails for people who destroy their lives via cults, MLMs, scam artists, addiction, etc?

>All gig workers are slaves and we should treat each other with more dignity and upgrade them to employees. It's our bloody duty as a decent human being.

Lyft/Uber can upgrade them to employees but the arithmetic of bottom-up economics means Uber has to raise prices to cover full employment benefits. The raised fares conflict with what passengers are willing to pay. E.g. even though yellow medallion taxis often cost more than Uber (especially for suburb trips) -- those yellow cab drivers were not employees with benefits like unpaid leave and healthcare.

I believe what this really comes down to is that society is not willing to pay the higher prices for drivers to be treated as employees. Same situation as not willing to paying higher prices at hair salons so hair stylists are full employees (instead of being contractors) with healthcare. It does seem like constantly blaming Uber for mis-categorizing employees conveniently shifts the blame from the society/customers. The extra money to pay the drivers comes from the passengers.

Let's look at comparison cases: The city of Austin TX temporarily banned Uber from operating there. A non-profit rideshare (RideAustin[1]) was formed. Even though they don't have to implement the same business practices as Uber/Lyft, it's interesting that the RideAustin drivers are also independent contractors and not employees with full benefits. Also as far as I can tell, there is no worker co-op owned by the drivers anywhere in the world that treats members/drivers as employees with benefits. Why is that?

Serious question about the framing of ethics: if (some) drivers see an arbitrage opportunity because potential passengers think Uber-with-employee-drivers "charges too much" so drivers willingly choose a rideshare co-op that treat them as contractors to undercut Uber, are the co-op drivers being unethical towards the Uber-drivers-as-employees?

Yes, a judge can force Uber to convert everyone to employees but that same judge can't force potential customers to pay higher prices. The alternative entities of RideAustin and driver co-ops shows there's a limit to prices that ride shares can charge.

[1] http://www.rideaustin.com/

There is no such thing as "society is not willing to pay the higher prices for drivers to be treated as employees." Society isn't a brain which thinks. There is emergent behavior.

* I am glad to be forced to pay more to have Uber/Lyft drivers treated well. I think we should have worker's right protections.

* I am unwilling to pay more myself as a one-off (e.g. through tipping). It's a Prisoner's Dilemma. That's what regulations are for.

If everyone were like me, we'd end up exactly where we are. Do I think everyone is exactly like me? No. But I think it's a similar model.

That said, the concept of treating gig workers as employees is dumb as rocks. It's reusing in 1920 mechanism to accomplish a 2020 goal. My goal is for gig workers to have health care, vacations, and so on, not that they be employees; they're not. The gig workers I know appreciate being able to jump from Uber to Instacart to other life constraints. A half-dozen 1/12th time jobs is just a bad system.

And the medallion cab system was far more abusive of drivers than Uber/Lyft ever was. The power there sits with the medallion investors. The drivers were getting shafted.

> There is no such thing as "society is not willing to pay the higher prices for drivers to be treated as employees." Society isn't a brain which thinks. There is emergent behavior.

I don't see this argument made enough, especially on HN.

I did Uber eats for a few months after I got injured.

Between that and renting out a room on airbnb, It kept us from going homeless while I recovered enough to work again.

Turns out Disability insurance is nearly worthless for any complicated injuries.

There is nothing in California employment law that prevents open schedules. Uber can have employees with exactly the same working agreement. The main difference is that Uber now has to pay into things like unemployment insurance and workers compensation.

> I believe what this really comes down to is that society is not willing to pay the higher prices for drivers to be treated as employees. Same situation as not willing to paying higher prices at hair salons so hair stylists are full employees (instead of being contractors) with healthcare. It does seem like constantly blaming Uber for mis-categorizing employees conveniently shifts the blame from the society/customers. The extra money to pay the drivers comes from the passengers.

Generally I'd argue that society/customers, and in particular employees/'contractors' don't have all that much leverage over big companies, especially ones that capture a market. That's why we have regulation.

Blaming the customers for not keeping track of everything and going for the cheapest option is like blaming climate change on the consumer. It's technically sort of true, but practically speaking it makes no sense.

Consumers will keep buying cigarettes, marketeers will keep marketing them via entertainment channels, and tobacco companies will keep rolling in the money and do everything they can to encourage all this. But taxes, anti-smoking campaigns and government-enforced restrictions on where you can smoke have made a /ton/ of difference over the years.

There seems to be a trend to have 'flex-workers' (contractors) where in practice they all quack like employee ducks, without many of the benefits and guarantees. It mostly feels like a loop-hole and /of course/ the average consumer will go for cheap and convenient when they can. doesn't mean it's a good thing for society (and in particular the workers).

Businesses want more profit. Consumers want to pay less. Workers want to earn more. Pretty much always.

This doesn't always result in an optimal outcome. Market power, externalities, information asymmetry, etc.

This is why we have regulations. Forcing the society and Uber to pay for drivers to be treated as employees seems like a very reasonable outcome. If they don't like it they can hire less drivers, but the ones that remain will at least have some minimum standard of living that developed countries pride themselves for.

> Blaming the customers for not keeping track of everything and going for the cheapest option is like blaming climate change on the consumer. It's technically sort of true, but practically speaking it makes no sense.

It's part of the current US economical ideology where individual responsibility is taken as a mantra.

I completely agree with you, it's a good soundbite that any simple analysis and some thinking show how stupid it is.

>There seems to be a trend to have 'flex-workers' (contractors) where in practice they all quack like employee ducks, without many of the benefits and guarantees. It mostly feels like a loop-hole and /of course/ the average consumer will go for cheap and convenient when they can. doesn't mean it's a good thing for society (and in particular the workers).

Well, instead of abstract descriptions about trends of mis-classified flex-workers and abused loopholes such that nobody can argue about it... I was trying to steer the conversation towards concrete cause & effect.

Let's look at another worker-owned driver rideshare -- Local Driver Co-op: https://localdriver.co/

It costs members/drivers $100 to join. They are trying to undercut Uber and excerpt of verbiage from their webpage: "Riders save up to 20% versus competition -- Enjoy unbeatable rates, guaranteeing your money supports the drivers and their families."

Some questions of morals and decency:

- Should a judge (or new legislation) force LDC to treat drivers as employees with minimum hourly wage and unpaid time off? Since LDC contractors are trying to undercut Uber, a proposal to force LDC re-classification to "employees" would cause some drivers to protest this. So bottom line is... should drivers even be allowed to declare themselves as independent contractors and form a platform to chase after passengers?

- If LDC drivers don't get decent pay -- and we can predict they won't because history shows that taxi drivers and rideshare drivers in every country don't get enough dignified pay to put kids through college and save for retirement and cover the wear&tear on their car -- who is to blame for "abusing* them? LDC? (That would mean the drivers are abusing themselves.) Or the customers/passengers?

- Should LDC be completely shut down and that business "should not exist" (as some commenters put it) because it pays too poorly?

Let's talk in concrete terms of how "driver protection" laws would realistically affect outcomes. Let's talk about game theory of economics where customers may not willingly play along with the intentions of well-meaning laws and will just avoid paying higher prices. Some drivers themselves may not want to play along with "drivers must be employees with minimum wage". These are the aspects we don't discuss enough.

> Blaming the customers for not keeping track of everything and going for the cheapest option is like blaming climate change on the consumer.

But that's not quite it, I believe. The point isn't that customers choose the cheaper of two options, it's that non-users don't become users of a service until there's a super cheap option. Taxis/Yellow cabs were a thing before Uber, but they're more expensive than what lots of people were willing to pay.

It's not "do I want to buy X for $5 or $2?", it's "I won't buy X unless it's $2 max".

If you increase Uber's prices to those of Taxis, few people will use them. That's not necessarily a bad thing, but it's a thing.

>Lyft/Uber can upgrade them to employees but the arithmetic of bottom-up economics means Uber has to raise prices to cover full employment benefits. The raised fares conflict with what passengers are willing to pay

Then the business is not profitable enough to exist. Simple as that.

It’s incredible how many people just start from the assumption that these services must exist and then work backward from that. Obviously you run into serious dissonance when you arrive at the pricing problem, where the solution is quite simple: they shouldn’t exist.

Then you can start thinking about real solutions to urban transit that have existed for more than a century.

You know the entire purpose of the company that runs this site is to fund businesses that aren’t profitable enough to exist? Only two companies that YC has funded have gone public.

People still need transportation.

This is a straw man argument. Only because other jobs also have issues doesn't mean we shouldn't try to start improving somewhere at some point. Also customers NEVER want to pay more for anything, so that is hardly an argument to treat some people like slaves.

It is the duty of the strong to fight for better treatment of those who can't fight for themselves because they lack financial security or for other practical reasons. Law is exactly doing that.

>Only because other jobs also have issues doesn't mean we shouldn't try to start improving somewhere at some point. Also customers NEVER want to pay more for anything, so that is hardly an argument to treat some people like slaves.

Please don't paint my intention to describe the underlying economics for higher quality focused discussion as me being against humanity's improvement and you being the one with the moral high ground.

I was emphasizing that there's a dynamic interplay between what drivers (whether Uber or non-profit driver co-op) can charge and what customers will willingly pay. Your comment left the dynamics of out of it which can lead to a naive assumption of what law can realistically accomplish. Consider your next statement:

>It is the duty of the strong to fight for better treatment of those who can't fight for themselves because they lack financial security or for other practical reasons. Law is exactly doing that.

The law isn't just exactly that. A law that attempts to add economic advantage to one group will inevitably make another group worse. The other disadvantaged group often becomes the "unseen"[1] group. Instead of talking in feel-good sentiments that nobody can debate (e.g. "duty of strong to fight for the weak")... let's try to discuss via math/probabilities:

Uber has about ~150,000 drivers in California. A law that forces all drivers to become employees does not automatically mean 150000 get minimum hourly wage of $15 and 2 weeks of paid time off. No, what happens is that many (I'm guessing more than 50%) Uber drivers would be removed from the system to comply with the "drivers-must-be-employees" law. The drivers that remain in Uber would be the ones on profitable routes in more affluent regions of the cities than can pay higher prices. The unemployed drivers that lost income from Uber now become the "unseen". Do the unseen who get $0 because Uber can't afford them as employees get also get attention in our moral framework?

