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Comment by plankers | Hacker News Reader

>It's very possible that Uber/Lyft will decide that the overhead of being an employer is not worth the reduced revenue, it's not like they're making a lot of money in the first place.

Here's the thing... they're not making _any_ money in the first place. Every single segment of Uber's business is loss-making. So AB5 will uh, force a loss-making, VC-capital-burning, parasitic business to be slightly more loss-making at the cost of providing a living wage to drivers?

The whole situation is frankly absurd.

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The point of labor laws is to force companies to conduct business in a way that doesn't infringe on the rights of employees. Making certain business practices financially unsound is the point.

Uber/Lyft have found a loophole that enables them to skirt by one of the "Riders Must Be At Least This Tall" measuring sticks, and the law basically says: No, you actually have to be this tall, sorry.

I don't see what the issue is.

It's a backwards way of going about it. Instead of forcing anyone who ever wants to hire a human being to pay for their health insurance, the government should be providing it for everyone.

If I want to hire teenagers on my street to mow the lawn or babysit the kids, should I be forced to pay them benefits as well?

The alternative is the way California is heading: instead of taking care of people's needs directly, it's regulation after regulation to lock everything up so that only entrenched corporations with the scale to afford all these benefits can afford to operate.

No, that kicks in once you have 50 or more of them and they work for you full time.

> The alternative is the way California is heading: instead of taking care of people's needs directly, it's regulation after regulation to lock everything up so that only entrenched corporations with the scale to afford all these benefits can afford to operate.

These companies spent almost 200 million for this proposition (highest in California history, and since it's California - highest in all of the states). They are not poor mom and pop shop.

> I don't see what the issue is.

The issue is that uber and lyft will likely shutdown in much of california.

I guess you can think that this isn't bad, if you want. But I can assure you that many of their drivers, and customers, do not agree with you.

> Making certain business practices financially unsound is the point.

Ok, fine. But most of their california drivers probably disagree with you that it would be good for them to be fired. Most of them probably do not want to be fired. Which will likely happen.

> I guess you can think that this isn't bad, if you want. But I can assure you that many of their drivers, and customers, do not agree with you.

I'm not sure about that: https://www.cnet.com/news/uber-drivers-sue-they-say-company-... and who cares about the customers? Many of their customers wouldn't have problem if Uber was using a slave labor as long as price is low, and ultimately that's what it is about.

> who cares about the customers?

Well the customers do. Most people are customers are something.

And most people would say that the opinion of customers matter.

If your opinion is "I don't care about the opinion of people who buy things", I guess you can feel this way. But most of society and our legal system regarding businesses is targeted toward consumer welfare.

I think you might be conflating two related things. The unit economics of Uber/Lyft, in principle, work out. If there was no way for them to make a profit nobody have invested in them.

They're currently unprofitable in the same way that Amazon spent a decade being unprofitable; every cent was invested back into growing future revenue. It's a little different; if Uber flipped their switch and started taking a profit Lyft would swoop in and steal away market share. But the unit economics do work out, I'm claiming that once prop 22 fails there will be markets for which the unit economics will no longer work out at all.

It’s not axiomatic that Uber is supposed to exist. I think it should, but that is a matter of opinion.

It’s like Walmart saying, “if we pay a living wage we’ll become unviable!” Well, maybe you should be. Maybe stuff shouldn’t be that cheap.

This is what always surprises me on HN when talking big tech. Same level of arguments as an online news article.

Have you even read their latest releases? Ridehailing in US as a singular unit is insanely profitable. The take home is incredible.

Look up "hollywood accounting" - making money is bad, that means paying taxes - companies like uber make tax deductible losses.

https://thespinoff.co.nz/business/13-01-2020/uber-is-a-case-...

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