I'm afraid you're repeating Uber's favorite talking point, which is that everyone should respect the worker's decision to be an employee or contractor.
Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold.
The problem is that Uber currently exerts so much control over its "independent contractor" relationships that they have become, as a matter of law, employment relationships.
Moreover, in practical terms drivers don't end up with the choice they ought to. If they want any working relationship with Uber, they have to accept a mash-up of all the burdens of employment minus many of the benefits of being a contractor.
"I'm afraid you're repeating Uber's favorite talking point, which is that everyone should respect the worker's decision to be an employee or contractor."
I've never seen Uber argue that everyone should "respect the worker's decision to be an employee or contractor." I have seen them argue that drivers are contractors based on the flexibility in the job, but not that it should be "the worker's decision".
"Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold."
Actually, pretty much all US employment law disputes that drivers should be able to choose what status they hold. Employee vs. contractor is not determined by what an employer says someone is, or what an employee says they are. Instead, it is determined by some key factors about the nature of the job, which (as you do point out) mainly centers around control of important aspects of the job.
But it is important to understand that you never really get to "choose" whether you're a contractor or an employee, it's determined solely as a function of the type or work you do and the nature of your relationship to the employer.
> "it is important to understand that you never really get to 'choose' whether you're a contractor or an employee, it's determined solely as a function of the type or work you do and the nature of your relationship to the employer"
I don't understand what you're trying to say here. In my experience, on both sides of this, a good deal of thought is put into what kind of position to seek / offer. I think employers and workers think a lot about which legal arrangement would work better and there is a great deal of choice involved.
For instance, I can imagine Uber offering jobs v.s. contractor positions with differing levels of support, remuneration, and expectations. That they don't do so seems like a choice to me?
> I can imagine Uber offering jobs v.s. contractor positions with differing levels of support, remuneration, and expectations.
Legally, in California, they can't do that. As outlined in the article, the 'ABC test' is the legal test for determining whether someone is an employee or a contractor. The 'B' part of that test is "The worker performs work that is outside the usual course of the hiring entity's business." If you are an employer, you could not have one group of drivers that you classify as employees and the other you classify as contractors, not if they're basically doing the same work.
Note this is common in a lot of different businesses, and there have been many lawsuits where contractors who DID want to be classified as employees argued that they were basically doing the same work as employees. There was a fairly famous case involving Microsoft 2 decades ago: https://www.computerworld.com/article/2589538/it-personnel-m...
You are interpreting it all wrong. Staff augmentation happens all the time who do same work as employees. The fundamental difference is amount of time you are hiring the person for. If you say I need person to augment my existing staff only for 6 months then they need not be employee. This is why many contractors are forced on leave after certain number of months. A contractor may also chose to work, say, 20hr per week.
Being a contractor is not fundamentally bad if US hadn’t tied medical insurance and companies hadn’t tied stock bonuses with employment. Technically there is no such need for “employment”. You go work for the time and you get paid equitably without an artificial status called “employment”. Unfortunately this status has became part of many arcane laws and difficult to get rid of.
> The fundamental difference is amount of time you are hiring the person for.
That's not the fundamental difference in either federal law or the California ABC test. It's not a factor in the ABC test, [0] and it's one of several factors in the “relationship” prong of the federal test. [1]
No, I am not interpreting it all wrong. You are fundamentally misinformed about what AB5 in California allows. And while I agree, there are many cases where staff augmentation exists, in many of those cases employees would be misclassified under AB5. Also, in many of those cases of staff augmentation the person is hired through as an employee of a staffing company, not as a 1099 contractor by the client company.
> argued that they were basically doing the same work as employees
I think that's case by case though. Contractors usually do finite focused projects and don't want to be employees. I myself was self-employed for 5 years doing specific contracts as a software engineer. I was "writing code" which is "the same work" as employees. Were all those companies breaking the law?
This is actually a really good thread, because most people are surprised to discover that yes, those companies probably were "breaking the law".
As other posters pointed out, AB5 is relatively new, so the test is relatively stricter now, and only relevant in California.
More importantly though, employment classification is only challenged when a plaintiff files a lawsuit. Thus, even if someone is technically misclassified, if the relationship is mutually beneficial, nobody is going to complain. This goes on all the time, which is why most people are surprised to find out they were technically misclassified.