[1] Bastiat's essay on "that which is seen and unseen": https://en.wikisource.org/wiki/Essays_on_Political_Economy/T...

> Lyft/Uber can upgrade them to employees but the arithmetic of bottom-up economics means Uber has to raise prices to cover full employment benefits

What's the problem with that?

> Also as far as I can tell, there is no worker co-op owned by the drivers anywhere in the world that treats members/drivers as employees with benefits. Why is that?

http://www.unioncabpdx.com/

The world is a big place. I'm sure there are others.

>http://www.unioncabpdx.com/

Are you responding to the actual constraints in this discussion of _employees_ with _benefits_?

As far as I can tell, Union Cab PDX does not provide employee benefits such as:

- minimum hourly wage

- paid time off (e.g. funding 2 weeks vacation)

- unemployment payments if laid off

I don't know if it's related but Unioncabpdx recently left the CWA Local 7901 union as they weren't paying membership dues: https://nwlaborpress.org/2018/12/union-cab-quietly-goes-non-...

From http://www.rideaustin.com/faq

> RideAustin is a community driven nonprofit ridesharing company founded by local entrepreneurs. The RideAustin launch team is led by Joe Liemandt, a longtime Austin tech entrepreneur, and Andy Tryba, CEO of Crossover. It is powered by donations, with paid and volunteer hours from both the Austin tech community and the broader Austin community working together.

So it's a non-profit, with volunteers ("volunteers"), who can get a stipend.

Sounds like a legal fiction, but I'd need to know more about how much they pay, how much money the founders make, etc. The cynic in me says it's the same shit but marketed better and not publicly traded, but there may be some genuine benefits.

“ Uber has to raise prices to cover full employment benefits. ”

The question is how much would this be per ride(a few cents?) and do they really? Uber and Lyft are raking in cash.

I mean in a EU country a male haircut costs 6€. In another EU country a male haircut costs at least 30€. People can live on both wages. These number are relatively arbitrary as they make sense in the ecosystem of housing and other prices. California can compensate in many ways for the fact that "people don't want to pay the gig workes more". Free/social healthcare, education and housing via progressive taxing etc. Since people in the USA don't want to be "slaves of communism" or whatever, they are wage slaves

Was society willing to pay for workers when they had slaves?

To think that if only the Confederate states would have made that iron-clad argument back then, the civil war would have been avoided. Imagine how low the prices could be if we still had slaves.

If your business is unsustainable without taking advantage of the workers then it ought not to exist.

Why wouldn’t taxi drivers be forced to become employees as well as truck drivers and other gig economy workers?

I don't exactly agree with your conclusions but I upvoted you anyway because you got me realizing what about the whole arrangement of Uber/Lyft really makes me uncomfortable with the "independent contractor" definition: the companies actively impede the self-sufficiency of drivers to cultivate a client base. This would be like if a massive home improvement company which subcontracted all of its labor to smaller outfits had the workers wear some kind of monitoring to watch every step the on site guys did, make sure the sub company wasn't promoting its own signage, or doing any custom work above and beyond to satisfy the client. That doesn't fly in my book. If you subcontract work, your value add is the market penetration that gets the clients in the door, and that's it. If the outfit doing the work is not an employee, then the relationship ends with the fee paid upward. If you believe that business entities have rights, which I am sure Uber's board does, why should it be legally binding in a contract for a business to sign those away any more than an individual can sign away his own?

Well. There have been stories of independent truck drivers that are being forced to leave California because they can’t be independent any more.

Jason Snell, a long time editor of Macworld, was let go years ago and decided to do podcasting and blogging full time, but he still wanted to do freelance writing. The new laws passed in California made it more difficult.

The only reason the gig economy is bad is because we have an ass backwards system where your health insurance, unemployment insurance, etc is tied to your employer.

Yes, a number of freelance writers I know, many of whom have been happily doing it for decades, were very unhappy about the California law.

Your comment reminds me of this comment[0] on HN from a developer who was complaining he couldn't accept donations in Finland because of the laws of that country.

[0] https://news.ycombinator.com/item?id=23615853

Should people have the ability to choose to be contractors?

For example, “Accept wage X as an employee, work these set hours, and you have to bring in some multiple of X to justify your employment. Or stay a contractor, work when you want, get the benefit of surge pricing and keep a fixed % of your revenue”

As a consumer of Uber and Lyft, what differentiates them from Taxis is the ability for them to react to changes in demand. (Try finding a taxi in the rain) I can’t see them pulling this off without some portion of the workforce being contingent.

I vehemently disagree.

I used to tutor for Chegg tutors on the side--outside my main job. They paid ~$20/hr and for 5-10 hours I week I could bring in some extra money for food and rent.

They shut it down in my state because they reclassified them as employees, and Chegg was not going to do all that leg work to bring people on as part-time employees.

I didn't need benefits like sick days or unpaid leave since it was just a gig I did online for extra money. I didn't need health insurance, since my main job provided that. I didn't need job security that was provided by the inability to fire people.

I was just trying to make some extra money online.

And now I can't because Big Government decided I can't.

You know who it really hurts? The kids I was tutoring. Now there is a huge tutor shortage and kids that need help aren't getting it. There was ALREADY a tutor shortage before they cut off several states from being tutors.

If it's the law, then it's a stupid law and needs to be changed.

It's telling that Uber/Lyft drivers weren't the ones asking for this. They were fine the way they are. No Uber/Lyft driver was saying "Wouldn't it be nice if we were REAL employees??".

It's the bloody taxi companies trying to get back at Uber because taxi drivers ARE real jobs that require real benefits, and they can't compete with a better business model.

Fuck California.

>It's the bloody taxi companies trying to get back at Uber because taxi drivers ARE real jobs that require real benefits, and they can't compete with a better business model.

Ah, yes, Big Taxi conspiracy.

I can't imagine thinking a company losing billions while subsidizing chauffeurs for rich people while skirting laws is a "better business model".

>Fuck California.

Have you considered living in a place that doesn't require you to do "gig work" on top of your regular job in order eat? Isn't that the world we want?

> Have you considered living in a place that doesn't require you to do "gig work" on top of your regular job in order eat? Isn't that the world we want?

I love this line because raising uber prices to meet the demands of Big Government will be cost prohibitive for most people. That means, a) uber drives get less than before, and b) fewer people will take uber, and c) the people that do will have to pay more for it.

So... you've just increased the cost of living for everyone, making it harder to live on a regular job.

I've done gig work on top of my regular job to have a little extra in savings. Really helped during the virus when the stock market went on sale. Luckily I'm in a free state and don't have to worry too much about this regulation spreading

I work for a billion dollar tech company. I make plenty of money to take care of myself, but I like a little padding for extra fun things and rainy days. I also find it fun to tutor.

I have plenty of money because I don't live if a shitty place like California.

If you care so much about the kids you were tutoring, why didn't you continue tutoring them yourself, without the rent-seeking middleman?

There is a lot of regulation and paperwork/fees to start your own business. Makes it hard to justify if you only want to tutor a few hours a week

Chegg provided the kids (and rightfully took a cut for it).

What am I supposed to do? start cold calling college students asking if they need help? lol

Yeah, I could start my own tutoring business, but imagine the costs: I'd have to start a website, take payments, advertise, advertise, advertise.

It'd be great if someone did all that for me and I just could log in to tutor when I wanted.

While I agree with your overall message, I have met an Uber driver that was handing out cards. They really did suggest I call them back directly at any time during our stay in San Francisco. He had an actual mini-bus, not just a car or mini-van. So that guy, at least, was self-employed.

But for the vast majority of Uber's drivers, I think you're correct.

Meanwhile in Japan, We never get sick pay (treated as leave pay) nor usually leave pay even when employed...

Meanwhile Japan is also the only country which has an actual word in the dictionary to describe "Death through overwork".

It's called Karoshi.

No modern society should have such a common problem that you have to invent a specific word for it.

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

The fact that Japan is abusive to its workers doesn't in any way reduce the OPs point.

Japan should - and I realize that this won't make any difference - get with the times and start treating people like they are something else than lemons that need to be squeezed. It's a cultural problem.

No reason why they both can't be fixed. At least this judge got it right.

Japan is a far cry from a role model of work environment, this is just another signal to it...

That's basically abuse.

I really hope for the Japanese people that this changes with a new generation where family is family, and business is business, and that the former is more important than the latter.

> Then they have merely the chance to accept/decline it.

But isn't the definition of contractor vs employee.

Can they still reject if they are converted to an employee, because then it would be weird.

> doesn't make any sense in the gig economy where the wages are close to minimum rates.

It makes sense if it’s better than your next best option.

If the value you are able to bring to an employer is under what minimum wage requires, an employer faces the decision to employ you at a loss to them or to not employ you. Many choose the latter.

> Lots of HN comments are here like "I know people who prefer to be contractors", "My sister's neighbours little brother actually doesn't want to be treated with respect by Uber", blah

It's a willful misrepresentation to characterize these merely as anecdotes. Polls/surveys show that drivers overwhelmingly share this sentiment[1].

> This is utter nonsense. Being a contractor means being self employed. You don't get paid leave or sick pay. It's a risk taking and doesn't make any sense in the gig economy where the wages are close to minimum rates.

This is not a prerequisite for being a "contractor". That the rates are "close to minimum rates" is a reflection of the market demand for the labor.

> If you are truly self employed then you have a skill which you can market, you can charge fees which allows one to put money aside for things like unpaid leave or sick days.

Again, this is nice in theory, but not necessarily true for all self employed contractors.

> If you are truly self employed then part of your job is building customer relationship, building up recurring customers, increasing your business through marketing, word of mouth, etc.

Again, this is nice in theory, but not necessarily true for all self employed contractors.

> Uber drivers are NONE of this.

Correct, but that doesn't change the fact that they are not employees.

> They clock into an app which belongs to someone else and they have no share in.

