Uber drivers “employees” for unemployment purposes, NY labor board says

https://arstechnica.com/tech-policy/2018/07/uber-drivers-employees-for-unemployment-purposes-ny-labor-board-says/

by Deinos • 8 years ago

121 187 8 years ago

hobls4• 8 years ago

This is important. We’re at risk of the “gig economy” undoing over a century of hard fought gains in workers rights. Minimum wage laws, unemployment, etc, these are good things that should be preserved.

Uber has clearly shown that they’re happy to be as exploitative as they’re allowed to be. (And that even when they’re specifically disallowed they’ll do everything they can to ignore it and fight the laws.)

crunchlibrarian• 8 years ago

It seems like most of those rights have been eroded to near nothing. Effective wages (and minimum wage) have gone down in many places since the 1970s. Unemployment insurance is a luxury for white collar workers, few people get that benefit anymore.

What are we preserving exactly? The memory of some ghost? That's the wrong stance, if you want to advocate for something in this area it should be with shameless and unbridled aggression for change and new systems, not defensiveness or preservation.

pasquinelli• 8 years ago

once change is achieved it needs to be preserved and defended from attack, forever.

hobls4• 8 years ago

I absolutely agree. We need to be fighting for modern legislation to protect workers as well as trying to hold on to badly eroded victories of many decades past.

I must admit that I’ve been working white collar engineering jobs for nearly 15 years now, so I’m not exactly an authority on being a minimum wage worker. I thought you were still eligible for unemployment and that it was paid for by your employer?

knuththetruth• 8 years ago

The two things are not opposed to each other. The Fight for 15 movement has been successful in many places by explicitly invoking the true legacy of a “minimum wage,” socialized healthcare is more popular than ever under the banner of “Medicare for All.”

I agree that it’s important to push intellectually beyond a reform-minded liberalism that seeks to “take the edges off” of Capitalism. But that doesn’t exclude using the history of labor protections or organization as a jumping off point.

s73v3r_15• 8 years ago

We absolutely should be fighting for more. But we shouldn't be so hardlined on more that we lose what we have.

ythn5• 8 years ago

It's basically impossible to have nice things because people will always try to any little thing into a career and then complain when it isn't viable.

Made an app so that kids can deliver lemonade on weekends to neighbors for a few bucks? Someone will try to make a career out of delivering lemonade full time and sue you because it doesn't pay a living wage with benefits.

dragonwriter4• 8 years ago

It's basically impossible to have nice things

If by “nice things” you mean “maximally exploitative capitalist businesses”, sure.

emodendroket• 8 years ago

Well if you were offering, for instance, $40,000 loans for lemonade stands, and imposing a number of employee-like restrictions on where, when, how, and for what price they could sell the lemonade, I'd start to wonder whether you weren't actually employing those people too.

jjulius5• 8 years ago

It's basically impossible to have nice things because people will always try to any [sic] little thing into a career and the complain when it isn't viable.

Can you blame people for trying to make a career out of it when that's how Uber and Lyft marketed themselves when they first started to grow?

dragonwriter4• 8 years ago

Minimum wage laws, unemployment, etc, these are good things that should be preserved.

Well, they are clumsy patches on top of an inhumane system of exploitation, and we could probably do a lot better, but preserving them is better than retrograde progress.

slededit7• 8 years ago

The number of contract workers is actually down since 2005. The BLS just released updated numbers recently. The "gig" economy is a made up story.

e1ven3• 8 years ago

Your observation about the number of workers this effects seems out of place.

For the many people who do work these jobs, this ruling strengthens their protection.

Cthulhu_3• 8 years ago

Are gig economy people included in that figure? It seems like a category on its own, contract workers (the way I see it) still get to work full-time instead of 'whatever the market demands'.

ellisv• 8 years ago

I'm guessing this [1] is the report you're referring to.

The problem is that "contingent workers are persons who do not expect their jobs to last or who report that their jobs are temporary" and I don't think factors in anyone with a full or part-time job that also does side work.

