Should Uber & Lyft be ordered to fully employ drivers?

[disneysteve]

I hear both sides, but here's my take. The drivers need to be regulated as commercial drivers and they should be required to have a new class of commercial license which also needs to include DOT medical certification. Their vehicles need to be subject to FMCSA-like rules across 50 states, not local or municipal rules.

I wouldn't disagree with any of that. Whether IC or Employee, they are driving commercially so should be licensed and regulated accordingly (although having been a DOT medical examiner for many years, I know how worthless that certification can be).

But the fundamental question of this thread is whether or not Uber/Lyft drivers are employees. As it currently stands, they aren't. If the companies are forced to make them employees, they'll need to substantially alter their business model away from the "gig" work it is currently. A lot of their drivers won't continue if that happens because many people are doing it as a side job and just working whenever their schedule allows. If they switch to having set shifts, that won't work for many people.

[Smallsteps]

I'm no expert but it's my understanding that once approved to work, Uber/Lyft drivers have no set schedule. You control when and how much you work and you're paid by the job, not by salary or by the hour. That sounds an awful lot like an independent contractor to me.

This was designed for people to make money on the side, to subsidize their income or a between things type job. I think of it as an independent contractor as the person chooses to drive or NOT.

Instead some for various reasons some quite sad, some people decided these types of jobs should be their Main job.
When you do the math it is not a good deal unless you happen to have a great route near an airport/ big attraction.

This was not really designed to be a career, much like many starter jobs... but some people think they can make them one. When that turns out as a poor choice some would like the government to step in and change the agreement.

The AB-5 law passed in California is killing many freelancer (gig) type jobs not just Uber and Lyft.
Even freelance writers can only sell a few articles to a publication before California would decide that writer is on staff of magazine/ paper etc. Many other independent contractors must jump through hoops to fit this law. Many media companies have writers that live in different states write articles about California items to avoid this.

It is up to the state but in the end they are hurting far more then they help by trying to force companies to fit into a one size fits all model.

[Petunia 100]

I wonder if delivery services such as Door Dash are next.

[disneysteve]

I wonder if delivery services such as Door Dash are next.

It sounds like they are going after any gig workers at all, not just drivers. If freelance writers are impacted, so is pretty much anybody who does anything on a freelance basis.

[disneysteve]

The AB-5 law passed in California is killing many freelancer (gig) type jobs not just Uber and Lyft.
Even freelance writers can only sell a few articles to a publication before California would decide that writer is on staff of magazine/ paper etc.

This is nuts. Why are they trying to destroy freelancing, which has been around forever. Heck, I've written a few articles for another website. They pay me when they publish one. I don't work for them. They don't assign me articles to write. I write what and when I want and if they buy them, they pay me.

[ua_guy]

It sounds like they are going after any gig workers at all, not just drivers. If freelance writers are impacted, so is pretty much anybody who does anything on a freelance basis.

The bill establishes a higher bar for classifying freelance work. Freelance work is not eliminated. Here is the three-prong test which the bill requires.

1. The worker is free to perform services without the control or direction of the company.
2. The worker is performing work tasks that are outside the usual course of the company’s business activities.
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

It seems common-sense to me. Before this there wasn't really anything in place to prevent a company to just classify all its workers as freelance and not pay them any benefits, while treating their contributions and function the same as employees.

[bjl584]

I don't think that their business model works if they fully employ their drivers.
It will make them just another taxi service company.
They are bleeding cash as it is.
That would be a death nail

[disneysteve]

The bill establishes a higher bar for classifying freelance work. Freelance work is not eliminated. Here is the three-prong test which the bill requires.

1. The worker is free to perform services without the control or direction of the company.
2. The worker is performing work tasks that are outside the usual course of the company’s business activities.
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

So drivers fulfill point 1 as they drive when and where they wish.
Point 2 is a problem. If the purpose of the company is to connect drivers with riders, is that task (driving) "outside the usual course of the company's business"? I'm not quite sure how they're interpreting that.
As for point 3, what does that mean exactly? Is that saying that in order to be an Uber driver, you must already work as a driver elsewhere?

[ua_guy]

So drivers fulfill point 1 as they drive when and where they wish.
Point 2 is a problem. If the purpose of the company is to connect drivers with riders, is that task (driving) "outside the usual course of the company's business"? I'm not quite sure how they're interpreting that.
As for point 3, what does that mean exactly? Is that saying that in order to be an Uber driver, you must already work as a driver elsewhere?

All 3 tests have been problematic for Uber/Lyft and is why they are potentially shutting down temporarily. Test 2 has been the question for uber/lyft for a long time - are they a technology company, or a transportation provider? Looks more and more like the latter with how they utilize their workers.

I fear for regular employment if an exception is carved out for these companies. Suddenly major companies can just reclassify their workers as IC and skirt wage laws and other protections. They need to pay their workers for the work they do... I have the same problem with trucking companies and owner/operator drivers - if these services are so damn essential, pay them what their services are worth.

[disneysteve]

Test 2 has been the question for uber/lyft for a long time - are they a technology company, or a transportation provider?

How does this compare to something like ebay? Ebay provides the platform to connect sellers with buyers. Ebay facilitates the transactions and takes a cut of each sale. But as an ebay vendor, I don't work for ebay. They are just the means to an end. I can sell whenever I want, as much or as little as I want.

Is that the same as Uber? They provide the platform to connect drivers with riders. They facilitate the transaction and take a cut of the fare. The drivers can work whenever they want, as much or as little as they want.

I'm not sure how the two differ.

[Petunia 100]

All 3 tests have been problematic for Uber/Lyft and is why they are potentially shutting down temporarily. Test 2 has been the question for uber/lyft for a long time - are they a technology company, or a transportation provider? Looks more and more like the latter with how they utilize their workers.

I fear for regular employment if an exception is carved out for these companies. Suddenly major companies can just reclassify their workers as IC and skirt wage laws and other protections. They need to pay their workers for the work they do... I have the same problem with trucking companies and owner/operator drivers - if these services are so damn essential, pay them what their services are worth.

Well, the IRS rules regarding independent contractors vs employees are still in place.

[disneysteve]

if these services are so damn essential, pay them what their services are worth.

All services are worth exactly what others are willing to pay and not a penny more. That's how the market works. If Uber finds that they can't attract enough drivers, then they need to consider raising the pay. As long as they have an ample supply of drivers willing to work for the current wage, they aren't going to increase it.

[LivingAlmostLarge]

but uber is also getting into the business of leasing cars for drivers. So i am going to guess this turns into a different sort of employment when you are "providing" cars to drive?

[disneysteve]

but uber is also getting into the business of leasing cars for drivers. So i am going to guess this turns into a different sort of employment when you are "providing" cars to drive?

That may be different than their base business model. Though again, if the drivers are still free to drive when and where they want, just because they happen to be leasing the vehicle from Uber still doesn't make them employees.

[Smallsteps]

How does this compare to something like ebay? Ebay provides the platform to connect sellers with buyers. Ebay facilitates the transactions and takes a cut of each sale. But as an ebay vendor, I don't work for ebay. They are just the means to an end. I can sell whenever I want, as much or as little as I want.

Is that the same as Uber? They provide the platform to connect drivers with riders. They facilitate the transaction and take a cut of the fare. The drivers can work whenever they want, as much or as little as they want.

I'm not sure how the two differ.

Good point. ......
Once again some simply do not respect that drivers made a choice to be independent contractors for many reasons.