This was true before Uber/Lyft, where taxi drivers had to pay for the privilege of driving a car with a medallion that belonged to someone else. They were independent contractors under that arrangement.

Today, Uber/Lyft drivers report to no boss and can decide to drive whenever they want on a whim. They can drive 20 hours one week, 2 hours the next, and then take a vacation indefinitely with no repercussions. When Uber/Lyft announce layoffs for cost cutting, drivers are notably not affected. Insofar as drivers have experienced less work during COVID, it’s because there are fewer riders requesting rides, which suggests a rather direct rider-to-driver relationship.

> They can't even negotiate their own fees. That itself is fucked up.

Yes, Uber drivers can’t really set their own rates (this is changing soon), but that’s also not really a prerequisite for independence. There are loads of platforms where the intermediary only buys services by providers at set rates and sells them to a buyer, where the providers are not literally employees of the platform provider, eg: health insurance. This was also true of taxi drivers before Uber/Lyft came around.

> It's complete nonsense in extremely disingenuous by anyone here to suggest that an Uber driver is a self employed contractor and that this is good for them.

This is a borderline rule breaking content on its face, but just to engage with it, how do you know what's good for them? Maybe get off your high horse and speak for yourself.

[1] https://www.cadriversurvey.com/

I don't think they're necessary treating them like "slaves" because they want to. It's a tradeoff between more jobs or fewer jobs and better pay.

Agreed mostly with you about negative impact of the gig economy. However, not seeing how the slavery element goes away with your proposal. Better regulations YES, but wouldn't you just be reinforcing the power of the slavemaster by converting his temp labor to perm?

> All gig workers are slaves

This is repulsive. You denigrate all people who have suffered in actual slavery. Follow your "bloody duty as a decent human being" and learn what slavery is actually like.

And you are unable to recognise a metaphor.

>All gig workers are slaves

If gig workers are slaves, then we must conclude that slavery isn't that bad. Nobody is forcing people to sign up to drive for these companies, and if they don't like it, then they can choose to drop out by tapping on their screen to indicate that they're out of service.

> Nobody is forcing people to sign up to drive for these companies

No single person, sure. But the inceasing lack of secure, reliable income sources remove most other choices.

"gig" work should not be the norm. It should (and always used to) be the job that the teenager does (delivering newspapers, etc) or someone does for a bit of extra cash.

But they're becoming pervasive, normalized and this should be rejected.

That's like your opinion... vs the needs of the drivers. They are free not to work there. The fact that plenty of people still work there, means that it works OK.

I mean, they (unqualified workers) can always go to work to MacDonalds or something like that but they stick with Uber.

Slaves, mmm.... yes I remember the first day that jackbooted thugs from Uber forced me to drive for the company. Every day that I felt like driving instead of doing literally anything else, these Uber slavemasters would show up with their chains and their whips. The horror... I hope Uber goes out of business so I can finally go back to my old life...

Slavery doesn't come only through the form of physical subjugation, if so there wouldn't be classifications of work analogous to slavery.

Don't be so shallow minded...

Not direct physical subjugation but if force isn’t uses somewhere along the responsibility chain then it can’t be called slavery.

Debt slavery for example, relies on debts being permanent and the state jailing people who do not pay.

If a debt can be discharged in an easy bankruptcy, you can simply do that instead of becoming a slave to someone.

>Slavery doesn't come only through the form of physical subjugation

from dictionary:

slavery - the state of being a slave.

slave - a person who is _the legal property of another_ and is forced to obey them.

The fact that you use "slavery" as a synonim to hard work and/or high dependance, doesn't make "doesn't come only through the form of physical subjugation" true.

As a non US citizen that does not live in America and just looks from the outside, I'm always amazed at the rapid transformation going on in the last decade. If hackernews is a sample of the general american population, you guys are becoming communist. And it won't end well.

Because from Reagan on, America has been doing quite well of course...

Don’t worry, the American spirit of liberty and free market capitalism is alive and well. It’s just that most Americans are busy getting things done instead of planning everyone’s lives for them on twitter or HN.

I would be alarmed too, except I hang out in diverse US communities. Hacker News is not a sample of the general american population. Increasingly, it is not even a sample of tech workers. Tech workers tend to be rather libertarian, and this has not changed. HN is becoming a sample of Bay Area politics and/or Twitter, neither of which are representative of the USA.

Sorry about the downvotes you received. I’ve been on HN a long time. It is sad to see the great decline of HN. Check out reddit.com/r/TheMotte if you want something a bit more representative and more similar to the HN of old, with its attendant high level of discourse as opposed to the shit-flinging and downvote brigading you see on HN today.

That's probably mostly California but yeah - it's amazing (also as an European but from a post-soviet country).

It strikes me that these articles are always biased in the direction of the benefits of being an employee. I have several friends that actively choose to be contractors because they prefer the (legally protected) flexibility to decide their own hours, among other things. It's a personal decision, and there are upsides and downsides in both directions.

Sure - some (non-insignificant) portion of Uber and Lyft drivers would like to be employees. But surely some (also non-insignificant) portion would prefer to be contractors for Uber and Lyft and keep the legal protections that come with that.

These articles always make it seem like it's a no-brainer win for all drivers no matter what, but it's never seemed so clear cut to me.

I'm afraid you're repeating Uber's favorite talking point, which is that everyone should respect the worker's decision to be an employee or contractor.

Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold.

The problem is that Uber currently exerts so much control over its "independent contractor" relationships that they have become, as a matter of law, employment relationships.

Moreover, in practical terms drivers don't end up with the choice they ought to. If they want any working relationship with Uber, they have to accept a mash-up of all the burdens of employment minus many of the benefits of being a contractor.

This comment is just wrong on so many levels:

"I'm afraid you're repeating Uber's favorite talking point, which is that everyone should respect the worker's decision to be an employee or contractor."

I've never seen Uber argue that everyone should "respect the worker's decision to be an employee or contractor." I have seen them argue that drivers are contractors based on the flexibility in the job, but not that it should be "the worker's decision".

"Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold."

Actually, pretty much all US employment law disputes that drivers should be able to choose what status they hold. Employee vs. contractor is not determined by what an employer says someone is, or what an employee says they are. Instead, it is determined by some key factors about the nature of the job, which (as you do point out) mainly centers around control of important aspects of the job.

But it is important to understand that you never really get to "choose" whether you're a contractor or an employee, it's determined solely as a function of the type or work you do and the nature of your relationship to the employer.

Having been a driver for 1.5 years my questions for you are these:

1. If Uber and Lyft allow their drivers to choose, would it be reasonable for them to make "having the other app on at the same time" cause for dismissal? I know of no other employee that is allowed to simultaneously bill time on a competitor. Contractors, absolutely. Employees, no.

2. What if Uber, instead, charged $1.00/mo for the drivers to use the app, thereby making them customers instead of contractors?

The fact that it's Uber's talking point doesn't make it any less true.

If rideshare drivers are employees, then there's going to be fixed overhead costs of hiring employees and drivers will not be able to set their own hours. The rideshare company would not recoup the costs of benefits for drivers that drive less than a certain number of hours per month, and so drivers would have to be required to work at least that many hours.

Can you elaborate on what you mean by, "in practical terms drivers don't end up with the choice they ought to"? I know people who drive for Uber and Lyft less than 10 hours per week, and some do it nearly full time.

>I'm afraid you're repeating Uber's favorite talking point

True, but that does not mean rdgthree's argument has no merit.

> Nobody disputes that Uber can have employees or contractors

What about the California judge?

This is an argument against treating drivers as contractors, but it's not an argument against the OP's point, which is that a contractor relationship might be beneficial for some non-negligible part of the population, even if it's not beneficial more generally. And the fact that articles don't acknowledge this is notable.

Going to be the big reason is that is makes it easier to reach into their deep pockets when one of the drivers does something bad. Where there is an overtly obvious benefit to one group it usually means someone else is using it as a cover, that is going to be the trial lawyers.

I am in the group that says if you want to be a contractor and the employer agrees so be it. I have a good number of friends doing uber after hours aimed at specific purchases and the flexibility is what sold them. Not the life for me but for some it is a good alternative.

Plus the biggest benefit was the kick in the pants traditional taxi services got so they now how to treat their "drivers" better. How they get off with how that business is run and Uber and Lyft get called out should tell you the priorities here.

There is a very similar thing happening with UFC fighters. There are currently class action lawsuits ongoing for this topic.

I wonder how this decision will play out to other businesses

Uber drivers literally need not even show up. What "control" are you referring to?

> The problem is that Uber currently exerts so much control over its "independent contractor" relationships that they have become, as a matter of law, employment relationships.

Sure, this could be true.

But people should recognize that a possible solution to this, is for companies to provide more flexibility and control to these people, such that they stay contractor but also get the additional contractor benefits, as opposed to forcing the employee relationship.

You realize there are tons of jobs with employees that allow employees to chose their own hours.

There is nothing in this ruling that prevents Uber from allowing people to chose rides _exactly_ as they are doing it now.

The changes are:

1. Uber needs to pay into unemployment insurance.

2. Uber needs to pay into workers compensation.

3. Uber needs to pay into social security.

4. Uber needs to collect payroll taxes in advance.

5. Uber cannot discriminate based on protected classes such as race or gender.

6. Uber must comply with the WARN if large scale layoffs occur.

7. Uber has to provide for heath insurance depending in accordance with local and federal laws.

8. Uber needs to verify the legal working status of their drivers

9. And many other things all other businesses pay into and rules they have to follow.

We make businesses pay into this because the general public is ends up footing the bill anyway. Like right now where we’re providing Uber drivers with unemployment benefits even though Uber cheated their responsibility. And when a driver gets in an accident and we have to pick up the bill of unpaid hospital bills and disability payments.

Flexibility has nothing to do with it. Paying into the system everyone else has to and following the rules everyone else needs to follow is.

Current employment law really isn't well suited for cases where someone can be an "employee" of 4 or 5 companies at a time, and stop and start on a whim as they see fit. I mean, just look at unemployment insurance. When the nature of the job is essentially a bid out to people willing to do the work, what does it mean for someone to be unemployed in the first place if there is just less work to go around? Flexibility DOES have a lot to do with it: I'm fine with the company not guaranteeing me a set number of hours per week if I can just choose to not work a particular week if that's what I want.

