GrubHub Drivers Ruled Contractors(bloomberg.com)
bloomberg.com
GrubHub Drivers Ruled Contractors
https://www.bloomberg.com/news/articles/2018-02-08/grubhub-drivers-are-contractors-judge-rules-in-bellwether-suit
171 comments
I never understood the employee distinction.
If I sign up on one of those freelance coding websites and I get no work offered to me, can I claim they need to pay me a minimum wage? What is the difference between that website and Uber that makes them entitled to be treated as employees?
If I sign up on one of those freelance coding websites and I get no work offered to me, can I claim they need to pay me a minimum wage? What is the difference between that website and Uber that makes them entitled to be treated as employees?
Not that I agree with that, but the usual argument against that is always that on a freelance coding website you set your own price, while it's not possible on Uber.
I don't know enough about many subjects to know the answer to this, but naively if it was that simple wouldn't Uber just let drivers set their own rates if it solved this problem for them?
I believe both Uber and Lyft avoid revealing the destination until a ride is accepted, to stop drivers from cherrypicking the most profitable rides. Therefore there is no way to tell which of the two rides will be paying more.
Uber will warn the driver if a ride is especially long and allow them to decline those, but overall the driver is kept in the dark as to which rides are more profitable.
Additionally, until recently, Uber punished drivers who declined too many rides, either by deprioritizing them, or dropping them altogether.
Uber will warn the driver if a ride is especially long and allow them to decline those, but overall the driver is kept in the dark as to which rides are more profitable.
Additionally, until recently, Uber punished drivers who declined too many rides, either by deprioritizing them, or dropping them altogether.
Valid, but the premise still stands. The driver can sit there on both apps, and just take the first one that pops up. They aren't "working" for either company until they voluntarily choose to take a "contract" (maybe not actually a contract, almost definitely not legally a contract in some technical sense I would understand, but colloquially).
I do support worker's rights heavily in most cases, I just really feel like these rideshare cases (and other similar industries, carefully curated) should be exceptional. It is hard for me to feel like the lack of structure that the driver's operate under is enough to demand full employment rights.
I'm sure that somewhere in their algorithms, there is a way (or a potential way) to discriminate/penalize less active or lapsed drivers when they return to business. But that relatively minor power being said, Uber/Lyft can literally only control their worker's schedules and availability and hours using positive profit reinforcement. Like, are you really an "employee" if you can, without warning or consequence, just not work for a months and then return just as suddenly? I don't know if "contractor" is the right word, maybe this should be considered something new like "micro-contractor" or something, but it operates in a way that is economically and operationally fundamentally different from traditional employers, including taxi companies.
I do support worker's rights heavily in most cases, I just really feel like these rideshare cases (and other similar industries, carefully curated) should be exceptional. It is hard for me to feel like the lack of structure that the driver's operate under is enough to demand full employment rights.
I'm sure that somewhere in their algorithms, there is a way (or a potential way) to discriminate/penalize less active or lapsed drivers when they return to business. But that relatively minor power being said, Uber/Lyft can literally only control their worker's schedules and availability and hours using positive profit reinforcement. Like, are you really an "employee" if you can, without warning or consequence, just not work for a months and then return just as suddenly? I don't know if "contractor" is the right word, maybe this should be considered something new like "micro-contractor" or something, but it operates in a way that is economically and operationally fundamentally different from traditional employers, including taxi companies.
>Uber/Lyft can literally only control their worker's schedules and availability and hours using positive profit reinforcement.
This isn't an acceptable situation because the workers aren't employees. Uber and Lyft can offer below minimum wage to contractors who don't get their "positive profit reinforcement". The contractors will then self-enforce employee-like behaviours in order to get a better wage that still doesn't have to be above minimum wage.
This isn't an acceptable situation because the workers aren't employees. Uber and Lyft can offer below minimum wage to contractors who don't get their "positive profit reinforcement". The contractors will then self-enforce employee-like behaviours in order to get a better wage that still doesn't have to be above minimum wage.
And then a large portion of drivers who only drive as a secondary or supplementary income don't drive, and there is a supply shortage, meaning prices surge.
Minimum wage is the acknowledgement that supply/demand is not sufficient for wage control. Your argument seems more like an argument against minimum wage in general.
Yes, I also don't think that Uber/Lyft should necessarily be considered a means of primary employment.
You should tell that to the majoroty of (my Seattle) Lyft drivers that bought a Prius just so it could be their primary form of employment. From my personal experience it is only in the Bay Area that people use ride share as a supplemental income.
Also anecdotal, I've used uber in DC many times, and many, many, many times in Toronto. Almost every driver I have has was supplementing their income.
I've found that all of the Lyft drivers here (also Seattle) that start conversations drive as a side thing. I have no statistics, but it appears you don't either.
Another anecdote here - spent a few weeks in North Carolina. Every Lyft driver we got while there was doing it as a supplement to their income.
There's lots of room for the law to insist that they actually treat the drivers as contractors though. A lot of the controversy comes from attempts to weasel into directing them a great deal while pretending they aren't employees.
Oh yeah. I'm not super informed about the specifics, but I have no doubt that there is some level of exploitation going on which can and should be addressed (as opposed to just sitting in a laissez-faire grey area indefinitely).
It just seems like this is a case where free-market solutions really could be a powerful optimization for just about everyone involved (already the companies are struggling with drivers exploiting the system themselves). There is always regulation necessary, I just hope that this particular business remains pretty fluid compared to most industries.
Part of this stems from my suspicion that the steady-state of driving services will either require a bulk of the labor to be done by people for which driving is not their primary income anyway, or there to be a very large overhead built into the prices.
It just seems like this is a case where free-market solutions really could be a powerful optimization for just about everyone involved (already the companies are struggling with drivers exploiting the system themselves). There is always regulation necessary, I just hope that this particular business remains pretty fluid compared to most industries.
Part of this stems from my suspicion that the steady-state of driving services will either require a bulk of the labor to be done by people for which driving is not their primary income anyway, or there to be a very large overhead built into the prices.
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Even if they aren't picking rides that are the most profitable, the fact that a driver can serve an Uber customer and then a Lyft customer an hour later indicates that these drivers aren't traditional employees.
Now you could classify them as freelancers taking contracts at will, or you could classify them as employees working out with their manager which shifts they will work so they can get to their second job. It's just that the shifts are a few minutes long and spread out throughout the day. To most people the freelance classification probably makes more sense.
Now you could classify them as freelancers taking contracts at will, or you could classify them as employees working out with their manager which shifts they will work so they can get to their second job. It's just that the shifts are a few minutes long and spread out throughout the day. To most people the freelance classification probably makes more sense.
This distinction would not make them contractors in CA. All legal, off hours activity is protected including working for a competitor. Even if you are an Uber employee they cannot fire you for moonlighting for Lyft.
> I believe both Uber and Lyft avoid revealing the destination until a ride is accepted
How can they possibly claim to be ride-sharing services if the driver doesn't know where they'll be going until they've accepted the ride?
How can they possibly claim to be ride-sharing services if the driver doesn't know where they'll be going until they've accepted the ride?
> Additionally, until recently, Uber punished drivers who declined too many rides, either by deprioritizing them, or dropping them altogether.
How is that an argument against drivers being contractors? My parents tried to get some contractors to work on the roof of their house. The contractors wouldn't do it. I suspect they may get deprioritized, or dropped altogether, for future roofing work.
How is that an argument against drivers being contractors? My parents tried to get some contractors to work on the roof of their house. The contractors wouldn't do it. I suspect they may get deprioritized, or dropped altogether, for future roofing work.
I'm not a lyft/uber driver but I am almost positive they cannot see destination or payout for a job before accepting it.
An Uber driver I had told me he keeps two devices. On one, he checks the uber fares to see if they’re surging. If they are, he’ll swap to uber and take an uber fate. If not, he’ll check lyft. He does this back and forth all night.
Individual rides don't really matter, what matters to the drivers are the averages, which they can assess after driving a bit for both.
This example is super flimsy.
I could be a server who works shifts at two restaurants. They both call me the same morning with available shifts that day. I pick the one that usually gives better tips. I’m still an employee of both.
Edit: Guess the Uber shills don’t like it and downvoting is easier than admitting you’re wrong.
I could be a server who works shifts at two restaurants. They both call me the same morning with available shifts that day. I pick the one that usually gives better tips. I’m still an employee of both.
