California is cracking down on the gig economy

https://www.vox.com/policy-and-politics/2019/5/30/18642535/california-ab5-misclassify-employees-contractors

by luu • 7 years ago

264 317 7 years ago

manfredo19• 7 years ago

Increasing benefits and worker protections also increases the cost of hiring employees. This is widely understood. In countries where employees have extensive benefits and protections like France, employers are very picky about which employees they hire because it will be difficult or expensive to fire them if they turn out to be poor workers. Hence, and unemployment rate over twice that of the US.

The ease of entering and exiting the gig economy is one of its most valuable aspects. What other kinds of jobs can you set your own hours, and join and quit largely at whim? If Uber, Lyft, DoorDash, etc. all now have to consider their contractors employees then they will have to start setting hours. If they have to give their workers the same benefits as employees, then it will be financially unsustainable to let them set their own hours. People who depended on Uber for flexible employment will not be able to continue working.

This seems like political posturing that's going to hurt the majority of employees if it passes.

Leszek• 7 years ago

Germany has similar workers' rights and protection from firing, yet it has a lower unemployment rate.

manfredo19• 7 years ago

Its still easier to fire employees in Germany than in France from what I understand. Germany also has also averaged roughly half the yearly population growth rate as compared to France for the last several decades (even dipping into the negatives for several years). So the supply of labor is more constrained.

cinquemb5• 7 years ago

Not that I think employment rate means much (look at japan's very low employment rate compare to their economic growth since 1989, its very low [2.4% now]), but their unemployment rate for April came in at 4.9%, whereas in the US was at 3.6%.

freeflight• 7 years ago

Those German worker rights, and strong ties between companies and unions were supposedly among the reasons why Walmart failed in Germany:

“They didn’t understand that in Germany, companies and unions are closely connected,” Mr. Poschmann said. “Bentonville didn’t want to have anything to do with unions. They thought we were communists.” [0]

[0] https://www.nytimes.com/2006/08/02/business/worldbusiness/02...

barry-cotter• 7 years ago

German labour law and culture are utterly unlike the US. Under NLRB regulations the kind of long term, relatively collegial, give and take contract negotiation that is mundane in Germany is illegal. Volkswagen and other German car companies would like to have the same system in the US as in Germany. They don’t because it’s illegal.

joejerryronnie• 7 years ago

Germany essentially leveraging the poor countries in the EU to subsidize their economy may also have something to do with their low unemployment rate.

mseidl2• 7 years ago

Plus in Germany, you have what's called a probezeit, or probationary time. It can't be longer than one year, but it's a time where either party can end the work contract if it's not working out.

erikpukinskis• 7 years ago

Don’t German companies penalize you for quitting sometimes?

tstgggssg4• 7 years ago

The problem is that most are not making much money [0] and most would be better off working a min wage job.

Most Uber/lyft drivers are recent immigrants , working poor who end up taking on a lot of risk for little if any reward.

Uber also uses psychological tricks to trick drivers into driving more then is rational [1]

[0] https://www.nytimes.com/2019/04/12/technology/uber-driver-ip...

[1]

https://www.nytimes.com/interactive/2017/04/02/technology/ub...

manfredo19• 7 years ago

The problem is that most are not making much money [0] and most would be better off working a min wage job.

$40,000 a year is hardly minimum wage. Most of the drivers I've talked to explain that it does usually equate to between minimum wage to $20-$25 an hour after expenses depending on how effective you are at getting surge priced rides. But, unlike a minimum wage job you can set your own hours which is a huge advantage.

Most Uber/lyft drivers are recent immigrants , working poor who end up taking on a lot of risk for little if any reward.

Yeah, and what would poor recent immigrants be doing instead? Probably work that is much riskier (e.g. farm work).

Uber also uses psychological tricks to trick drivers into driving more then is rational

I don't see any "psychological tricks" in this article. Telling drivers where the most riders are and where surge pricing is happening helps drivers get more money. And I'm supposed to think this is a bad thing?

Also, I would advise against trusting the NYT when it comes to reporting on the tech industry - especially large tech companies. I have observed grossly exaggerated stories and even outright falsehoods portraying tech companies in a negative light with enough consistency that I do not consider them a reliable source on this topic. Remember, traditional media like the New York Times is being decimated by Google and social media. Fanning the fires of the "techlash" is in their best interest.

inferiorhuman5• 7 years ago

This seems like political posturing that's going to hurt the majority of employees if it passes.

Will it hurt them more than making roughly minimum wage or less?

https://www.marketwatch.com/story/this-is-how-much-uber-driv...

Marketwatch is estimating under $11/hr with no insurance, no retirement benefits, etc. Even In-n-Out and Starbucks pay more, offer better benefits (even for part timers), and generally offer flexible schedules.

ravenstine6• 7 years ago

Mostly no, because the majority of gig economy workers already have full time employment and are working for Uber or DoorDash to make supplemental income. I'm saying this as someone who drove for GrubHub for months and knew other drivers.

conanbatt4• 7 years ago

What job will they get if this one stops existing?

pjmlp• 7 years ago

As someone that has worked across several European countries, all of them with better employee protection laws than US, I pretty much prefer our view of how employees should be handled. And yes I also enjoyed the French Alps as part of it.

There is an limit to exploitation capitalism.

naner• 7 years ago

Is there a name for this type of reasoning? An extreme version is that sweat shops are more beneficial then letting kids starve to death.

Can we try and improve the situation for low wage workers as well as additional methods to address unemployment?

eecc• 7 years ago

TINA? Paternalism (think of factory owners building Falansteriums for their workers)

chewz4• 7 years ago

Increasing benefits and worker protections also increases the cost of hiring employees.

Majority of land owners over the course of history had come to the conclusion that serfdom and slavery is beneficial to positive returns on landholding.