I agree with some other posters, I think a new categorization for "gig" workers is necessary, as I think a lot of your other points (e.g. paying workers comp) make sense.

Can they

1. Work for the competitors

2. work as much or as little as they want

3. Take as much vacation time as they want

4. Leave with zero advance notice

Also, should Twitch streamers and Youtube creators also become employees? What about Etsy/Ebay sellers or AirBnB hosts?

Why don't we legislate a new category of taxation for gig economy companies like Uber? Make them pay more taxes and support a new social safety net (especially universal healthcare) without changing their business model.

Do you have examples of jobs where employees choose their own hours and can work for competitors?

Some things, like not being able to set their own rates, meant drivers were never contractors, even if they wanted the perks of contracting (e.g, choose your own hours). Saying 'I wish to be a contractor' isn't legally sufficient: the agreement needs to permit setting rates.

Not all contractors set their own rates. Sometimes they bid on an already published rate. Which is what happens here. Uber/Lyft tell you what you will make before the ride starts.

If you accept, you just set your own rate.

I get what you're saying, but I don't think "setting their own rates" has anything to do with it. Any driver would be able to set their own rates by going at it alone, completely independent from a ride share company. They would create their own service and charge what they want.

However, because the drivers choose to participate in the Uber/Lyft marketplace and benefit from the network affects that they have created, it follows that Uber/Lyft would have a say in the cost of goods sold in that marketplace. Just because the drivers can't set their own rates doesn't mean they aren't independent contractors.

If I hire you to mow my lawn, we mutually come to an agreement of what time and price you would perform the service. Just because you want to work for $100 / hour doesn't mean I'm willing to pay that. And because I'm only willing to pay a certain price only for your services doesn't make you an employee.

I think it's that simple. Uber/Lyft have a price they are willing to pay for services. They even allow their drivers to pick their own schedule (unlike my lawn service example). Drivers are not setting the price directly with the customers, they are getting paid by Uber/Lyft, but that doesn't make them employees.

This is certainly the (fairly robust) legal argument. My hesitation is that I think a significant amount of drivers prefer and would benefit from the arrangement that Uber and Lyft have set up, and it's a shame that we aren't discussing how to write legislation to fit those people in.

It just feels like forcing everyone to be an employee will box out a large number of happy part-time drivers who weren't too concerned with setting their own rates.

Uber can say that drivers can set their own rates but they can only afford certain rate. Wouldn't this work?

You set your own rate by accepting the ride or not?

I don't know where this meme started. Taxi drivers have never set their own rates and have always been contractors.

Ome might as well say that "Some things, like being able to work for Uber's competitors, meant that drivers were never employees."

This is a fuzzy line.

What if Uber adds an option where a driver can set a minimum rate per mile or per estimated minute, does that shift the balance back to making them contractors again?

What you seem to be advocating for is a service something like Fiverr, where drivers set their own prices and Uber/Lyft takes a 20% cut off the top.

Uber drivers now set their own rates in California

Isn't selecting their own job - at least a bit related to selecting their own rate..

I guess uber could put the jobs up for bid.. to address that.

Do contractors really set their own rates?

Drivers set their own rates via a reverse dutch auction. Uber offers a short term contract at a certain rate. If no contractor accepts that rate, Uber increases the contract rate until someone accepts.

> I have several friends that actively choose to be contractors because they prefer the (legally protected) flexibility to decide their own hours

Those legal protections can be enforced by those who have the means to hire a lawyer. Yes, white collar contractors often get to enjoy the legally enshrined protections to decide how, when and where their work is done. They are often paid twice as much or more than their salaried peers to make up for the increased costs of self-employment and lack of employer provided benefits.

Blue collar workers working as contractors are almost always doing so not for their own benefit, but for the economic benefit of their employers. The workers get little say in how, when or where their work is done. Their pay does not reflect the increased cost of self-employment, and they are not offered benefits.

Uber drivers can't even set their own rates.

As an aside, there are plenty of people employed as employees with flexible hours and schedules in the US.

Uber drivers can set their own rates in some parts of CA [0]. It’s a pretty big change brought out by these lawsuits to make the drivers as independent as possible.

0 - https://www.npr.org/2020/01/28/800437791/due-to-new-californ...

> I have several friends that actively choose to be contractors because they prefer the (legally protected) flexibility to decide their own hours, among other things. It's a personal decision, and there are upsides and downsides in both directions.

What "legal protections" are you talking about? Uber can put out a notification right now that if you don't take 1 ride in the next hour that you are banned from the platform and there's nothing your friends could do about it.

A contractor gets to work w/e hours they want because they are their own boss and collect their own contracted work. Uber basically forms a new contract with a driver per-ride. There's no promise of future rides, and Uber has every right to withhold new rides for whatever reason, including that they do not like your schedule.

HN FACT CHECK:

IRS Common Law Rules for Determining Status:

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

Type of Relationship: Are there written contracts or employee type benefits? Will the relationship continue and is the work performed a key aspect of the business?

Source: https://www.irs.gov/businesses/small-businesses-self-employe...

CA ABC Test:

Autonomy. The worker must be free from the control and direction of the hiring entity with regard to how the work is performed.

Business Dissimilarity. The worker’s labor or services must fall outside the usual course of the hiring entity’s business.

Custom of the Worker. The worker must be customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Source: https://leginfo.legislature.ca.gov/faces/codes_displaySectio...

Are they software contractors making a couple hundred an hour, or Lyft/Uber drivers making a $25 an hour? I think the problem some people see is many Lyft/Uber drivers don't have that wealth of choice.

I think the core issue as to why employeeship is favored is that those folks that want the freedom of contracting have more personal power and are less disadvantaged compared to the employer. If you are choosing to favor the flexibility of your own hours over other work benefits then you have a much more secure source of income than a lot of working Americans. I think that ensuring that those poorest off have the ability to keep themselves above water is vital - and while I think everyone should be able to better control their work-life balance we live in a society where that isn't valued, so I'm not holding my breath.

Then that is for the government to provide, not for a company to provide.

I was a 1099 contractor for several years and couldn't agree more. It drove me nuts when I'd read articles like this, since I had made a conscious choice not to be an employee, for all of the pros and cons that implies.

That option is still completely possible under this law. One of the provisions that allows you to remain a contractor is "The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed."

I work as a 1099 contractor under my own LLC consulting business. This is valid under CA law. The law is meant to protect people who are unfairly classified as contractors outside of a trade.

"It's a personal decision"

It's not a decision if they have no choice in the matter (one way or another).

Large companies can use their massive leverage to force sub-optimal conditions which are in their favour.

Though there are definitely arguments to be made for 'prefer contractor' - there is no doubt, that on the aggregate, there are huge, systematic problems with the new 'gig economy' that need to be sorted out.

Free markets work when people have skills and at least some leverage, but at the bottom end, where people are less skilled, it doesn't work well, which is why we need to have minimum wage, possibly unions in some cases etc..

New economy, new rules.

> I have several friends that actively choose to be contractors

I've worked many years as a contractor billing at a daily rate.

The difference being that I can choose to enter permanent employment any time I wanted, due to the field we work in.

It's not the same as contracting for Uber or Lyft. Not even close.

Just some perspective here, not discounting what you said.

You’re not missing anything. There is a populist slant to one specific outcome that doesn't factor in the populace itself.

The most marginalized and desperate gain more from employment structure.

I don't see where you're getting that "bias" accusation. The subtitle of the article is literally written from the company's perspective ("A stunning court ruling puts Uber and Lyft in a tight spot"), and not the drivers'. In fact the benefits to drivers as employees don't even get treated until the end of the second paragraph, after the author has explained things like the already-filed appeal.

Honestly, I think objectively I'd look at this as very much sympathetic to the employers, if I had to assign bias (though honestly it's fairly neutral).

As far as the law goes: this result was coming for sure, the only surprise here is the fact that it happened via injuction. The California "AB5" law under which the suit was filed is a new law from last year, and it was very much written with the intent to make gig economy positions into "employee" relationships. There's a link in the article to this explainer, which is pretty good:

https://www.californiaemploymentlawreport.com/2019/03/unders...

I'm an on-and-off Uber driver. It's a great gig to supplement my income. As someone who has many limitations from a disability, it's almost impossible to find a job that classifies me as an employee. I just don't get hired. And I need to take a break when I need to take a break. I can't have someone dictating my hours for me.

In my city, which fortunately is not in California, being classified as an Uber employee would destroy my 10-20 hour weeks at $20-$30/hour. The key is to work during busy times and for $30+/hour you generally have to be entertaining to get tips (which I have tons of fun doing). If you work during slow times, then it's $10/hour or less.

Busy times are too nuanced for a manager to determine when the best time to work is.

And I don't want to subsidize other drivers with my hard work because they don't want to do the market research to know when to drive.

Maybe Uber can keep all the incentives the same (like surge) and classify drivers as employees, but I doubt it.

Nurses have a lot of these benefits. You can work certain shifts for more money than other shifts. Similarly restaurant workers.

There are alot of cities that have so many drivers uber and lyft wouldnt even be able to employ them all. If all of them were required to be employees, there are many drivers that may be out of a source of income. Personally, i think that its the contractor agreement that should be drawn into questiom. There are rules tgat are forced upon by uner and lyft that gives drivers no option but to agree to. Secondly, is this really even needed to be a talking point now? Not only are we in a pandemic with so much uncertainty relating to drivers not knowing even if they can go back to driving, bit alos just with autonomous cars likely to be here within 5 years.

I'm an employee, I pretty much decide my own hours. Sometimes it's 20 hours per week, sometimes it's 60, most of the time it's around 40. I can work Saturday and not Monday, I can work 4-10's and take Friday off, etc.

Uber and Lyft employees are paid on commission. Uber and Lyft don't call it commission, but that's exactly what it is. You get X% of your sales, with bonuses, etc.

For me, price was never the primary motivator of using Uber or Lyft. It's the convenience and having a well known brand that will more likely than not actually come pick me up.

