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California appeals court rules Uber, Lyft must reclassify drivers as employees

reuters.com

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Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#61

Post by omgwtfbyobbq »

Judgmentality wrote: post #52
not2b wrote: post #16

If Uber and Lyft don't win their proposition, they can either agree to classify their drivers as employees, or some company that is willing to classify drivers that way will take over the market. People are commenting as if app-based ride share will no longer be available. It might cost more, but it wouldn't be much more.

> People are commenting as if app-based ride share will no longer be available. It might cost more, but it wouldn't be much more. Uber lost $8.5 billion dollars in 2019. Think about that. Uber is losing the better part of a billion dollars every month. They are hemmorrhaging money at their current prices. It will cost a lot more for this to be profitable when you consider how much more expensive this will make the dr…

A quick search puts them at 6.9 billion rides in 2019, so profitability should come with a $2/ride increase.

I think their current rates are a lot, so their current rates plus $2 are also a lot, but I think most riders would tolerate it.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#62

Post by syntaxing »

This has always been an interesting discussion morally. On one side, our free market should be able to allow any drivers to not work for any ride sharing company if they choose not to. On the other hand, the question I haven't been able to answer is if they truly have viable options or if the workers understand they are making under minimum wage. It's hard to balance between the freedom of choice and regulations to protect the people. At one point we (as in the US) decided child labor is unacceptable at the expense of household income dropping for the benefit of the future. Likewise, how much regulation are we willing to impose on the private market for the benefit of the workers and are there national growth consequences. I'm not sure how this will play out but it will be interesting to see.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#63

Post by whyenot »

ende wrote: post #54
whyenot wrote: post #41

Earlier quoted context omitted.

Many legislators come to the job with previous experience serving at the county or city level. Once they have are elected at the state level they can serve for up to 12 years. To me, that seems like a reasonable balance between giving them enough time to gain experience while not allowing them to stay in office forever and amass the power and corruption that led to the passage of term limits (proposition 140) in the…

The academic literature is overwhelming support of the argument that legislative term limits have zero value. They only lead to inexperienced, ineffective legislators.

It would be nice to have a citation or two from said academic literature.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#64

Post by wpietri »

johnloeber wrote: post #32
youeseh wrote: post #30

Earlier quoted context omitted.

The difference is in the power imbalance. Taxi drivers hold much more power and control over their ability to earn compared to Uber and Lyft drivers.

No they don't. Taxi drivers are exploited end-to-end. There's a reason why the medallions eclipsed a million dollars in price. The drivers have to lease their cars on a daily basis, and start at around $160 leasing fee in the hole. They're driving for many hours before they start making any money at all. That's not "power and control", that's getting totally screwed. And every Uber or Lyft driver who has ever driven…

Have you actually talked to taxi drivers about this? Pre-plague, I've talked with hundreds about their views on their work, and at least dozens about Uber. Were cab companies beloved? Mostly not. Did drivers see themselves as being "totally screwed"? Definitely not. And they almost universally despise Uber.

The daily vehicle rental approach in their eyes has advantages. Number one is zero capex. Number two is predictable, controllable opex. Number three is a hard cap on the number of drivers on the road, meaning they have a good idea of the supply/demand balance. Number four is competition; if they didn't like one cab company, they could switch to a variety of others. And number five is regulation: if they were having issues with a cab company, they could take it up with the taxi commission.

Contrast this with Uber/Lyft, which is a dupoly with almost no regulation, few constraints, and which has shifted core capex and opex onto drivers, as well as most of the risk. With power and incentive to push driver pay well below sustainability. And of course a history of labor exploitation and the willingness to spent approximately infinite money to lock that exploitation into law.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#65

Post by randmeerkat »

dpc_pw wrote: post #51
haroldegibbons wrote: post #36

This ruling could pave the way for a model that is good for everyone. As of now the gig economy exploits the poor[0]. Unless you think making 70% less than minimum wage is fair. 0: https://web.archive.org/web/20180302041610/http://ceepr.mit....

Is not being able to work for Uber and being unemployed more fair? Or do you or California's government have any more fair deal to offer these people?

These zero sum arguments are pointless and needlessly inflammatory.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#66

Post by lostcolony »

whyenot wrote: post #53
johnloeber wrote: post #32

Earlier quoted context omitted.