Case in point: I worked at a company (in a state much more permissible regarding employment law than CA, and pre AB5) that forbid using the term "contract-to-hire", even though that happened pretty frequently. Reason being that technically contract-to-hire is not legal unless there is a substantial difference in the work and relationship when the person is a contractor. Now, many times there is, but that phrase alone can make it seem like the work contractors do is too similar to the work employees do, which is why our legal department banned the phrase.
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 prove that they had more clients than just that one, and it had to be reasonable. So no having five clients of which one accounted for 99% of all income.
If a client didn't ask for this 'VAR', it could cause problems down the road.
From 2016 on they changed this, but apparently the result has been a confusing mess, so in 2021 they'll try to clear up some of it.
Practically speaking, as a contractor, I've found that only the big clients (with legal teams, I imagine) would ask for a VAR, if at all.
Most of the time, whether working in Holland or Germany, I usually did the exact same work that their employees did. In some cases there seemed to be vague distinction where I worked on shorter projects and they did support and the like, but in practice that distinction was very blurry.
I suppose with some of these clients I could've caused trouble, but because I got paid well, often better than the full-timers (even with insurance and all that deducted), I didn't see any reason to.
My general impression is that NL is a bit more 'liberal' in these matters than many other parts of Europe, so I'd be curious to hear how this works in France/Germany/Italy, etc.
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 yourself employed by the corporation you own. I do not know if there is any legislation that prevents that business from having just a single customer. But I know that in my own case, my business have had a single customer the entire time it has existed.
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.
Outside of the VAR thing there already was laws that contractors can't make more than x% of their income from a single customer. If they do the customer would have to treat you as an employee.
Fair enough, but this is a bit splitting hairs. AB5 codified the standard put forth in Dynamex (which was decided in mid 2018), which was much stricter than the previous standard, the Borello test, decided in 1989, and that test more or less followed a common law interpretation that had been the standard.
In the UK, the government has taken the view that in some sense, yes, some contractors who were claiming to be self-employed were in fact employees and therefore have to pay more tax (the same tax as other employees), and can claim fewer expenses against tax (also the same as other employees). The underlying principle is equal treatment.
There is no advantage to the individuals from that decision, nor is there any intended.
So people spending 5 years working for the same company doing the same commute and same work as employees, subject to the same kind of control over their work etc., cannot maintain a claim to be self-employeed for the tax flexibility that goes with that.
However. You "writing code" as a contractor is not the same work as an employee if the manner in which you are doing it differs.
For example, if you have to purchase your own equipment, set your own hours, work on a "statement of work" basis instead of set hours, can substitute a subcontractor to do your work for you, and can and sometimes do work for multiple companies at the same time, and often switch the site at which you are working, those sorts of things signify that you are not operating as an employee would, and that it would be correct to classify you as running your own business and therefore subject to business taxation instead.
Of course every contractor wanted to claim that status for the tax benefits, which are basically less income tax and the ability to deduct more expenses. The government saw this and decided, although the law was what it was all along, people weren't applying it adequately. So they changed who does the assesment, and the tax liability if they get it wrong, from the contractor to the company hiring them. This is called the IR35 reform; IR35 is the name of the legislation that sets out what kind of working patterns must be treated as employment for tax purposes.
Although the reform will change who is liable for making the assessment, in principle it is still possible for a contractor to be retroactively assessed for their past as having been an employee all along, and have to pay back-tax. That's because you are supposed to have done the right assessment for yourself already, or perhaps your accountant should. This seems unlikely for most people now as long as the changes are followed through, but some people have been caught out by it.
> I think that's case by case though. Contractors usually do finite focused projects and don't want to be employees. I myself was self-employed for 5 years doing specific contracts as a software engineer. I was "writing code" which is "the same work" as employees. Were all those companies breaking the law?
The AB5 law has only been in effect since Jan 1.
The federal rules are already very strict. Generally contractors violate them a lot. The law was pushed by IBM to eliminate competition, and the feds incorrectly thought they would get more tax money by making the software contractor industry into employees. It's a sordid tale ending in domestic terrorism and murder: https://www.nytimes.com/2010/02/19/us/19tax.html
I am saddened to be reminded of the story in your link, as I read it at the time it was posted, and was also saddened then.
I’m not convinced you have adequately eliminated other potential reasons he may have done the uncharacteristic thing he did. Even if he was in his right mind, I’m not convinced he had anyone’s interest at heart but his own personal one, as jobs are a form of social control. He desired to be free of this control. Even if individual liberty is worth fighting for, the Constitution doesn’t grant you the right to the job you want on the terms you want. That’s what the courts are for.
