Uber and Lyft ordered by California judge to classify drivers as employees • Hacker News Board

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#761

Post by 2OEH8eoCRo0 » Wed, Aug 12, 2020, 3:02 PM UTC

moduspol wrote: post #660

ethanbond wrote: post #603

Earlier quoted context omitted.

It’s incredible how many people just start from the assumption that these services must exist and then work backward from that. Obviously you run into serious dissonance when you arrive at the pricing problem, where the solution is quite simple: they shouldn’t exist. Then you can start thinking about real solutions to urban transit that have existed for more than a century.

The starting assumption is that free and rational adults are choosing to work for the wage and customers are choosing to pay a sufficient price, so it should exist. That's not working backward, or dissonance--it's an acknowledgement of reality. It's a different unrelated group claiming that it shouldn't exist if it doesn't provide the pay / benefits they think it should.

I don't buy that. These rides are only as cheap as they are because of VC money and they aren't profitable. Imagine the cost of rides without VC money and more pro-worker regulations? If they aren't profitable now I don't see this ever being profitable without some radical change to the business model (driverless fleet for example).

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#762

Post by moduspol » Wed, Aug 12, 2020, 3:54 PM UTC

2OEH8eoCRo0 wrote: post #761

moduspol wrote: post #660

Earlier quoted context omitted.

The starting assumption is that free and rational adults are choosing to work for the wage and customers are choosing to pay a sufficient price, so it should exist. That's not working backward, or dissonance--it's an acknowledgement of reality. It's a different unrelated group claiming that it shouldn't exist if it doesn't provide the pay / benefits they think it should.

I don't buy that. These rides are only as cheap as they are because of VC money and they aren't profitable. Imagine the cost of rides without VC money and more pro-worker regulations? If they aren't profitable now I don't see this ever being profitable without some radical change to the business model (driverless fleet for example).

There are some rides that are subsidized as loss leaders undoubtedly, but that's not the primary case.

The way I see it, it's already proven that riders will accept paying X dollars and drivers will work for X dollars, minus Y% for Uber's cut. Uber's Y% is likely higher than it needs to be, but at the end of the day, it's a SaaS app. Even municipalities have set up local competitors / clones.

These companies are certainly pouring a ton of money into expanding into new geographic areas, other business models, and more. But as long as riders will pay an amount even a little higher than what drivers will accept, it can be profitable.

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#763

Post by mmsimanga » Wed, Aug 12, 2020, 3:57 PM UTC

scarface74 wrote: post #658

dustinmoris wrote: post #577

Lots of HN comments are here like "I know people who prefer to be contractors", "My sister's neighbours little brother actually doesn't want to be treated with respect by Uber", blah This is utter nonsense. Being a contractor means being self employed. You don't get paid leave or sick pay. It's a risk taking and doesn't make any sense in the gig economy where the wages are close to minimum rates. If you are truly sel…

Well. There have been stories of independent truck drivers that are being forced to leave California because they can’t be independent any more. Jason Snell, a long time editor of Macworld, was let go years ago and decided to do podcasting and blogging full time, but he still wanted to do freelance writing. The new laws passed in California made it more difficult. The only reason the gig economy is bad is because we…

Your comment reminds me of this comment[0] on HN from a developer who was complaining he couldn't accept donations in Finland because of the laws of that country.

[0] https://news.ycombinator.com/item?id=23615853

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#764

Post by mercer » Wed, Aug 12, 2020, 5:26 PM UTC

mongol wrote: post #710

mercer wrote: post #590

Earlier quoted context omitted.

This is fascinating, although I still feel there's too much disagreement for me to have a clear picture of how this works in California. I'll give a Dutch perspective (which perhaps applies to some degree to other parts of Europe): Until 2016, clients had to proactively ask for a 'Verklaring Arbeidsrelatie (VAR)'. An 'explanation of the work relationship'. If I understand correctly, the contractor/freelancer had to p…

Does this apply also for incorporated /limited liability corporations owned by the contractor, in the Netherlands? In Sweden, if you want to become contractor, you have two options - start a limited liability company of which you owns all shares (Aktiebolag). Or you can start a business in your own name (Enskild firma), which legally is not separate from your own liabilities. In the first case, you are making yoursel…

I don't know and am curious too, so I'll probably look into it at some point.

But I strongly suspect that this is one of those 'spirit of the law' situations. So I suspect that a company that doesn't want, well, liability, would avoid hiring an LLC that really is just one person working only for said company.

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#765

Post by subsaharancoder » Wed, Aug 12, 2020, 5:35 PM UTC

Jommi wrote: post #554

subsaharancoder wrote: post #322

Earlier quoted context omitted.

> except uber/lyft will remove you from the platform if you decline too many rides, thereby only giving the illusion of choice. Factually incorrect for Uber drivers in CA, the platform no longer penalizes drivers for declining trips and now allows them to pick and choose trips without any impact on driver rating. (I worked in Uber Eng up until the 5/18 layoffs)

This is the bigger problem. None of the people even here on HN actually now how Uber works and how different the experience for rider and drivers can be varying on city, state, country etc. Just a bunch of people repeating what they hear from anti-tech journalsits writing about startups.

Uber app is very hyperlocal because each location has different requirements/challenges especially around fare calculation, taxes and levies, how the app works in CA is very different from London and different from New York. The Driver app in CA was reworked on extensively during Q4 2019 in response to AB5 in order to strengthen the Uber case that it is essentially a platform that matches riders to drivers. Internally those changes can be rolled out to all cities in the U.S. if the AB5 tide goes beyond CA, but to be honest no one knows if those changes will make the case for Uber or not, they are the proverbial canary in the coal mine.