Edit: Guess the Uber shills don’t like it and downvoting is easier than admitting you’re wrong.
> Edit: Guess the Uber shills don’t like it and downvoting is easier than admitting you’re wrong
This breaks not one but two of the site guidelines. Would you please (re-)read them and not do that? https://news.ycombinator.com/newsguidelines.html
This breaks not one but two of the site guidelines. Would you please (re-)read them and not do that? https://news.ycombinator.com/newsguidelines.html
Except most restaurants will have a set schedule of shifts and it's typically somewhat rare to get called in on your day off. It would be exceptionally rare to get called in on your day off from both.
For uber/lyft that's not rare at all, that happens multiple times a day if you want to extend the shift analogy to giving someone a ride.
For uber/lyft that's not rare at all, that happens multiple times a day if you want to extend the shift analogy to giving someone a ride.
Restaurants do have shifts but no it is not rare to get called on your day off if you’re a good server who is up for additional shifts and does a good job with them. Nor would it be crazy to get called to two at once because often times if it’s a busy day for one it could be a busy day for another.
And again these are irrelevant details. The point remains solid.
And again these are irrelevant details. The point remains solid.
What point?
The reason you are an “employee” and not a “contractor” at the restaurants is because they dictate your hours and place of business.
Your example about filling in is a red herring as by its nature it’s an atypical circumstance.
The reason you are an “employee” and not a “contractor” at the restaurants is because they dictate your hours and place of business.
Your example about filling in is a red herring as by its nature it’s an atypical circumstance.
But you're also not able to just jump to the other place if it suddenly gets busier and more profitable.
That totally depends on the people who manage those restaurants. And I would argue it’s a detail that has no real relevance.
Now you're just making things up to support your (incorrect) point. It would be an impossibly rare, uncommon restaurant that would be cool with an employee -- during their shift! -- calling another restaurant where they also work, finding the other restaurant will pay them more to hop on over right that minute, and then following through. That's just not realistic at all, and I'm super disappointed that you're lowering the level of discourse here by insisting on supporting an obviously wrong premise.
Sure, but you don't bring your own table to work. And you don't get to leave in the middle of your shift and go to the other job just because you feel like it.
Yeah and you don't write your own app to do Uber or Lyft and you can't dump a passenger out on the sidewalk to pick up a better ride in the middle of it.
These arguments are ridiculous.
These arguments are ridiculous.
Your mistake is in assuming that someone is trying to solve some scholarly distinction between who matches the dictionary definition of either term better.
No. It's a tax construct, and that is the only criteria we should use to measure it.
No. It's a tax construct, and that is the only criteria we should use to measure it.
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From the ruling by the court:
Other dishonest conduct during this lawsuit further supports the Court’s finding that Mr. Lawson intentionally manipulated the app to get paid for not working. During discovery he produced a resume that falsely represents that he attended a Loyola Marymount University Master of Fine Arts program from August 2012 to May 2015, and even lists a specific grade point average; however, Mr. Lawson was only enrolled in the program for one year and did not graduate. When confronted at trial with this misrepresentation, Mr. Lawson testified that he listed all three years because he was “still involved in various activities” and he felt “still part of [the Loyola Marymount] community.” (Dkt. No. 208 at 48:13-16.) This explanation is not credible.
Other dishonest conduct during this lawsuit further supports the Court’s finding that Mr. Lawson intentionally manipulated the app to get paid for not working. During discovery he produced a resume that falsely represents that he attended a Loyola Marymount University Master of Fine Arts program from August 2012 to May 2015, and even lists a specific grade point average; however, Mr. Lawson was only enrolled in the program for one year and did not graduate. When confronted at trial with this misrepresentation, Mr. Lawson testified that he listed all three years because he was “still involved in various activities” and he felt “still part of [the Loyola Marymount] community.” (Dkt. No. 208 at 48:13-16.) This explanation is not credible.
Is it really material - except in the loosest sense - that a food delivery driver lied about a Fine Arts course?
That aside, reading the linked court documents that contract has major problems. It requires deliverers to sign up for a weekly block and to be available (except under extenuating circumstances) for work, and not refuse work, during that time. That sounds like being a part-time employee to me, regardless of the preceding prose specifically disclaiming employee-employer status (why would they need that I wonder!), and saying the driver was free to work other gigs. If you're free to work other gigs how can you not often have to refuse jobs?
I'm not saying Lawson's been harmed, I didn't read enough to know, but that contract looks like it's demanding exclusive employment for a particular company within a given time range; that looks terrible for GrubHub from where I'm sitting.
That aside, reading the linked court documents that contract has major problems. It requires deliverers to sign up for a weekly block and to be available (except under extenuating circumstances) for work, and not refuse work, during that time. That sounds like being a part-time employee to me, regardless of the preceding prose specifically disclaiming employee-employer status (why would they need that I wonder!), and saying the driver was free to work other gigs. If you're free to work other gigs how can you not often have to refuse jobs?
I'm not saying Lawson's been harmed, I didn't read enough to know, but that contract looks like it's demanding exclusive employment for a particular company within a given time range; that looks terrible for GrubHub from where I'm sitting.
It's material to the extent that the judge does not trust the guy. There are other examples of dishonesty in the ruling too. It seems like he may have lied to GrubHub and intentionally got himself hired and then fired as a pretext for a lawsuit. Because he was provably dishonest about several important things, nothing he says can be trusted, including statements he makes about his interactions with GrubHub.
The guy was working other jobs, including for other gig delivery companies, at the same time he was delivering for GrubHub. It was clearly a flexible arrangement for him, and GrubHub was not able to control his activities much or prevent him from working for other companies. That's probably what decided the case.
If you were a lawyer looking for a sympathetic plaintiff to fight for employee status at gig economy companies, this guy is a pretty bad choice. First of all, he can't be trusted. Even worse, he was clearly benefitting from the gig economy in exactly the way that gig-economy proponents say people benefit -- flexible hours, the ability to pursue other work, etc.
The guy was working other jobs, including for other gig delivery companies, at the same time he was delivering for GrubHub. It was clearly a flexible arrangement for him, and GrubHub was not able to control his activities much or prevent him from working for other companies. That's probably what decided the case.
If you were a lawyer looking for a sympathetic plaintiff to fight for employee status at gig economy companies, this guy is a pretty bad choice. First of all, he can't be trusted. Even worse, he was clearly benefitting from the gig economy in exactly the way that gig-economy proponents say people benefit -- flexible hours, the ability to pursue other work, etc.
> that contract looks like it's demanding exclusive employment for a particular company within a given time range
The ruling specifically says that this is not the case:
"The driver is not precluded from doing business with others and Grubhub does not have the right to restrict the driver from being concurrently or subsequently engaged in performing delivery services for other companies, even those that compete with Grubhub."
I am actually pretty impressed with the efforts Grubhub was making for compliance here.
"The driver may (1) lease insulated delivery bags from Grubhub in exchange for wearing Grubhub t-shirts and hats"
Since requiring someone to wear a uniform or use your logo is a strong sign of an employment relationship they make wearing the uniform consideration for a separate contract. Clever.
The ruling specifically says that this is not the case:
"The driver is not precluded from doing business with others and Grubhub does not have the right to restrict the driver from being concurrently or subsequently engaged in performing delivery services for other companies, even those that compete with Grubhub."
I am actually pretty impressed with the efforts Grubhub was making for compliance here.
"The driver may (1) lease insulated delivery bags from Grubhub in exchange for wearing Grubhub t-shirts and hats"
Since requiring someone to wear a uniform or use your logo is a strong sign of an employment relationship they make wearing the uniform consideration for a separate contract. Clever.
It's sort of generous to call the imaginary "second" relationship an effort at compliance.
> "The driver may (1) lease insulated delivery bags from Grubhub in exchange for wearing Grubhub t-shirts and hats"
So if another source of bags were founds the Grubhub contractors could be wearing clothes that advertise a competing service, or is loaded with restaurant sponsorships, to make more money? Hrmmm...
So if another source of bags were founds the Grubhub contractors could be wearing clothes that advertise a competing service, or is loaded with restaurant sponsorships, to make more money? Hrmmm...
> he produced a resume that falsely represents that he attended a Loyola Marymount University Master of Fine Arts program from August 2012 to May 2015, and even lists a specific grade point average; however, Mr. Lawson was only enrolled in the program for one year and did not graduate
None of that is contradictory as described. He attended. He had a grade point average.