This guy was wrong to do what he did in every way but for the right reasons in a very minor way that is more a matter of principle rather than tax law. No matter his beef, it was just his own, and as such, it doesn’t justify so much as slapping someone’s hand, let alone the stunt he pulled.
That story is a perfect encapsulation of the faux-compassion mindset that seeks to stamp out all forms of entrepreneurship, including driving for Uber/Lyft instead of being an employee.
Based on what? Were you a contractor while AB5 was in place? Everything I have seen suggests that Uber and Lyft will be legally prevented from having drivers that are classified as contractors.
Gotcha - so a company can choose to use employees or contractors for a given type of work, but must be consistent within that type of work?
So, for instance, you might hire initially a contractor to create the encrypted part of your product, but once you had hired someone to do that work full time you would be legally barred from hiring additional contractors to do that?
> so a company can choose to use employees or contractors for a given type of work, but must be consistent within that type of work?
Pretty much, though even then it is determined by what the courts decide is the company's "normal course of business." Obviously there are big gray areas here. And, also obviously, there are many cases where both the worker and the employer would prefer to treat the relationship as a contractor relationship, and if they both agree there is nobody to file a lawsuit contesting it (unless, of course, there are lots of people in the exact same role who could challenge the classification, as is the case with Uber).
Also, note while there are federal rules that determine IRS classification, California has stricter laws when it comes to employee vs contractor.
Would setting up another company that would employ drivers and provide services to Uber do the legal trick?
I don't know about Uber in US, but in Russia this is how it typically works. Drivers are hired by local taxi companies, which partner with large-scale Uber-like aggregators. This way, user-facing (aggregator) companies don't have drivers as employers, but contract other companies (or individual drivers, shall they want to act as sole proprietors) for the actual transportation services.
> Would setting up another company that would employ drivers and provide services to Uber do the legal trick?
That is exactly how software development contract jobs are handled in the US. They are called contract companies (and many other names) but essentially find talent, place them at a contract position, then bill the company for that contractor. They pay the contractor directly, with or without benefits (W-2 vs 1099). And in most cases, the contractor gets to choose contract or employee status with the contract company, although at different pay.
> You've effectively spend a few paragraphs adding nothing of value to the conversation.
You might want to check what you consider "adversarial" when it comes to a discussion forum.
The issue is that the comment I responded to seems to be under the false notion that workers (or employers, for that matter) get to "choose" how they want to be classified, and that's what this debate is about. My point is that, when it comes to employment law, a worker or employer's preference about how they are classified does not factor in at all about how the law classifies the job.
Quibble, far as I understand the law in California doesn't force you to be a contractor. But it's hard nosed about when someones an employee. If the law allows you to be a contractor you're free to choose whatever. Currently I'm an employee being paid twice a month. I could get overtime if I ever worked that much, which I don't.
If I owned slaves and called them unpaid indefinite interns the law would rightly disagree. You can call the relationship whatever you like, but the law is there to keep the playing field level for everyone. That it's taken Uber so long to play by the same rules as everyone else is a travesty and should take a billion dollar law suit or two for damages to sort out.
> They are employees in that they cannot negotiate rates.
Hmm... How is an Uber driver different from a plumber here?
Let's say Google needs some pipes fixed at one of its offices and they tell me how much they'll pay, refusing to budge from that figure. That doesn't make me Google's employee. I can choose to do the work for that price, or I can go fix Apple's pipes instead. What am I missing?
I don't see how Uber's relationship with the passenger has any bearing on a driver's relationship with Uber.
If instead, my analogy were that I was a general contractor who built water slides and a water park put out a bid on construction of a water slide and refused to negotiate, my only option is to take that bid or leave it. Why does it matter what the water park is going to charge the people to ride the slide?
Your analogy doesn't map to this situation. Google and Apple would be the people you're driving around, not Uber. The company that employs you as a plumber maps to Uber, which of course would just be you if you were self employed.
Many service companies are passed down in the family, or bought out for plum rates by star employees. Others are sole proprietorships. The service worker analogy is problematic because of the storied history of regulatory capture in the taxi industry, and the century of bad legal rulings that allowed it to continue. I guess licensed professions and gatekeeping like the AMA does to limit residency spots are the closest analogues I can think of off the cuff, but I also think those things are wrong for similar reasons, so moving on.