Also multiple countries had been greatly improving their GDP from forced labor (Nazi Germany, Mao's China, Stalin's Russia and other).

https://en.wikipedia.org/wiki/Unfree_labour

https://en.wikipedia.org/wiki/Serfdom

tstgggssg4• 7 years ago

You left out USA

manfredo19• 7 years ago

Are you seriously comparing gig workers to slavery? This is just beyond absurd, and it makes me dubious as to whether you're participating in this conversation in good faith.

On the off chance that you're not trolling, contractors - unlike slaves - have the freedom to choose what work they'll do. Drivers for Uber often also drive for Lyft when it pays better. There's nothing stopping them leaving if their opinion is that the pay is not worth the work. By comparison, slaves are not free and are forced to do whatever work their masters tell them to.

georgeecollins• 7 years ago

> This seems like political posturing that's going to hurt the majority of employees if it passes.

That reminds me of the posturing when they passed those child labor laws. And what did we get? A bunch of unemployed children.

zhoujianfu• 7 years ago

The child unemployment rate in America is more than twice that of China!

pishpash6• 7 years ago

Surely you're not arguing that adults have the same degree of agency and consent as children.

manfredo19• 7 years ago

Categorizing contract workers as employees and forbidding or limiting child labor are vastly different situations. I can only assume that this is some failed attempt at a joke.

Child labor laws prevented parents from sacrificing their children' educations to use them for immediate economic gain. This is not at all related to extending employee benefits to contract workers that set their own hours.

rzwitserloot2• 7 years ago

Take the wider view.

Let's posit as a hypothetical that 1% of the workforce is deplorably bad at the notion of being employed (let's define that as: It'll take them 100s+ of trying things until they find a job where the employer is better off employing them vs. not employing them). Let's say a further 1% is rated as 'quite bad' (defined as: More than half the jobs they would on paper qualify for, they'd do such a bad job the employer is better off not employing them).

Why employ these people? In western europe the common song and dance routine is a calvinistic 'because work is good for you, otherwise they'd be lazy gits'... at which point apparently the argument becomes: The employers of the notion must carry the burden of dealing with these folks, for the good of society.

In the US and a lot of right wing euro parties the sentiment is more: Well, they are lazy! I don't wanna pay taxes to enable these morons. Except that is an economic falsehood; they drag society down no matter what you do. I guess unless you're willing to take the moral position of just casually killing them in a way that is really cheap and easy (and thus, probably quite imprecise – few to no people are morally okay with this I assume), you just have to grin and bear it. Yeah, they drag a bit. It's fine; the economy can easily accomodate them.

The point is: A system that does let such people be employed here and there for a while is not inherently better than one that does not, and, 0% unemployment is a crazy goal.

manfredo19• 7 years ago

Let's posit as a hypothetical that 1% of the workforce is deplorably bad at the notion of being employed (let's define that as: It'll take them 100s+ of trying things until they find a job where the employer is better off employing them vs. not employing them). Let's say a further 1% is rated as 'quite bad' (defined as: More than half the jobs they would on paper qualify for, they'd do such a bad job the employer is better off not employing them).

This is an overly coarse grained depiction of the situation. An individual is not blanket "bad employee" who can't be productive. I'm a good software developer, but if you hired me to be a concert pianist I'd suck at it. I'd say probably 5-10% of employees end up being under productive or non-productive at their jobs. This is consistent with the performance review scores I've seen.

When firing an employee is easy, employers are much more willing to hire because they know that they will be able to terminate employees that are not productive. When firing an employee is hard, employers will be reluctant to hire employees and will only hire the ones that they are confident will do well. This usually makes it very hard to get started in an industry, because companies are leery of workers without experience.

Why employ these people? In western europe the common song and dance routine is a calvinistic 'because work is good for you, otherwise they'd be lazy gits'... at which point apparently the argument becomes: The employers of the notion must carry the burden of dealing with these folks, for the good of society.

This doesn't seem to be the case seeing as how most of Western Europe has a higher unemployment rate than the US.

In the US and a lot of right wing euro parties the sentiment is more: Well, they are lazy! I don't wanna pay taxes to enable these morons. Except that is an economic falsehood; they drag society down no matter what you do. I guess unless you're willing to take the moral position of just casually killing them in a way that is really cheap and easy (and thus, probably quite imprecise – few to no people are morally okay with this I assume), you just have to grin and bear it. Yeah, they drag a bit. It's fine; the economy can easily accomodate them.

You're seriously saying that if we don't employ people who are incapable of doing their jobs, then the only other option is summary execution? This is absurd to the point that I can only assume this is a bad joke.

The much more likely approach is to let them continue to be unemployed and search for a job that they are capable of doing.

The point is: A system that does let such people be employed here and there for a while is not inherently better than one that does not, and, 0% unemployment is a crazy goal.

0% unemployment is a crazy goal and I don't know why you seem to think that making it harder or easier to fire employees will ever bring it closer to zero. Even in fields where the number of job openings vastly exceed the available positions, unemployment is still usually at 1-2%.

asicsp• 7 years ago

seems like same topic as https://news.ycombinator.com/item?id=20065910

egypturnash• 7 years ago

From TFA:

Uber would likely have to reclassify tens of thousands of drivers in California as employees — something Uber drivers have been fighting for in court, unsuccessfully, for years.

"Fighting for in court" links to https://www.vox.com/2019/5/8/18535367/uber-drivers-strike-20... - which includes these choice paragraphs:

It’s worth reemphasizing this: Uber doesn’t want to pay drivers to take 15-minute rest breaks every few hours because it would cost too much, even though all US employers are required to give hourly workers paid breaks under federal law.

In the filing, the company says that dissatisfied drivers could become a business liability, as recent protests in India, the United Kingdom, and the United States have interrupted business on the platform. Instead of outlining ways to make drivers happy, Uber suggests it will just get worse.

“As we aim to reduce driver incentives to improve our financial performance, we expect Driver dissatisfaction will generally increase,” the company stated.