Free choice to work and free choice to pair drivers with riders is as close to a free market as you can find. It works great. As soon as regulation enters the room the dynamic changes.

It should be illegal to pay any form of wages, whether gig work or 9to5, without paying into social security, medicare, medicaid, and unemployment insurance.

This pandemic has proven that EVERYONE needs unemployment insurance, and it is already well-known that everyone needs income and healthcare in retirement.

Sp sure, let people do gig work on their own time, but don't let them opt out of the basic social safety nets we all need to survive.

I'm not American so I'm curious, do contractors not have to pay into these systems themselves? I'm from a European country, and if you're self-employed and working contracts, when you do your taxes, all the social insurance stuff instead gets paid by you directly (so your total income tax is much higher as you're paying all the employment taxes that are normally hidden from you)

There is no legal obstacle to Uber/Lyft continuing to allow drivers all of the flexibility they currently allow, even if they have to treat them as employees. That can even be legally protected in an enforceable way by the employment contract if desired, as can any other current Uber/Lyft driver flexibility you're referencing.

The only thing that is being lost here is the inability of Uber/Lyft to pay less than a minimum wage and otherwise deprive the drivers of the benefits that employees are entitled to.

Anyway, it's not like Uber/Lyft were giving drivers the choice whether to be contractors or employees so that the drivers could pick the status they prefer - nor does the law ever truly allow that except when the genuine nature of the services relationship is adjusted based on the answer to legitimately conform to the desired status. They're forcing everyone to pick the status that's generally more expensive and precarious for the worker.

given that progressives, myself included, tend to believe healthcare and retirement should be assured with or without employment I am baffled that some are against gig work in principle. with those two entitlements gig work is the most worker friendly approach to employment. What am I missing?

Your friends could still be considered contractors under this law. One of the provisions that allows you to remain a contractor is that "the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed." The other prongs of the test have long been part of IRS law.

I work as a 1099 contractor doing software engineering under my own LLC consulting business. This is valid under CA law. The law is meant to protect people who are unfairly classified as contractors outside of a trade, not restrict choice of those of us already working in this capacity.

Being an employee and setting your own hours are not mutually exclusive

There's no reason why you can't be an employee but also be in control of your own hours. It's not much different from a part-time job that I had while going to school. I'd provide my manager a list of times that I was available to work for the week and he'd slot me into shifts.

Technology has decreased the lead time needed to let someone know that you're available to work to 0. There's absolutely no reason why that should mean that you can't be an employee.

Sure, it would be beneficial if they had this flexibility, and nothing here prohibits this. Literally nothing prevents an employer allowing an employee from setting their own hours.

This ruling is a reclassification - the work that they have been doing in the manner they've been doing it is already employment. Or, in other words: the current relationship doesn't have to change a single bit, they just get additional benefits.

What legal protections? Most "contractors" are actually employed by their own personal shell companies, specifically because there is no meaningful protection for contractors. No protection from IRS, from customers, from law enforcement, from health insurers, from COVID. But you get to make your own hours, and work with no bosses no homework no bedtimes no rules, and that's cool I guess.

Why does this have to be an exclusive or? I don't see how drivers would not be able to choose their own hours or the amount of work just because Uber has to treat them as employees? I live in Germany, I work when and as much as I want, and my employer still pays health insurance and I get sick leave and paid holidays, based on the average time I work.

> I have several friends that actively choose to be contractors because they prefer the (legally protected) flexibility to decide their own hours, among other things

I'm sure the flexibility is nice when you are making $100+ per hour but drivers make a tenth of that and struggle to get health insurance

I don't see why Uber couldn't offer that same flexibility to employees. I'm an employee and I have a lot of flexibility about when and how much I work - that's a matter of policy that Uber could offer if they chose to.

The thing is that the option to be a contractor can always exist, along with having an option to be a full time employee. Generally, I agree that a company shouldn't be an entity that its core workforce is a bunch of "temps"

It seems to me that in the larger perspective it could erode workers rights in other places

I’m guessing many would rather see Uber drivers all be forced to be employees even if 99% don’t want to, than a spreading erosion of workers rights.

What behavior on the worker side will being classified as an employee preclude? E.g. nurses are employees but in many cases set their own hours and take on more shifts if need be. Same for restaurant workers.

Being an employee officially and being able to choose your own hours are not mutually exclusive. You can be an employee without having fixed hours or a fixed salary.

> flexibility to decide their own hours

That is possible for employees as well. Part time employment is also possible. What is different is ability to set rates etc.

Are your contractor friends lower-wage workers?

It’s quite a different story being a specialist contractor compared to a easily replacable minimum-wage earner.

So why don't they offer both options then?

I am a w2 employee and I choose my own hours.

Uber and Lyft could still grant the same flexibility to employees. If they don't wouldn't it kind of blow their entire "contracting is better anyway" argument out of the water?

Doesn't understand the difference between free-lance software engineer and indentured gypsy cab driver.

...not going to make it.

I thought flextime is totally a thing.

Flextime does not mean you can work 5 hours per week.

lol you're literally just regurgitating Uber's talking points since like 2009

Just because someone said something doesn't make it wrong.

Uber drivers invest $20k for opportunity to earn $15/hr.

How much do your contracting friends invest? What's their compensation?

That's not fair. It's like claiming that airbnb hosts spend 500k to earn 100 dollars a night. Most people own cars anyways, this is an opportunity for them to make money off of that investment.

Do uber drivers really not want or need cars for anything other than uber? Some of the places I get uber - there are no sidewalks.

One irony, all the gig economy workers do make a car a LOT less necessary if you are in an area well served by them.

So are you claiming Uber drivers buy cars solely for the purpose of becoming Uber drivers?

These articles are written by people who have incentive to write such articles. Those who are contractors do not bother running around asking journalists to write stories about how much they enjoy being independent they just focus on driving Uber. A small % of people on other hand try to create a lobby for this sort of things and the opportunist politicians will use this to arm twist Uber and Lyft to seek rent. This creates a need for journalists who write these biased stories.

The consequences of this ruling are probably not going to be known for a while. This is certainly bad for Uber & Lyft insofar as it will greatly increase their operating costs. The question is what effect the ruling will have on drivers.

Uber is not a profitable company with fat margins like Google, Facebook, Amazon, Apple or Netflix. I don't see any way for Uber to absorb the increased costs that come with full employment without reducing the number of drivers and increasing the cost of rides in California.

The change in employment classification means that drivers will no longer be able to choose when they work. Uber will choose when they work, and for how long. The barrier to becoming an Uber driver will increase. Currently, in most cities it's possible to sign up to drive entirely online and basically just requires a license and a completed background check. Going forward people who want to drive for Uber will have to interview like any other job, probably in-person with a resume, and jump through the many hoops which that process entails.

My guess is that for new drivers who can pass the interview and existing full-time drivers who don't get laid off this will bring a big improvement in quality of life and provide some much-needed financial security and benefits. The rest will be out of a job.

I think it's unfortunate that some kind of compromise couldn't be reached which would have provided some economic security for these workers while accounting for the real differences between gig work and regular employment.

Profitability should have no bearing on whether drivers are classified as employees or contractors. If these companies can’t turn a profit while complying with the law then they don’t have a viable business model. That is entirely their problem.

Furthermore, the assumptions you make regarding future hiring practices are unfounded. Nothing stipulates that resumes or interviews, let alone in person, would be required to extend employment.

There might be no stipulations, but do you really expect Uber to be completely different to every other company when hiring actual employees? People that you are legally liable for?

>If these companies can’t turn a profit while complying with the law then they don’t have a viable business model. That is entirely their problem.

But let's completely ignore the part where companies lobby for laws that protect their market. Can't wait to go back to the old taxis.

> If these companies can’t turn a profit while complying with the law then they don’t have a viable business model

Are you seriously telling me that if people don't interact freely in the way bureaucrats want them to interact, then those people should, by law, not be allowed to interact?

Big Brother knows best, huh.

What is a minimum wage?

The whole point is that Uber isn't actually treating its drivers like contractors. Any theoretical benefit to being a contractor is not really relevant if they don't have those rights in practice.

I'm not sure you can claim that with confidence if you haven't driven with Uber before. Many drivers hold the opposite opinion as well and prefer to keep their job and only drive whenever they're free.

>drivers will no longer be able to choose when they work

Why? Uber is still free to let them choose if they choose so.

>Going forward people who want to drive for Uber will have to interview like any other job

Why? Uber would be free to hire without interview.

>this will bring a big improvement in quality of life

That's the point.

>The rest will be out of a job

It was deemed that this kind of a job is not worth having people in, often being below minimum wage and with no protection. In a bit of hyperbole, abolition took jobs from slaves as well.

To answer your first "Why?" it's because employees have to be paid much more when working over 40 hours / week. Drivers will no longer be able to work an extra 5 hours when they need extra money: They'll have to have a second job. Similarly, there are certain minimum costs associated with each employee above and beyond the costs of a contractor. This may mean Uber is forced to favor drivers who commit to a certain minimum of hours per week, ridding themselves of the "before and after work" driver crowd. The net effect of these two forces means Uber will just be another part-to-full-time job.

Basically you're arguing that the race to the bottoms is good for everyone involved.

From a country that has hard fought-for USD16/hour minimum wage, paid 10 sick leave and 20 annual leave days per year, this doesn't appear true at all.

What a tasteless and tortured analogy. I'm sure the slaves hated being freed as much as my brother will be when they tell him that he needs to drive X minimum hours a week to keep his employment status with Uber/Lyft. More realistically, there probably won't be an Uber/Lyft left to drive for if this ruling sticks. God knows they're already bleeding funds as we speak. There's no way they'll stay afloat.

No matter how you want to spin this, it's not going to be a victory for the majority of the drivers. Let us, in our high and mighty chair, obliterate a burgeoning industry filled with people voluntarily making money on their own time. Let the taxi medallions flow back in its stead. Problem solved - slavery is no more.

Freed Russian serfs were indeed distressed in many cases, which doesn't make their emancipation any less moral.

Uber pays less than minimum wage for many, which can't stand.

