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Lyft Joins Uber in Threatening To Pull Out of California Over Driver Status (theverge.com) 340

Lyft said it would shut down operations in California if forced to classify drivers as employees, the company's executives said in an earnings call with investors on Wednesday. Lyft joins Uber in threatening to pull out of one of its most important US markets over the question of drivers' employment status. From a report: At issue is the classification of ride-hailing drivers as independent contractors, which Uber and Lyft say most drivers prefer because of the flexibility and ability to set their own hours. But labor unions and elected officials contend this deprives them of traditional benefits like health insurance and workers' compensation. Earlier this week, Uber and Lyft were ordered by a California superior court judge to classify their drivers as employees. Both companies have said they would appeal the ruling, which was stayed for 10 days. But if their appeals fail, Lyft may join Uber in closing up shop in California, the company's president John Zimmer said. "If our efforts here are not successful it would force us to suspend operations in California," Zimmer said on a call announcing the second quarter earnings of 2020. "Fortunately, California voters can make their voices heard by voting yes on Prop 22 in November."
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Lyft Joins Uber in Threatening To Pull Out of California Over Driver Status

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  • Let 'em (Score:5, Insightful)

    by spun ( 1352 ) <loverevolutionary&yahoo,com> on Thursday August 13, 2020 @10:58AM (#60397451) Journal

    Cities can just allow more actual taxis, and the ex-drivers of said pathetic companies can get real jobs with decent pay and benefits.

    If your lifestyle depends on taking advantage of underpaid, exploited workers, maybe get a different lifestyle.

    • Cities can just allow more actual taxis

      That would reduce the value of existing taxi medallions so no, they really cant

      the ex-drivers of said pathetic companies can get real jobs with decent pay and benefits.

      Laughably stupid in an economy where most places are still shut down or only partly open, and one of the few things you COULD do that earned a decent wage with great flexibility, was drive for money.

      If your lifestyle depends on taking advantage of underpaid

      See: Politicians.

      Otherwise are you talking about

      • by spun ( 1352 ) <loverevolutionary&yahoo,com> on Thursday August 13, 2020 @11:26AM (#60397569) Journal

        Who cares if the value of medallions goes down? Allowing Lyft and Uber does the same thing!

        How is driving for a taxi not "driving for money?" Explain how it is any different from driving for Uber or Lyft?

        I know that your anecdotes seem like "facts" to you. But they are not. This is what a fact looks like: https://www.thestreet.com/pers... [thestreet.com].

        The average is $8-$11 per hour, with no benefits. Do you live in California? On that salary, you are living in a bunk bed in a room with twelve other guys.

        And yes, I have a friend who is active in labor organizing Lyft and Uber. I'm pretty sure I know a bit more about this issue than you appear to.

        • by Paxtez ( 948813 )

          If you read the link you posted it is "after expenses".

          Normally when I see those numbers they are trying to make the $/HR as low as possible so they factor EVERYTHING in. Your car payments, insurance, vehicle registration, tires, oil changes, etc.

          There are certainly arguments that can be made for part of each thing put on the list, but certainly not 100% of everything.

          Not to mention that a self selected survey of 1,100 people isn't the most scientific way to figure it out.

          I'm curious, do the drivers even w

          • by spun ( 1352 )

            I have a friend who drives for Uber and has been trying to unionize them, and yes, that is what the majority of drivers want.

            They don't buy into the "this will make for less hours" propaganda. Experience has shown that is simply not the case, when workers get paid more, the difference usually comes out of the owners share, which is astronomical, rather than being taken as an hours cut, or even a major increase in prices.

            See, it turn out that if the owners could be charging nay more, they already would be. A

      • by whitroth ( 9367 )

        Yep. But why not call them what they are: day laborers. They've got a phone, and other than that, they're no different than the folks who line up at a well-known location at 06:00 and 06:30, hoping to be chosen to work that day.

        In fact, they're no different than most folks a century about, before unions.

    • Re:Let 'em (Score:5, Insightful)

      by rnturn ( 11092 ) on Thursday August 13, 2020 @11:24AM (#60397561)

      ``If your lifestyle depends on taking advantage of underpaid, exploited workers, maybe get a different lifestyle.''

      I tend to think if it more like:

      ``If your so-called business model depends on taking advantage of underpaid, exploited workers, maybe get a different business model.''

      I'll say the same to anyone who thinks that getting an extra $600 for the limited time they're on unemployment insurance (a maximum of 26 weeks in many states) is living high on the hog.