Sssssooo this maybe sounds like something employees who have been doing these jobs have been wanting for a while...

manfredo19• 7 years ago

Drivers want it, but drivers probably don't look at Uber's finances. Ask drivers this:

You would get the benefits of employees, but now you would have to work at least 40 hours a week and now those hours will be set by Uber - you will not get to choose your own hours.

Do you think they'd want that situation?

inferiorhuman5• 7 years ago

now you would have to work at least 40 hours a week and now those hours will be set by Uber

Why would you have to work at least 40 hours a week? There is such a thing as a part-time employee In fact most low-rung jobs try to keep employees under full-time to avoid the extra benefits that FTEs qualify for.

Or, put it another way, if Uber required its drivers to work 40 hours a week and this resulted in unhappy drivers, what makes you think anyone would want to drive for Uber in the first place?

e403• 7 years ago

Benefits can be given at less than 40 hours per week. The policy of many companies is a 30 hour per week threshold for that.

jypepin• 7 years ago

It's unclear how many drivers are actually fighting this and how many are actually happy in the current situation and do not want to be classified as employees.

The article mentions "Last month, Uber settled the main court case with 13,600 Uber drivers". That doesn't seem like a lot of drivers (or the majority) of drivers.

distances• 7 years ago

The next sentence explained how 350,000 other employees are unable to fight this is courts due to mandatory arbitration clauses, another abomination that should have never existed.

wutbrodo2• 7 years ago

Is there any particular reason (beyond lazy, motivated reasoning) that you think that these drivers represent an appreciable fraction of the Uber workforce? "Some drivers are unhappy" seems roughly as useful a data point as "every Uber driver I've talked to seems happy", which would be rightfully dismissed as unrepresentative by anyone with a modicum of intellectual honesty.

maxerickson• 7 years ago

I wonder what federal law they are referring to there. I'm under the impression that there's no requirement for paid breaks.

(There's a requirement that short breaks be treated as compensated time for the purposes of determining when overtime pay starts, but that's not what your quote is getting at.)

wyre• 7 years ago

Its most likely state law in California and not a federal law. A lot of states require employers to allow paid breaks.

andrei_says_2• 7 years ago

“If only we could have drivers work for free and be extremely satisfied...”

I’m wondering if Uber will seek to collaboration with the correctional facilities which can provide staffing for similar scenarios.

dmode3• 7 years ago

While I am sympathetic to Uber and Lyft drivers and other gig economy workers, I am wondering if anyone has the done the calculus on job losses vs. making something. And whether making something is better than being jobless. I met a Uber driver the other day who drives 5000 miles per month. Clearly that is close to exploitation. But if Uber is forced to pay drivers 100% more surely there will be fewer drivers. And many people may not have a path to make money. In addition, I have met many Uber drivers who are retired and only do few hours over the weekend for supplemental income. This sweeping bill will also take out those positions. It feels like short sighted without accounting for these edge cases.

Also, what is the difference between Uber and eBay / Airbnb ? Can a seller in eBay or a host at Airbnb be considered an employee ? Essentially both eBay and Airbnb have no business without their sellers or hosts. One can claim that these are marketplaces, but the only difference between these marketplaces and Uber is that Uber sets price (according to the ABC test). Can Uber then simply skirt the law by allowing a price "opt-in" suggestion ? or even outsourcing pricing to another LLC ?

Edit: just thinking more about my last point. Uber can easily let drivers set their own price and simply show the lower price range to the passenger. Will be interesting to see how that plays out

manfredo19• 7 years ago

I met a Uber driver the other day who drives 5000 miles per month. Clearly that is close to exploitation.

Averaging 30 miles an hour, that's 166 hours a month.

stevesimmons• 7 years ago

How did you know 30mph is the right average speed? For instance, average driving speed in Manhattan in 2016 was 7.1mph.

Your working time calculation also needs to consider loading and unloading passengers, gaps between fares, time for comfort breaks, refueling, vehicle cleaning and maintenance, etc.

dmode3• 7 years ago

166 hours of driving can mean 8 hrs of driving for 20 days. This is very different than 8 hrs of sitting in front of a computer. I get tired driving 2 hrs every day back and forth from work. Not to mention that that hours can be way more in an urban area as most rides are short distances and traffic is very tight

andrei_says_2• 7 years ago

My commute to work which excludes downtime waiting for fares averages between 10 and 20 mph. Some of the streets I take have 40mph limit which is higher than average.

So by these calculations, that person is driving close to or above 300h/month. Possibly with few bathroom brakes and no rest.

While absorbing the cost for insurance and car amortization. If this is not exploration and a great deal for an unscrupulous employer I don’t know what is.

Yes, the “economy” is doing great. And yes, for a frighteningly large proportion of its citizens the US feels more and more like a 3rd world country.

jeremyjh2• 7 years ago

eBay and Airbnb sellers are using their own capital to buy and sell goods that they own. They are not selling their labor in any sense. Uber drivers use their own cars but they are primarily selling their labor.

entropea4• 7 years ago

They include the cost of all of that in their prices, at least, someone who ran a good business would. This is not comparable to Uber, because drivers do not set their own prices. I also am pretty certain Uber takes much higher percent cut than eBay and Paypal/payment processing.

dmode3• 7 years ago

Does it matter whether labor or capital is sold ? The ABC test doesn’t check for that. Uber drivers also use their own capital to buy cars. The major difference is setting prices

sokoloff• 7 years ago

I met a Uber driver the other day who drives 5000 miles per month. Clearly that is close to exploitation.

It seems to me like you skipped a step or two in your explanation there. What inherently makes driving 5000 miles per month exploitation? There are many paid driving gigs (some employee, some owner-operator) that drive at least that much and I'm not sure I'd classify any of them as exploitative.

brianchu• 7 years ago

I'm coming to the view that gig workers are neither employees nor independent contractors. Employees don't get to unilaterally set their own hours, and contractors don't get prices unilaterally dictated to them or barred from their profession if their rating falls too low.

