The Gig Economy Is Being Sued to Death • Hacker News Board

Re: The Gig Economy Is Being Sued to Death

#41

Post by gnu8 » Tue, Feb 17, 2015, 7:08 PM UTC

toomuchtodo wrote: post #7

mr_luc wrote: post #6

This will not kill it. The Gig Economy will be a thing, and it should be. But it needs to be legitimate, and it should lead to more autonomy and freedom for the Giggers, not less. To accomplish this, businesses that treat contractors like employees should absolutely be punished! If we really are to replace the old "master-servant relationship with a purely economic one, between equals," (like Paul Graham said so beau…

This will never occur, as businesses employing these workers want employee level of control with independent contractor costs.

It will never occur until the workers start making a concerted organized effort to tip the scales the other way. The majority of the profits of any enterprise should go to those doing the work, whether it's driving a car or developing software.

Re: The Gig Economy Is Being Sued to Death

#42

Post by al2o3cr » Tue, Feb 17, 2015, 7:09 PM UTC

"Lose this workforce structure—either by a wave of class-action lawsuits, intervention by regulators, or through the collective action of disgruntled workers—and you lose the gig economy."

Hang on, lemme get my tiny violin to properly eulogize the loss of an opportunity for VCs to get rich on the backs of low-wage workers. Won't you please think of the billionaires?

Re: The Gig Economy Is Being Sued to Death

#43

Post by CPLX » Tue, Feb 17, 2015, 7:13 PM UTC

tptacek wrote: post #25

will_brown wrote: post #22

Earlier quoted context omitted.

>The rules, such as they are, seem fairly straightforward. The laws are anything but straightforward. For starters there are 50 States with each one having different laws. Take Florida where I have personally represented employers and employees/Independent contractors in these types of matters. The FL case law establishes, what in my opinion is the very worst kind of law, a factors test. So essentially there are a nu…

The rules the parent commenter is referring to are federal, and extraordinarily well-known, because several generations of businesses have tried to come up with ways to skirt them to avoid taxes. As far as I understand the rules, the "most heavily weighted factor" you cite is in fact not an IRS employee classification factor at all. A contractor can still be classified as an employee even though they bill through an…

You are correct. Most of the obfuscation comes from the fact that people don't like to follow the rules.

It's actually not that hard to sum up the difference between a contractor and an employee. If the suspected employer regulates the time, place, and manner of the work being performed, chances are they're not contractors.

Yes, there's more nuance than that. But most of the supposed controversy usually involves people trying to pretend that basic premise isn't true for some reason. Usually without success.

Re: The Gig Economy Is Being Sued to Death

#44

Post by mtbcoder » Tue, Feb 17, 2015, 7:13 PM UTC

AnthonyMouse wrote: post #30

mtbcoder wrote: post #13

Earlier quoted context omitted.

You mean the Web?

You're talking about the wrong level of abstraction. Think about the problem as this: A worker sets up a website offering services. A potential customer is looking for a local purveyor of that service to hire. How does the customer find the website? If there are 25 local workers willing to do the job, how does the customer choose between them? If the customer wants to pay with a credit card, how does the worker get t…

> Think about the problem as this: A worker sets up a website offering services. A potential customer is looking for a local purveyor of that service to hire. How does the customer find the website? If there are 25 local workers willing to do the job, how does the customer choose between them?

Right, but these issues that the Web currently faces (discovery, signal-to-noise ratio for example) will plague any given open marketplace after a critical mass is reached as well.

> If the customer wants to pay with a credit card, how does the worker get the money?

There are numerous payment systems that aren't terribly difficult to implement for small transactions (PayPal, Stripe, et al). Sure, a little HTML, JS knowledge might be needed, but that is really nothing difficult to do after a small amount of reading.

Re: The Gig Economy Is Being Sued to Death

#45

Post by smacktoward » Tue, Feb 17, 2015, 7:14 PM UTC

mathattack wrote: post #31

This is a very touchy area. Firms can pay $20 an hour for cleaning services precisely because they're not paying for sick days, health insurance and the like. If they have to pay all that, then the wages go down. This is one of many reasons why a large company will pay a company like Accenture two or three times the salary compensation of it's own employees. (There are other reasons too, like having someone to blame…

> Firms can pay $20 an hour for cleaning services precisely because they're not paying for sick days, health insurance and the like. If they have to pay all that, then the wages go down.

Or they could, you know, charge more.

The problem with "let the market solve it" is that customers are generally extremely price-sensitive, and if all the other cleaning companies are getting away with misclassifying their workers, the one that does the right thing and treats them as employees voluntarily will be at a serious market disadvantage. If Good Guy Cleaners charges $25 while Bad Guy Cleaners charges $20, Bad Guy Cleaners will get rich and Good Guy Cleaners will go out of business. The only way out of the trap is to remove the option for any players in the marketplace to do the wrong thing.