Now that the app driving companies turned over the apple cart by essentially cyber-squatting on the legal system while backed by high power lawyers paid by VC cash, the driving companies themselves want to cry foul when they don’t get the way they bought and paid for. I guess what they didn’t foresee is the long view of judgeship, and their concomitant dim view of cheaters, no matter the problem domain.
It’s too ironic to be believed. The judges apparently agree with me.
Seems like it maps to me. Google and Apple are hiring me to do work, then they are selling the output of that work to someone else (indirectly, in this case, but I don't see how that matters.)
Given that rates are determined collectively by deciding whether or not it's worth your time to go online given the current level of surge. If enough drivers decide it's not worth it, the price will change. This is a pretty standard pricing mechanism in any market for an easily fungible good or service (read: commodity).
Having been a driver for 1.5 years my questions for you are these:
1. If Uber and Lyft allow their drivers to choose, would it be reasonable for them to make "having the other app on at the same time" cause for dismissal? I know of no other employee that is allowed to simultaneously bill time on a competitor. Contractors, absolutely. Employees, no.
2. What if Uber, instead, charged $1.00/mo for the drivers to use the app, thereby making them customers instead of contractors?
Regarding #2, that's just generally not how the law works. There may be some cases where legal technicalities are successfully argued, but in general the legal system doesn't put up with someone sticking their finger a millimeter from its face and saying "technically I'm not touching you."
okay, let's make the price higher. Let's make it $150/mo. Now we're about 10 centimeters away from your face, and not too far off from what taxicab companies do.
Yeah. I pay PayPal to process payments for me: I don't work for them. Hell: I pay Apple to publish apps to the App Store on my behalf, and they even decide whether my app is "OK" or not: when they tell me to make a change to my app, I must do that or I lose my ability to collect revenue. They even require I use certain tools that I have to purchase from the company store to do my work. I have no direct relationship with the customer. They collect all of my money, and then pay me. Am I somehow an employee of Apple? Supposedly I am Apple's customer, but it sometimes doesn't feel like that ;P.
And, perhaps more importantly, the user sees your app and branding in the end and they can choose to pick you again. Which is not the case for uber either.
Not sure about California, but here in France it's the kind of difference that would change the nature of the relationship. Although it would be evaluated as a whole, and would be under a lot of scrutiny to determine whether this change wasn't meaningless for practical purposes.
I suspect that in practice there seems to be a political consensus in Californian that Uber is evil. The rest is just trying to find ways to punish them.
If the existing laws can be interpreted to punish them, they will be used. If not, the coalition against Uber will look into getting new laws passed. (As they already have.)
Thus rendering any discussion about whether existing laws can justify punishment somewhat moot.
(Of course, even a moot discussion can be interesting. Just like people can have fun arguing whether the Stark Trek Enterprise would beat a Star Wars Destroyer.
The legal discussion is also very important to Uber lawyers. Even if they lose in the end, any delay is worthwhile.)
I think giving the ability for one driver to promote their services over other drivers is also a key feature. Each driver needs to be able to differentiate themselves and not be essentially interchangeable.
That's the a key difference for me to consider it a contractor/client relationship rather than a employer/employee relationship. I'm not a lawyer, so I don't know what the law says in each country Uber operates.
They already do it. I've spoken to several drivers who rent their vehicles through the ride sharing company just like a Taxi driver does, and the price per day is about the same as the local cabs.
For #2, are you suggesting that the drivers would then get the full fare in exchange for the payment for the app? If so, yes, that would clearly be a great, extremely driver-friendly change that would defuse the employee vs contractor controversy... But, I suspect it would also result in layoffs and perhaps lawsuits from the shareholders.
I'm currently interning at a startup called Empower. This is their exact business model, the company provides software, the driver can set their own rates and they get the full fare. The drivers pay a monthly subscription free.
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.
There's nothing in the law that prevents employers from giving their permission to remain available for competitive work at the same time. Indeed, isn't that quite close to the dynamic of a union hiring hall situation, where union members are simultaneously available for jobs from any of the employers with contracts with that union?
Of course, one wouldn't be actively working for two employers at the same instant, but neither would one be simultaneously driving an Uber ride and a Lyft ride.
So when lyft is liable for meeting a minimum wage, how is time calculated? Based on logged-in time? Based on in-ride time? What if I'm in ride and I leave the other app on, and get a ride on the tail end of the ride I'm in (I've seen a driver do this).