All this regulatory squabbling is arguing over whether a square peg fits a round hole or fits a triangular hole.

We need a third classification for gig workers that affords them some protections while preserving the economic viability of ridesharing companies. Disregarding any problems we might have with specific companies, I think ridesharing companies are a benefit to consumers.

johnchristopher2• 7 years ago

We need a third classification for gig workers that affords them some protections while preserving the economic viability of ridesharing companies. Disregarding any problems we might have with specific companies, I think ridesharing companies are a benefit to consumers.

How about the ridesharing companies should provide - by law - for food and shelter (paid for with a pay cut from the gigs) until the employee/contractor can get his own food and roof ? That would offer some protections to people while keeping the economy going on ? It would also allow really poor people to get on the job wagon with some kind of peace of mind regarding the end of the month.

The companies could make a year-contract euro style so they would be certain the original investment isn't wasted and the employee/contractor has a job for a year until he becomes a regular contractor.

threatofrain• 7 years ago

Do you want employers to provide housing because you think employers can spend money on housing and food better than employees? Believable.

But I am wary of the efficiency of company towns. In my perspective, things like housing, food, and medicine are "power vacuum" issues, where not taking up these issues is the same as leaving power (and responsibility) on the table for someone else to grab. I also think once power is taken away it's hard to get back.

I view the issues you're talking about as social and government issues, and I'm wary about ceding more and more responsibility to businesses simply because we think government sucks.

kmlx2• 7 years ago

"How about the ridesharing companies should provide - by law - for food and shelter "

so basically making gig workers even more dependent on the company?

m0zg• 7 years ago

They'll do that right as soon as you are required, by law, to use their services no matter the price.

kartan• 7 years ago

Disregarding any problems we might have with specific companies, I think ridesharing companies are a benefit to consumers.

I am all for ridesharing. But Uber and Lyft, as an example, has nothing to do with that concept. It is not like your Uber driver was coincidentally going to the exact place that you were going.

Ridesharing, as understood before the gig economy, was someone in the company realizing that there were more employees in her neighbourhood and providing a ride for them for a price (some times just sharing gas expenses).

That is a really good approach. Uber/Lyft and others hide their business model calling themselves ridesharing when they are not, calling their employees contractors, when they are not, etc.

willio58• 7 years ago

I thought that was called carpooling.

kelnos4• 7 years ago

Except we never called that "ridesharing". It was just "carpooling".

As much as I hate the term ridesharing, since it doesn't actually describe what these companies and drivers do, it's not like it was a widely-used term that's been redefined over the past decade.

chungleong2• 7 years ago

A service like BlaBlaCar (in Europe) is what can legitimately be called ride-sharing. Uber is fleet of pirate taxis.

ibeckermayer• 7 years ago

And why exactly should anybody care what you like and don’t like? If you don’t like Uber/Lyft, be my guest and call a taxi.

Nobody is using these services under the impression that the drivers just happen to be going to the same destination. So your semantic quibble is just that.

your-nanny2• 7 years ago

yeah the whole "sharing economy" is just bs marketing.

will42742• 7 years ago

Uber offers ride-sharing services (Uber Pool) and Taxi services. As a frequent Pool rider, I'm not sure what else you would call it besides ride-sharing - the three of us taking the Pool don't own cars and wouldn't have otherwise gotten in touch with each other. Uber provides a car, a driver, and route coordination for a price and the three of us share the ride.

jquery3• 7 years ago

Edit: [mistaken reply to wrong post]

cycomanic3• 7 years ago

Just because somethin has a benefit to the consumer does not mean we should keep it a viable business model, otherwise we should also allow slave labor. Moreover, while there might be an immediate benefit to consumers, as the article notes it might as well be detrimental overall, because it increases costs for everyone. The only people who are really benefiting are the large shareholders.

humanrebar2• 7 years ago

You are correct that some business models are inherently bad. Ones that require violence like slavery or fraud like Ponzi schemes especially.

But I don't care for California to make sure privately hired cars are theoretically X% cheaper. If there are protections that are needed for drivers so their net income is more obvious or something, let's do that.

bko3• 7 years ago

Just because somethin has a benefit to the consumer does not mean we should keep it a viable business model, otherwise we should also allow slave labor.

How could you compare someone voluntarily engaging in employment to slave labor?

well be detrimental overall, because it increases costs for everyone.

I don't buy it. The math that claims that these designations cost taxpayers is naive. As though applying additional costs to the employers would somehow just generate wealth and tax revenue from nowhere. The money would come from somewhere (consumers and gig workers), and would result in less business as an artificially higher price would scale back quantity demanded.

The only people who are really benefiting are the large shareholders.

Most of these businesses are losing a lot of money. They're not fleecing anyone. It might not be viable by any means but increasing the costs arbitrarily would decrease their chances. It's important to remember that most of these gig workers work these jobs because they prefer them over any other job available to them. So removing options for them is unlikely to benefit them.

morpheuskafka• 7 years ago

Slavery deprives someone of a basic human freedom. A free market is the exact opposite of that.

will42742• 7 years ago

Parent is suggesting a new regulatory category. Even if we accept that the gig economy is detrimental overall today, in theory this new regulation would bring it up to a different point. I'm not sure how you can conclude that it's "detrimental overall" without better defining the regulation. That is, I'm not sure your comment really addresses parent's comment.

wiggler00m• 7 years ago

Well said. The legal origins of the separation between contractors and employees pre-date computers, not to mention the internet.

hrktb• 7 years ago

Employees don't get to unilaterally set their own hours

Doesn’t it depends on the contract ? Nothing stops a company from letting their employee set their own hours.