I think Uber already chooses when they work and for how long. Uber will have to cap the hours at 8 hrs a day to save on overtime. But the "new employees" can work multiple jobs if they want.

Are there employment laws I'm not aware of that require "interviews"? Most fast food works can become employees by just walking in the door, I think.

This is just untrue. Drivers are free to choose when they want to drive.

Doesn’t Uber decide who to route which ride?

Sure, but Uber varies rates so they want to drive when Uber needs them.

The judge does not understand what a "gig" is. Uber drivers can choose to drive one, twelve, or zero hours in any given day. They can suddenly stop working by simply not accepting any more ride requests. It's the ultimate remote, self-directed, self-managed job.

An employee can't make such decisions; they do as they are told or they are fired.

Uber drivers are private, self-owned businesses that rent out their time and equipment to a corporation on a completely arbitrary basis. The company counts on an oversupply of such drivers to meet demand and does not need to manage the supply other than to continually recruit more people.

I suspect this ruling will be overturned, if not in the Ninth Circuit Court of Appeals, then in the Supreme Court.

The judge certainly does understand what is going here. Secure employment is being replaced with "gigs" to the point where a huge chunk of the country has no stable income and is one week away from homelessness.

I guess that's one theory: Uber, purely by existing, somehow managed to significantly reduce the number of secure employment opportunities available in the US and lured happily employed people onto a life that's inches away from homelessness. In the same vein, if we were to shut down Uber right now and went back to the taxi model we should be able to salvage our economy.

> Uber drivers are private, self-owned businesses that rent out their time and equipment to a corporation on a completely arbitrary basis.

As far I know, this is not true. Uber dictates the prices that drivers can charge, they cannot set an arbitrary price for their own labor. Is that not the case?

California law is pretty clear on the matter. You don't have to like the law (it's a dumb law), but the law is clear.

It's interesting how often Silicon Valley companies blitzscale an unsustainable business model and then leave public investors holding the bag. In the Uber and Lyft case, the time bomb was the regulatory issue. Which investors should have known about, given that these companies have been breaking the law since day 1. Tesla with their full self driving is also an example of this dump the risks on the bag holders pattern.

> then leave public investors holding the bag.

Their labor issues are hardly new. If you did not know about them when you invested in Uber, you didn't even read the news articles, yet alone the filings. You were supposed to price that in to your investment if you purchased.

To be fair, the founder didn't want to do IPO and according to rumors that was the reason why he was kicked out. All the toxic workplace stuff was just a narrative tool to make it happen more easily.

Also, it's a public market. No one is "holding the bag". This may be true if Uber crashed before the IPO because private investors can't easily sell, but once on the public and liquid market, it is the public investor's own choice to invest or divest in these companies.

Somebody chose to pay the IPO price. Nobody could've offered to buy at that price, or interested parties could wait for the price to fall (if the party felt the IPO price was unreasonable). Typically, the underwriters will ensure there's interest at a given price range, prior to the listing. The demand was there.

I place some blame on the companies (and it is their responsibility to list potential risks in their public filings), but also it's somewhat the fault of buyers who scooped up millions/billions dollars worth of shares at sky-high valuations.

Uber has never made money. They haven’t even come close to making money. It’s hard for me to have any sympathy for investors who keep funneling money into a company that defines “success” by lowering their quarterly loss to a mere billion.

It’s not as if this information isn’t public. Everyone can see that Uber can’t make money.

I'm not sure I follow the "holding the bag". The regulatory risks were really obvious when Uber IPO'd last year. If investors lose money because of those risks, it's their fault for not accounting for them.

As other commenters have mentioned, all the company has to do is disclose risks in their public filings and it's up to investors to do their due diligence. It's safe to say that unless they lied to investors, the majority of capital coming in is from people who know what they're doing and are comfortable with the risks.

To be fair, that is the investors' risk and part of their return. Uber very likely didn't lie about their risks in their investment prospects so everyone buying UBER should be aware of the inherent regulatory risk for the business.

I don't agree that investors should be protected from this (or from TSLA assertions), if you are investing you should be more sophisticated than buying stocks blindly, there is a risk to any investment and, obviously, that is why it can be so profitable.

Poeple shouldn't be protecting investors. It's literally public market job and only job to access risk and pick stock. Why are we protecting them from their only job.

Aren’t investors supposed to research what they’re investing in?

Isn't the other time bomb that they aren't profitable?

If Uber and Lyft are forced to classify drivers as employees, doesn't that mean these companies will try to lock them in? For example Uber won't allow their drivers to work for Lyft, and vice versa.

If this is the case, I think Lyft will die very quickly because as far as I know, most drivers prefer Uber over Lyft.

Well... many people work more than one job. IANAL, but I don't think your employer can forbid you from working more than one job.

But Uber and Lyft are direct competitors. I have a clause in my contract that forbids me working for a direct competitor, but I'm a software engineer and I have knowledge of trade secrets. A driver? Not so much.

So I think that a court would find a restriction that you couldn't work for both to be an unreasonable exclusion... but I don't know.

But let's say it was legal. Uber still might not be able to do it. They need onboarding to be as frictionless as possible. Tying their hands by saying they can't also drive for Lyft might make people think twice.

From my experiences I've heard they prefer Uber solely because of surge pricing, so they can make more money. Many drivers only drive Lyft because Uber attracted early on the more price conscious users, who initially likely checked both apps for cheapest price and cancelled more expensive ride; Uber subsidized rides to a higher amount and in more markets AFAIK.

IANAL, but to my knowledge, in California, a company cannot[] legally prevent their employees from working a second job in their spare time, so this kind of lock in would not work.

[] some exceptions apply, mainly related to IP I think.

So I think the biggest question here is whether, as an employee, Uber/Lyft can set hours for a driver. Some specific implications:

* Will we see employees (drivers) get a say in their shifts? An employee can be asked to work a 3AM - 9AM shift for example.

* Can not arriving to shifts on time be grounds for dismissal?

* Can refusing a shift be grounds for dismissal?

* Can incurring unapproved overtime be grounds for dismissal?

* If a driver is incurring overtime, is that reflected in the pricing that consumers pay?

* Can Uber/Lyft systemically set employee hours to like 29 per week to avoid FTE status?

* Will multihoming (ie working for multiple "gig" apps) be grounds for dismissal as a conflict of interest?

I see a lot of ways Uber/Lyft could retain significant power over drivers.

> Will we see employees (drivers) get a say in their shifts? An employee can be asked to work a 3AM - 9AM shift for example. > > Can not arriving to shifts on time be grounds for dismissal? > > Can refusing a shift be grounds for dismissal?

If Uber requires someone to work a "Shift", then they have to pay them for that shift regardless of miles driven. Uber doesn't want that. I don't believe the state is requiring Uber to pay hourly and Uber almost certainly doesn't want to pay people hourly either so none of this is relevant.

> Can Uber/Lyft systemically set employee hours to like 29 per week to avoid FTE status?

This is what most low-wage jobs do so why wouldn't they?

> Will multihoming (ie working for multiple "gig" apps) be grounds for dismissal as a conflict of interest?

Maybe. But since a big chunk of the appeal of working for Uber is flexible hours that work around the hours of other jobs or responsibilities, why would they?

If Uber prevents drivers from doing other gig-jobs, they will have a hard time finding drivers.

In a lot of ways this gives them more power over drivers than they had before.

>Will we see employees (drivers) get a say in their shifts?

How different is it compared to now? I want to drive now but there are no customers.

> Can not arriving to shifts on time be grounds for dismissal?

> Can refusing a shift be grounds for dismissal?

Surely they're free to set lax conditions for employees?

> Uber and Lyft say drivers prefer the flexibility of working as freelancers

What would prevent Uber and Lyft from continuing to let employee drivers set their own hours?

Nothing, but since now they have the added cost of health insurance, minimal wage, etc, it would make more sense for them to arrange pre-set shifts for the drivers to optimize for supply/demand based on time of the day.

Some drivers would like that arrangement, especially if that's their full time job. But some drivers who do this for supplemental income may not be able to meet the demand of the new fixed schedule set by Uber/Lyft.

Because benefits like healthcare are gated on the number of hours worked. Uber isn't going to (and can't possibly afford to) pay healthcare for someone who drives 2 hours a week.

The same reason it doesn't work in other industries: if you pay everyone the same wage and let them pick, everyone will work the quite shifts. This is doubly true for Uber: why would I work a shift when I have to actually drive places and burn gas when I could insist on doing shifts I knew no one would use the service?

So if Uber & Lyft lose their appeals, I’m taking bets on how long it will take before they cease operations in California. I’ll set the over/ under starting at 65 days.

In all seriousness, I’m not sure they will stop operating completely, but I have a hard time imagining this will be good for a large number of drivers who do it part time, or for consumers.

If they have to be employees, then I imagine Uber/Lyft will only want to keep the most productive drivers around. The ones who do already do it full time. They will likely have to enforce real working hours/ actual schedules, based around demand.

This means any of the fringe drivers, who do it part time for supplementary income will be out. They might not have the option anymore of just turning on the app and working a little bit when they decide. This will mean less choice and higher prices for riders.

What would happen if both Uber and Lyft would stop providing the service in California? Would other States follow with that kind of legislation or would it make them less likely to introduce such legislation? I can't imagine the customers would be too happy with Uber and Lyft gone.

The relevant statute:[0]

2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied: (A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. (B) The person performs work that is outside the usual course of the hiring entity’s business. (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

[0] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml...

This seems to pretty conclusively result in Uber drivers being employees, then. Specifically, in B. It's going to be hard for Uber to argue that driving cars is outside of the usual course of Uber's business.

Other than the spirt of the law being drafted to explicitly target Uber/Lyft the letter explicitly clears them.

The corollary to this is that Uber and Lyft will now be able to exert more control over drivers.

Contractors have certain legal freedoms that employees do not, such as setting their own hours, being able to turn down work, driving for both Uber and Lyft, etc -- that last one seems pretty common.

I wouldn't expect those freedoms to last long after they are reclassified as employees. After all, this is Uber and Lyft we are talking about. We know how they behave. Now the government has both increased their operating costs and given them the ability to exert more control over their drivers.