Re: The Gig Economy Is Being Sued to Death

#46

Post by rlucas » Tue, Feb 17, 2015, 7:22 PM UTC

kefka wrote: post #29

Ah, you mean "Using capitalism as a cudgel to undo the social advances from the 1930's". I shed no tear if Uber and the likes of companies that use 1099 to destroy employee rights. For those that believe that Uber and the like are good for the US and the economy, I have a question for you: 1. What happens if we have 10% unemployment? We already have; this answer is simple. 2. We turn the screws of automation and comp…

One of the very, very few proven formulas for rapidly generating concentrated wealth is: centralize (privatize) the profits, distribute (socialize) the risks and costs.

Once you start looking for this meta-pattern, you'll see it a lot. A chemical company concentrates the profits from synthesizing a useful compound, but diffuses the risks and costs of pollution and disease into the commons. A social network distributes the effort and cost of building up a massive, informative graph, and then centralizes the profits from exploiting that information. A contract-work marketplace pushes the risks onto individual drivers, and centralizes the profits from matchmaking.

My personal view is that this will always happen to some extent, and is intrinsically linked with the system of inequality that drives the turbine of ambition in our society. Therefore, it will never be done away with, and arguably shouldn't be.

But, especially when there is no consent to the socialized externalities (e.g. pollution) or very lopsided or coerced consent (e.g. "Grapes of Wrath"-level treatment of workers), decency requires, and eventually the pitchforks-and-torches will demand, some balancing of things by the Leviathan.

Re: The Gig Economy Is Being Sued to Death

#47

Post by TeMPOraL » Tue, Feb 17, 2015, 7:28 PM UTC

leereeves wrote: post #40

Along with the legal gymnastics regarding independent contractors, this struck me as notable: "If Solominsky had built his own handyman business, he would not be so impacted by the decisions of another company. But all he has of his supposedly independent business—his pages and pages of glowing reviews, his nearly unanimous five-star ratings—is tied up on the TaskRabbit platform." Something to keep in mind as/before…

I have this quote from Mass Effect written down in my quotes file:

"Your civilization is based on the technology of the mass relays, our technology. By using it, your society develops along the paths we desire. We impose order on the chaos of organic evolution. You exist because we allow it, and you will end because we demand it."

Replace "civilization"/"society"/"organic" with "business", "mass relays" with "platforms", and there you go.

Something that keeps coming back to my mind in cases like this since the Twitter API fiasco of 2012/2013.

Re: The Gig Economy Is Being Sued to Death

#48

Post by threatofrain » Tue, Feb 17, 2015, 7:34 PM UTC

The problem is that companies like Uber don't want to call you an employee, but they want to treat you like one. They want as much power over you as they can have without taking any responsibility for their relationship as an employer.

Re: The Gig Economy Is Being Sued to Death

#49

Post by tptacek » Tue, Feb 17, 2015, 7:39 PM UTC

will_brown wrote: post #39

tptacek wrote: post #25

Earlier quoted context omitted.

The rules the parent commenter is referring to are federal, and extraordinarily well-known, because several generations of businesses have tried to come up with ways to skirt them to avoid taxes. As far as I understand the rules, the "most heavily weighted factor" you cite is in fact not an IRS employee classification factor at all. A contractor can still be classified as an employee even though they bill through an…

Even upon rereading OP it is not clear it was referring to Federal Law, there is even mention of both State and Federal Departments of labor, so I think use of the word rule was an all encompassing term for classification law. Still it only adds to the problems with this area of the law, after all it is not only possible, but common, for an individual to be classified as an employee/independent contractor on the fede…

This is likely due to the IRS being prohibited from issuing rules and regulations, and as a result in the words of the IRS, "Previously issued guidance may not reflect current case law, statutory changes, or changes in workplace situations." However, you are correct that this factor, under FL case law, though weighted more heavily is not determinative by any means.

I've read this 3 times and I don't really understand what it means, so I'll just repeat myself:

The IRS contractor rules are the most important employee classification rules with any bearing on this discussion, and they are both clear and very well-understood by employers.

You're a lawyer, so I feel like it's weird that we're having this discussion. I am not a lawyer, but I am something like 99.999% sure that 1099'ing an LLC does very little to ensure that a contractor can't be retroactively classified as an FTE for whom W2 withholding was required.

Re: The Gig Economy Is Being Sued to Death

#50

Post by aceperry » Tue, Feb 17, 2015, 7:40 PM UTC

toomuchtodo wrote: post #3

The title should be: "Startups with business models based on sidestepping worker protections and labor regulations are being sued to death". As they should be.

Absolutely! Glad to see that most commenters here see that this gig economy is really bsed on exploitation.