That’s actually close to how door to door sales contracts work in some fields, where the company doesn’t care about how long or where the salesman works, and mostly pays by the sales number.

gowld2• 7 years ago

This is of course correct. Classifying workers into exactly two categories is logically absurd, but that's what the old law does, at least in USA.

dnautics• 7 years ago

Just charge drivers $1/day to use the platform and now they aren't contractors, they're customers.

esolyt• 7 years ago

Even better, categorize your app as a game. Now they're players.

Pokémon Go players don't even get paid, yet they drive from pokestop to pokestop just to earn virtual items.

antisemiotic• 7 years ago

By default you get 5 uses of GPS per day, for more than that use in-app purchases. Also try our lootbox for a chance at winning fancy avatars to display near your name!

didibus2• 7 years ago

Actually, this might happen in the future. You could totally see it as, any independent person who want to offer rides as a service might need a platform for it. And if Uber offers itself more as a marketplace, this could make sense. Pay Uber a fixed price to be on the app, or have them take a percentage, and be routed through calls, but set your own prices for the rides.

I'm surprised there isn't an Uber like app that operates this way yet actually.

CryptoPunk6• 7 years ago

The people I see working gig economy jobs seem to come from diverse socioeconomic backgrounds, ranging from people with new Teslas to those who look like they are on the margins of society.

With respect to the latter, these are people who I don't see in any other occupation. I assume the reason they work these jobs is that they cannot get traditional jobs which generally have higher barriers-to-entry due to higher guaranteed wages and more benefits.

If gig economy jobs are made to be more like other jobs, then the same barriers to entry are going to emerge.

It's the very low-cost nature of providing these jobs that makes them accessible to those at the lower end of the skill scale.

Th US has actually seen wages for low-skilled workers grow very quickly over the last couple of years and perhaps it is not a coincidence that it has been over the last couple of years when the number of gig economy jobs has grown to become a significant portion of the total job market.

Basic economy theory dictates that increasing the sources of demand for low-skilled labor will increase wages for low-skilled labor. That's why gig economy jobs shouldn't be prohibited.

JMTQp8lwXL• 7 years ago

I've never been picked up by a Tesla when requesting Uber or Lyft rides.

cardiffspaceman• 7 years ago

It might happen if you change your preferences in the app, but then you'd be paying a higher fare. I usually use Uber for "occasions" and I wouldn't be surprised by a model X or model S. Usually it's an Escalade or similar.

tomohawk2• 7 years ago

In the 80s IBM got the federal law changed so that tech workers no longer had a safe harbor provision to be 1099s. They wanted to pay less for the workers, and they got their wish. The take home for tech workers dropped a lot. You have to wonder what the big interest is that is pushing this puff piece from vox.

This law will have an overall negative impact on people who want to work independently and take care of their own stuff.

Here's how its already impacting freelance journalists:

https://www.cjr.org/united_states_project/california-freelan...

We're not talking about slave labor here. It's a consensual relationship.

If I want to be a 1099 and be more independent, I'm not sure what the state's interest is here.

imagetic4• 7 years ago

I fall under this umbrella, as I do journalism, media and TV production work. It looks as if it will have a HUGE impact. But to be honest, I don't think many of the freelancers/contractors really understand any of the fine print. I barely do.

LanceMan• 7 years ago

This, along with the need to offset $1B operating losses will severely cripple Uber. I enjoy the convenience of using an Uber to get around town but afraid these coming actions will raise prices significantly.

huffmsa• 7 years ago

Ah yes, legislation from a "helpful government" which will ultimately drive companies which depend on quasi-contractors to develop their robot replacements at an accelerated rate.

Classic political short-sightedness.

entropea4• 7 years ago

Your FUD is basically saying "I approve of major exploitation". Robots are coming, but not any time really soon. Autonomous vehicles are not a current threat in the slightest, might as well make drivers lives better at the expense of a corporation who's executives and corporate employee's will do just great.

Remove the drivers, Uber doesn't have a business. Their drivers are the most important thing to them.

ravenstine6• 7 years ago

This last year, I drove for GrubHub for about 6 months in order to pay rent while trying to build a business as well as do web development contract work(I'm now employed full time). The whole time, I was active in various gig economy subreddits.

There are some people out there who only want to drive for companies like GrubHub, but most of the drivers are people who already have jobs and are using the gig as supplementary income.

The topic has come up before in these communities about whether they want to be employees or contractors. At the end of the day, most people want to stay contractors because they already have other jobs and want to make some extra cash during their off hours and weekends, and being an employee would actually mean being their GrubHub's bitch because then they could be told that they can't refuse to pick up orders that are too far away.

While I do see the argument that businesses shouldn't be using contractors as a replacement for employees, unless we solve the problem of stagnating wages, doing so will take away a lot of needed extra income from people who don't feel wronged by these companies.

e403• 7 years ago

If you have another job, you have benefits, right? If you don't have another job, being an employee and getting benefits (e.g., health insurance) would be a huge deal.

lotsofpulp• 7 years ago

Not all jobs offer benefits, and not all benefits are worth much.

jlawson• 7 years ago

The real issue here is the struture of the US healthcare system, which massively penalizes the provision of healthcare as part of any plan besides benefits from a job.

We should have either a heavily government-subsidized user-pay system like Japan, or a real open market without the absurd straitjacket or US healthcare market regulations. With needs-based welfare in both cases.

If the medical part of the economy wasn't so ridiculously wrongly regulated, it wouldn't be so distorting the rather academic difference between "contractor" and "employee".

baggy_trough• 7 years ago

This is certainly terrible news for the drivers, but the companies will get by.

DataWorker• 7 years ago

So the drivers think they are getting away with something (not being grubhub’s bitch) and the company is actually turning that misperception into profit. Sounds like good old fashioned exploitation to me. And I think if people had a first job that paid them a livable wage there would be no need for supplementary income. People don’t deliver pizza as a hobby, they do it for financial reasons.

xfitm3• 7 years ago

Sometimes a living wage isn’t enough.

momokoko7• 7 years ago

I really get confused about this. I wonder if it is because I'm a bit older. Plenty of part time employment is like that. For example, many people that work retail or service part time have very flexible schedules. They typically have an availability chart and then if they need a day off last minute, they are often required to find someone else to cover for them.