Perhaps there’s more to it than you’re describing.
None of that is contradictory as described. He attended. He had a grade point average.
Perhaps there’s more to it than you’re describing.
He attended, but only for a year as the parent comment says. Not from August 2012 to May 2015.
What is the point of this comment? To disparage the complainant? Who cares if he's a meth head and dead beat dad. It has no bearing on whether Uber, Lyft, etc. are acting within the law or not.
The article specifically states that his credibility regarding enrolling in a program was a material aspect of the case.
As a (former) lawyer, I know that magistrate decisions do not necessarily carry the weight of a typical federal judge. And even a district court decision would not be binding on any other district court. Until an appellate court weighs in on this, it seems that the issue is very much up for grabs.
I would welcome the more nuanced view of a litigator — I was a transactional lawyer and am just remembering my law school lessons about precedential authority.
Edit: corrected an autocorrect.
I would welcome the more nuanced view of a litigator — I was a transactional lawyer and am just remembering my law school lessons about precedential authority.
Edit: corrected an autocorrect.
> Charlotte Garden, an associate law professor at Seattle University, said [U.S. Magistrate Judge Jacqueline Scott] Corley’s decision is a “doubly big” win for GrubHub due to California’s relatively high standard for establishing workers as independent contractors.
Would someone familiar with the California standards summarize the contractor/employee test? The article doesn't make specific reference to the criteria. (I'll hunt the internet now myself, and report back.)
edit: From the California Tax Service Center...
> Does the principal (you) have the right to control the manner and means in which the worker carries out the job? The right of direction and control, whether or not exercised, is the most important factor in determining an employment relationship. The right to discharge a worker at will and without cause is strong evidence for the right of direction and control. When it is not clear whether you have the right to direct and control the worker, you must look further into the actual working relationship by weighing the ten secondary factors.
There are secondary tests as well.
http://www.taxes.ca.gov/iCorE.bus.shtml
Would someone familiar with the California standards summarize the contractor/employee test? The article doesn't make specific reference to the criteria. (I'll hunt the internet now myself, and report back.)
edit: From the California Tax Service Center...
> Does the principal (you) have the right to control the manner and means in which the worker carries out the job? The right of direction and control, whether or not exercised, is the most important factor in determining an employment relationship. The right to discharge a worker at will and without cause is strong evidence for the right of direction and control. When it is not clear whether you have the right to direct and control the worker, you must look further into the actual working relationship by weighing the ten secondary factors.
There are secondary tests as well.
http://www.taxes.ca.gov/iCorE.bus.shtml
This is the strangest part of California labor law:
> The right to discharge a worker at will and without cause is strong evidence for the right of direction and control
One usually thinks of a contract worker as being totally de facto dischargeable (contract says you do N jobs, if I don't like you the N+1th job doesn't get contracted), whereas an employee as being entirely nondischargeable due to union agreements or labor laws, but the law itself says the reverse elsewhere.
P & !P => Q
> The right to discharge a worker at will and without cause is strong evidence for the right of direction and control
One usually thinks of a contract worker as being totally de facto dischargeable (contract says you do N jobs, if I don't like you the N+1th job doesn't get contracted), whereas an employee as being entirely nondischargeable due to union agreements or labor laws, but the law itself says the reverse elsewhere.
P & !P => Q
> One usually thinks of a contract worker as being totally de facto dischargeable (contract says you do N jobs, if I don't like you the N+1th job doesn't get contracted)
That's not dischargeable at will, that's an option to not renew after a set point.
> whereas an employee as being entirely nondischargeable due to union agreements or labor laws
“At will” employment makes employees dischargeable at will (hence the name). Labor laws add specific prohibited bases, but still make discharge less restricted than a contract. A union contract is a special case, a contract on top of general labor laws that covers people who are otherwise regular employees.
That's not dischargeable at will, that's an option to not renew after a set point.
> whereas an employee as being entirely nondischargeable due to union agreements or labor laws
“At will” employment makes employees dischargeable at will (hence the name). Labor laws add specific prohibited bases, but still make discharge less restricted than a contract. A union contract is a special case, a contract on top of general labor laws that covers people who are otherwise regular employees.
>That's not dischargeable at will, that's an option to not renew after a set point.
What if N == 1
What if N == 1
Its still not dischargeable at will, which allows discharging even with a task incomplete/in-progress.
Hence why I said de facto. Especially in the case of ride-sharing.
> totally de facto dischargeable (contract says you do N jobs, if I don't like you the N+1th job doesn't get contracted)
Or you could look at like the contractor will get paid for N jobs regardless, while the employee can be discharged at N - 1 and only get paid for N - 1.
Or you could look at like the contractor will get paid for N jobs regardless, while the employee can be discharged at N - 1 and only get paid for N - 1.
If the contract doesn't specifically name means of severing the relationship, arbitrarily terminating the contract is being in breach and opens you to litigation.
Even in non at-will jurisdictions you can end an employment relationship whenever you want, you just have to follow the rules established by legislation to do so (notice or in lieu, just cause, etc)
Even in non at-will jurisdictions you can end an employment relationship whenever you want, you just have to follow the rules established by legislation to do so (notice or in lieu, just cause, etc)
Right, but if I contract a painting company to paint my office building, I don't get to fire members of the work crew.
But if you contract a person to paint your office building, you do. That doesn't make that person into your employee.
You'd be firing the company not the individual - who presumably would have the right of substitution.
If you contract a person to paint your building, you're contracting an individual.
Uber, Lyft, et al contract individuals to work for them, not companies.
Uber, Lyft, et al contract individuals to work for them, not companies.
That would be employment then - uber and lyft claim that they are self employed contractors not employees - which is what all the legal arguments are about.
But that's crazy. If you're a store owner and painting the awning is a one man, once every three year job, you are not going to employ someone to do it. You are going to contract someone. If you are taking a taxi from the airport to the home you are not employing them, you are contracting them.
Having been a full time Lyft and Uber driver for 1.5 years, I honestly don't think classification as employees makes sense. I'm paid by each ride (which you could think of as an individual contract). I have walkaway rights at any given time. I could be logged on to both platforms simultaneously and pick up whichever came first (logging off of the other one as appropriate). Nobody forced me to work any given hours. This is very much unlike any employment condition I've ever been in.
Having been a full time Lyft and Uber driver for 1.5 years, I honestly don't think classification as employees makes sense. I'm paid by each ride (which you could think of as an individual contract). I have walkaway rights at any given time. I could be logged on to both platforms simultaneously and pick up whichever came first (logging off of the other one as appropriate). Nobody forced me to work any given hours. This is very much unlike any employment condition I've ever been in.
But a self employed painter is self employed - whereas the legal Q is are these "gig" economy really self employed.
The self employed painter could send some one else to do the work for example - I know employment law is a trickily area for civilians (ie non hr specialist and lawyers) to get there head around
The self employed painter could send some one else to do the work for example - I know employment law is a trickily area for civilians (ie non hr specialist and lawyers) to get there head around
A self-employed painter could not send someone else to do the work (without the client's consent) if he was personally contracted to do it. There's no contradiction there.
If you "personally contract" with some one you are their employer.
You might hire Joe Blogs And Son's to do a painting job but it does not mean Joe Blogs does the work personaly it might be his son or he may "get a lad in" to do some of the work
You might hire Joe Blogs And Son's to do a painting job but it does not mean Joe Blogs does the work personaly it might be his son or he may "get a lad in" to do some of the work
If you hire me to do some freelancing for you, you're hiring me, but that doesn't make me your employee.
Isn't the theory that you actually have a contract relationship with a contractor and termination is specified by the contract? Its been perverted over the years, but the original intent is still in the law.
We have a round hole and a triangle hole, and we're telling the courts to decide which one to put the square peg in.
Sooner or later our legislatures are going to have to deal with this issue.
Sooner or later our legislatures are going to have to deal with this issue.
I think that's a very good point. My personal opinion is that considering drivers "employees" in these scenarios is ridiculous, but it's possible that "contractor" (as defined by law) isn't a great fit, either.
Looks like he's also trying to sue Amazon for the same thing.
https://www.courtlistener.com/docket/4537667/rittmann-v-amaz...
https://www.courtlistener.com/docket/4537667/rittmann-v-amaz...
Am I in the minority to be appalled by the actions of Lawson (and people like him)? Clearly, you are not a full-time employee if you are employed on an as-needed basis.
