Should Uber & Lyft be ordered to fully employ drivers?

[ua_guy]

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.

Two answers here. One in Jest. It only applies if you are in the state of California, much like only cars from California are known to cause cancer. Because there's a sticker on the window ,which says so. But truthfully, this is only an argument in a couple of states so far. California, Illinois, and may one or two others? Someone help me out.

The real answer is it's not really a question. Ebay doesn't pay you. The buyer does. In fact, you pay eBay (I believe - I haven't looked into what it takes to be a 'vendor' there). Same thing as a garage sale, or a city craft fair. The vendors are not employees of the garage sale, the fair, or the city. Uber/Lyft do, however, pay their drivers. And the drivers have not historically set their own prices.

[LivingAlmostLarge]

Two answers here. One in Jest. It only applies if you are in the state of California, much like only cars from California are known to cause cancer. Because there's a sticker on the window ,which says so. But truthfully, this is only an argument in a couple of states so far. California, Illinois, and may one or two others? Someone help me out.

The real answer is it's not really a question. Ebay doesn't pay you. The buyer does. In fact, you pay eBay (I believe - I haven't looked into what it takes to be a 'vendor' there). Same thing as a garage sale, or a city craft fair. The vendors are not employees of the garage sale, the fair, or the city. Uber/Lyft do, however, pay their drivers. And the drivers have not historically set their own prices.

this is a big point. That drivers are not setting their own prices and uber taking a cut for facilitation. They do a thing where they use an algorithm and then drivers have to drive to get bonuses. What if they were a clear cut taxi service? Just getting say flat 10% fee for facilitation? What would happen if lyft did that? Made it purely you set your price/mile at certain times of day and then the drivers have to decide.

[ua_guy]

this is a big point. That drivers are not setting their own prices and uber taking a cut for facilitation. They do a thing where they use an algorithm and then drivers have to drive to get bonuses. What if they were a clear cut taxi service? Just getting say flat 10% fee for facilitation? What would happen if lyft did that? Made it purely you set your price/mile at certain times of day and then the drivers have to decide.

You're right - allowing drivers to set their own prices would help satisfy the test. Allowing drivers to be selective about their fares would help satisfy the test. That moves the model much closer to a free and independent market for drivers and they operate like ICs, but the opponents of that model are concerned that it will dilute wages for drivers. If one driver will charge you $10.00 for the fare but another one offers the fare at $8.00, are you going with 8, or 10? Maybe another driver offers it for $6 just to see if he can make up the difference on volume and maintain dominance in the same area. The existing model does protect wages for drivers in part, but it leaves them hanging in the fringe without benefits or minimum pay. And it's Uber/Lyft's key to turning a profit, treating its drivers like IC's instead of employees because as IC's they are NOT required to pay benefits or minimum wages.

[disneysteve]

And it's Uber/Lyft's key to turning a profit, treating its drivers like IC's instead of employees because as IC's they are NOT required to pay benefits or minimum wages.

How could they treat drivers as employees, though, without completely altering their business model? An employee has a set schedule. I can't just show up at work whenever I feel like it and see however many patients I feel like seeing and then go home.

Also, employees don't typically get benefits unless they work a certain number of hours. So a driver who is doing it full time might qualify but the ones who do it as a side gig and just fire up the app when they have a little free time might only work a few hours per week. Even if they were reclassified as employees, they still wouldn't qualify for benefits.

I think part of the problem with a lot of tech-driven innovation is trying to shoehorn it in to existing models that just don't fit. The laws often lag behind the advances.

[ua_guy]

How could they treat drivers as employees, though, without completely altering their business model? An employee has a set schedule. I can't just show up at work whenever I feel like it and see however many patients I feel like seeing and then go home.

Also, employees don't typically get benefits unless they work a certain number of hours. So a driver who is doing it full time might qualify but the ones who do it as a side gig and just fire up the app when they have a little free time might only work a few hours per week. Even if they were reclassified as employees, they still wouldn't qualify for benefits.

I think part of the problem with a lot of tech-driven innovation is trying to shoehorn it in to existing models that just don't fit. The laws often lag behind the advances.

Agree on both fronts. The models don't really encompass what gig work is, and "some" of the benefit that it provides truly casual workers. And being a physician at a medical facility is a truly different engagement than casual driving. I believe the crux of the discussion is about minimum wage, overtime eligibility worker's comp, liability, the actual legal requirements and duties of an employer versus things that are typically agreements between employees and employers, i.e. shift schedules. The strongest opponents of the IC model are those who see using the IC as a means of exploiting cheap labor and skirting well-established employment. I see how it happens, and back to my original statement, I think the issue is bigger than employment classification-- what kind of power are we giving to large companies, what kind of culture of work are we creating?

[james.hendrickson]

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.

I'm with ua_guy on this. Uber/Lyft likely have their employees classified as independent contractors instead of employees because they're basically employees under California law.

The only trouble is...the California legislature has basically mandated an increase in the cost of labor for a wide swath of California industry. Its likely going to decrease hiring, slow economic growth and accelerate the flight of businesses to other states.

[Petunia 100]

How could they treat drivers as employees, though, without completely altering their business model? An employee has a set schedule. I can't just show up at work whenever I feel like it and see however many patients I feel like seeing and then go home.

Also, employees don't typically get benefits unless they work a certain number of hours. So a driver who is doing it full time might qualify but the ones who do it as a side gig and just fire up the app when they have a little free time might only work a few hours per week. Even if they were reclassified as employees, they still wouldn't qualify for benefits.

I think part of the problem with a lot of tech-driven innovation is trying to shoehorn it in to existing models that just don't fit. The laws often lag behind the advances.

That's a good point. Maybe we need a third classification.