If Uber hasn't been preparing internally for the possibility of losing this suit, they've been irresponsible in the hopes that California would go "oh shit, they're gonna shoot the hostage".
Well, I'm sure they have. They fundamentally disagree with the outcome, and so they will just not operate in California. Nobody will because the business model won't allow you to pay people enough money without charging too much. I also fundamentally agree with Uber and others here. They created a platform for someone to make a few bucks. If I sell something on Etsy they don't have to all of a sudden pay for my healthcare costs. The fact that people have turned to driving for Uber (and others) highlights problems with our government, economy, and priorities, not the companies. I really wish people would stop giving government a pass and wanting corporations to come save them. Go vote, educate yourself, and do something with your democracy. If people have to resort to driving for Uber to live, then that's something we need to fix at a state-wide or country-wide level.
Many people depend on rideshare like Uber to get to work like a public utility. Maybe if California (and this is true of other areas) actually built and invested in bike able neighborhoods and public transport, then they wouldn't need Uber.
California will lose this one eventually. You don't know what you have until it's gone.
> You compare uber to etsy, but uber sets a price and does not even list the name of the driver till you order to pay.
Yes, but the driver is similarly offered the fare, and may choose to accept or not. This is actually one of the critical distinctions between employees and non-employees. If they were an actual employee, Uber would be able to just assign the fare to them.
This is also unlike taxis, where, if your light is on, it is illegal to not accept the fare. (Although violations of these rules are common and blatant, which ironically stopped me from using taxis altogether.)
It’s certainly true that Uber operates in a grey area. When cities have explicitly banned them, they stop operating (e.g. Vancouver). It seems like California has clarified some of the ambiguity around employment, and Uber may similarly stop operating.
The important factor for employee vs contractor isn't whether the worker can accept/reject the job, since employees have that option under many union contracts, and in fact this is how many restaurants have operated for decades (where "job" = "shift").
What matters is whether the worker can independently decide what fare to charge (even if in practice the fare is limited by market forces to what a customer/client would pay). If they can, they are almost always a contractor. If they can't, they are almost always an employee. (Note: Hollywood unions and guilds set minimum rates for work, but members are free to charge higher rates if they can get away with it, and many do. The contractor/employee distinction is largely moot because the unions/guilds took on the healthcare and benefits provisioning functions that employers would normally handle.)
EDIT: reply to ericmay since HN won't let me reply that deep.
No, "accepting" a fare is not the same thing as deciding what fare to charge. Accepting a fare in the Uber/Lyft context means you take the fare Uber/Lyft offers you, or you go home; there is no potential for negotiation or other work. Deciding what fare to charge means you get to post your fare to Uber/Lyft, and customers decide whether they are willing to pay it, or conversely that a customer posts a desired fare, and the driver gets to decide whether they take it. If Uber/Lyft were truly just platforms and their drivers were independent contractors, either of those would be how fares are determined (and in fact, Uber is moving toward the former in CA as a result of this law).
If I offer someone $10 to mow my lawn and that's the only price I'm pay, are they now an employee because they can't decide what fare to charge? Do I now owe the kid down the street and all of her friends a 401k if they rotate through who mows my lawn for that price
Paying someone $10 to mow a lawn occasionally would not turn them into an employee. Terms of payment are just one of the factors in part A of the ABC test (which analyzes the worker's level of independence), so stop focusing on that single non-determinative data point.
Moreover, benefits requirements don't kick in until an employee exceeds a certain threshold of work performed (generally 30+ hours/week) for a single employer, and 401K contributions are not mandatory benefits anywhere. If a worker satisfies the ABC test for independence, they aren't an employee and benefits would not be required unless negotiated for as part of the work contract.
I get your point, but I think the restaurant analogy is flawed.
With restaurants, there’s an ongoing relationship and and expectation about shifts. There’s just a small amount of flexibility. The employee with take some good ones, some bad ones (with more good ones probably going to folks with more seniority, or those favored by the managers).