That doesn't follow at all. I think you're confusing "contractor vs. employee" with "full-time vs. part-time". Plenty of retail employees are deployed as-needed, and none of them are contractors.
None of those retail employers can clock in and out as they please. "as-needed" is the wrong phrase for sure because it indicates the choice is in the hand of the employer. "as-desired" would be better.
It's a weighting of factors argument, right? It's probably not simple (or these cases would all be finished by now). Counting against the contractor definition: single, longstanding continuous relationship.
But most of the driving-giggers that I know do not have single relationships, they're working with both Uber and Lyft, or GrubHub, Seamless, Doordash, etc, as each one rises and falls in profitability for them.
Employment law is not so black and white. And in the case of employee classification of contractors, there is rarely a "clearly".
Why not just say all employees are contractors and working "as needed"? No more pesky employment tax, unemployment tax, health care benefits, etc.
But that is not to say this guy was in the right. Just that it's rarely obvious.
Why not just say all employees are contractors and working "as needed"? No more pesky employment tax, unemployment tax, health care benefits, etc.
But that is not to say this guy was in the right. Just that it's rarely obvious.
No. Employees and employers can both be shitty to each other.
I have worked on zero hours contracts before and I was still an employee
Have you never been on call?
Obviously this is bad for workers in the short-term.
The judge notes however that under California law, you’re either an employee or contractor, there is no in-between, and she presumably wants to see that fixed.
This is an old issue that goes way back to Microsoft hiring contractors and treating them really well like employees, until the IRS discovered they were also doing it to not pay payroll taxes :(
Afterwards, Microsoft had to significantly dock contractor benefits to show there was a real distinction and it was not an accounting gimmick.
Like a lot of labor and tax law, these were all put in place 60+ years ago and have pretty much been stretched to the maximum. Ironically, this makes me see people going to Law School as in a really cool spot for the future. I thought I’d never say this, but I can imagine us needing more lawyers in the future to hammer all these things out for whatever the next de facto American System is.
The judge notes however that under California law, you’re either an employee or contractor, there is no in-between, and she presumably wants to see that fixed.
This is an old issue that goes way back to Microsoft hiring contractors and treating them really well like employees, until the IRS discovered they were also doing it to not pay payroll taxes :(
Afterwards, Microsoft had to significantly dock contractor benefits to show there was a real distinction and it was not an accounting gimmick.
Like a lot of labor and tax law, these were all put in place 60+ years ago and have pretty much been stretched to the maximum. Ironically, this makes me see people going to Law School as in a really cool spot for the future. I thought I’d never say this, but I can imagine us needing more lawyers in the future to hammer all these things out for whatever the next de facto American System is.
> Obviously this is bad for workers in the short-term.
That's not obvious at all.
Why is this bad? It means people can have lots of flexibility on when to work, and for who. For some people this is very valuable.
It also means a lot more flexibility to those offering work (i.e. they can scale up or down based on short term demand), which means there are now more companies willing to offer work, and again that's a win for the worker.
To me, it's a net win because it results in more work being available, and more work being done (i.e. people getting paid).
That's not obvious at all.
Why is this bad? It means people can have lots of flexibility on when to work, and for who. For some people this is very valuable.
It also means a lot more flexibility to those offering work (i.e. they can scale up or down based on short term demand), which means there are now more companies willing to offer work, and again that's a win for the worker.
To me, it's a net win because it results in more work being available, and more work being done (i.e. people getting paid).
While I take advantage of that flexibility you cite, after many years of seeing the inside of many clients, I have reluctantly concluded that state of employment is not a viable policy prescription for the American general population in the near future. To be really secure as a freelancer over the long-term (multiple decades), you ideally should have three years’ living expenses set aside. That lets you ride out big dips like the 2000 tech recession or 2008 Great Recession and still have enough left over to strategically pick your projects and rebuild your reserves at the same time.
From where we sit today, it is a very long road to getting most of the population saving even 6-12 months living expenses. To get there, we need to take many intermediate baby steps. Perhaps special tax treatment for savings accounts belonging to taxpayers below a certain income level, and the account balance meets some kind of latency metrics, or outright grants for hitting metrics in lieu of EITC.
From where we sit today, it is a very long road to getting most of the population saving even 6-12 months living expenses. To get there, we need to take many intermediate baby steps. Perhaps special tax treatment for savings accounts belonging to taxpayers below a certain income level, and the account balance meets some kind of latency metrics, or outright grants for hitting metrics in lieu of EITC.
Didn't those contractors have to pay payroll taxes through self employment tax then? The govt gets the same amount of tax in the end AFAIK.
So those contractors basically have ~%8 less pay because they pay the employer part of the tax, unless MSFT paid them more to compensate.
So what is the incentive for MSFT to do that in the first place? Is it just to fool the people who don't realize they might be paid less in a complicated way?
So those contractors basically have ~%8 less pay because they pay the employer part of the tax, unless MSFT paid them more to compensate.
So what is the incentive for MSFT to do that in the first place? Is it just to fool the people who don't realize they might be paid less in a complicated way?
Contractors have to pay the "employer" half of FICA (social security and medicare) themselves, true.
But there are things other than FICA that employers have to pay for employees but not contractors. The most obvious one is unemployment insurance, both state and federal. There are likely others, in various location-dependent ways. Obviously contractors effectively self-insure for unemployment; this is a major reason why contractors are typically paid more on a nominal basis than employees are.
In addition to that, there are compliance costs with employees (having to do tax withholding, pay reporting requirements to states and the IRS, etc) that are somewhat lower with contractors.
But there are things other than FICA that employers have to pay for employees but not contractors. The most obvious one is unemployment insurance, both state and federal. There are likely others, in various location-dependent ways. Obviously contractors effectively self-insure for unemployment; this is a major reason why contractors are typically paid more on a nominal basis than employees are.
In addition to that, there are compliance costs with employees (having to do tax withholding, pay reporting requirements to states and the IRS, etc) that are somewhat lower with contractors.
That struck me as odd as IT contactors in the UK are paid a lot more than FTE's and have much better (still) tax advantages.
Benefits and protections available to employees but not to contractors all cost money. This is why contractors get paid more. If the benefits and protections are provided to contractors, then it will (sooner or later) come out of their paychecks.
I worked for the USPS at their national training facility, and most of the people there were contractors. The "real" USPS employees, the ones being trained, were employees. Apparently the reason was due to USPS employees getting really good benefits as they get to participate in the federal retirement program which includes a pension.
They don't want to have to pony up for all the support staff, even though we worked at a facility, 8-5, 40 hours or more a week, with basically an infinite contract length. They paid for our healthcare plan as well - like an employee might get? :)
There wasn't really anything to complain about, as the pay and benefits for even the contractors were really nice (we had "unlimited PTO" before it became a thing in the startup world), but the debate about employee vs contractor is interesting in this particular case.
They don't want to have to pony up for all the support staff, even though we worked at a facility, 8-5, 40 hours or more a week, with basically an infinite contract length. They paid for our healthcare plan as well - like an employee might get? :)
There wasn't really anything to complain about, as the pay and benefits for even the contractors were really nice (we had "unlimited PTO" before it became a thing in the startup world), but the debate about employee vs contractor is interesting in this particular case.
Infinite contract length might be a bit tricky and did the USPS pay the benefits? Sounds like an employee to be - which is where MS messed up.
Were you a 1099 contractor, or an employee of a contracting firm? Big difference.
If they paid for healthcare I would expect an employee of a firm that the work was outsourced to.
PEO's (Professional Employment Organizations) will have a future as more and more laws are enacted about how we classify an employee.
PEO's (Professional Employment Organizations) will have a future as more and more laws are enacted about how we classify an employee.
My current company specifically chooses to do employment and not contracts for drive related services. The thought model is that an employee would be a better representative for spreading the brand, would have more dedication to customer happiness, and the available supply of drivers would result in consistent ETAs.
I wonder if the plaintiff's, Lawson, case was weakened by the fact that he was attempting to work as an actor simultaneously and lied on his resume. Additionally, does the weakness of his case and the precedent that was established from this verdict affect future cases about contractors vs employees? If so, I'd be pissed at Lawson if I were a gig worker
> Additionally, does the weakness of his case and the precedent that was established from this verdict affect future cases about contractors vs employees?