Judges have lots of experience at (and precedents for) figuring out when employees are on the clock in many contexts, including ones where employees have some degree of ability to select whether and when to accept a given work shift. Guidance does exist.
I don't know California law on this specifically, but any state would definitely include time when actively serving as a driver for a ride, many would include time driving to pick up an accepted passenger, some might include time when logged in as a driver.
>Of course, one wouldn't be actively working for two employers at the same instant, but neither would one be simultaneously driving an Uber ride and a Lyft ride.
Until someone figures out how to multiplex the cabshare part of the two apps :p
Hehe, true. :P Well I imagine both companies would kick you off their platform under either type of worker status if you did that, and being an employee wouldn't protect you (the typical default duty of loyalty probably does extend at least as far as working for just one company per ride).
1. Makes sense. CA is wrong to outlaw voluntary working relationships between two parties.
2. Interesting idea, but then all companies could just do this and make the same claim that their employees/contractors/vendors are just customers too! Not gonna fly.
In practical terms, this is trivial for uber to dodge. All they need to do is transform from a company offering rides, to a company connecting riders to drivers. It sounds like a big difference but I susoect very little about the user experience would change.
For instance they could allow riders to offer different rates, but heavily favour (through ui and other soft incentives) the suggested rate.
In the end the drivers would be driving the same car at the same price with the same benefits.
> In practical terms, this is trivial for uber to dodge. All they need to do is transform from a company offering rides, to a company connecting riders to drivers. It sounds like a big difference but I susoect very little about the user experience would change.
There's typically an agenda behind these laws in terms of trying to increase the benefits and power of workers at the expense of the company. So I'm not sure Uber will be allowed to sidestep that goal by simply changing the way things are handled and presented. The govt could simply argue that giving users the option to choose a ride from Bob or Sally is meaningless since customers have no idea who these people are and just choose the first or cheapest on the list. Especially considering the amount of gray area already crossed to classify uber drivers as employees in this ruling.
I submit that it's not trivial, in that Uber will have to either let drivers set their own rates, or let drivers cherry-pick without penalty the contracts they wish to accept. Either change constitutes a monumental change to the rider experience.
2. Just FYI, this is basically what the taxicab companies do. And a lot of companies that you interact with basically do this, except at a higher level of organization: namely franchises. A manager at a mcdonald's is not typically an employee of mcdonald's, and is responsible for paying a lot in fees (and has to fulfill a lot of XYZ requirements to maintain the franchise).
> 1. Makes sense. CA is wrong to outlaw voluntary working relationships between two parties.
Wrong in what sense? In a moral sense I might agree with you. In a legal sense, governments around the world do that all the time, and get away with it.
1) if they forced that requirement on drivers, that would 100% indicate an employment relationship. But note that it is generally regarded as fraud to double bill multiple clients for the same unit of time.
2) irrelevant to the employee/contractor determination. It is possible for an employee to also be a contractor, see for example restaurants...
#1, If you pick to be in a contractor relationship you can do whatever with regards to having both apps on simultaneously.
#2 If you pick to be in an employee relationship, uber and lyft have a right to exclusivity during all phases of the ride. Of course a driver can choose to work for both, but lyft can terminate a driver if they find that a driver is online for uber, and vice versa.
Or #3, the state can decide that the "employees" are "not working" unless they are in the phases where they are going towards an accepted ride or have a passenger in the car.
The state will almost certainly not go with #3. Between #1 and #2, I can tell you which option 90% of drivers will take. It's not #2. So we will be back to square one.
AFAIK here is a "duty of loyalty" that requires you not to compete with your employer so working for a company that directly competes with them would be out. Like working for both Waymo and Uber self driving cars at the same time "as an employee". As a contractor no such standard exists.
That's an oversimplification. Uber could just as readily add an exclusivity provision in an independent contractor agreement as waive (or strengthen) any default duty of loyalty in their employment contract.
The fact that this question is practically speaking unilaterally up to Uber and not the result of any meaningful negotiation between the parties makes the relationship even more employment-like, as there's usually much less negotiation around terms of employment (certainly some still happens) than in true independent contracting.
What's more, it's not clear to me that courts would enforce the duty of loyalty (and maybe not even an express contractual provision depending on the state) against a part-time rank-and-file provider of comparatively unskilled labor, just as they wouldn't prevent a 20-hour-per-month sandwich shop employee from spending an additional 20 hours per month at a different sandwich shop in parallel. Maybe a guarantee from Uber of full-time pay would change that. I believe a federal trial court has even ruled that non-fiduciary employees in California have no duty of loyalty, though I don't know if that was overturned on appeal or whether state courts have agreed.