One couldn’t show up every couple weeks for two peak hours at the restaurant and expect to work. But some Uber drivers do exactly that.
Aren't they deciding what fare to charge by accepting the job?
If I offer someone $10 to mow my lawn and that's the only price I'm willing to pay, are they now an employee because they can't decide what fare to charge? Do I now owe the kid down the street and all of her friends a 401k if they rotate through who mows my lawn for that price?
It's more complicated than that. The kid down the street can say I'll do it for $15 and you can decline. There's no negotiating with Uber. If the kid down the street says no to $10 you're not going to ban him from ever cutting your grass. With Uber if you decline too many offers you will be effectively booted off the platform.
More broadly, you can't compare 1 person trying to contract with 1 other person with 1 multi-billion dollar company contracting with 10s of thousands of people. Dynamics change when it's only a handful of companies hiring many people.
If you want to take this analogy further, if that kid has the opportunity to do something else for more money and keeps declining to cut my grass for $10 I'll ban her from cutting it and find someone else.
There's also no negotiating with me. It's $10, take it or leave it! (If they leave it, like they don't accept the fare, then so be it my grass doesn't get cut and Uber doesn't make money).
> More broadly, you can't compare 1 person trying to contract with 1 other person with 1 multi-billion dollar company contracting with 10s of thousands of people.
Why? The foundational principles seem to be the same to me here.
I think too many people want Uber to be this company that meets these certain expectations and they want that because the government has failed them and so they've turned to corporations to save people via jobs and paid benefits because they want the illusion that someone is paying their fair share. Instead you need to change the laws in your state/country/area to represent your values. If people don't have healthcare, pay money and give them healthcare. Making Uber do it simply isn't going to work here. Especially for them in particular.
To me there is no fundamental difference between me picking up an app and then getting $10 to go pick someone up and someone coming to mow my grass for $10, or someone paying me $20 to move a couch for them. I'm doing some work for some money. That's it. There's nothing more to it.
Based on your last paragraph, you seem to be conflating you paying someone with you getting paid. If your thoughts on this subject are that confused, it makes sense that you're not understanding the issues here.
AB5 is about the relationship between the worker and the person paying them. Fundamentally, yes, it's all just compensation for work performed, but the law is all about the specific details of the work relationship not the zoomed-out overbroad simplification you've reduced it to, because at that level everybody is the same as everyone else and if everybody is the same why bother with any laws at all?
Yes there is. Or at least there is with most people. Even if you are adamant on price there's plenty of other areas for negotiation like when the work will occur, subscription agreements, or the kid can try to work it out and cut your grass at the same time as your neighbors.
>Why? The foundational principles seem to be the same to me here.
You really don't see a difference in a business transaction between two people and one between a person and a multi-billion dollar corporation?
The genius of early (Uber X) Uber was that it launched a service that was illegal, but got away with it and paved a road to legality because it was significantly better than its competitors, liked by customer (read: voters), and displaced competitors no one had much sympathy for.
Back in 2014...when they were using billions of VC funding to undercut taxi rates.
Uber hasn't been that cheap in years. Uber is now roughly the same or more than using a taxi in LA, and that doesn't even include Uber's original and more expensive black car service.
Tried it. Then compared it to the prices that I would actually get using the app and found that they were nowhere close to the estimates on the website, because the website estimate doesn't account for surge pricing, driver multipliers, waiting time fees, or taxes and other levied fees.
In contrast, the taxi service you linked to is the all inclusive price and is generally standard for all taxis as a matter of local law.
In the app, Uber is now more expensive than a taxi in LA for long trips.
On the first point, could you supply a bit more than just "wrong"? That's not a very convincing argument. Do you have data? Evidence? Anything besides just "wrong"?
I suspect this pleases the gov't transit authorities and unions, now they have less competition by decree. (Yes I realize Uber "could" stay, but practically speaking for a business, not really).