The reality is that the contractor part of this is to hide them(GrubHub) from the risk involved. That's what no one understands here. Bicycle messengers were notoriously the original "gig economy" job. The reason no one wanted to make them employees is that they would then be responsible for workers compensation when they got in an accident.

This is the same as GrubHub. You were lucky. You did not get in an accident. Someone else working for GrubHub somewhere else in the country probably did. And they very likely had very expensive medical expenses. Workers compensation also covers permanent long term disability payments if someone is injured and can no longer work. This can be millions of dollars.

When anyone does the math with these gig jobs, they leave out risk. That's the difference. GrubHub is pushing the risk of long term disability, and other things like unemployment due to business slowdown, entirely onto you. As well as other risks they are free from if you are not an employee.

lbotos• 7 years ago

Plenty of part time employment is like that. For example, many people that work retail or service part time have very flexible schedules. They typically have an availability chart and then if they need a day off last minute, they are often required to find someone else to cover for them.

I think you are missing a large part of it. The "gig" economy is "on-demand" labor. There is no schedule to coordinate at the "worker level". Just a network of demand and a worker pool that grows and shrinks to meet demand.

"Oh, I'm free for the next 3 hours, maybe I'll make some money"

vs.

"I need to let my boss know I'm not coming in tomorrow so we have coverage"

That marketplace effect is "freedom".

AnthonyMouse14• 7 years ago

When anyone does the math with these gig jobs, they leave out risk. That's the difference. GrubHub is pushing the risk of long term disability, and other things like unemployment due to business slowdown, entirely onto you. As well as other risks they are free from if you are not an employee.

It's generally quite the opposite. It's employer regulations hiding the cost of insurance from you. There is nothing stopping you as an individual from buying disability or unemployment insurance.

But insurance typically has a negative expected value. With perfect efficiency the expected value is zero; probability of claim times payout from receiving claim equals average premium. Then you add the costs of administration and insurance fraud and it goes into the red. Whether the peace of mind from having the insurance is worth that cost to you is your own decision.

Requiring employers to provide it does two things. The first is that it hides the cost from you. The employer is a corporation and corporations don't really pay for anything, employees, customers and investors do. It'd be nice to think the investors are paying for it, but the kind of employers who hire unskilled workers are typically not in high margin industries. In practice it's generally going to be the workers and customers. And then people ask for more and more things like that, thinking someone else is paying for it when it's really still them.

Which leads to the second problem, which is that when it's required you can't decline it. If some double digit percentage of the people on unemployment are committing insurance fraud, you may be better off to just put the money you would have paid in premiums into a brokerage account to rely on if you lose your job, but you no longer have that option. You no longer even realize its cost, because you never receive a bill for unjustifiably high insurance premiums, you just get paid that much less or pay more when you buy stuff.

conanbatt4• 7 years ago

I think the ones that don't do the math are the ones that think the gig workers don't take into account the risk.

Why is unemployed casual employee better than employeed contractor for you? Because its definitely not for the gigers: if it were, only 1 of the gig companies has to offer the contract, take that into account into the pay they give the employees (or substitutes like insurance) and then they would get all the workers.

There are definite market failures, but the vast majority of denouncing of market failures are people not understanding the market has made a good decision.

michaelbrave• 7 years ago

I've worked a lot of part time jobs in my life. Very few respect your availability very well, and if it becomes too low they drop you. Most of the time the expectation is that you keep all hours available and they only have you work as is convenient for them not you. I only say this as I think you are a bit more optimistic about that than most who work those jobs would agree with.

sharadov• 7 years ago

In LA, a lot of drivers are struggling actors, who need flexible schedules, and nothing like working for ride-share companies.

esturk• 7 years ago

I feel like your argument is biased towards the contractor argument probably caused by your own experiences. Have you considered the opposite side where there are people who _only_ wants to be a full time employee so there's stability in their lives?

Its hard to take your words that _most_ people want it without anything backing.

aiisjustanif3• 7 years ago

Is the majority people who have other jobs and this is just their side job, or is their "gig job" their main job.

ravenstine6• 7 years ago

The California bill, known as AB5, expands a groundbreaking California Supreme Court decision last year known as Dynamex. The ruling and the bill instruct businesses to use the so-called “ABC test” to figure out whether a worker is an employee. To hire an independent contractor, businesses must prove that the worker (a) is free from the company’s control, (b) is doing work that isn’t central to the company’s business, and (c) has an independent business in that industry. If they don’t meet all three of those conditions, then they have to be classified as employees.

What does this mean for engineers who are independent contractors in California? It's arguable that an engineer would likely be working on something that is central to a company's business, and whether said engineer has an "independent business" in their industry.

e403• 7 years ago

I think it's clear it will cause a lot of contractors in the software industry to be reclassified as employees.

To me, the real test is what will happen is this passes. Will it move hiring to other states and offshore?

I'm in CA and I haven't hired someone from CA in a long time. Poland and Ukraine are the main places. The last 3 candidates wanted more than the CEO makes. We're small and can't afford Bay Area salaries.

ravenstine6• 7 years ago

That's an interesting angle I didn't think of. As someone who lives in California and has gotten to where they are now through various forms of contract work, I feel like this bill is potentially a bad idea, but I can see how it can also shift the "balance of power", if you will, away from California, which would probably be a good thing for the rest of world.

Still, I'm not a fan of losing more freedom, which is what my state government is seemingly doing. If I couldn't work as a contractor this last year, I don't know if I could have made ends meet in one of the country's most expensive cities and have the time to get hired making 6 figures as a software engineer. Maybe, but I imagine it would have been more difficult.