A lyft driver can have the uber and lyft apps on at the same time during the phase when you don't have a passenger in the car. This is basic driver strategy 101. It's generally good etiquette to turn it off when you get pinged for a passenger, but that doesn't always happen[0], and for sure I have seen drivers flip the other one back on towards the end of their ride. This is critical question for employment law because: how do you calculate minimum wage hours?
[0] I did this once, uber had a really stupid and un-thought-out halloween weekend bonus on a weekend where halloween fell on a friday night (people don't party hard on saturday night of a halloween weekend like that), and pink mustache copied with their own equally asinine bonus. So I went out to a place within the service area where I knew I would not get very many uber or lyft rides, and left both apps on for hours while reading inside a Denny's. I did happen to get ONE ride, and I left the other service on to rack up bonus time on it. I was definitely nervous as hell though, which in retrospect, was unnecessary.
A lyft driver can have the uber and lyft apps on at the same time during the phase when you don't have a passenger in the car.
I'm well aware of this. If you look in my comment history, you'll see that I drove for Uber and Lyft, too.
But the point stands — You can't earn money from both at the same time, just like someone can't earn money from waiting tables at two different restaurants at the same time.
uber had a really stupid and un-thought-out halloween weekend bonus
Ick. Don't get me started about Uber's promotional games. Like making everyone sign up for a big promotion during a big event, and then there are no qualifying rides.
The fact that it's Uber's talking point doesn't make it any less true.
If rideshare drivers are employees, then there's going to be fixed overhead costs of hiring employees and drivers will not be able to set their own hours. The rideshare company would not recoup the costs of benefits for drivers that drive less than a certain number of hours per month, and so drivers would have to be required to work at least that many hours.
Can you elaborate on what you mean by, "in practical terms drivers don't end up with the choice they ought to"? I know people who drive for Uber and Lyft less than 10 hours per week, and some do it nearly full time.
Employees can set their own hours. White collar employees do it all the time...
It's up to the employer what freedoms they allow. Generally, like with existing businesses, it would probably utilize a shift assignment system, where employees get assigned shifts but can swap them with other employees.
An employee working 10 hours a week is already a thing, it's called part-time work. Part time employees have fewer benefits and exist in many industries, e.g. food service. A weekend barista at Starbucks is not an independent contractor.
A weekend barista is only comparable to a gig economy driver the day that they can decide on a whim to show up to work for an hour or take a 2 week break unannounced, bail in the middle of a shift, or skip a shift altogether with no repercussions.
The barista doesn’t bring their own espresso machine, isn’t expected to eat all externalities and fund their own healthcare and pension. Granted I don’t know how that works for employees in the US either, but that has always been the point of contention in Europe.
The ability to choose their own hours is only one of many complimentary litmus tests that determine whether or not someone is an employee or a contractor. It is not a solely sufficient, nor a necessary condition of classifying someone as a contractor.
> The way I see it, as employees, their employers will either give them benefits for 10 hour work, or force them to work 40 hours.
Most benefit mandates apply to full-time workers, usually triggered at somewhere between 30-35 hours/week; those that apply to part time workers at all tend to be scaled down for them based on working hours.
> If rideshare drivers are employees, then there's going to be fixed overhead costs of hiring employees and drivers will not be able to set their own hours
There will be less flexibility about hours, but less risk that an hour reserved for work will be unpaid. Within the need not to overbook available business, and laws requiring payment for scheduled time even if cancelled at the lat minute, there's no inherent reason rideshare companies couldn't provide scheduling flexibility, including a notice-of-availability system for immediate call-ups.
(Optimizing decision algorithms for when to bring on additional staff becomes is a challenge that this opens up, also similar with when to accept the cost of short-noticd cancelling scheduled shifts.)
> The rideshare company would not recoup the costs of benefits for drivers that drive less than a certain number of hours per month
Nor would they be required to provide benefits for them; most benefit mandates apply only to full-time employees, not part-time employees.
Of course, 'employees' vs 'contractors' are purely terms made up by the legal system. So the people in charge of the legal system, both on the law making side and the law interpreting side, can over time change what they mean, and the meanings don't have to be particularly sensible nor consistent.