It just annoys me it's couched as "we are doing this for the worker!", and then those workers have no work.
If I sell something on Etsy they don't have to all of a sudden pay for my healthcare costs.
Etsy is not even remotely the same thing as Uber. For starters, shops choose what they want to sell, and for how much, and customers choose which shops on Etsy they wish to buy from. Other than handling payment processing, Etsy operates just like a mall.
In contrast, riders don't get to choose which driver they get; Uber chooses for them. Uber chooses how much riders pay and how much of that drivers get. Uber is not a platform, it's just a techified transportation service.
Many people depend on rideshare like Uber to get to work like a public utility.
This is an extremely warped and privileged view to have. Only people with lots of discretionary income used Uber to commute to work before COVID. They did not depend on it. And this is a very small subset of the US or CA populations; most people can't afford to take an Uber to work everyday.
I really wish people would stop giving government a pass and wanting corporations to come save them.
The problem is corporations like Uber that are exploiting their employees, not government. Corporations started paying their executives tens of millions for minimal work instead of the labor force doing the work and actually creating the value.
Maybe if California (and this is true of other areas) actually built and invested in bike able neighborhoods and public transport, then they wouldn't need Uber.
California, including especially the Bay Area, LA, and San Diego, has public transportation, and thousands of miles of bike lanes. It is possible to visit every major city and national park in CA using just public transportation.
LA's public transportation system has one of the largest geographic footprints in the world. Most of the system is buses rather than fixed rail lines, but the rails run from Downtown to Hollywood, Pasadena, Santa Monica/Culver City, and Long Beach. Prior to COVID, more than 1.3 million people used LA Metro each week.
Sure, and it's possible for me to canoe to Antarctica but it's not a reasonable way for anyone to travel.
What an extremely narrow and privileged worldview you have. No wonder people hate techies so much these days...
Every day, more than a million people use CA's public transportation systems to travel between cities for work, even now during COVID. I guess they're all being unreasonable.
I took CA public transportation every working day for 5 years. Compared to the rest of the world, it's unreasonable.
Trains and buses are infrequent and have terrible evening/weekend schedules. Sure, during rush hour they can likely be faster than the incredibly overcrowded Californian roads, but otherwise they're crap. They're also not exactly cheap!
It's no surprise why Uber & friends started in the bay area, and why it's so popular there. They had no competition. The transit in these places is like the bare minimum possible. It doesn't even come close to touching world-class transit systems popular all over the world.
With LA you might have a point. We have it but it's young and still growing and not as convenient as it should be. But SF? Are you kidding me? I can take busses, trains, etc. to get anywhere in that city and out to the valley. It's awesome!
Either you aren’t being serious or you just haven’t lived in a city with real public transport.
You can get to a lot of places in the Bay Area by public transport, but the time penalty for doing and the number of services you have to use is absurd outside of downtown SF. Typically 3x driving and upwards.
Compare this to New York, or London or Amsterdam, where it can be close to parity, or on the 1-2x range. (I mention these because I have), and you’ll realize that Bay Area public transport is effectively non-existent.
Zepto, prior to covid, it was faster to take LA Metro between Santa Monica and LA, or Hollywood and LA, or Pasadena and LA, or Long Beach and LA, than it was to drive those same distances. During rush hour, it was approximately 1 hour faster to take Metrolink between LA and OC destinations than it was to drive the same distance. In the Bay Area, it was at least 1 hour faster to take BART cross-bay than to drive, especially if you were headed to places like Dublin or Pleasanton.
Traffic is just that bad in CA.
CA isn't like NY or London. Our cities weren't built to the same level of density as NY or London, and systems that dense would be overkill. Moreover, given that CA's public transportation systems are geographically larger than any other public transportation systems outside of China (in the sense of geographic territory serviced), it would also be prohibitively expensive to build systems that dense in CA. A system as dense as NYC's metro in LA would cost more than a trillion dollars.
