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The lawyer taking on Uber and the rest of the on-demand economy

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Re: The lawyer taking on Uber and the rest of the on-demand economy

#61

Post by s54b32dd »

I actually like this lawsuit, as if I'm honest, I don't think Uber/Lyft, etc. should have gone the contract-service offering route. I think they might have been just as well off as a middleware provider, connecting customers with existing cab services, and offering their tools as a SaaS.

It's interesting to think about how different the world would be right now if Uber had gone into software sales as opposed to attempting to be a cab competitor.

I realize the inventors largely created the service as an alternative/competitor to cabs, which they disliked for various reasons. It's still interesting to think about what could have been, if only they'd been more interested in fixing the logistics of cab companies than "inventing an industry".

If this attorney is ultimately successful, I can easily see Uber/Lyft's business model morphing as a result. I don't think there's enough profit in their business if they have make all their contractors W-2 workers.

Re: The lawyer taking on Uber and the rest of the on-demand economy

#62

Post by SomeStupidPoint »

greggyb wrote: post #59
SomeStupidPoint wrote: post #48

Earlier quoted context omitted.

I think the real point of challenging Uber is this: they can either set the rates or they can push the cost of materials on to drivers, but they can't do both. That is, they must either embrace the full employee or full contractor package, and not just take the parts they like of each with none of the liabilities.

Do you think that it is really that binary? I think that this quote from the article is apt: >U.S. District Judge Vince Chhabria, who is overseeing the Lyft case, said that existing labor law doesn’t map well with these companies’ business models. Lyft drivers don’t seem exactly like employees or independent contractors, he wrote in his motion. “The jury in this case will be handed a square peg and asked to choose be…

Running a business that relies on questionable legal intrepretations doesn't necessarily have to be something we support.

That Uber set themselves up in such a way that they can't relate to their workers in a clearly legal way is suspicious -- which is exactly the accusation: they're dodging liabilities they should have by making up their own kind of square peg.

Re: The lawyer taking on Uber and the rest of the on-demand economy

#63

Post by s54b32dd »

greggyb wrote: post #22

An analog that sprang to my mind early in the article, and briefly raised with the comparison to Craigslist, but which I feel is more apt than Craigslist: eBay. Some points: * eBay can ban a seller for not following the rules. * eBay absolutely requires its sellers to earn revenue. * eBay can set expectations and incentivize behavior with its various seller-partner programs at different levels. * An eBay seller may d…

>I do not believe Uber should have to treat all of its drivers as employees.

I think they should, because currently it's very hard to live a life as an uninsured contract worker unless you are married to someone with health insurance.

I think the ultimate solution to this is to do away with distinctions between W-2 and 1099-MISC income, and really only have investment income vs. wage income.

Re: The lawyer taking on Uber and the rest of the on-demand economy

#64

Post by s54b32dd »

amateurpolymath wrote: post #33
greggyb wrote: post #20

Earlier quoted context omitted.

>While these cases are always launched claiming to be on the side of the angels, they ultimately ignore that all that extra legal overhead is not free, and only the currently large companies will be able to manage it, essentially barring any smaller competitors from entering the market. This is a well known phenomenon in public choice economics, colloquially referred to as "Bootleggers and Baptists"[0] after an obser…

I don't see the problem. If Uber's costs will go up if they are no longer able to classify their employees as contractors, they can simply raise their prices. Uber appears to provide both a lower price and higher quality taxi service than traditional cabs, so even if their prices go up they will still be competitive. If they have to raise prices above traditional cabs (highly unlikely), that suggests their service de…

>If they have to raise prices above traditional cabs (highly unlikely)

I don't think you realize how much it would damage their business model's profitability to have to pay payroll taxes on all their drivers. It's not just about offering a better service to consumers; Uber/Lyft would emphatically not have this many backers if their business model weren't insanely profitable. If profit margins shrink, poof, there goes funding.

Re: The lawyer taking on Uber and the rest of the on-demand economy

#65

Post by FireBeyond »

rayiner wrote: post #11
jkoudys wrote: post #10

This right here is one of the driving forces behind American corporatism. While these cases are always launched claiming to be on the side of the angels, they ultimately ignore that all that extra legal overhead is not free, and only the currently large companies will be able to manage it, essentially barring any smaller competitors from entering the market. If a court rules that Uber drivers must be employees, then…

That's kind of an entitled attitude. Society puts certain obligations on businesses, and providing certain benefits to employees is one of them. If you're too small to meet those obligations, then you shouldn't get a free pass on them. That just leaves the workers out in the cold.[1] I'm certainly willing to entertain the notion that we should pay for those benefits with taxes instead of pushing the burden on employe…

Maybe. But is it no less entitled to say "Screw regulations/laws, we're gonna do our thing, anyway", make a bunch of money and then say "y'know, we can afford to follow regulations/laws, let's beef them up so others can't 'bootstrap' themselves"? (where 'bootstrap' in this case is 'ignore regulations and laws to maximize profit').

Re: The lawyer taking on Uber and the rest of the on-demand economy

#66

Post by SilasX »

s54b32dd wrote: post #64
amateurpolymath wrote: post #33

Earlier quoted context omitted.