The argument which won was not that there is some legal reason Uber can’t have both independent contractors and employees, but rather that the relationship between Uber and it’s drivers is de facto employment and should therefore be subject to employment law.
Huh? The whole point is that the California judiciary is literally saying that legally Uber cannot classify drivers as contractors.
So no, they cannot have independent contractors, unless you mean for the operations side of their business, which nobody is talking about so I hope not.
I don't think so... The ruling is that the relationship as it is in employment. The test is:
A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
B) the worker performs work that is outside the usual course of the hiring entity’s business; and
C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Of course you can argue about the minutia of each test (that's what lawyers are for) but there's nothing stopping the hiring of drivers as contractors per se. It's just that the judge thinks the current relationship as it is does not pass this test.
Right, but the issue is that there doesn't seem to be any clear way Uber as an entity with the business model that it has (make an app that connects drivers with riders, take a portion of proceeds) can ever have drivers that are contractors.
Said another way, what could Uber change from their current policies that would pass ABC if they don't at the minute?
> B) the worker performs work that is outside the usual course of the hiring entity’s business;
This seems to be the insurmountable point; the judge seems to be inclined to see drivers as within the usual course of business, which means nothing changing on A and/or C would matter, and, assuming the strong statements in the injunction reflect the eventual ruling on the merits, Uber would have no means other than radically changing the business they are in to have drivers-as-contractors.
There's correct, under CA law Uber would need to restructure its entire business model if it wants to treat drivers as contractors. (The ABC test in the other reply was codified into CA law.)
The Carlifornia judge also agrees, just that the definition of a contractor is based on more than flexible hours. If Uber truly wants to have contractors, they'll have to cede more decision-making/autonomy to drivers; or alternatively have 2 classes of drivers and have them choose to be employees or honest-to-goodness contractors with full autonomy (or enough autonomy to cross the line between employee and contractor).
One part of the "ABC test"[1] used to check the "contractorness" under law requires that "...the worker is free from the control and direction of the hiring entity in connection with the performance of the work..." - Uber controls every minute of drivers work time, so this will be a high hurdle to clear.
Part B is similarly challenging, because it requires that the contractor & the work they are doing not be in the same line of business as hiring entity
Being an independent contractor is about more than "choosing your own hours". you can be an employee and have flexible hours. You can be a contractor and have fixed hours. There are plenty of examples of both in the tech industry.
Hmm, maybe I just don't know enough people, but I don't know any employee (with benefits and such) that can just stop working for their company for 12 months with no prior notice, and then pick it back up whenever. And infinite variations on that refrain.
I also don't know any employee who gets paid money by the customer to do a job, of which a small portion is taken by the company. For every "employee" I know, it works in exactly the opposite way.
Uber gets paid, not the driver. The money does not drop directly into the driver's bank account. The driver cannot decide to change his rate or charge extra if the customer pukes in the car.
And besides, Getting a cut of your sales and it's called commission.
Independence goes much further - can the driver assign someone else to do the job?
Uber collects the payment. But it belongs to the driver. Uber then takes a fraction of it.
As with any other marketplace/platform: Amazon, Patreon, App Stores, Twitch, Steam, etc.
Stripe collects payments for me when I sell my app. The money does not drop directly into my bank account.
And I don't think Uber has any problem with drivers hiring other people to drive their car and do Uber for them. The people that take an issue with that are the municipalities that want to require background checks, etc. for drivers.
Uber doesn't tell the driver how much it's charging the customer, takes an arbitrary cut, and doesn't let you decide of the price, exactly unlike the Apple App store, Amazon, Patreon, and Steam. There are also more reasons why they are employees, but these are material to your claims.
A quick search is showing me a ton of answers on Quora of being emphatically stating that Uber actively allows you to hire people to drive your car for you, as long as you can show they are insured to do so: the money goes to you, to the one parent account, so you get to decide how to pay your subcontractors; supposedly you can even register as a corporation?
I don't think the CA Judge disputed that Uber could have a relationship with drivers that was legally structured as "independent contractor" but rather that the relationship Uber currently has with drivers does not meet the legal requirements to be classified as "independent contractor". If Uber wanted to change the requirements they place on drivers nobody is saying they couldn't be contractors under different circumstances.
Nothing about the ruling prevents Uber from having contractors. It prevents them from having employees (as determined by California law) that they label as contractors in order to skirt around legal requirements for employees.
True, but when 100k uber drivers (contractors) in California are reclassified as employees, it seem fair to say a "dispute" is happening.