      • I'll say the same to anyone who thinks that getting an extra $600 for the limited time they're on unemployment insurance (a maximum of 26 weeks in many states) is living high on the hog.

        $600/wk = $31k/yr. That's why a lot of people have likened it to a test of a UBI.

        Regardless of whether you think $600/week ($31k/yr) constitutes a "significant" amount of money, I think everyone can agree that unemployment payments should be structured so that it's always preferable for people to work, rather than sit at

      • Re:Let 'em (Score:4, Insightful)

        by lgw ( 121541 ) on Thursday August 13, 2020 @01:08PM (#60398017) Journal

        If I offer you money to do a job, and you willingly take that money and do that job, and there's no fraud involved, then there is no "taking advantage" or "underpaid" involved.

        There are areas new to the gig economy, and new with managing people by algorithm, that we need to figure out how to regulate. But the basic prospect of "here's what this job pays, take it if you like" is fundamentally fair (again, as long as there's no fraud involved).

    • Cities can just allow more actual taxis, and the ex-drivers of said pathetic companies can get real jobs with decent pay and benefits.

      Hopefully those are two distinct thoughts and you weren't suggesting that getting a job driving an actual cab provides decent pay and benefits. Many places the cab drivers are not actual employees either.

      • by spun ( 1352 )

        https://neuvoo.com/salary/?job... [neuvoo.com]

        This source pegs average taxi driver compensation in the US at $54,600, significantly higher than Uber and Lyft drivers make. But this source is on the high side.

        Another source indicates closer to $36,000, still higher than the average for Lyft and Uber. https://www.salary.com/researc... [salary.com]

        Benefits are not as good as in many industries, but that is due to taxi drivers being classified as independent contractors in many places.

        You get that this law will change that in California

    • You misunderstand the power dynamics at play. Politicians have an investment in entrenched interests like taxi cabals. You are buying into tbe surface reasoning.

      Follow the money. It doesn't lie.

      Uber and Lyft disrupt this cozy, unholy relationship, and, just like the mafia demanding protection money, the pols dutifully go after the disruptors.

      Follow the money, it doesn't lie.

      There. Now you're woke.

      • by spun ( 1352 )

        Nope. Sorry, you think that Uber and Lyft aren't bribing their own politicians? You think they aren't playing the very same "screw the working class" game? Are you that simple?

        The only thing Silly Valley disrupts is the middle class. Their idea of innovation is to take an industry and turn the workers into low paid contractors while siphoning off the profits for themselves and their bought and paid for politicians.

        Don't be naive. The elite of Silicon Valley are nothing more than rapacious villains with the

  • by nagora ( 177841 ) on Thursday August 13, 2020 @11:01AM (#60397459)

    Please forget to write.

  • California is not perfect, however it is the Wealthiest state in the United States, California State alone economy is 5th largest in the world Above India, and Behind Germany.
    I know it is popular for the Conservatives to hate California, Mostly because it tend to vote for Democrats, and it has a lot of Electoral Votes and Representation in the US.
    However Uber and Lyft are sacrificing a lot dropping the State. Normally in business you know you should let your biggest customer get away with more nonsense tha

    • however it is the Wealthiest state in the United States

      Um, nope. In GDP per capita, we aren't even top five among the states. The only reason our collective economy is so large is because our population is so large.

      However Uber and Lyft are sacrificing a lot dropping the State....the extra nonsense is just annoying not severely hitting your profits.

      What profits? Uber and Lyft already don't make a profit with their independent contractor model. There is no way they will ever make a profit by having to pay full time employees and benefits. They lose nothing by dropping California.

      • Your population statement is false. Divide the economy per capita and you'll be way way ahead of the next state, Texas.

      • Umm - exactly what expenses related to the core business does Uber/Lyft carry? Operating a carpool coordination app is practically free, it certainly doesn't cost them several dollars each to coordinate a single passenger pickup.

        If they're not turning a profit it's because they're spending all that income lawyers, lobbyists, and executive salaries - none of whom contribute anything to the customers or drivers to justify that income.

        • God, some of the shit I read around here. So let me get this straight, you're convinced that everything Uber (outside the drivers themselves) just materialized as if from the aether and that means that their cut is, I'm double checking here, "almost pure profit"? Jesus Christ, how silly.