A trial court ruling isn't binding authority even on the same court, much less others, and unless it is (unlikely) a published decision, it won't, IIRC, even be citable as persuasive authority in other cases.
Now, if it gets appealed and an appeals court rules on the case, things change...
A trial court ruling isn't binding authority even on the same court, much less others, and unless it is (unlikely) a published decision, it won't, IIRC, even be citable as persuasive authority in other cases.
Now, if it gets appealed and an appeals court rules on the case, things change...
The precedent was established a long time ago.
Taxi drivers have been working as contractors for decades.
Just because a tech company is doing it, doesn't mean that the law has changed its opinion on the matter.
Taxi drivers have been working as contractors for decades.
Just because a tech company is doing it, doesn't mean that the law has changed its opinion on the matter.
Why don't these companies like GrubHub and Uber just hire the people as employees but with 100% commission based salary? What risk do they take?
Is there any way to see the actual ruling? Not finding on search.
The judge basically punted the issue to the CA legislature. If enough drivers get together and lobby, I think the legislature may clear up the drivers' ambiguous position.
The main thing the so called gig-economy brings to the table is a regression in workers rights and benefits. That's the core. That's the profits. I can't understand why people are wilfully accepting that this is somehow the inevitable result of some smartphone app having been created.
> The main thing the so called gig-economy brings to the table is a regression in workers rights and benefits
In the present regulatory environment, sure; one could argue that that environment is using employers as a vehicle for general social services in a way which is undesirable and reduces employment, economic output, and well being especially for the poor.
Moving the basic protections to public benefit schemes with appropriate tax support might be a better option. E.g., UBI instead of minimum wage, universal (single-payer or mandatory and subsidized default minimum coverage) healthcare instead of employer-mandated insurance, etc.
In the present regulatory environment, sure; one could argue that that environment is using employers as a vehicle for general social services in a way which is undesirable and reduces employment, economic output, and well being especially for the poor.
Moving the basic protections to public benefit schemes with appropriate tax support might be a better option. E.g., UBI instead of minimum wage, universal (single-payer or mandatory and subsidized default minimum coverage) healthcare instead of employer-mandated insurance, etc.
> In the present regulatory environment, sure
In almost any likely regulatory environment we are likely to see in the next decade, and definitely in absolutely any regulatory environment that the the-poors-are-revolting HN zeitgeist has any influence on forming.
I realize I am not telling you anything that you, specifically, don't know. (And I don't think you are the type to approve of those environments.) But having that out there provides important caveats for your "might be"'s. The problem exists and the problem is real and bad people are using it to hurt people and while I know you know the difference, underlining that "might be" might be doesn't erase what is.
In almost any likely regulatory environment we are likely to see in the next decade, and definitely in absolutely any regulatory environment that the the-poors-are-revolting HN zeitgeist has any influence on forming.
I realize I am not telling you anything that you, specifically, don't know. (And I don't think you are the type to approve of those environments.) But having that out there provides important caveats for your "might be"'s. The problem exists and the problem is real and bad people are using it to hurt people and while I know you know the difference, underlining that "might be" might be doesn't erase what is.
I'd like to point out that the difference between contractor and employee is even larger in Europe since more rights have been fought through to the same "Everyone will become unemployed!" cries of capital during the whole 20th century.
> is a regression in workers rights and benefits.
But, it also brings an expansion in available jobs, and much greater flexibility in deciding when to work.
For a LOT of people, those are worthwhile tradeoffs.
> of some smartphone app having been created.
Piecework (which is basically what this is), long long long predates the smartphone.
But, it also brings an expansion in available jobs, and much greater flexibility in deciding when to work.
For a LOT of people, those are worthwhile tradeoffs.
> of some smartphone app having been created.
Piecework (which is basically what this is), long long long predates the smartphone.
It is absolutely, positively, incontrovertibly full-stop dishonesty to throw up the smokescreen of "oh they're choosing the 'gig economy' because of flexibility!". They're "choosing the 'gig economy'" 'cause there's no real jobs. The choice being made is between that and unemployment, not that and full-time work.
"Flexibility" is what it's called when PR flacks, from their actual-full-time jobs (but, ha ha, not for long, the bell tolls for thee too), have to hide the hatchet job they do to the poor. It's not some "but fairings!" situation--it's a systemic attack on people.
"Flexibility" is what it's called when PR flacks, from their actual-full-time jobs (but, ha ha, not for long, the bell tolls for thee too), have to hide the hatchet job they do to the poor. It's not some "but fairings!" situation--it's a systemic attack on people.
The vitriol and blanket generalizations are neither helpful nor accurate.
It's an indisputable fact that these gig economy jobs provide more flexibility in the form of being able to choose your hours of work.
Is this flexibility a critical motivation to accepting work? For some people, yes. For others, no.
Is unemployment a critical motivation to accepting this type of work? For some people, yes. For others, no.
You want to paint this as black and white when the reality is only SOME of the workforce is faced with unemployment as the only alternative.
My question to you is: Do you know what fraction of gig workers would actually otherwise be unemployed?
If I had to guess, it's a small minority.
It's an indisputable fact that these gig economy jobs provide more flexibility in the form of being able to choose your hours of work.
Is this flexibility a critical motivation to accepting work? For some people, yes. For others, no.
Is unemployment a critical motivation to accepting this type of work? For some people, yes. For others, no.
You want to paint this as black and white when the reality is only SOME of the workforce is faced with unemployment as the only alternative.
My question to you is: Do you know what fraction of gig workers would actually otherwise be unemployed?
If I had to guess, it's a small minority.
> They're "choosing the 'gig economy'" 'cause there's no real jobs.
Unemployment is historically low right now. Yet, tons of people are still choosing gig work.
So there is something about it that people value. You can't just say there are no other jobs, because that's just not true.
Unemployment is historically low right now. Yet, tons of people are still choosing gig work.
So there is something about it that people value. You can't just say there are no other jobs, because that's just not true.
>They're "choosing the 'gig economy'" 'cause there's no real jobs. The choice being made is between that and unemployment, not that and full-time work.
This may very well be the more common case but it's not responsible to generalize either way. If you have evidence to support your claim please share.
This may very well be the more common case but it's not responsible to generalize either way. If you have evidence to support your claim please share.
I know when I was told to go home at 31.5 hours every week it wasn't by my choice. The months it took to scrape together enough money to get a car and interview at non retail jobs also wasn't really a choice unless you count "give up and be homeless" as a reasonable option
Piece rate workers are employees,and full time workers are not exempt. A subset of them (locals who work only during harvest season, and kids, basically) are exempt from overtime status and minimum wage. https://www.dol.gov/whd/regs/compliance/whdfs12.pdf
Corollary to that is that it makes work available where previously it was uneconomical to employ somebody.
How is that the case when looking at ridesharing services? Using uber instead of a cab takes away work from one and gives it to another by undercutting them. As much as it's 'creating work' for a lyft driver, it's also taking someone else's job. I don't mean to defend the cab industry herr, but it's not like this work wasn't being done elsewhere.
Sure, in dense metros like NYC you can say each Uber/Lyft is replacing a cab ride. I won't argue with you there. But in the suburbs, using a cab was not a normal thing to do, but using Uber or Lyft is.
Maybe I'm being too anecdotal, but I can only think of a couple of rides (out of dozens) where I would have called a cab had Lyft not been available.
Trying to get a cab ride from my house to a random place 15 miles away was a nightmare. Bad dispatch, no-show drivers, etc. Never really bothered after a few bad experiences, just designated a driver instead.
Maybe I'm being too anecdotal, but I can only think of a couple of rides (out of dozens) where I would have called a cab had Lyft not been available.
Trying to get a cab ride from my house to a random place 15 miles away was a nightmare. Bad dispatch, no-show drivers, etc. Never really bothered after a few bad experiences, just designated a driver instead.
I would totally agree with you there regarding getting to/from a random place. Getting to downtown from where I grew up was a cool half hour drive, and no cab would dare giving you a ride down there. In that way, Uber definitely added value to anyone who didn't want to park downtown for an evening. I just assumed that that was not the majority of ride-sharing usage, where most of the action was in NYC/LA where cab-usage was already relatively high.
There are plenty of rides happening with Uber/Lyft now that just wouldn't have happened at all previously, not just gone to a taxi.
Taxi cab drivers already work as contractors in many real taxi companies.
Uber did not invent this practice. They took it from the existing industry.