[1] https://www.bls.gov/news.release/conemp.nr0.htm

cgriswald• 8 years ago

The BLS data you seem to be referencing[0] categorizes the various forms of contract workers based on their primary job (i.e., where they work the most hours). It is possible for a few part-time gig workers who have other jobs to replace a full-time traditional worker without increasing the number of contract workers reported in that data. Additionally, many independent taxi/limo drivers work for their own businesses, but employ a variety of 'gig' jobs (Uber, Door Dash, etc.) to get clients. It is not clear to me whether the BLS data identifies these as contract workers.

So, you might be right, but without better evidence and a more complex analysis from you, I can't really buy your conclusion.

[0] https://www.bls.gov/news.release/conemp.nr0.htm

rayvd2• 8 years ago

People choose to work where they work, right? Why should you or someone else get to define the conditions they think are mutually acceptable?

Also, last I knew, Uber wasn't driving around forcing people to work for their service.

The only thing exploitative here is the state and Taxi Lobby imposing conditions on the agreements you or I make with an employer.

In the end it will mean fewer jobs for prospective Uber drivers and higher costs for people taking advantage of the service.

heegemcgee• 8 years ago

People choose to work where they work, right?

I chose to work as CEO of Amazon, but Amazon had other ideas.

malvosenior4• 8 years ago

You are 100% correct, it’s just not a popular opinion around here.

I take Uber a lot and not once has a driver had anything bad to say about the “gig economy”. Most are thankful to make a couple extra bucks during their free time.

Their ability to make that money is under constant attack by those who supposedly “know better” than they do about how they should be earning a living.

jjulius5• 8 years ago

In the end it will mean ... higher costs for people taking advantage of the service.

As an occasional user of such services, I am OK with paying an increased rate if it means that the drivers are able to get unemployment.

minikites• 8 years ago

People choose to work where they work, right? Why should you or someone else get to define the conditions they think are mutually acceptable?

The agreement between an employer and an employee is not "mutual" because of the massive power differential. Your premise is flawed.

s73v3r_15• 8 years ago

"People choose to work where they work, right?"

People who have the ability to choose get to choose where they work. Many people do not have this freedom of choice. Otherwise people wouldn't continue to work for places that steal tips or sexually harass employees.

"Also, last I knew, Uber wasn't driving around forcing people to work for their service."

This is not, and never has been an excuse or defense. It has literally no bearing on anything.

Cthulhu_3• 8 years ago

Yes they are; the idea of the gig economy is great, like, doing the odd job in your own time and earn some money, but there's so many people that went ahead and are doing it full time as their primary source of income. The employees then compete with each other, driving the price down. And Uber's laughing all the way to the bank because they don't need to care about it, they'll make money either way. In fact I wouldn't be surprised if Uber was lowering the prices to get more consumers to use ubers more often.

malvosenior4• 8 years ago

Uber has been raising prices lately.

there's so many people that went ahead and are doing it full time as their primary source of income.

Did you ever think that they do this because it’s their best opportunity and they’re acting rationally? That taking away the opportunity to drive for Uber would be bad for them? It’s a way to make money that didn’t used to exist and people want to kill it because it’s vaguely incompatible with their political ideas.

lozenge• 8 years ago

The whole "gig economy" concept is just marketing. I don't think you can find a single platform where most of the services are provided by people with some free time on the side.

This is the industry that decided that "ride sharing" consists of getting in somebody else's car and telling them where you want to go...

koolba• 8 years ago

This is important. We’re at risk of the “gig economy” undoing over a century of hard fought gains in workers rights.

There's definitely work to be done to modernize our employment laws with the changes to the economy. It's not a clear cut "Everybody is an employee" though.

If someone drives for Uber for 1-ride per month should Uber pay $1000/mo for that driver's health insurance? How about 1-ride per week? How about if they have the app "on" but never accept a ride? Should they be paid for the time they didn't do any driving?