No they don't. Taxi drivers are exploited end-to-end. There's a reason why the medallions eclipsed a million dollars in price. The drivers have to lease their cars on a daily basis, and start at around $160 leasing fee in the hole. They're driving for many hours before they start making any money at all. That's not "power and control", that's getting totally screwed. And every Uber or Lyft driver who has ever driven…

I don't know about other major cities in California, but in San Francisco, taxi medallions were free until Gavin Newsom decided to "monetize" them in 2010. After that the city sold them for $250,000 each while providing low interest loans (via a local credit union) so drivers could pay for them. When Uber and Lyft arrived, their drivers didn't need medallions and there were no limits on how many drivers either compan…

They were "free", but they've always been supplied lower than demand (that is, the number of permits grew slower than the population's need for taxis did), an arrangement that worked well for cab drivers since it allowed less competition, and a profitable secondary market for the medallions. Lyft/Uber/etc gutted that demand.

Not saying 'good' or 'bad', just, you can't blame the city for the price of the medallion; it already had a high one due to the demand outstripping the supply. Makes sense that the government would seek to profit when it supplies them, given that.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#67

Post by Judgmentality »

omgwtfbyobbq wrote: post #61
Judgmentality wrote: post #52

Earlier quoted context omitted.

> People are commenting as if app-based ride share will no longer be available. It might cost more, but it wouldn't be much more. Uber lost $8.5 billion dollars in 2019. Think about that. Uber is losing the better part of a billion dollars every month. They are hemmorrhaging money at their current prices. It will cost a lot more for this to be profitable when you consider how much more expensive this will make the dr…

A quick search puts them at 6.9 billion rides in 2019, so profitability should come with a $2/ride increase. I think their current rates are a lot, so their current rates plus $2 are also a lot, but I think most riders would tolerate it.

This is ignoring how much more expensive it will be if the drivers are employees. I don't know how much that is, but I'd imagine in addition to those $2 it would likely add another 30% or so to the total cost (someone more knowledgeable please chime in with a better estimate). Of course that's assuming you're operating at Uber's scale (there are still overhead costs), but since prices go up you aren't, so now the prices need to go up even more!

I don't know where the equilibrium point is, I just know it's higher than what Uber is charging. My extremely hand-wavy guess is rides would need to cost around 50% more.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#68

Post by dybber »

dpc_pw wrote: post #51
haroldegibbons wrote: post #36

This ruling could pave the way for a model that is good for everyone. As of now the gig economy exploits the poor[0]. Unless you think making 70% less than minimum wage is fair. 0: https://web.archive.org/web/20180302041610/http://ceepr.mit....

Is not being able to work for Uber and being unemployed more fair? Or do you or California's government have any more fair deal to offer these people?

That’s not the alternative scenario.

The alternative scenario is that either Uber/Lyft or another company abides by the rules, and deliver the same service with hired employees. The demand is there. Yes, it will become a bit more expensive for the consumer, but that price difference, is what it costs to give decent benefits and rights to workers.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#69

Post by wpietri »

bhb916 wrote: post #57
not2b wrote: post #16

If Uber and Lyft don't win their proposition, they can either agree to classify their drivers as employees, or some company that is willing to classify drivers that way will take over the market. People are commenting as if app-based ride share will no longer be available. It might cost more, but it wouldn't be much more.

But what about the driver who doesn't want to be classified as an employee? What right do they have? Less trite - my nephew is in his mid-twenties and appreciates the flexibility that food delivery and ride sharing allows him. Is legislation that outlaws that an improvement?

What makes you think Uber and Lyft won't find ways for flexible employment? It's one of their big draws. I'd expect more faith in market-driven innovation here on HN.

I've been an independent contractor for large parts of my professional life; I think it can be a great setup when it's truly independent. But for decades companies have been ramping up fake contracting, where it's just employment but worse.

Re: California appeals court rules Uber, Lyft must reclassify drivers as employees

#70

Post by gsujsgwuaja »

tcbasche wrote: post #35
umvi wrote: post #5

So does this mean it'll be more economical for me to just rent cars again and drive myself whenever I fly to California?

Forgive my ignorance, but doesn't California have public transport? Renting cars isn't the only option I would think? I dunno, I'm not from the US so maybe I just don't understand.

I think a lot of Europeans don't appreciate just how abysmal the public transport options are in practically every American city.
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