The existing industry was actually WORSE in that you would have taxi medallion owners who would charge people rent for the luxury of using their taxi medallion!
So please, do not blame Uber for the existing taxi cab contractor business practices.
Uber did not invent this practice. They took it from the existing industry.
The existing industry was actually WORSE in that you would have taxi medallion owners who would charge people rent for the luxury of using their taxi medallion!
So please, do not blame Uber for the existing taxi cab contractor business practices.
I don't think that's entirely the case. It's true that taxi drivers in many markets are seeing less work because of Uber/Lyft, but many many many more people are taking Uber/Lyft than would have been taking taxis otherwise. I and literally everyone I know in SF are prime examples of that. (And I literally mean "literally"; there is not a single person I know for whom this is not the case.) People don't even think about ordering up a Lyft when they need one; they just do it. It's nearly as automatic as breathing. Attempting the painful process of getting a taxi was always pretty low on anyone's list of "reasonable ways to get from point A to point B".
(You can certainly argue that now having all these extra cars on the road is a bad thing, but that's a separate issue.)
(You can certainly argue that now having all these extra cars on the road is a bad thing, but that's a separate issue.)
Assuming that Uber is either more convenient of cheaper than a cab, one would assume that the number of cab rides goes up.
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If you work at a typical retail store or do pizza delivery, what kind of benefits do you receive? Do you actually receive a usable healthcare plan working at a typical US retail operation?
If america had universal health care like the rest of the developed world, would anyone really care about this stuff that much?
If america had universal health care like the rest of the developed world, would anyone really care about this stuff that much?
It varies from state to state, but the two main protections that employees get but contractors don't are unemployment and minimum wage.
There are others as well, which stems from the fact that for the most part the law considers contractors to be entities negotiating on equal footing with their customers (i.e. those who would otherwise be considered employers), whereas employees are required to have certain protections.
There are others as well, which stems from the fact that for the most part the law considers contractors to be entities negotiating on equal footing with their customers (i.e. those who would otherwise be considered employers), whereas employees are required to have certain protections.
Probably not. But we don't, so we care.
Iirc many fast food places will try to limit your hours so you don't qualify for benefits.
It's an exchange. The freedom of the gig economy vs. the loss of rights and benefits. If it's worth it for you take it, if not, don't.
Sure. It's an exchange. It's an exchange designed to consign the poor into being ever poorer. But hey--you get your food delivered for two bucks and you never have to talk to a person. So that's great.
The "gig economy" is designed to break employment. It's designed to turn people who already are living hand-to-mouth or worse into always-available scutworkers for the upper class and the (smaller than one would expect) middle class that serves them in ways the participants in that "gig economy" cannot. But you can choose to not do it! And when, obviously and inexorably, that becomes the game in town available to vast swaths of the working poor, what then? There aren't even any workhouses anymore. Scrooge can't even offer that whatabout.
Most people may not have much of a choice about feeding themselves (ourselves) or their (our) kids into the thresher, but the people who do can have the minimal decency not to oh-but-it's-fine about it. And that includes most people on HN.
The "gig economy" is designed to break employment. It's designed to turn people who already are living hand-to-mouth or worse into always-available scutworkers for the upper class and the (smaller than one would expect) middle class that serves them in ways the participants in that "gig economy" cannot. But you can choose to not do it! And when, obviously and inexorably, that becomes the game in town available to vast swaths of the working poor, what then? There aren't even any workhouses anymore. Scrooge can't even offer that whatabout.
Most people may not have much of a choice about feeding themselves (ourselves) or their (our) kids into the thresher, but the people who do can have the minimal decency not to oh-but-it's-fine about it. And that includes most people on HN.
It's neither accurate nor constructive to make it seem like there's an evil villain in these companies who's ACTIVELY designing/rigging the system to screw over the poor.
The reality is that these companies are just being driven by profits. And, one way to maximize profits is to minimize costs by offering fewer benefits to workers.
This outcome has a lot more to do with capitalism as a whole than the gig economy.
If you are a proponent for worker's rights and mandated benefits then by all means argue for that. But, please don't make it seem like there's some evil person on the other side that you're seeking justice against. That doesn't exist.
The reality is that these companies are just being driven by profits. And, one way to maximize profits is to minimize costs by offering fewer benefits to workers.
This outcome has a lot more to do with capitalism as a whole than the gig economy.
If you are a proponent for worker's rights and mandated benefits then by all means argue for that. But, please don't make it seem like there's some evil person on the other side that you're seeking justice against. That doesn't exist.
There are villains in this. They're the people who exploit, who maximize profits on the backs of the poor instead of treating their employees like human beings and trying to not grind them into powder.
Maybe capitalism has problems and it's not just the "gig economy"? This is creeping towards an epiphany--maybe choosing to participate in capitalism at a high level rather than mitigate its excesses makes you complicit? Maybe you own what you do and when what you do hurts people, you own that harm and that hurt?
Yes, this does characterize many HN-sanctioned heroes. Too bad. Maybe they should instead be decent.
Nobody forced these companies to exist. If you can't do business without bloodying the poor who are your "human resources," maybe you shouldn't do business.
Maybe capitalism has problems and it's not just the "gig economy"? This is creeping towards an epiphany--maybe choosing to participate in capitalism at a high level rather than mitigate its excesses makes you complicit? Maybe you own what you do and when what you do hurts people, you own that harm and that hurt?
Yes, this does characterize many HN-sanctioned heroes. Too bad. Maybe they should instead be decent.
Nobody forced these companies to exist. If you can't do business without bloodying the poor who are your "human resources," maybe you shouldn't do business.
If the legal standard finds they are employees the added cost is just more incentive to automate the jobs away completely. Soon enough all these terrible horrible jobs you speak of (which every driver I’ve spoken to is happy to have, usually having quit some other full-time employment to do gig work instead), soon enough all these jobs simply won’t exist at all.
You are incentivized to hurt people and steal their money if you reasonably think you can get away with it. That fact being true does not mean that actually hurting people for your benefit isn't evil. There are lots of actions that you are theoretically incentived to take, but it _is_ evil to do so.
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Every time I read arguments like this (the threat of increased cost leading to more automation), I just further believe that some sort of guaranteed basic income is what we need to be moving toward. Ideally in the utopian future we automate "all" jobs away to the point where we have so few jobs compared to the number of people, and obviously people will still need to be able to tend to their basic needs and then some. Owning the automation just cannot mean you get all the profits from it.
Let's think about money for a minute. Money itself of course has no meaning. But we apply meaning to it. It essentially works as a proxy for the value we assign to labor and materials - both of which are finite in reality. So obviously you'd prefer drivers make more money, so they could live a better life. Well how much? I imagine you think a ballpark for a 'fair' wage would be somewhere around $15/ride. Now let's consider your person that relies on taxi type services for transportation. We'll say they go out and return to their house once a day. And every other day they also go in/out again for entertainment, essentials, and so on. For a 30 day month that's a total of 30 x 2 + (30/2) x 2 = 90 trips. And 90 x 15 = $1350. On a yearly basis that's 365.25 x 3 x 15 = $16,436.
Well that's a lot of money. Of course I expect you'd probably say that that's because the 'bourgeois' are holding back the 'proletariat.' Okay. Let's go full on social system economics. Let's just pretend the entire GDP in the US is spread completely evenly between each and every person. And that's quite unreasonable as our GDP would decrease dramatically under such a system, but for arguments sake I'll give you that. Okay, that's easy. That's the GDP/capita or $52k. The total value of all annual goods and services in the US produced works out to $52k/person/year. But we can't forget about taxes now. To sustain our social utopia we'd need quite a high tax rate. But again, I'm going to let you have that and we'll just maintain current taxes. So we're each taking home about $42k. I'm also going to pretend that state and other taxes don't exist.
Now look at your $15/ride. If somebody was going to depend on that, they'd end up spending nearly 40% of their entire income just getting around even with a perfectly fair share of all income generated nationwide! And I gave you several unreasonably optimistic assumptions that makes that number a real lowball. The point here is that even in what I assume is your idealized system, this would not be a sustainable industry. It's very easy to see things through the lens of a victim complex because of the apparent inequality of our society. But these optics are in large part caused by inconceivably large population numbers. Imagine you earned just $1 from each person on this Earth. You'd be the 65th richest person in the world! Far from a 1%er, you'd be a 0.000000001%er. Earn $12 and you'd be the single richest person alive. Even if we just consider the USA. Imagine you took every penny Bill Gates, currently the richest person in the world, is worth and equally distributed it to each and every person in the US. That'd be a total of $275. Maybe you would say well do that to them all! By the time you're down to the 100 richest person you're only getting $17/person, and again that's for the US population only.