Clearly the driver isn't an employee in the traditional sense of the word. But they also aren't a totally independent contractor either as their livelihood is so closely tied to the platform of a private entity. My gut says to err on the side of not imposing restrictions or mandates until we figure out the right balance.

Minimum wage laws, unemployment, etc, these are good things that should be preserved.

Unemployment insurance, as it's implemented in the USA through effectively a tax collected by a private entity, is a scamola. A better idea would be having the employee get their own private unemployment insurance. That would also lead to lower costs of insurance for workers that are less likely to be discharged.

Uber has clearly shown that they’re happy to be as exploitative as they’re allowed to be. (And that even when they’re specifically disallowed they’ll do everything they can to ignore it and fight the laws.)

Nobody is forcing drivers to drive for Uber. An argument may be that they were enticed with higher rates that were subsequently lowered in some markets. There's also the argument that a lot of the drivers don't under the total costs involved (double payroll tax, depreciation, etc) but by itself offering work in the "gig economy" isn't exploitation. Uber (and Lyft, and ...) should be lauded for (net) creating thousands of jobs.

ceejayoz9• 8 years ago

If someone drives for Uber for 1-ride per month should Uber pay $1000/mo for that driver's health insurance? How about 1-ride per week? How about if they have the app "on" but never accept a ride? Should they be paid for the time they didn't do any driving?

We already account for these situations due to part-time jobs. NY requires a certain amount of wages be met to be eligible for unemployment benefits, for example.

randomdata• 8 years ago

But they also aren't a totally independent contractor either as their livelihood is so closely tied to the platform of a private entity.

Does this also mean that, say, an iOS developer could be considered an employee of Apple due to their livelihood being closely tied to that platform?

callalex• 8 years ago

I agree that privatizing unemployment insurance would lower costs for reliable, low risk employees by shifting the burden to higher risk people, but is that a good thing? The kind of people that can’t hold down a job are exactly the people that need unemployment benefits the most. Not everyone can’t hold down a job just lazy, many have mental or physical disabilities that make holding a job more challenging, and those are exactly the kind of people that can’t afford extra insurance in the first place.

thanatropism3• 8 years ago

This is a lot like the story of slave-like labor conditions for Nike in Indonesia or Bangladesh and such.

From our comfy seats and nice intellectually stimulating jobs, it really looks like Bangladesh should be standing up for its workers and telling Nike what's what. But then Nike will just move to neighboring starving Nepal, and Bangladeshis will have to return to farming and being affected by flooding and having a really, really bad time.

It's bad that things are bad, but it's good that they could be worse otherwise.

rayiner2• 8 years ago

Unemployment insurance, as it's implemented in the USA through effectively a tax collected by a private entity, is a scamola.

In every state I'm aware of, unemployment insurance is managed by the State. It is a form of social welfare, and the government will intervene to e.g. extend unemployment benefits during periods of high unemployment. Applicants for benefits also cannot be denied on a case-by-case basis, and certain groups of people almost certainly receive more in benefits than they pay in. Private insurance would not achieve the same objectives.

athenot• 8 years ago

If someone drives for Uber for 1-ride per month should Uber pay $1000/mo for that driver's health insurance?

It's no different than any other company. Most places have benefit levels tied to work levels. Working full time you get full benefits, for part time your benefits are lower and below a threshold, there are almost no benefits.

protonimitate• 8 years ago

> But they also aren't a totally independent contractor either as their livelihood is so closely tied to the platform of a private entity.

It's this weird middle-area that I think is causing the most friction.

As a thought experiment, I wonder what would happen if these platforms allowed drivers to set their own rates on a per trip or per session basis. As an independent contractor, you have complete control over how much you charge in order to make up for the burden of no benefits and heavy taxes.

galazzah• 8 years ago

My gut says to err on the side of not imposing restrictions or mandates until we figure out the right balance.

I would rather not wait until more workers lose their lives.

will_brown4• 8 years ago

An argument may be that they were enticed with higher rates that were subsequently lowered in some markets. There's also the argument that a lot of the drivers don't under the total costs involved (double payroll tax, depreciation, etc) but by itself offering work in the "gig economy" isn't exploitation. Uber (and Lyft, and ...) should be lauded for (net) creating thousands of jobs.