I agree with you about rush hour and with central downtown locations only, although even at those times and for those specific routes the Bay Area only approaches parity with the other cities I listed.
I think the point about geographic density is completely fair as an explanation for why the disparity exists, but it mostly serves to confirm the general point.
If you consider the percentage of locations or population addressable in a unit of time - e.g. in 1 hour, by public transport. The Bay Area does terribly.
This is an argument why public transport cannot substitute for ride share or car services in the Bay Area in the way that it can in other cities.
I speak as someone who has personal experience of all of these cities.
I am just waiting for the lawsuits for when they shut down from drivers but also politicians threatening to jail the executives for taking that course.
This just isn't about Uber and Lyft but they were targets because some very big money was getting hurt by their existence.
It’d be a very American thing to do to sue for the government enforcing labor rights through legislation and judicial action. Push that throttle forward further while racing to the bottom.
Perhaps put that time into advocating for a living wage and universal healthcare instead of embracing Stockholm Syndrome with gig platforms. They might not be around much longer, but your government will be.
“Nobody will” is a bet, mostly on history of the last 30 years of winning these bets. If/when someone does do it, being a business that drew a line in the sand is going to make it difficult to adapt. Playing regulatory games is hard.
People are voting & doing something with their democracy; that’s how this passed. And they’ll have another choice when they vote on the prop. You’re tired of people leaning a certain way, I’m tired of people coming up with really cheap shots just because they don’t like outcomes. Get a cup of coffee.
Let's say we leave aside low voting turnout, lack of education about issues, etc. I don't have a problem if people decide to vote Uber and eventually others out of California. Your state, your rules. I don't really use Uber (or Lyft) unless I am traveling so I really don't care what happens to them, and I definitely don't care about what happens to them in California. I just happen to disagree with California, and I think if this goes through it's going to be a losing proposition and once the reality of this sets in (i.e. people won't have access to ride share) it'll cause an actual public opinion upheaval. It's easy to complain about it and be edgy and "support workers rights" - just wait until you reap what you sow.
I'm not sure how my comment on this thread is any more of a cheap shot than any other comment, or how it's more of a cheap shot than telling someone you disagree with to "get a cup of coffee". I thought what I wrote was at least a coherent opinion on the matter. I'm sorry that it made you angry and that you took a negative interpretation of what I wrote. Not my intention.
People depend on Uber for transport because Uber has made their service available, but I strongly doubt that anyone would be stranded at home were they to shutter - and remember, former commuters are flocking to remote work anyway. Uber would be fools to position themselves as too big to fail. They're clearly a marginal business, but even if they were indispensable I think that would just stir CA legislators to further action against them.
The only freedom an uber contractor has is "when to work". All the pricing and trips are decided by uber, and they can't even reject properly. They are in fact an employees in everything but legal status.
In etsy, you choose your prices, what you sell, and even to whom you sell to, it's definitely a market place.
What Uber did likely isn't sufficient. Uber restricts the maximum drivers can set, only allows increases in 10% increments, does not allow passengers to see the rates of more than one driver at a time, does not let a passenger set their own rates, does not allow drivers to go below auto-pricing, and still sets surge pricing themselves instead of letting passengers and drivers set pricing when demand is high.
Starting Tuesday morning, drivers at the three test airports can either accept Uber’s original price for outgoing rides, or ask for up to five times more, in increments of 10%. After next week they will have the option to ask for less than Uber’s original price.
Essentially those drivers now are bidding against one another for riders. Uber passengers will see only the lowest proposed fare range. If that driver rejects their ride request, they could see a new, higher fare range, as Uber would then show the request to the next-cheapest driver.
Uber likely wouldn't be in this position if they stayed out of pricing/visibility and let passengers/drivers set whatever rates they wanted to. Just provide a platform for people to get rides and stay out of pricing entirely.