Well that's a lot of money. Of course I expect you'd probably say that that's because the 'bourgeois' are holding back the 'proletariat.' Okay. Let's go full on social system economics. Let's just pretend the entire GDP in the US is spread completely evenly between each and every person. And that's quite unreasonable as our GDP would decrease dramatically under such a system, but for arguments sake I'll give you that. Okay, that's easy. That's the GDP/capita or $52k. The total value of all annual goods and services in the US produced works out to $52k/person/year. But we can't forget about taxes now. To sustain our social utopia we'd need quite a high tax rate. But again, I'm going to let you have that and we'll just maintain current taxes. So we're each taking home about $42k. I'm also going to pretend that state and other taxes don't exist.
Now look at your $15/ride. If somebody was going to depend on that, they'd end up spending nearly 40% of their entire income just getting around even with a perfectly fair share of all income generated nationwide! And I gave you several unreasonably optimistic assumptions that makes that number a real lowball. The point here is that even in what I assume is your idealized system, this would not be a sustainable industry. It's very easy to see things through the lens of a victim complex because of the apparent inequality of our society. But these optics are in large part caused by inconceivably large population numbers. Imagine you earned just $1 from each person on this Earth. You'd be the 65th richest person in the world! Far from a 1%er, you'd be a 0.000000001%er. Earn $12 and you'd be the single richest person alive. Even if we just consider the USA. Imagine you took every penny Bill Gates, currently the richest person in the world, is worth and equally distributed it to each and every person in the US. That'd be a total of $275. Maybe you would say well do that to them all! By the time you're down to the 100 richest person you're only getting $17/person, and again that's for the US population only.
Yes, it's unsustainable to be privately chauffeured around everywhere if you're not wealthy. Is this controversial? It's also ecologically and infrastructurally unsustainable so it's not something anyone actually wants.
Most people in places where wages are livable walk, bike, ride a bus or train or drive themselves around. For the infirm there are subsidized transportation services.
Most people in places where wages are livable walk, bike, ride a bus or train or drive themselves around. For the infirm there are subsidized transportation services.
It's 'controversial' only in the sense that most people don't understand this. Many people seem to think that the only reason companies aren't giving great salaries to people, and 'letting' everybody earn a very good living doing most of anything, is greed. The person I was responding to went so far as to call these companies "villains." Or look at the other poster's response to this very topic. In reality, what people want is impossible, and but very few understand that. And I think the nature of this fact is often met with cognitive dissonance of some sort or another, which is sad. We are definitely becoming a nation that has an increasingly tenuous relationship with facts.
If wealth was evenly divided in the US, each household would have $760,000 [1]. Assuming a person spends $16,436 on taxi rides per year (instead of buying a new car every year), that would be 2% of their income, not 40%.
[2]https://www.federalreserve.gov/newsevents/speech/yellen20141...
[2]https://www.federalreserve.gov/newsevents/speech/yellen20141...
Let's talk about terminology now. First is households. A household in the US is a bit more than 2.5 people. You can go ahead and bump up your costs to $41k a year on transport alone. The next is wealth. Let's hit on two points:
- Wealth is not renewable, which is why income is vastly more important. If you have $100 of wealth and you only spend 10% of it a year. You're completely broke a decade. 'Only' spending 5% of your total wealth on transport per year is a path to very rapid ruin.
- There's nowhere near the amount of 'real' wealth as there is 'paper' wealth, which is the number you're indirectly citing. Most wealth is tied up in the form of various investments, stocks, and so on. When you liquidate these assets, it results in a decline in their value. If you were to liquidate large amounts of market assets into spendable money, simultaneously, you would find the total wealth in the US to be a very small fraction of the numbers stated.
- Wealth is not renewable, which is why income is vastly more important. If you have $100 of wealth and you only spend 10% of it a year. You're completely broke a decade. 'Only' spending 5% of your total wealth on transport per year is a path to very rapid ruin.
- There's nowhere near the amount of 'real' wealth as there is 'paper' wealth, which is the number you're indirectly citing. Most wealth is tied up in the form of various investments, stocks, and so on. When you liquidate these assets, it results in a decline in their value. If you were to liquidate large amounts of market assets into spendable money, simultaneously, you would find the total wealth in the US to be a very small fraction of the numbers stated.
You're assuming that it's a choice people want to make. If you talk to a few gig economy workers it becomes pretty clear that many of them would much prefer a 9-5 job with decent pay and benefits, but are unable to find such jobs.
These apps wouldn’t exist in the first place without these caveats since they operate on thin margins. Sure, we could put them out of business and then how will that help people who can’t find a regular job? At least now they have options. Also we have a big problem with unskilled workforce nowadays - if you are unskilled by choice or (unfortunately) by circumstances this world is not going to be kind on you. That’s the sad truth.
The deal is, I have, I am not assuming. There are a lot of people I have met personally who seem honestly to want the situation.
Many of them are people seeking a little extra money, a way to fund a new car, something to hold them over between jobs, a way to pick their own schedule... I have had a lot of conversations with a lot of workers in the gig economy and never have heard "I wish this was my full time job". Maybe that is the random set of people I've interacted with, maybe there is a bias for what people want to talk about.
What is absolutely clear though, is that a sizable amount of people participating in the gig economy are doing so because they want to take advantage of how it works, not despite how it works.
Many of them had other jobs, many of them clearly wouldn't want a full time job doing the gig.
Many of them are people seeking a little extra money, a way to fund a new car, something to hold them over between jobs, a way to pick their own schedule... I have had a lot of conversations with a lot of workers in the gig economy and never have heard "I wish this was my full time job". Maybe that is the random set of people I've interacted with, maybe there is a bias for what people want to talk about.
What is absolutely clear though, is that a sizable amount of people participating in the gig economy are doing so because they want to take advantage of how it works, not despite how it works.
Many of them had other jobs, many of them clearly wouldn't want a full time job doing the gig.
People are not choosing between full time work and the gig economy. They are choosing between unemployment and the gig economy.
This is just false though.
The guy who was the creator of a local web design business driving me around on a weekend afternoon wasn't choosing between unemployment and the gig economy, he was supplementing his income while worked on his dream.
The programmer giving me a ride to SFO from the peninsula wasn't choosing against unemployment, we had worked at the same company in similar positions, we had a great time talking about how things were going. He was just making money as he commuted home.
The Afghani translator who immigrated after the war was a student making money over the weekend on his own schedule. Neither of us understood football at all.
A lot of the things I pay for "gig economy" employees to do are things I think would be awful as full time jobs, it would make me sad to support a business that put people in the position where that was their life. When it's optional, people using those bits of work to fill in the gaps or add a bit of extra on top of whatever else they were doing with their life, I am a lot happier to support those workers and those businesses.
Not so say that the businesses are doing everything perfect, but I think it's obvious that the 'lead generation' role (companies like uber, lyft, etc) are going to become more of commodities to the benefits of the workers using them.
The guy who was the creator of a local web design business driving me around on a weekend afternoon wasn't choosing between unemployment and the gig economy, he was supplementing his income while worked on his dream.
The programmer giving me a ride to SFO from the peninsula wasn't choosing against unemployment, we had worked at the same company in similar positions, we had a great time talking about how things were going. He was just making money as he commuted home.
The Afghani translator who immigrated after the war was a student making money over the weekend on his own schedule. Neither of us understood football at all.
A lot of the things I pay for "gig economy" employees to do are things I think would be awful as full time jobs, it would make me sad to support a business that put people in the position where that was their life. When it's optional, people using those bits of work to fill in the gaps or add a bit of extra on top of whatever else they were doing with their life, I am a lot happier to support those workers and those businesses.
Not so say that the businesses are doing everything perfect, but I think it's obvious that the 'lead generation' role (companies like uber, lyft, etc) are going to become more of commodities to the benefits of the workers using them.
So how exactly is the gig economy harming them? Would you rather see these people unemployed?
People leave this comment 1,000 times every day on HN; a million times of the internet. Left to their devices, people who push this line of thinking would put kids back in mines, chimneys and mills. Hey, it's an exchange, am I right?