Something tells me you’re not very familiar with the history of Uber’s business practices.

It’s pretty easy to “create jobs” when you can move into jurisdictions and skirt the local laws.

In some cases, for example Pensacola Florida (where ride sharing was criminal), Uber solicited drivers from other counties where ride sharing was legal, with bonuses, to provide services in Pensacola during spring break. One of those drivers was arrested almost immediately.

In counties throughout Florida where ride sharing was illegal (civilly and criminally) Uber drivers racked up millions in fines that have never been paid. Why? Because Uber paid for their own lobbiest (who is a lawyer) to represent the drivers in court and then literally did nothing on their case and just let them linger. This is all beneficial to Uber and damaging to drivers.

Not to mention other issues such as Uber training driver in these jurisdictions on how to avoid detection by police.

One day someone might put together a study of the total numbers of drivers who now have criminal records for nothing more that becoming an Uber driver...when you get a criminal record for doing what you were hired to do, that should fit the very definition of exploitation.

heroprotagonist• 8 years ago

My gut says to err on the side of not imposing restrictions or mandates until we figure out the right balance.

The biggest problem with this approach is that it's often used to delay action until it's well beyond the point where it becomes necessary. It's very similar to the 'Well, we just don't know, and we need to do research' approach that tobacco companies used, very successfully, for decades in the arguments about whether their products cause cancer.

In the case of Uber, one state implementing these stricter measures is actually a good way to collect the needed data to make these decisions on a wider scale across the country. NY will take this approach and we'll see the results. Other states can look at those results and try to figure out a better way.

talltimtom• 8 years ago

“If someone drives for Uber for 1-ride per month should Uber pay $1000/mo for that driver's health insurance? How about 1-ride per week?”

Yes! A thousand times yes! Just because Uber is letting everyone i the door doesn’t mean they should get to dictate new terms of what employment means. Imagine your employeer removing your healthcare and defending the decision with the argument “well we’ve now set it up so anyone can just walk in the door and start working and we’ll pay them per hour worked. I know that’s not what you are doing but we have to treat everyone the same so we’re also cutting your pay”.

chimeracoder9• 8 years ago

This is important. We’re at risk of the “gig economy” undoing over a century of hard fought gains in workers rights.

Not in this case. In New York, taxi drivers are licensed but not employees. Uber and Lyft drivers are all licensed by the TLC, so they're no different legally from any other black cab service.

The situation may be different in other cities, but in New York, all of the established precedent so far classifies TLC drivers as independent contractors or self-employed.

amyjess• 8 years ago

We’re at risk of the “gig economy” undoing over a century of hard fought gains in workers rights

Consumer rights too. I've seen some really horrendous people on /r/Lyft arguing that they are well within their rights as independent contractors to refuse service to disabled people and if Lyft kicks them off the platform for it, they can sue Lyft for violating their rights as contractors.

And you can replace "refuse service to disabled people" with any other form of mistreating customers, and you'll see people on /r/Lyft arguing for it and claiming that Lyft can't kick them off the platform for it.

The gig economy needs to go.

Agustus• 8 years ago

It should be noted that minimum wage laws are not good, from their original implementation to today. The original law was put in place to keep unskilled persons (read minorities of color) from taking white's jobs. The hard working unskilled people were learning the skills to take the white people's jobs at a lower rate, so they passed a bill that made it impossible to effectively climb up the wage ladder. Today it is used to keep people subservient to the government when the wage gets higher than an economy can bear, look at Puerto Rico and how unemployment was so high, the only jobs available were government jobs. Any economist who can look themselves in the mirror will tell you this.

rayvd2• 8 years ago

Score one for Big Taxi!

SamReidHughes• 8 years ago

How does this work if they drive for both Uber and Lyft?

