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Comment by momokoko | Hacker News Reader

> No matter what you think of the morality of the existing setup, the failure of Prop 22 will force some large structural changes to how it operates.

No it won’t. Uber and Lyft will operate identical to how it is today. They will outsource the HR and employment issues to staffing agencies.

Drivers will simply have to be “employed” by one of these agencies and then go about driving the same way they are now. These agencies will likely allow their “employees” to drive for whatever companies the agencies have agreements with during their shift and call everything over minimum wage “incentive pay”.

Uber, Lyft etc will contract these staffing agencies and pay them per ride instead of the drivers and the agencies will passthru that income minus their cut.

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This is an interesting theory and I'm excited to see it tested. I like how it lets you share supply between multiple platforms but if the problem is that supply has been simultaneously reduced and made more expensive I'm not sure that the extra flexibility afforded by using an agency makes much of a difference.

You can't defeat a structural problem with staffing agencies. If the drivers are the employee of anybody, they don't get to choose when they work, or how often, or where. Some of the drivers need that, so they lose work. The riders in the areas or times served by those drivers can no longer get rides, or have to pay more, and then more people drive drunk and lower income people pay more for transportation.

If the employer has to provide benefits, those costs have to be passed on to the riders, even if there are drivers who don't need those benefits, e.g. because they get them through a spouse or a second job. Then costs increase even more and there aren't as many riders, which means there aren't as many drivers and even more lose their jobs.

How is a staffing agency supposed to solve any of that?

> If the drivers are the employee of anybody, they don't get to choose when they work, or how often, or where. Some of the drivers need that, so they lose work.

There's nothing about having a staffing company involved that forces drivers not to pick when they work or how often or where. When you're a contractor, your contracting company cannot enforce those things, however, when you're an employee, you absolutely can have those things -- or not -- at the discretion of your employer subject to the terms of your employment relationship.

All having a staffing agency involved does is force a minimum wage, and an employer-employee relationship. They, the staffing company, take on fares from Uber and disperse them across their drivers. They pool the fares to provide a minimum wage and benefits, and then anything else above that gets distributed to the driver who created the specific revenue as "incentive pay" in exactly the way the parent suggested. Or as profit sharing proportional to work performed.

There's nothing crazy or unprecedented about this.

tl;dr: The company contracting you cannot tell you when and how to work, an employer can -- but does not have to.

> They pool the fares to provide a minimum wage and benefits, and then anything else above that gets distributed to the driver who created the specific revenue as "incentive pay" in exactly the way the parent suggested

Zero chance the bulk of the surplus gets distributed to the drivers. I know of a few New York medallion era brokers keeping an eye on the California market, and they aren’t doing it because they plan on passing along profits.

That's an opinion, not fact. The charter of such an organization or co-op could be written to that effect, and in fact, Uber and Lyft could refuse to do business with employers that didn't support that structure. My point isn't that employees are immune to being screwed over in such a structure, my point is that they do not have to be which is what the parent post was suggesting.

But they do have to be, otherwise they would go out of business. If someone can choose when and where to work and they choose a time and place where people mostly don't need rides, they mostly don't do any work or make any money. Which they may be fine with if they're willing to be signed in for 40 hours a week but only work 10.

If you force them to a fixed hourly wage, you can't hire that person and still let them work those hours in those places, because you'd be paying them for 40 hours while they're still only working 10. So the now money-losing employee either gets a pink slip or has to work different hours.

A fixed hourly wage is not mandated by this rule, a minimum wage is. So you do this, ready? Everyone continues to drive exactly the way they do right now. All revenues go into one big bank account.

Next, you provide incentive payments for drivers proportional to the extra amount they brought in above and beyond the minimum wage for the hours they drove, as a slice of the pool of revenues after subtracting out minimum wages and benefits. Then you stack rank your drivers at the end of each half, and fire the bottom 20%.

I'm not even advocating this approach, I'm just saying there are ways of incentivizing this that are shown to work. This part here isn't rocket science.

True, it doesn't have to tell you when you work. But it does have to pay you a minimum wage. If a staffing company said: "work whenever and we'll pay you a minimum wage", then drivers would probably routinely drive at times they found pleasant, not profitable times for the staffing company. In this case the staffing company would start up restrict the hours a driver could drive.

A staffing company wants to reduce the amount of unprofitable hours driven. To do that they have to restrict working hours. It's not guaranteed but a highly likely outcome of the set up.

> ...then drivers would probably routinely drive at times they found pleasant, not profitable times for the staffing company.

Are you sure? Have you ever worked in a job at the mall that was relegated to telling you to "I dunno, why don't you come in when you're feeling pleasant or comfortable?" Similarly, airlines that schedule flight attendants don't tell them to come in whenever they want. You can fire people who are your employees, yeah? And you can pay people who outperform more.

Kind of dead thread but... If the company says to you: "you can work whatever hours you want!" And then turns around and says, "oh, but if you work those unprofitable hours, we'll fire you.." then how exactly is that not restricting the hours that you work? You can't have both.

> If the drivers are the employee of anybody, they don't get to choose when they work, or how often, or where.

This is commonly repeated and there’s nothing inherent an employment forcing fixed hours or less flexibility. It’s false.

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