"For some time now" meaning less than 1 month, or long after this particular point was raised in the trial that just concluded.
And importantly, it's not actually in effect in the entire state yet. It's still just limited to the Bay Area, with the rollout to the rest of CA happening over the rest of the summer.
If this truly is an invalid business model (riders can't/refuse to pay driver's full salary + benefits), then a lot of people willing to work at these lower rates will be losing their jobs / extra income.
True, but to be fair, that is a huge freedom, and one many people want or need.
Yes, driving Uber is a shit job, but for many people it is far better or more compatible with their lives than waiting tables or working retail, which are the realistic alternatives for most Uber drivers.
> There must have been something compelling about it.
One of those compelling things is that it seems like a better deal. Uber relies on you not doing the expenses math on things like vehicle depreciation, car insurance, unpaid time spent waiting for fares, etc.
Would a system that allows the drivers to "set their own pay" and in which Uber dispatches drivers with the lowest rates follow the law better? This would clearly be a race to the bottom (the pay would probably be even lower than what Uber drivers get today). Is that a preferable outcome?
I also object to this characterization of consent.
> The only freedom an uber contractor has is "when to work".
How is this not complete freedom? Loads of contracts out there specify the rate that the contractor will be paid, and both parties are expected to uphold that specified pay. Are those contracts no longer valid? In some cases with written contracts, the pay is specified as a non-negotiable condition from the paying party, and the "only freedom" the contractor has is to take it or leave it. Is that a violation? If a contractor never actually gets hired under a contract for which she sets her own rates and all of the other "freedoms" supposedly necessary for forming a contract (in CA), is she being oppressed in some other way?
No one is holding a gun to Uber drivers' heads forcing them to drive. They seem to be doing it voluntarily (this seems the case for every one I've met). Insofar as this is their only option, this is not a problem of Uber's creation, but of the overall political economy. And that, after all, is GP's point.
The difference is that contractors can negotiate those other contracts to change the rate of pay. An Uber driver cannot negotiate how much they get paid by Uber. (Part A of the ABC test.)
In some cases with written contracts, the pay is specified as a non-negotiable condition from the paying party, and the "only freedom" the contractor has is to take it or leave it. Is that a violation?
No, because one of the other factors in being a contractor was having multiple (potential) contracting counterparties (aka clients). An Uber driver contracts with just Uber, not the riders. In contrast, a contractor would generally have more than one client if they were in the business of providing that type of service as a contractor. (Part C of the ABC test. Note that Part C requires a contractor to engage in the legal formalities of creating their own business, so it's not just enough to work for both Uber and Lyft.)
But note that for Uber and Lyft, what matters is not that they failed part A and C of the ABC test, since those are relatively trivial to structure around.
Uber and Lyft fail part B of the ABC test, which is that a worker cannot be engaged in a job that is the usual course of the employer's business. Uber and Lyft call themselves transportation companies, ergo, any worker that is providing a transportation service is automatically an employee under the ABC test. Indeed, drivers are the only workers at Uber/Lyft that would be treated as automatic employees; the programmers could be employees or contractors.
They have since before the suit was filed, that's why they are sponsoring a ballot initiative on the November ballot to exempt themselves from the ABC rule articulated in the Dynamex case and then codified in AB5.
The temporary shutdown (which will probably be reversed win or lose, but more profitably if they win) isn't so much a response to the injunction but a stunt related to the campaign for the ballot measure.
They almost certainly have fallback plans if they lose both the suit and the ballot measure, but they aren't as desirable and they'd rather operate with the rules aligned in their favor, and they are willing to accept significant short-term cost to maximize the prospects of that outcome.
The drivers (and customers) are the hostages. Uber should've been spending the last few months preparing for the possibility of this ruling being enforced. (I suspect they have been, and "oh we'll have to shut down!" is a negotiating tactic.)