I don't see the problem. If Uber's costs will go up if they are no longer able to classify their employees as contractors, they can simply raise their prices. Uber appears to provide both a lower price and higher quality taxi service than traditional cabs, so even if their prices go up they will still be competitive. If they have to raise prices above traditional cabs (highly unlikely), that suggests their service de…

>If they have to raise prices above traditional cabs (highly unlikely) I don't think you realize how much it would damage their business model's profitability to have to pay payroll taxes on all their drivers. It's not just about offering a better service to consumers; Uber/Lyft would emphatically not have this many backers if their business model weren't insanely profitable. If profit margins shrink, poof, there goe…

Margins are also about prices, not just expenses. Depending on the shape of the demand curve for Uber-like services vs traditional taxis, they may be able to pass along a lot of that cost to customers -- assuming similar competitors would also face the new cost structure.

Anecdotally, Lyft/Uber are so much better that they could charge me a lot more and still be preferable, though obviously they expect the margins would be smaller. I doubt it would be business-model-killing smaller though.

Re: The lawyer taking on Uber and the rest of the on-demand economy

#67

Post by ahallock »

erroneousfunk wrote: post #43
greggyb wrote: post #22

An analog that sprang to my mind early in the article, and briefly raised with the comparison to Craigslist, but which I feel is more apt than Craigslist: eBay. Some points: * eBay can ban a seller for not following the rules. * eBay absolutely requires its sellers to earn revenue. * eBay can set expectations and incentivize behavior with its various seller-partner programs at different levels. * An eBay seller may d…

When customers use Uber, they have no real choice in the drivers they are getting, unlike eBay or Craigslist, where they can comparison shop and choose based on seller ratings, product/seller descriptions, and prices. With Uber, you just press a button and Uber gives you a driver that is assigned to you, at a rate that Uber defines. The consumer is penalized for canceling the trip (you can usually get the cancellatio…

> they have no real choice in the drivers they are getting

Have you used Uber? That's a feature. I don't want to comparison shop on Uber; I'm performing a quick action in real-time, often on a busy street or at an airport after a long flight. Plus it's not like you have this huge pool of drivers to compare--at least the times I've used it. People don't want to put huge amounts of effort into a transient experience that gets them from A to B. Now shopping for that antique armoire, of course.

> Uber drivers fail the IRS's 20 point test spectacularly

Interestingly removing drivers for bad ratings and customer complaints were reasons they gave for failing the IRS test, so I guess no one will ever be satisfied. If Uber is so awful, don't use the service. I mean, barring ISPs, I generally don't use products & services I hate.

Re: The lawyer taking on Uber and the rest of the on-demand economy

#68

Post by greggyb »

s54b32dd wrote: post #63
greggyb wrote: post #22

An analog that sprang to my mind early in the article, and briefly raised with the comparison to Craigslist, but which I feel is more apt than Craigslist: eBay. Some points: * eBay can ban a seller for not following the rules. * eBay absolutely requires its sellers to earn revenue. * eBay can set expectations and incentivize behavior with its various seller-partner programs at different levels. * An eBay seller may d…

>I do not believe Uber should have to treat all of its drivers as employees. I think they should, because currently it's very hard to live a life as an uninsured contract worker unless you are married to someone with health insurance. I think the ultimate solution to this is to do away with distinctions between W-2 and 1099-MISC income, and really only have investment income vs. wage income.

Not all of Uber's drivers are "full time." UberX and its similar offerings are open to anyone with a car who wants to give a ride.

The incredible value of Uber and similar is not that they are a better way to hail a traditional cab. That is not disruptive, and doesn't create huge value. At most a better way to hail traditional taxis smooths the process a little bit.

The huge value that Uber and similar create is in allowing a very low friction means to utilize the millions of private cars that otherwise carry few people and sit idle >90% of the time. This provides value to drivers (defray an expensive and largely fixed cost) and to riders (higher availability than traditional taxis). This value-add is primarily due to the low friction to providing marginal rides.

If every driver is an employee, then you destroy the marginal ride benefit and turn Uber and its ilk into just another traditional taxi service, just with a better hailing app.

Re: The lawyer taking on Uber and the rest of the on-demand economy

#70

Post by jkoudys »

tptacek wrote: post #54
jkoudys wrote: post #13

Earlier quoted context omitted.

_American_ society puts those obligations on businesses, and those obligations have created an economy that rewards those who are either already wealthy, or the backing of those who are. This is very directly giving more power to the rich. I don't see how criticising the very necessity of health benefits, one of the biggest costs of hiring employees, is at all a separate argument. There are many other countries which…

Don't the very richest companies in the US tend to lobby against employer health care mandates? Wouldn't Walmart, for instance, be much better off in a single-payer system?

Walmart was very in-favour of the PPACA, at least in favour of it applying to other companies. In practice, they have teams of lawyers and accountants making sure they pay as little as possible. It's the SMBs, on the other hand, who now pay twice: once to meet their obligation to their own employees, and again to pay for government assistance for all the Walmart employees we expected would be receiving company benefits.

http://www.forbes.com/sites/rickungar/2012/12/09/walmart-bai...

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