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If Lyft can't keep its drivers as contractors, it may never be profitable

latimes.com

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Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#41

Post by avree »

badfrog wrote: post #30
newprint wrote: post #7

I'm kind of torn on this. My father has been truck driver his entire life and for the last 20 years worked as a contractor, while driving his own truck and trailer, since it gives him more $$$ than average driver who works as employee. However, he has non-existent social net. No health insurance, no pension benefits. If he out of work or has serious health issues that ground him for months, he has to dig into savings…

> So, if Lyft driver who was "gigging" for them for years gets sick and he is out of work, what kind of help would he get ? None, at least in US. Honestly, the same is probably true for most full-time and part-time employees in the US.

Employers are mandated to give health insurance to full-time employees after they reach a certain size in the US. So no, it is "probably" not true.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#42

Post by toomuchtodo »

newprint wrote: post #7

I'm kind of torn on this. My father has been truck driver his entire life and for the last 20 years worked as a contractor, while driving his own truck and trailer, since it gives him more $$$ than average driver who works as employee. However, he has non-existent social net. No health insurance, no pension benefits. If he out of work or has serious health issues that ground him for months, he has to dig into savings…

Is an ACA marketplace plan available to him? And subsides based on income? I know people in their 60s not yet on Medicare with $800/month premiums with $600/month tax credits based on their income, so their premium nets out to $200/month.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#43

Post by ams6110 »

seanmcdirmid wrote: post #11

This is really one of the bad problems with the gig economy in the USA. Even Switzerland, which requires private insurance, disallows group plans to detach insurance from employment, making labor markets more liquid and flexible (as well as preventing huge distortions in the individual healthcare market). Your dad does have one social net: even 1099's must opt into SS and Medicare (paying both employer and employee s…

They can deduct the employer share though? Or is that just self-employment taxes?

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#44

Post by AlexTWithBeard »

scarface74 wrote: post #24
dkashbfldls wrote: post #22

Earlier quoted context omitted.

Any alternative to employees is even more inhumane and enables explicit exploitation, as uber and lyft do (aka the gig economy). What would you suggest as a meaning for this third type of workin class?

How about we have universal health care like every other industrialized nation?

A universal health insurance may be unfair, non-american, going against a free market ideology and endorsing nanny state.

But it would relieve so many problems, from homelesness to our overly litigious society, that I'd vote for it with both hands.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#45

Post by ams6110 »

badfrog wrote: post #37
akulbe wrote: post #29

Earlier quoted context omitted.

He probably can. However, there's a BIG difference in the cost and coverage he'll pay and get between what he has for options as a self-employed person doing gigs, and what he'd get on a group plan with a company, as an employee. Here's some data. I've been contracting for 4 years, and paying for my own insurance. Mediocre medical for a family of three: Year 1 & 2: $970/mo. Year 3: $1167/mo. Year 4: $1410/mo. $BIG_CL…

> My cost for health insurance on the group plan? $560/mo. Is that the full cost, or is your employer also paying something?

That's his cost. The employer is probably paying twice that much more behind the scenes. Money they could otherwise be paying him.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#46

Post by badfrog »

avree wrote: post #41
badfrog wrote: post #30

Earlier quoted context omitted.

> So, if Lyft driver who was "gigging" for them for years gets sick and he is out of work, what kind of help would he get ? None, at least in US. Honestly, the same is probably true for most full-time and part-time employees in the US.

Employers are mandated to give health insurance to full-time employees after they reach a certain size in the US. So no, it is "probably" not true.

They're not required to pay you while you're unable to work. And aside from some fairly narrow exceptions in FMLA, they could just fire you for being sick.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#47

Post by denormalfloat »

baby wrote: post #25
denormalfloat wrote: post #23

Earlier quoted context omitted.

How much help did he earn? How much does he deserve? The money a driver gets paid is the help. There is a market for non-fulltime jobs that would not exist at all if it was forced to be full time. Forcing Lyft to hire employees instead of contractors won't mean there will be more workers with a safety-net; it means there won't be any Lyft. That would be bad for both drivers and the people being driven.

“How much does he deserve”. Welcome to America. Honestly. This market is not a problem in European country where you get free health care. Why would uber/lyft make an exception for the US? If they can get away with it of course they will.

As a rider, I am going to pick the cheapest ride. If Lyft pays their drivers less, it's because I pay Lyft less. If society as a whole picks Lyft, then it's society as a whole paying Lyft drivers less. I view Lyft more as a market maker rather than a company. In that sense, I agree with you, the market isn't the problem. The people to blame are riders, who got fed up with expensive and bad service taxis, and wanted cheaper rides. Lyft (and Uber) delivered on that, but they are only reflecting the will of us as riders.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#48

Post by AlexTWithBeard »

jackschultz wrote: post #6

Anyone else see these and think about how maybe there should be some other type of worker other than employee or contractor? Those are hard definitions, and creating laws to reflect this type of worker is incredibly difficult considering people and companies figure out loopholes, but really feels like there should be another category to go with this type of work that's going to become more and more common.

Like... what?

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#49

Post by seanmcdirmid »

ams6110 wrote: post #43
seanmcdirmid wrote: post #11

This is really one of the bad problems with the gig economy in the USA. Even Switzerland, which requires private insurance, disallows group plans to detach insurance from employment, making labor markets more liquid and flexible (as well as preventing huge distortions in the individual healthcare market). Your dad does have one social net: even 1099's must opt into SS and Medicare (paying both employer and employee s…

They can deduct the employer share though? Or is that just self-employment taxes?

Basically they are self-employment taxes, which is just the employer side of payroll taxes.

Re: If Lyft can't keep its drivers as contractors, it may never be profitable

#50

Post by lykr0n »

RodgerTheGreat wrote: post #13
Judgmentality wrote: post #8

Earlier quoted context omitted.

I never understood why anyone thought otherwise, unless you believed self-driving cars would be ready by now. I'm not going to pretend to understand the intricacies of Lyft and Uber and their experiments with food delivery, carpooling, and other endeavors. But scaling up does not solve the problem of paying your contractors more than they're making you - in fact it only scales up the problem. Granted, I've thoroughly…

Even if self-driving cars were ready right now, why would Lyft or Uber have an advantage? In theory, their current competitive edge over taxi services comes from pushing externalities to drivers. If they had to worry about owning and maintaining all their cars, suddenly they're in a new and very capital-intensive line of business. I'd expect at least one of the established rental car chains- which have physical infra…

There was a great post about Avis (I think) who had an incubator to explore ideas about what they could do with their fleet of cars. I think if you looked at rental companies, they are actively thinking about the future.
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