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#766

Post by dnautics » Wed, Aug 12, 2020, 7:56 PM UTC

sanderjd wrote: post #504

dnautics wrote: post #327

Earlier quoted context omitted.

no. There's no reason why you couldn't do both. There's plenty of apps where you both pay for entry and pay a cut out of each transaction.

Ah, then the reason this wouldn't work is that the court would still deem them to be employees, after seeing through this incredibly transparent and cynical facade.

the courts haven't seen through the facade of the taxi companies (the point is: this would be uber doing exactly what the taxi companies do)

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#767

Post by Jommi » Wed, Aug 12, 2020, 8:42 PM UTC

subsaharancoder wrote: post #765

Jommi wrote: post #554

Earlier quoted context omitted.

This is the bigger problem. None of the people even here on HN actually now how Uber works and how different the experience for rider and drivers can be varying on city, state, country etc. Just a bunch of people repeating what they hear from anti-tech journalsits writing about startups.

Uber app is very hyperlocal because each location has different requirements/challenges especially around fare calculation, taxes and levies, how the app works in CA is very different from London and different from New York. The Driver app in CA was reworked on extensively during Q4 2019 in response to AB5 in order to strengthen the Uber case that it is essentially a platform that matches riders to drivers. Internall…

Yep. Though is it still true that the prices for riders and the earnings for drivers are seperated? To me that is the key greediness here.

At least in Europe all competitors still work with the % of fare calculations.

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#768

Post by threepio » Wed, Aug 12, 2020, 10:24 PM UTC

rdgthree wrote: post #72

JMTQp8lwXL wrote: post #22

Earlier quoted context omitted.

Some things, like not being able to set their own rates, meant drivers were never contractors, even if they wanted the perks of contracting (e.g, choose your own hours). Saying 'I wish to be a contractor' isn't legally sufficient: the agreement needs to permit setting rates.

This is certainly the (fairly robust) legal argument. My hesitation is that I think a significant amount of drivers prefer and would benefit from the arrangement that Uber and Lyft have set up, and it's a shame that we aren't discussing how to write legislation to fit those people in. It just feels like forcing everyone to be an employee will box out a large number of happy part-time drivers who weren't too concerned…

Why is there a need to "write legislation"? If Uber wants to treat drivers as contractors (or employees), California's lawmakers & courts have already set out a clear path toward legally doing either. Meanwhile, I'm sure you're right that many drivers would prefer to be contractors.

So who's the resistant party? Right -- Uber. Why? Because they can't make their unit economics work either way.

"But if the drivers want this intermediate arrangement, and Uber wants it, why should Calif stand in the way?" States make a lot of contracts, especially labor contracts, illegal because they go against public policy (including externalizing too many costs on state & local govts themselves). Still, Uber would be welcome to restrict its activities to states and countries that have labor laws more to its liking. Chemical & manufacturing & agricultural firms have been doing this for years. But Uber can't turn a profit without being in dense cities in liberal states (where labor laws are usually stronger)

One more argument is often advanced, which is "there is no scenario under which Uber could use contractors." This is also untrue. For instance, instead of working directly with individual drivers, Uber could pursue a franchise-style model, where it might, say, solicit bids among companies representing groups of drivers to handle all the rides in a certain zip code. Variations of this model are already used in a lot of industries, of course. But Uber's margins are already too thin, and it would have to give up too much control. Uber prefers the current model precisely because the balance of negotiating power is permanently asymmetric.

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#769

Post by murgindrag » Thu, Aug 13, 2020, 4:00 PM UTC

momokoko wrote: post #708

murgindrag wrote: post #634

Earlier quoted context omitted.

There is no such thing as "society is not willing to pay the higher prices for drivers to be treated as employees." Society isn't a brain which thinks. There is emergent behavior. * I am glad to be forced to pay more to have Uber/Lyft drivers treated well. I think we should have worker's right protections. * I am unwilling to pay more myself as a one-off (e.g. through tipping). It's a Prisoner's Dilemma. That's what…

There is nothing in California employment law that prevents open schedules. Uber can have employees with exactly the same working agreement. The main difference is that Uber now has to pay into things like unemployment insurance and workers compensation.

Nope. They can't.

If I am doing 8 hours Instacart, 8 hours Uber, 16 hours part-time work, and 16 hours part-time study towards my BS, doing a bit of Amazon Turk while waiting for gigs, who pays for my health insurance? And if I'm injured on the job, while having three ride sharing apps and one delivery app open, what happens to my worker's comp?

Once you dive into detail, employment law just doesn't work here. It's not a question of more right or less rights (I'm all for worker protections). It's a question of how we get there.

Re: Uber and Lyft ordered by California judge to classify drivers as employees

#770

Post by rsanek » Fri, Aug 14, 2020, 1:04 AM UTC

exhaze wrote: post #536

quadrifoliate wrote: post #472

Earlier quoted context omitted.

> Uber drivers are private, self-owned businesses that rent out their time and equipment to a corporation on a completely arbitrary basis. As far I know, this is not true. Uber dictates the prices that drivers can charge, they cannot set an arbitrary price for their own labor. Is that not the case?

Uber has been rolling out a feature to allow drivers in California to set their own prices, and today rolled it out to the entire state. https://www.independent.co.uk/news/world/americas/uber-calif...

Small correction: not today, this article is from over a month ago.