Any “exchange” that’s premised on the “loss of rights” is just the Capital class leveraging their power to further exploit the poor.
There's a trade off, though. It might not be the right one just yet, but it's there. Gig economy workers have much more flexibility to set their own hours, schedule, and what jobs they want to do than traditional employees do.
Really the only problem here, and the only reason why there are lawsuits, is that these workers aren't being paid enough. I really doubt any of these people care whether they're classified as employees or contractors; they just want to feel like they're making enough money to support themselves (plus take care of self-employment taxes and healthcare costs) without feeling like to do so they need to work themselves to the bone. If these jobs provided a decent standard of living, I don't think these issues would exist at all.
Really the only problem here, and the only reason why there are lawsuits, is that these workers aren't being paid enough. I really doubt any of these people care whether they're classified as employees or contractors; they just want to feel like they're making enough money to support themselves (plus take care of self-employment taxes and healthcare costs) without feeling like to do so they need to work themselves to the bone. If these jobs provided a decent standard of living, I don't think these issues would exist at all.
My entire point was that the fact that they are not paid enough - including the loss of rights and benefits which translates to labor costs - is a feature not a bug. The core feature. I have no idea why there is this insistence on some kind of "benefit of the doubt" ad infinitum.
Who are the "wilfully accepting" people you speak of?
I think most people aren't accepting nor rejecting anything.
Someone is hungry and now they have food delivered. Someone doesn't have a job and now they have a delivery job. It's a win-win situation in a short-term micro scale and people are just responding to short-term incentives. It may have a bad effect in the long term but hungry/unemployed people don't have time to think about that and middleman-apps are making good profit exploiting that.
Someone is hungry and now they have food delivered. Someone doesn't have a job and now they have a delivery job. It's a win-win situation in a short-term micro scale and people are just responding to short-term incentives. It may have a bad effect in the long term but hungry/unemployed people don't have time to think about that and middleman-apps are making good profit exploiting that.
Taxi drivers working as contractors is not something that started when the App was invented.
They have been working as contractors, for companies, for decades.
Maybe you think the law should be changed, but situations like this have been established and determined for a very long time.
They have been working as contractors, for companies, for decades.
Maybe you think the law should be changed, but situations like this have been established and determined for a very long time.
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This sux. Gig economy workers are on their own now. I expect a decline in wages. I thought technology was supposed to help us all.
A win for contract rights, which is a basic human right.
You know what they say:
Bad case, bad case law.
Bad case, bad case law.
> Lawson claimed the company violated California labor laws by not reimbursing his expenses, paying him less than minimum wage and failing to pay overtime.
I have also failed to do all of those things for Mr. Lawson, fortunately like GrubHub I did not tell him I ever would.
I have also failed to do all of those things for Mr. Lawson, fortunately like GrubHub I did not tell him I ever would.
This case aside - if I exclude legally mandated terms when I hire somebody and they accept the offered terms that doesn't mean I'm exempt from the law.
I think it’s pretty reasonable to state that gig economy employees are contractors, for the most part. If you set your own hours, then you’re your own boss.
The problem - in America, at least - is that contractors are denied benefits like health insurance and pensions/401k plans. But the issue of an inadequate social safety net is separate and much deeper than a mere employee/contractor distinction. Otherwise it remains a game of IRS musical chairs.
The problem - in America, at least - is that contractors are denied benefits like health insurance and pensions/401k plans. But the issue of an inadequate social safety net is separate and much deeper than a mere employee/contractor distinction. Otherwise it remains a game of IRS musical chairs.
> The problem - in America, at least - is that contractors are denied benefits like health insurance and pensions/401k plans.
The problem is much larger, and the "sharing" economy companies (and YC) are way ahead of you. It's more accurate to call it the "loophole" economy. A hotel chain that doesn't have to obey health and safety rules? It's called AirBnB! A taxi company that pays its under-insured drivers less than minimum wage? It's Uber! Exploiting a legal loophole and calling it "tech" is currently a lucrative enterprise.
The problem is much larger, and the "sharing" economy companies (and YC) are way ahead of you. It's more accurate to call it the "loophole" economy. A hotel chain that doesn't have to obey health and safety rules? It's called AirBnB! A taxi company that pays its under-insured drivers less than minimum wage? It's Uber! Exploiting a legal loophole and calling it "tech" is currently a lucrative enterprise.
>contractors are denied benefits like health insurance and pensions/401k plans
As their own employers, independent contractors can (and probably should) set up one-participant 401k plans for themselves. This can have significant advantages, since the "employer" gets to select the terms for the 401k, and employer-sponsored plans often drop terms that cost less than the value it'd provide you (eg, in-service Roth conversion + after-tax contributions).
As their own employers, independent contractors can (and probably should) set up one-participant 401k plans for themselves. This can have significant advantages, since the "employer" gets to select the terms for the 401k, and employer-sponsored plans often drop terms that cost less than the value it'd provide you (eg, in-service Roth conversion + after-tax contributions).
They totally should on those sweet less-than-minimum contract wages.
The lives of a high-flying contractor doing skilled work are very, very different than someone who faces a the "gig" contracts.
The lives of a high-flying contractor doing skilled work are very, very different than someone who faces a the "gig" contracts.
Totally separate issue. An employment contract with a beautiful, perfect 401k setup could also pay too little for you to save anything.
That's a misconception.
There are plenty of employees who work on piecework or an ad hoc basis. Setting ones own hours isn't really a cornerstone test for contractor status. Certainly much less so than the ability to set prices or subcontract.
There are plenty of employees who work on piecework or an ad hoc basis. Setting ones own hours isn't really a cornerstone test for contractor status. Certainly much less so than the ability to set prices or subcontract.
I've never understood this logic. Shouldn't you be able to set your own hours and prices?
> and prices?
You can, sure. Doesn't mean anyone will hire you.
The fact that someone offered a particular rate, and you agreed, doesn't really change anything material.
To me a contractor can decide to work that day, or not work (doesn't matter why - could be timing, or doesn't agree with the pay), and it's fine - if he works he gets paid, if not, he doesn't.
In contrast an employee has to work every day (other than agreed breaks), or he'll be fired, and no further work will come.
You can, sure. Doesn't mean anyone will hire you.
The fact that someone offered a particular rate, and you agreed, doesn't really change anything material.
To me a contractor can decide to work that day, or not work (doesn't matter why - could be timing, or doesn't agree with the pay), and it's fine - if he works he gets paid, if not, he doesn't.
In contrast an employee has to work every day (other than agreed breaks), or he'll be fired, and no further work will come.
How do you set your own prices? A contract is about autonomy. If you're forced to follow rules, e.g. can't set prices, how is that any different than an employee?
> If you're forced to follow rules, e.g. can't set prices
But you're not forced to set prices. It's just you won't be hired if your price is too high.
Is a grocery forced to set a particular price, if people won't buy the product at a lower price because a competitor has it?
If I say "I'll buy rice from you for $10", am I forcing the other guy to sell at $10? He can set whatever price he likes. I just won't buy it. Maybe someone else will.
But you're not forced to set prices. It's just you won't be hired if your price is too high.
Is a grocery forced to set a particular price, if people won't buy the product at a lower price because a competitor has it?
If I say "I'll buy rice from you for $10", am I forcing the other guy to sell at $10? He can set whatever price he likes. I just won't buy it. Maybe someone else will.
I'm not sure you understand how a contractor generally works. Sure you won't get hired, however a contractor can set a price. So the question is, can you set a price with GrubHub? Perhaps a driver will want to have a lower price in order to compete with volume; or a higher price because they're faster.
GrubHub drivers can do... neither?
Your example is nonsensical. We're talking about the distinction between an employee and a contractor. Not a store selling products. And again, to my knowledge drivers cannot set prices no GrubHub to begin with, so what you're saying is just irrelevant.
GrubHub drivers can do... neither?
Your example is nonsensical. We're talking about the distinction between an employee and a contractor. Not a store selling products. And again, to my knowledge drivers cannot set prices no GrubHub to begin with, so what you're saying is just irrelevant.
You set a price as part of choosing who to do business with. No contractor expects to set whatever price they choose on a specific client. They negotiate a price with each client, and take it or leave it.
Grubhub is only one client. If you want different pay, get a different client.
Grubhub is only one client. If you want different pay, get a different client.
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At that point, I don't understand how could anyone argue they are an employee (in the traditional sense of the word) of either company.