Cthulhu_3• 8 years ago

That's an interesting conundrum. I don't think Uber or Lyft has it in their terms that they forbid it. At the same time, they don't seem to compete enough on worker rights and pay either, so for the drivers it's not beneficial to go exclusive.

e1ven3• 8 years ago

I would presume it would work the same as if you had two other part-time jobs, such as working at both Walmart and Best Buy.

thanatropism3• 8 years ago

It's different though. Part-time retail workers pledge their loyalty to Walmart from 9-13 and to Best Buy from 18-22. They're not instantly choosing which boss is paying better for the next 15 mins. You actually have to get someone to cover your shift if you need a mental health break or something -- otherwise, your relationship with Bestmart is strained and you might be out of work.

For all of the phoniness behind phrases like "ride-sharing" and "gig economy", workers have never had a more horizontal relationship with their bosses -- except, perhaps, in higher pay-grade service sectors where "bosses" are referred to as "clients".

viscanti• 8 years ago

But neither company would pay you as a full time employee when you're jumping between jobs for both in the same hour/shift.

asdsa5325• 8 years ago

But if you are part-time, then you don't get employment benefits.

cwilkes• 8 years ago

I can understand filing for benefits if you were terminated by Uber (first one was for low ratings) but one of the plaintiffs quit because of low pay. Quitting for non egregious reasons (bad work environment, harassment, etc) is usually a blocker for filing for claims.

ceejayoz9• 8 years ago

A significant drop in wages is generally considered "constructive dismissal" for unemployment purposes.

chimeracoder9• 8 years ago

A significant drop in wages is generally considered "constructive dismissal" for unemployment purposes.

A significant drop in wages can be considered constructive dismissal, but it's generally difficult to prove without explicit evidence of the intention behind it. And in this case, it's pretty hard to make the argument that it constitutes constructive dismissal, since there is zero evidence that Uber acted in a way to target the driver by intentionally cutting their earnings specifically, whether or not those actions were intended to target or retaliate against the driver.

cm20122• 8 years ago

And yet Taxis weren't for 100 years? Taxi drivers were even more restricted and were still not employees.

ceejayoz9• 8 years ago

A neighbor of mine is a taxi driver. I can call the number on their cab (or their business card) and get them, specifically. I can also hail them if I see them on the street.

That seems like a far more legitimate "independent contractor" relationship than the one Uber sets up between drivers and riders.

chimeracoder9• 8 years ago

That seems like a far more legitimate "independent contractor" relationship than the one Uber sets up between drivers and riders.

The relationship that Uber sets up between drivers and riders in NYC is exactly the same as the relationship that all FHV services in NYC set up between licensed drivers and riders. Uber operates as an FHV service, no differently from any other.

EDIT: Before downvoting, you may want to look up the facts here. In NYC, unlike some other cities, Uber and its drivers are licensed by the TLC. There is literally zero distinction between the operations of them from any other FHV service.

cm20122• 8 years ago

You can do the same thing with Uber. The driver can just turn off the app and pick you up if you're nearby. Realistically it won't happen often, for the same reason that people didn't keep folders full of yellow cab business cards.

pitaj• 8 years ago

This is absolutely ridiculous and just more cronyism on behalf of the taxi companies. Uber and Lyft drivers are definitively independent contractors. There is no legitimate argument otherwise, and pretending like they are is just showing the bias of these bureaucrats.

peacetreefrog6• 8 years ago

Deciding to drive for Uber is a mutually beneficial transaction between consenting adults (or an adult and a company). If the driver wasn't benefiting, they'd do something else.

Well-intentioned (by some people, prob most people on HN) and not so well-intentioned (anti-competitive lobbying by taxis) efforts to make the relationship less "exploitative" are likely doing more harm than good.

What happens when the gov mandates all these extra benefits? "Drivers WILL earn more money!" The answer is some combination of: Uber becomes costlier, people take fewer rides (or growth is slower than it should be), and some people who are perfectly willing and able to drive right now are unable to do so. Or (if demand is more inelastic) a bunch of new drivers decide the new benefits make it worth entering the market, and not everyone who wants to drive can/people sit around idle, etc.