This is an example of regulation getting in the way of innovation again.

It’s like they want the medallion taxi system again.

The way for Uber to defeat this is to fight for single payer health insurance and universal basic income.

How is that similar to the medallion taxi system at all?

Regulation, in general, exists primarily as a response to exploitation.

If drivers felt they were getting paid equitably, had fair dispute resolution, had access to benefits, etc., there wouldn't be a need for this.

There is a solution to the medallion problem: make the taxi licences non-transferable and require taxicabs to be owned by drivers themselves.

This is an example of regulation getting in the way of innovation...

If by innovation you mean the abuse of people forced to work in the "gig" economy, then sure.

It seems inevitable that the government will make reactionary, uninformed decisions. The question is, how do we revert to normal (a freer market) and begin to teach those in power some basic economics lessons? I'm not hopeful that an op-ed by Uber's CEO will help. Perhaps it needs to look more like a grass-roots movement.

This doesn't sound reactionary or uninformed at all. There's a decision that the benefits of stable employment are more important than flexibility. You can be free to argue whether it's better or worse bit it's not about ignorance.

For the vast history of humanity, "Normal" was little more than serfdom or outright slavery. I'm not sure what "normal" you're actually implying, but if you're referring to the post-War era as normal, that's really just a microcosm.

I find it really interesting how rigid this all is. No one is willing to accept that Gig-work might be a thing and that we need a third category of work to cover it. It seems to me (the outside observer) that the US labour market is deeply dysfunctional. But the best anyone can muster is trying to force Uber drivers into the OTHER deeply dysfunctional category...

The reality is that these "gig economy" jobs are neither "Employee" nor "Contractor".

It's a new kind of working relationship, and jurisdictions insisting on one of the old categories can't really have a modern gig economy.

Leave it to California to stick it to a company losing $7 billion per year trying to find its footing.

Drivers are voluntarily entering into the current work arrangement. Why does the government need to have an opinion on the matter?

Regardless of whether this decision is correct or not, Uber's financial situation is of their own making and shouldn't factor in to the ruling.

Yup, it's definitely Uber and their billion dollar investors that need the government assistance here, and not their below minimum wage workforce.

A worker’s will to do something does not necessarily mean that thing is good for the worker or society. Lower classes are currently forced to work for survival, there’s a lot of room for improvement.

Poor management of investments on Uber/Lyft’s end is a burden the lower classes should not be forced to take on.

Is it still voluntary if it happens out of economic desperation?

>Leave it to California to stick it to a company losing $7 billion per year trying to find its footing.

Uber has spent their entire existence dancing in legal gray areas. It's hard to have a ton of sympathy for them when their over-generous re-interpretations of the law bite them in the ass on occasion.

> Drivers are voluntarily entering into the current work arrangement. Why does the government need to have an opinion on the matter?

This is the argument used against every single labor law ever passed. It's not even an argument.

Our government and current economy is poorly equipped to handle the gig-economy. This decision doesn't really help it, but maybe it will motivate some lawmakers to try and address it longer term.

> Why does the government need to have an opinion on the matter?

Because constituents voted for that government which gave them the power to vote employment laws that apply to Uber/Lyft. Or are you contesting the legitimacy of the democratic process, and California's constitution?

Uber/Lyft are free to move their business to another state.

> Drivers are voluntarily entering into the current work arrangement

Irrelevant, not all "arrangements" are legal. By that logic slavery should be legal as well, if the slave enters in a slave agreement willingly, to settle a debt for instance.

What's Uber's path to profitable?

I'm confused how they are violating Assembly Bill 5 (workers can generally only be considered contractors if they perform duties outside the usual course of a company’s business)? Do any employees working at Uber or Lyft currently do any driving?

Their business is providing riders with drivers. The driving is not their business.

This decision technically doesn't find that Uber/Lyft are violating the statute. The analysis considers: (1) the likelihood that the prevailing party will ultimately prevail on the merits; and (2) the relative interim harm to the parties from the issuance or nonissuane of the injunction.

Here, a Superior Court judge found that the State of California is likely to prevail on the merits in the end. The reason being that Uber/Lyft failed to satisfy the prong "(B) The person performs work that is outside the usual course of the hiring entity’s business." Basically, the judge thought that Uber/Lyft is in the transportation business, not some "multi-sided platforms" as they claim to be.

Can this injunction be overturned by a higher California court? Absolutely. Does it look bad for Uber/Lyft in the court of public opinion? Yup, very much so. That's why three's an Opinion piece in the Times today by the CEO of Uber.[0] He knew this was coming.

[0] https://www.nytimes.com/2020/08/10/opinion/uber-ceo-dara-kho...

>Their business is providing riders with drivers. The driving is not their business.

Can't you use this excuse to bypass that clause altogether? eg. a pizza restaurant that classifies its delivery drivers as contractors: "their business is making the pizza. delivery is not their business".

What I'm guessing will happen if Uber/Lyft are forced to treat drivers as employees is that those driving full-time will be hired and everyone else will be let go. The employees will lose some control over what hours they work and may be forced to sign non-compete agreements (not sure if that would fly in CA).

What I don't understand is why Uber/Lyft don't just allow drivers to set their own prices. Whatever their pricing algorithm is it cannot possibly be better than an efficient market of riders and drivers bidding on trips.

Probably because they would end up losing money, drivers would be willing to work for less.

There’s a lot of discussion in this thread about whether or not it’s a good idea to force Uber and Lyft to classify drivers as employees.

I think that discussion is a tangent the real issue.

California’s elected officials already ended that discussion by writing it into law. If you live in California and don’t like the law you can call or write your representative and see if they’ll repeal or change it.

But that law is the law. It seems unlikely that Uber and Lyft will win this appeal.

What we have here are two corporations ignoring the law because they don’t agree with it, and the “hire lawyers to endlessly fight this” number is lower than the “paying payroll tax for all our drivers” number on the spreadsheet.

Just my opinion, it’s frankly disturbing how many people are ready to jump to these companies’ defense. They’re proclaiming imminent disaster, that this business model can’t possibly work with W2 employees, but I doubt that’s true.

Nothing stops Uber and Lyft from allowing their W2 employees to make their own schedules, and nothing stops them from hiring directly from the app with quick approval. They just don’t want to pay their share of the payroll tax, and they don’t want to provide family and medical leave that their upper caste employees enjoy.

From AB5 (and yes, I posted this in another topic today, but few here seem to know it.)

...shall be considered an employee unless the hiring entity demonstrates that all of the following conditions are satisfied:

(1) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(2) The person performs work that is outside the usual course of the hiring entity’s business.

(3) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

#2 is the key issue for Uber. Uber claims to be merely a booking agent, not a ride service. This is not believed by their customers, drivers, or the courts. Nor is it the message on Uber's web site, which says "Sign Up to Ride - Reliable rides in minutes". Uber is in the taxi business.

Uber has been trying to get around #1 by allowing drivers a bit more flexibility. A tiny bit. Not too much.

Seems like crux of this disagreement is that there is a large group of drivers that do it full time as their primary source of income, and they want protection from all the part time gig workers that flood the market and depress their earnings.

Changing to employee model will result in fewer drivers (better protected), but lose out on the gig workers or even those doing multiple jobs just to make ends meet.

Before just randomly spouting out whether you personally feel like Uber and Lyft are employers, it might be helpful to look at the ELI5 criteria California lists at https://www.dir.ca.gov/dlse/FAQ_IndependentContractor.htm

> Under the ABC test, a worker is considered an employee and not an independent contractor, unless the hiring entity satisfies all three of the following conditions:

> The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

> The worker performs work that is outside the usual course of the hiring entity’s business; and

> The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

It's not enough to just say "they feel like they don't work for Uber" you have to put forward a more coherent case than that.

That's the bill that cost hundreds of freelance journalists their jobs in California, right? I wonder what the full consequences of it are going to be.

This is oddly specifically drafted to capture gig economy workers like this.

My employer employs people (on a permanent ongoing basis) who meet some of these conditions to be classed as an independent contractor...

> labor unions and elected officials contend this deprives them of traditional benefits like health insurance and workers’ compensation

This is the real problem that needs to be fixed. Most other developed nations have affordable, if not universal health care that isn't tied to their employment. The status of Lyft/Uber drivers wouldn't be as much of an issue if this was solved.

This debate seems to be about what's a user vs. a contractor vs. an employee. Does the fact that I walk a Google device around enabling Google to record rich profitable data, in exchange for extracting some value from their services, make me a contractor or an employee? Because for sure it doesn't sound like it makes me a user.

Edit: spelling.

It would be interesting to let passengers have a slider that let them show how price sensitive they were and the drivers were able to set a minimum price for total (driving to passenger + driving to destination). Maybe you'd be willing to wait for 15 minutes if Driver B would be cheaper than Driver A, even though Driver A was 3 minutes away.

Even better (if drivers are really treated as contractors) would be to show you the rates from Driver A, Driver B, and Driver C and you can pick one:

Driver A: 23 minutes, $20 Driver B: 35 minutes, $15 Driver C: 30 minutes, $18

The issue for Uber/Lyft is they're focusing on the ride and that's nice - I don't know that drivers rejected me since they're just showing the ride cost from Point A to Point B. But that ignores actual driving time for the drivers, plus that they might end up in an undesirable area.

If you think about this dispassionately, the biggest likely effect of implementing this is as follows:

Uber rides become more expensive.

That money largely will go to the government in the form of various payroll taxes.

No one will remember this in a couple of years.

Because of the forgetting, we will in the future be skeptical that labor compliance was so important to the price. The idea that gig workers could have ever existed without all this compliance will seem alien and barbaric.

If anyone suggests removing all this compliance, they will be called a free market purist.

It’s odd, because I think most people actually think what is going on with gig workers right now isn’t horrible oppression, but rather adults agreeing to working conditions and having a ton of freedom.

I don’t think we will see it that way in the future. And I don’t think we will ever be able to deregulate this after the fact.