Yeah, I’m totally with the drivers on this. Far too often “disruption” actually is a very predatory undertaking, with far too little benefit to society. The organizations behind this are typically very low on FTE, and maximizing shareholder value and profits and “democratizing” the suppliers (ie a race to the bottom for the drivers).
You see it all over the place, and I for one hope that this trend is reversed in the next decade. It’s not good for society as a whole.
Of course not, that’s the “hostage” part of the grandparent. I’m saying that taxi drivers and delivery services were better off before being “disrupted”. And I’m not talking about CA per se, but generally all western countries Uber operates in.
They may have a case in developing nations, I am not very familiar with the systems over there pre-Uber so I can’t comment on that.
Why were taxi drivers better off? They were also generally not considered employees (in the US). If anything, the appearance of Uber appears to have spurred some action in defence of taxi drivers, long ignored and kept out of the Fair Labor Standards Act and other legislation to protect the rights of workers.
In fact, for example in NYC, they generally had to pay to work, by being forced to rent cars from medallion owners like the charming Evgeny Freidman (aka Taxi King, formerly an owner of 900 cabs, now a convicted felon).
"The average rate a cabbie paid to take a taxi out for a 12-hour shift climbed 11 percent, to about $85, between 1990 and 1993, based on the most recent figures available from the city's Taxi and Limousine Commission. But meter revenue remained steady during the same period. As a result, the average income of drivers was about $19,000 in 1993, the same as in 1986 and less than in the peak years that immediately followed, taxi commission studies show."
Don’t you think the power balance between Uber and taxi drivers versus the situation before is different?
I’m aware that the US generally already had a very poor system for taxi drivers, but I don’t believe Uber did not make things better. And don’t forget that Uber also has Uber Eats — delivery drivers are most definitely far worse off with that than when they were working for the restaurants themselves.
> Don’t you think the power balance between Uber and taxi drivers versus the situation before is different?
Yes, Uber is more susceptible to competition than the old taxi companies. Where I live there are already three providers, and I stopped using Uber because the other takes a lower cut from the driver.
In the medallion system, you had to submit to Friedman, because even if another provider offered better conditions, they had a small number of medallions.
Competition between employers helps workers.
> I’m aware that the US generally already had a very poor system for taxi drivers, but I don’t believe Uber did not make things better.
Ok, why?
> And don’t forget that Uber also has Uber Eats — delivery drivers are most definitely far worse off with that than when they were working for the restaurants themselves.
Which restaurant replaces its drivers with UberEats? At least around here, the restaurants that already had drivers kept them, and UberEats even lets clients order from those restaurants and have the delivery be made by their own drivers. They just expanded the labor market to restaurants that did not delivery beforehand. I fail to see how can that be worse than before.
I'm sorry, but I can't possibly humor calling a job you're willingly partaking in a "hostage" situation. If Uber is offering them a better deal than what they were going through, even if it's still a bad one (by your standards), why should we forbid these people from taking it?
I live in a developing nation that takes refugees from communist hellholes and the gig economy is helping them out big time by providing the less advantaged ones with a chance at life, all while improving the lives of its users through the service. And it's not just good economically, by creating new markets they help grow the economy and prevent the spread of xenophobia caused by foreign actors participating in a stagnant economy.
Unless you have solved poverty in your country and no one would ever willingly work in such a job you're only causing harm to other people by strangling Uber and similar companies out of existence.
The power balance between employer (Uber) and their drivers is completely out of balance. To claim that the drivers can just ignore Uber would be false, and neither are they able to effectively unionize because they are not officially employees. As such, they cannot negotiate effectively as a group, which means Uber has all the negotiation power.
Again, I am not saying that this is the same case for developing nations; there maybe was no work and/or ability to unionize in the first place. But for large parts of the world this was the case, and Uber just “disrupted” the negotiation abilities of the drivers.
I believe we’re looking at this from two different points of views, a developing nation vs a developed nation (I’m from The Netherlands).