When I was driving for GrubHub, I was making about $17.50 per hour after tax, and the faster I was, the more I would make in cash tips. Not having the freedom to work when I want and only take the delivery orders I wanted probably would have meant flipping burgers for $11 an hour(minimum wage) pre-tax and having to work the hours dictated to me. That's if I could even get said minimum wage job, given that even when I was a college student employers would refuse me because I was "overqualified".

Either I would have had to stick to a job I didn't care for and not take a shot at starting a business, or I would have spent months or years trying to get on my feet on minimum wage without having as much time to do interviews and coding challenges.

biesnecker• 7 years ago

Are you in the Bay Area though? If you are, then the people applying may well not be able to afford living without Bay Area salaries.

aembleton• 7 years ago

What does this mean for engineers who are independent contractors in California?

The state’s Chamber of Commerce and dozens of industry groups have been lobbying for exemptions, and a long list of professions were excluded from the bill: doctors, dentists, lawyers, architects, insurance agents, accountants, engineers, financial advisers, real estate agents, and hairstylists who rent booths at salons.

ravenstine6• 7 years ago

I'd be interested in knowing whether any of us would be considered "engineers" under the law, given that many of us don't have engineering degrees or certifications of any kind.

My job title at my current employer is "software engineer", but I don't have a formal education in engineering, and who knows if the California legislature sees that as engineering or a glorification of "what my nephew does on his computer with a thing called Word Press." Perhaps I'm too cynical.

pishpash6• 7 years ago

That's "law smell" if I ever saw one, already so many carveouts. It means the law/the ABC test is shitty as written, makes no sense, and should be scrapped.

kllrnohj2• 7 years ago

What does this mean for engineers who are independent contractors in California? It's arguable that an engineer would likely be working on something that is central to a company's business, and whether said engineer has an "independent business" in their industry.

Are they, though? It's not just related to the business, it's central to the business. If you're an engineer working as an IC at a bank to beef up their IT security, for example, I don't see how that'd classify as being "central to the company's business." Similarly if you're an IC hired to help with QA or testing would that ever really be central to the business? It's a part of the companies product/offerings, yes, but is it central? Does the company's existence hinge on your role specifically?

Take away most IC engineers from most IT companies and the company gets worse but probably still exists. Take away the drivers from uber and there's literally no uber anymore.

imagetic4• 7 years ago

Journalists, photographers, video editors, live/TB production crews, movie crews, artists, illustrators, designers, programmers, almost EVERY construction worker...

pascalxus• 7 years ago

Consumers, make no mistake, This will drive up costs of using uber just like everything else in CA

And it will reduce the # of uber driver demand / work pool

entropea4• 7 years ago

Consumers, make no mistake, This will drive up costs of using uber just like everything else in CA.

Excellent. Consumers should be paying more for these things so that drivers have benefits and good pay. Solidarity with your fellow American worker. I personally leave huge tips and 5/5 stars no matter what unless I almost physically die or am assaulted. I know they aren't making great money and some probably live in their cars. I don't use them unless it's a non-medical emergency though.

"We the people"

whiddershins3• 7 years ago

“I don’t use them unless it is a non-medical emergency.”

I think the drivers would like it if you used it more, not less, because then they would make more money.

zaroth4• 7 years ago

That small status change is huge. These workers would suddenly get labor protections and benefits that all employees get, such as unemployment insurance, health care subsidies, paid parental leave, overtime pay, workers’ compensation, and a guaranteed $12 minimum hourly wage.

That’s an pretty optimistic take on the situation. What these new “employees” are going to get, is fired.

I know some people are OK with that, if the task isn’t profitable enough to pay a human full benefits to work on it, then it’s not profitable enough to employ a human to do it at all.

But there’s a lot of space to integrate under the employment curve for these types of super-low-skill jobs that people mostly use to fill in the gaps in their earnings. I think ultimately this does a huge disservice to the people who worked these gigs to earn some extra money, because it will no longer be possible to do that.

What will be left is full-time workers in these roles who have no other choice, who probably have a significantly shittier work experience doing jobs or working hours they previously would have passed on.

Which honestly is sad, because there is little to no advancement opportunity, so this is not supposed to be a career, and you’ve taken away the option for all these low friction ways to make up a financial gap that might come up one month to the next.

If someone finds themselves struggling to pay rent next week and they know they’ll be facing an eviction notice in 10 days, today they can jump on any number of apps and make up that couple hundred dollar shortfall. That’s not going to be possible if they’re classified as an employee.

ac292• 7 years ago

What these new “employees” are going to get, is fired.

If the choice is between raising prices to support higher employee expenditures, and firing all of their drivers and leaving the California market, you think they'll choose the latter?

Or is there a third option I'm not thinking of?

didibus2• 7 years ago

Firing some of their drivers, not all. And making it harder for someone to become a driver. Like say someone wants to drive 2 days a month, they won't be able too anymore. Uber will probably pick only the serious drivers willing to do it full time, fire all the others, and we have ourself a taxi industry again.

solidasparagus• 7 years ago

Bankruptcy? Uber and Lyft bleed money now, I can't imagine what it would be like if they had to add employee benefit costs on top of that.

lozenge4• 7 years ago

They'll raise prices (which will drop demand) and fire drivers (which will increase waiting time, and hence drop demand).

entropea4• 7 years ago

This is always the right wing take on this, that they're going to get fired, create fear, uncertainty, doubt, and inject that right into others minds, repeat for the next issue that helps anyone except for a corporation. That FUD works really well on the general public too. Surely Uber wants to do business and make money in one of the worlds largest economies, California, right? Why would they fire all of their employees? It makes absolutely no sense. Surely they will adapt, AI cars are not currently a threat, drivers will still be needed and hired.