For the record, I am not saying the ruling is incorrect, but it does make me feel uneasy because:
1) I think that Uber does provide a public good (increased efficiency compared to a taxi)
2) If all drivers are employees, the business does not seem sustainable
I think that new laws are needed rather than using pre-sharing-economy labels like employee, but that the ruling by the judge may be correct given the current laws.
1) In Victorian Britain, child labour provided a great many public goods. 2) After it was outlawed, many of businesses that relied on it became unsustainable.
I don't think it is sensible to justify exploitation with "but the public benefits from it' and 'without it the business might go under'. By that logic we'd still have Victorian workhouses, 12-hour workdays, and there'd be no health & safety.
Driving for a living is hard on a person. Truck drivers have bad health and quite high divorce/problematic relationship rates. Taxi driving is relatively dangerous. Driving is the most dangerous activity we commonly perform today and the risk corresponds to miles driven.
driving is one of the most dangerous things you can do nowadays. most Uber drivers have to support themselves and possibly others. Many drivers can’t afford private healthcare so in the case of an accident it would really suck for them and their family.
Maybe they’re not losing their fingers in factory machines like child laborers are but I think they deserve employer provided healthcare at the very least.
> By that logic we'd still have Victorian workhouses, 12-hour workdays, and there'd be no health & safety.
What makes you think so? There's more than one reason for the demise of child labour. Society has gotten richer over time, and so families place a comparatively higher value on not having their children work.
But for Uber being allowed to seize the market with their ultra low prices, which are only possible because they class their labor as contractors, there would be companies more like Uber than like taxis but that treat their employees like employees.
The problem with taxis was the medallion system and other crazy regulations.
There is a middle ground. No medallions or other protectionist measures, but you have to treat your employees like employees.
If all drivers are employees, the business does not seem sustainable
Uber lost $19,000,000,000 in 2019. It lost money last quarter. Uber is already unsustainable. Despite its labor practices, Uber has been unsustainable since its founding. And it’s not like Amazon’s early days where lack of profits was offset by acquisition of physical infrastructure. Uber loses money on via unit economics.
Uber has not ever been more efficient than the services it replaced. Better in many ways, definitely for riders and arguably for some drivers, but not efficient. Uber has simply been shoveling tens of billions of dollars in funny money into the maw of their attempt to corner a market, which has never worked.
Yes, and from my reading, Uber cannot possibly change anything without literally becoming an entirely different company with different business model in order for their drivers to be classified as contractors.
This is an argument against treating drivers as contractors, but it's not an argument against the OP's point, which is that a contractor relationship might be beneficial for some non-negligible part of the population, even if it's not beneficial more generally. And the fact that articles don't acknowledge this is notable.
Going to be the big reason is that is makes it easier to reach into their deep pockets when one of the drivers does something bad. Where there is an overtly obvious benefit to one group it usually means someone else is using it as a cover, that is going to be the trial lawyers.
I am in the group that says if you want to be a contractor and the employer agrees so be it. I have a good number of friends doing uber after hours aimed at specific purchases and the flexibility is what sold them. Not the life for me but for some it is a good alternative.
Plus the biggest benefit was the kick in the pants traditional taxi services got so they now how to treat their "drivers" better. How they get off with how that business is run and Uber and Lyft get called out should tell you the priorities here.
> The problem is that Uber currently exerts so much control over its "independent contractor" relationships that they have become, as a matter of law, employment relationships.
Sure, this could be true.
But people should recognize that a possible solution to this, is for companies to provide more flexibility and control to these people, such that they stay contractor but also get the additional contractor benefits, as opposed to forcing the employee relationship.
This would likely involve allowing drivers to set their own rates or handing over driver allocation responsibilities to another party. It’s really hard to envision a world where Uber hands over those kinds of abilities to someone. Companies like this rely on owning and setting the conditions of a market to keep prices competitive.
Why? Uber could easily set up an auction system similar to how Google auctions off ad space. And Google is certainly happy with the amount of control they retain.
Nobody disputes that Uber can have employees or contractors (or both), or that drivers should, in principle, be able to choose what status they hold.
The problem is that Uber currently exerts so much control over its "independent contractor" relationships that they have become, as a matter of law, employment relationships.
Moreover, in practical terms drivers don't end up with the choice they ought to. If they want any working relationship with Uber, they have to accept a mash-up of all the burdens of employment minus many of the benefits of being a contractor.