Either way, you're hurting consumers and many existing drivers.

peacetreefrog6• 8 years ago

I really think one of the biggest blindspots of the (generally well-intentioned, smart) crowd at HN is lack of appreciation of economics and markets, and the belief that tinkering with these markets for the better is as simple as turning a dial on a knob (or passing a law, or getting a good ruling in a court case).

Good article with related thoughts on this: http://www.econlib.org/library/Columns/y2005/Robertsmarkets....

britch4• 8 years ago

Edit: Yeah I'm off the mark, median pay is more like 10-8. I gotta read more closely

I think the "mutually beneficial" is somewhat debatable. If you take in to account the cost of upkeep on the vehicle from increased driving some drivers barely break even or even lose money driving for uber. On median a driver makes something like 3 dollars an hour https://www.theguardian.com/technology/2018/mar/01/uber-lyft...

potlee2• 8 years ago

No they don't. From your link:

The first draft of the paper, released last month, said the median profit was $3.37 an hour, but the author released a new analysis on Monday following criticism from Uber. In the new analysis, the researcher reported the higher median profit of $8.55 an hour.

Another quote from your link:

Alex Tabarrok, a George Mason University professor who called the paper’s findings “dubious” last week, said he still had concerns about the researcher’s reliance on questionable survey data and that he believed the average hourly profit of Uber drivers was closer to $13 an hour (similar to figures the company has cited).

peacetreefrog6• 8 years ago

It has to be mutually beneficial, otherwise drivers would be doing something else. We don't have slavery in this country anymore.

One of the biggest benefits is working whenever you want. A paper by the NBER found drivers get twice the consumer (or producer in this case I guess) surplus they would from less flexible arraignments:

http://www.nber.org/papers/w23296

LarryDarrell• 8 years ago

Every gig-based employer needs to be lobbying hard for universal health care. It's not the only benefit of being a employee, but it's a big one. If we keep insisting that only employees get health care then people are going to want to be considered employees.

peacetreefrog6• 8 years ago

"Regular" employees don't have universal health care. It's just that employers get a tax deduction for employer provided group insurance. Most economists believe this is hugely inefficient and a big policy mistake. If we're lobbying hard for pie in the sky goals, it'd be better to get rid of that (or let employers deduct contributions to individual plans instead) instead of applying the same crappy policy to gig economy jobs too.

potlee2• 8 years ago

How is this not going to result in even lower take home pay for drivers? Uber does not have the margins to absorb the cost. They will certainly pass it on the drivers. They could increase pricing, but that dampens demand, which given how many drivers are out there, could be really bad for driver utilization and hourly earnings.

YoyoyoPCP3• 8 years ago

I find it so funny when the state/government requires businesses to compensate people in some minimal way. If you think people need X dollars or Y benefits to live a comfortable life, why don't you give it to them?

/rant

foepys• 8 years ago

Who would pay for that? Businesses through higher taxes?

YoyoyoPCP3• 8 years ago

Sure! At least it would be a clear, defined system.

lotsofpulp2• 8 years ago

Just like healthcare, everyone believes no one should be left to die without healthcare, but when it comes to voting for politicians who support government funded healthcare for everyone, apparently we don't believe that. Better to try and get someone else to pay for it.

ball_of_lint• 8 years ago

They do it precisely because of people who share that idea with you. Minimum wage may increase unemployment a small amount but the positive effects are ensuring that those people who have the lowest paying jobs are able to afford to live. Similarly with unemployment and welfare. For many people losing their jobs or taking a pay cut would mean becoming homeless or being unable to feed themselves.

If you think that there are enough charitable people in the world to voluntarily sustain you through the end of your natural life, I invite you to try it out.

YoyoyoPCP3• 8 years ago

Apologies, I must have worded that too vaguely. I meant the state should minimally pay people the amount they believe to be a livable wage.

Uber drivers “employees” for unemployment purposes, NY labor board says

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