When Seattle raised it's minimum wage to $15/hr the same FUD was being pushed, that all restaurants would fire all of their employee's, that Seattle would become literal hell and the local economy would crash. Didn't happen and restaurants now enjoy one of the top markets in the USA.

conanbatt4• 7 years ago

Where were the uber/lyft drivers before these companies existed?

whiddershins3• 7 years ago

It would be interesting if I could see someone do the math on where all the money (for example) Uber would need to pay as a result of this actually goes.

How much of a bill like this is actually the government looking to increase revenue, and how much of it would ultimately benefit pole dancers?

Uber drivers are a particularly weird case because there is no way to really stop them from working for Lyft at the same time ... so they are supposed to get a guaranteed minimum wage? From each ride service they drive for?

pishpash6• 7 years ago

And what is minimum wage? When are they actually "working", especially if they are working multiple gigs at the same time? Dumb grandstanding lawmakers did not think about these.

lostmymind66• 7 years ago

This will most likely result in a loss of many jobs. If Uber/Lyft is going to be forced to reclassify contractors as employees, there will be stricter guidelines on who will actually be able to work for them (which means less people working for them), because the company simply will not be able to afford to pay insurance and a higher wage for everyone and anyone that wants to drive for them.

Everyone has a choice: You can choose to work for Uber/Lyft and make extra money or get a job somewhere else that provides benefits and a higher wage. There is no scam going on and everyone is trying to make a buck. I see no problem with classifying the drivers as contractors.

sidlls3• 7 years ago

I don't understand the implications of the second item in the test: "doing work that isn’t central to the company’s business."

How does this apply to business-to-business contracting arrangements, especially in the world of software engineering? Businesses hire contract labor from vendors all the time--are those laborers to be considered employees of both the vendor and hiring company now?

CydeWeys6• 7 years ago

In most B2B contracting arrangements, the contractors are full-time employees of the contracting firm, and get their benefits from that company. (This was my first job out of college.)

sidlls3• 7 years ago

Yes; I've done this myself. It's also not uncommon for individuals to contract themselves out through a shell corporation.

The test as indicated in the article doesn't say anything about this kind of B2B arrangement, though. Why wouldn't this law apply to individuals in this case?

whiddershins3• 7 years ago

I just don’t understand who is being protected here.

When I talk to people doing these jobs they are glad to have them, and don’t have a problem with the terms. They like the flexibility and many are doing them as a stepping stone to the next thing.

If an Uber ride becomes more expensive, how does that benefit an elderly person living on social security who can’t walk well and has to get across town?

conanbatt4• 7 years ago

The marxists that believe any money taken from a corporation is recuperating the thievery of labor surplus.

hawkOne• 7 years ago

Good news for workers

ddffre2• 7 years ago

Then what's the point if gig economy?

With these laws it won't be profitable for those companies to run their business.

mseidl2• 7 years ago

Well Uber has not been profitable for 10 years. So, changing the laws will make it worse. But uber is horrible anyway.

ddffre2• 7 years ago

Yeah Uber is quite terrible, they are aiming for the autonomous taxis, that's where they might start being profitable.

But the delivery companies, and the scooter companies that pay people to charge the scooters.

Overall the gig economy is the future, we shouldn't harm it because of greed.

cheerlessbog5• 7 years ago

I totally get the negative consequences of gig jobs: no benefits, security and so forth. But whenever I take an Uber or Lyft (maybe 100 in the US and UK) I ask the driver how they feel about the job. Almost all of them are happy with it - some gripe about the pay but they like the flexibility. It's possible they aren't thinking far enough ahead - and I'm talking to the self selected group who didn't get a disabling injury or illness and fall into poverty.

sgillen• 7 years ago

I think people in general want to put up a positive persona up. I think most people (certainly not all) aren’t going to tell strangers how awful their job is, even if they think that.

Zak2• 7 years ago

I have a couple of friends who have driven for Uber and found it to be a positive experience. It's not very many peoples' dream job, but it's a way to make money with a fairly low barrier to entry for anyone who already has a suitable car. It offers a lot more flexibility than, for example a retail or restaurant job.

ilaksh2• 7 years ago

What is that supposed to mean, "they aren't thinking far enough ahead"? Are you trying to say that since Uber drivers didn't complain about a lack of benefits or lay out their ten year plan for a stranger that it's evidence that they "can't think ahead" and plan to be an Uber driver forever?

cheerlessbog5• 7 years ago

I'm saying they may not have thought through what they will do in the case of sudden debilitating illness. Most of us don't.

acdha• 7 years ago

People don’t want to admit that they have a horrible job in general but I would bet that’s especially true in a context where everything is so dependent on getting a 5 star review. I don’t think they’re all secretly miserable but I would love to see public stats on turnover.

jquery3• 7 years ago

We finally have the closest thing to a guaranteed jobs program that's ever existed in the USA, and California (and New York) wants to destroy it? This is disgusting.

If I want to drive for Uber, all I have to do is pass a background check. When I want to drive for them, all I have to do is turn on an app. When I'm done, I turn off the app. I can work whenever I feel like it. Very low stress! I get wanting to "protect" workers but this ain't it. I want Uber/Uber-like things to exist so I can earn a few dollars here and there if I need to.

Ugh, sorry, this makes me so angry and other people have been much more eloquent on the subject.

aiisjustanif3• 7 years ago

Why don't we start with extending some employee coverage to 1099? Like just one thing healthcare, and idk car insurance for Uber/Lyft and then see how it goes.

Sounds better than dealing with extremes.

imagetic4• 7 years ago

That sounds far more reasonable of a solution.

webninja• 7 years ago

“Here we are in a great economy and yet most working people have no money saved,” Caitlin Vega, legislative director for the California Labor Federation, told me.

This quote from the article resounds heavily with me.

nitwit005• 7 years ago

I wish they would rework the laws so that being an employee or contractor mattered less. It seems we've created a perverse financial incentive to encourage this behavior of pretending everyone is a contractor.

seaghost• 7 years ago

Gig economy is a capitalisam at it’s worst.

California is cracking down on the gig economy

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