I mostly agree, but shouldn't the competition between states in the US be able to lead to the best solution? Maybe that is overriden by the large variance in the bag of different things (regulations etc.) one gets from being in one particular state vs another. This does not play well with the low dimensional action space of moving from one to another state.

Maybe it is time to think about "virtual" citizenship so there is competition between states on may distinct levels

Uber wants you to believe that the cost of paying drivers as employees is that you won’t be able to get a car in most places.

This can’t be true.

Uber replaced a poorly run system that actually covered most places and employed it’s labor force.

If Uber and other car services were forced to recognize their workforce as employees, there would be market incentives to support doing so.

American taxpayers pay for Uber and Lyft driver’s subsidized medical plans and other public benefits they receive because they are not paid as employees with the right to organize. Your ride may seem cheap, but you pay for it in your tax bill.

If you mean taxi drivers, apparently they were usually contractors, until this new law was passed, anyway.

https://www.sfchronicle.com/business/article/California-s-gi...

I don't know how a judge can so cavalierly grant preliminary injunction in this case when the facts have not been examined.

Anyway, it must be due to the recent law passed in California. Ultimately the citizens of California determine its shitty laws, and they can enjoy their rideless future and the bad old days of taxi cab monopolies because they went along with taxi medallion holder propaganda.

i hate living in california so much. it’s terrible being tied in a place due to family despite terrible governance

As usual, these laws show the broken underlying system and then trying to patch it with more broken patches.

I'm sure someone has thought of this, but why don't we have ridehailing apps where the contract literally is between the driver and the passenger(s)? The app can merely suggest a rate but the driver can set whatever price they want. The app takes a very small finder's fee.

What if drivers can't make a living wage using such an app because there is too much supply driving prices down? The app will be crucified for "exploiting drivers"

This has been going back and forth too much. I am not even sure why single person (judge) wants to make such sweeping decisions. These drivers work on their own whims. They may decide to show up or not. They can cut short day anytime. Uber or Lyft don’t require them to start their shifts and work 40 hours a day. The drivers don’t commit to any full time work schedule. So at best things are muddy and lawmakers needs to come together instead of individual judges start writing laws according to their individual whims and philosophy. This will most definitely be get challenged and ultimately SC will not want to hear this anyway so it’s just massive waste of time for everyone. Only lawyers are getting rich in the process.

Bear in mind that these ridesharing companies are basing their entire business model vs taxis not on some dumb app, every taxi company tries to get you to install its app. Instead its innovation, is reducing labor and capital costs in order to offer cheaper rides than taxis to corner the market. In order to reduce capital costs, they have workers bring the cars. To reduce labor costs, they pay less. Uber is a cash inferno and they have been fighting against employee status because for various reasons the workers get paid more overall.

Honestly, I've lost track of the actual argument in this app-taxi space. Is it primarily health insurance? What is the employee benefit that is the crux of the issue for the average driver?

What does this mean for other on-demand type of businesses like Handy (on-demand cleaning) that also employ Independent Contractors? Would they bring on their ICs as employees or would it be too cost-prohibitive and thus they'd opt not to operate in California?

Finally, California tends to set trends for the rest of the country. Would we see other states go the California way and change classification of ICs to employees?

Drivers in less population-dense areas such as my own keep both the Uber and Lyft apps open in order to fill enough time. Would this still be possible if they were an employee?

If I were Uber and Lyft I'd dropped the issue in California and instead of paying drivers directly, pay intermediary companies with full time drivers on their payroll.

I would agree that someone who drives for Uber about 40 hours a week is effectively an employee, however it leaves out a lot of drivers who only want to offer certain rides at certain time. For example, if every weekend I drive to my vacation home, which is in an area not practically reachable by public transport, and offer a ride, does that make me an employee? That's nonsense.

Why doesn't Uber just let Californian drivers set their own rates? Would it really be such a huge deal to their business model if drivers could set their own price per mile, or similar? Uber still takes a percentage cut and I assume the free market cost would work out to be in the same ballpark as Uber's pricing model.

Uber provides a platform connecting riders with drivers, not employment. The driver is employed by the rider.

The driver is free to work his or her own hours, routes, work or not work etc.

Uber overseas the platform to ensure it operates properly and there won’t be victims.

There are many of these platforms. It makes no sense to force LinkedIn classify job seekers as employees.

One of test in so called ABC test says

"B test requires that the worker performs work that is outside the usual course of the hiring entity’s business"

Isn't this a bad test in the first place. Let's take game studios, they need contract developers for a game, wouldn't that make them fail the test and make them an employee?

What a lot of people in this thread dont seem to understand is that the article is not making the case for Uber/Lyft drivers to be classified as employees (traditionally cab drivers have almost always been self-employed contractors), its simply reporting that under the current arrangements, Uber/Lyft drivers clearly _are_ employees. Legal scholars frequently cite the ability to set a price as a key criterion for being classed as a contractor. Maybe all Uber needs to do is to introduce some kind of "bidding" system in order to maintain the status quo. (They probabably wont though because Ubers entire value proposition to its shareholders rests on its ability to drive down the pay and conditions of its drivers)

You know because of this regulation, uber already introduce price setting to drivers.

This is literally what drivers do today in California.

To satisfy the "C" of "ABC", I reckon this provides an opportunity for small companies to start up, with drivers as employees, to contract out driving work for both Uber and Lyft.

I kind of hope that both companies just decide to not shut down the app in California. Otherwise I’m nervous that other cities might end up subsidizing the California market.

CA subsidized others before. Time's up

I'm not surprised. Uber and Lyft try co classify their workers as contractors when it comes to taxes and benefits, yet undermine workers abilities to actually be independent contractors when it suits them to do so. If you want to be a platform that helps connect drivers with passengers, then be that app. You can't then go in and set rates, not pay per client, not give contractors the ability to work for the customers they want, etc. These companies have such a strange culture of hubris and trying to skirt the law, its only a matter of time for that to catch up with them.

Part of the reason Uber and Lyft work so well for riders is due to how they structure the relationship between drivers and their platform. Drivers are required to conform to the platform's payment structure. This enables predictable up-front pricing for rides before they are even requested. This enables the surge pricing system, which rapidly ramps up supply to match surges of demand.

Drivers can decline rides at will, but if a driver excessively declines rides there is punishment for this. This makes perfect sense as the platform calculates projected rates and surge pricing based on driver availability. Unnecessarily declining rides provides a poor user experience for riders, and riders ultimately can choose to take their business elsewhere. This means drivers need to be disincentivized to decline rides in order to maintain the quality of the platform.

Ultimately the relationship between driver and platform is structured to ensure a consistent driver and rider experience. The benefits arguments are more interesting, and maybe there does need to be a system for driver benefits like health insurance if they are working full time for the company, but ultimately these costs will fall squarely on consumers.

Maybe we should consider for a second that the law is broken (hint: it is).

There is another post on the front page from The CEO of Uber. It seems like the NY times article was written as a way to control the narrative?

Look to history to see why Uber/Lyft/gig-economy is a backwards step for society. We've been here already.

Historically low wage rise. People lining up hoping to be picked for the next piece of work.

It ended up with the labor movement to fight for 40 hr weeks, protections for employees etc.

Uber hasn't done anything new in terms of labor use. Merely communication and organisation.

But society judged the labor use to be a poor outcome in the past so where do we think it will go now?

"Uber and Lyft say drivers prefer the flexibility of working as freelancers" laughs in german

These companies were losing billions already. What will happen with them now?

Uber and Lyft are exploiting a system never intended for low paid workers.

I can't see Uber not doing everything they can to fight this

1099 contracting is a cancer that's eating the entire sub-$50K job market. Most of my friends are 1099 contractors and every single one of them wishes they weren't.

dont contractors get to write off their car? if they are employees they no longer get write offs correct?

I hope they retroactively collect unemployment tax from both companies. They’ve been playing this shell game for long enough.

Funny, unlike whatever these busybodies in California are doing, I'm actively working to go the opposite direction in my own life - from full time work to the gig economy. I'm hoping to write about this some more, but so far so good a year and a half in. Here are a few directions I'm working towards:

  - 40 hours -> 20 hours or less
  - boss -> employee-owned
  - office -> remote or shared workspaces
  - set schedule -> set our own schedule
  - being on call -> tech to free us from obligation
  - brands -> anonymity
  - benefits -> societal evolution towards public healthcare
  - egalitarianism -> shared prosperity
  - job security -> a scalable job market in the gig economy
  - scraping by to make rent -> substantial cashflow (donating plasma, Uber, Lyft, Grubhub, Airbnb, etc etc etc)

I think that last point is the one that the status quo will go after, since they always start with the $$$. I'm dismayed that California has chosen to go this route, as they used to be at the forefront of tech and innovation.

The above points are loosely based on concepts from Burning Man (although I've never attended, sadly). Mostly regarding humanism and decommodification.

Can anyone think of some more points to add, or other sources of cashflow?

Interesting that Dara wrote this holier-than-thou opinion piece as this came out. I find it hard to think this is a coincidence.

https://www.nytimes.com/2020/08/10/opinion/uber-ceo-dara-kho...

California gets more stupid by the day, I have no words for how stupid this is.

Uber CEO: "Gig workers deserve better!"

CA: "Uber drivers are employees, how bout dat?"

Uber CEO: NOT THAT MUCH BETTER....

"Uber and Lyft say drivers prefer the flexibility of working as freelancers"

Doesn't this lawsuit prove otherwise?

This lawsuit isn’t being filed by drivers, according to the article it’s being filed by “the California Attorney General Xavier Becerra, along with city attorneys of Los Angeles, San Francisco, and San Diego”.

I mean drivers may or may not prefer freelancing, and certainly Uber will say whatever supports their case, but I don’t think the State suing Uber proves what drivers want in any way.

Short answer is no. This lawsuit, and particularly this motion for preliminary injunction, was filed by the State of California--not drivers.

>Doesn't this lawsuit prove otherwise?

No, you can have a lawsuit for anything and from anyone. All this article suggests is that some Uber/Lyft drivers want to work as full time employees.

In the case of this suit, it was filed by the California government, not drivers.

Reply on news.ycombinator.com