          Let me guess, you are one of these people also convinced that landlords are evil because they have a house just sitting there and it costs them almost nothing except maintenance of a few thousand a year and yet they charge

    • by penandpaper ( 2463226 ) on Thursday August 13, 2020 @11:28AM (#60397577) Journal

      > Mostly because it tend to vote for Democrats

      That is a big nope. Conservatives and Republicans don't like California because California spreads it's problems beyond the borders of CA. People move out of CA into neighboring states and bring those policies and problems with them. That is where the bulk of resentment comes from.

      There is an exodus from CA because of their policies as demonstrated by this article. As demonstrated by Tesla moving to Texas. As demonstrated by Rogan moving to Texas. As demonstrated by the ~600,000 people leaving a year [sfgate.com].

      What happens is that when people move out of CA they buy out the locals and jack up the real-estate of those places that displace the locals and cause problems. Rent and cost of living go up because CA cannot fix their problems of cost of living and wealth disparity. Those people bring CA with them through their vote which changes the local politics. Looking at AZ.

      Neighboring red states wouldn't care so much and is why New York, despite being just as democrat as CA, doesn't receive the same hate from those states.

      • What happens is that when people move out of CA they buy out the locals and jack up the real-estate of those places that displace the locals and cause problems.

        The obvious solution to high housing prices is to build more houses.

        Housing in California is unaffordable because they don't allow new construction. If you have the same problem where you live, it is only because you have the same stupid no-growth policy.

    • Just a tip for my California friends -
      Being similar to Mexico and India economically actually isn't a good thing.

      You guy say that to try to brag, and we feel sorry for you, wondering if next you'll say "our tap water is like Mexico's too, and almost as good as India".

      When the conversation goes like this:
      Somebody: California is crappy
      You: But it's a BIG piece of shit!
      you aren't winning.

      It's just not a winning argument, it might be the very best thing you can say about California, but saying it's economy is s

      • by Cyberax ( 705495 )

        Just a tip for my California friends - Being similar to Mexico and India economically actually isn't a good thing.

        Perhaps we should compare Idaho with Chad? "Our witch burnings are almost as great!"

  • by memory_register ( 6248354 ) on Thursday August 13, 2020 @11:11AM (#60397499)
    Uber and Lyft bleed money and exploit their workforce. How are they even companies to begin with?
  • because they had taken over so much of the Cab market that having them suddenly leave would create supply short term problems.

    That said during a global pandemic that's not really an issue.
    • by Luthair ( 847766 )
      I agree, though I would say at the same time it also allows uber/lyft to close down operations because they aren't really missing out on much. I wonder whether they now need to pay severance to the drivers.
      • I wonder whether they now need to pay severance to the drivers.

        There is no legal requirement to pay severance to either employees or contractors.

  • Profit (Score:5, Interesting)

    by Nite_Hawk ( 1304 ) on Thursday August 13, 2020 @11:15AM (#60397511) Homepage

    "Net losses for Lyft amounted to $437.1 million during the second quarter, compared to $644.2 million in the same period last year."

    "The company [uber] was able to narrow its net losses to $1.8 billion, a major improvement from last year when stock-based compensation contributed to a net loss of $5.24 billion."

    So both are doing better than last year, but both are still losing millions-billions of dollars every quarter. Maybe they are hoping that if they pull out of California due to labor disputes they can keep justifying to investors why they are having trouble actually making a profit.

    • So in a year when they are delivering far fewer rides (due to Covid shutdowns and minimal tourists), their losses are much lower. So much for economies of scale. It's almost like they lose money on every single ride they provide. When are the people who invested in this shitshow going to figure out they were scammed?
  • Is this poker or chicken?

  • by Aristos Mazer ( 181252 ) on Thursday August 13, 2020 @11:31AM (#60397597)

    A few years ago, both companies left Austin, TX. Took a few weeks for Ride|Austin to spin up and take their place. It's still in business as a non-profit that keeps the money local. If these two leave California, they can be quickly replaced. The model for how to do that already exists.

    • Re: (Score:3, Informative)

      by Train0987 ( 1059246 )

      The latest Form 990 available for the nonprofit "Ride Share Austin" is for the period ending December 2018.

      2017 revenue: $26,462,544
      2018 revenue: $6,478,713

      2017 expenses: $27,743,487
      2018 expenses: $6,771,150

      Yeah, they're doing great. Significant losses each year and a massive YOY revenue drop. I wonder how bad 2019 and 2020 have been.

      $5 million paid in "other fees" for 2018. I didn't look up 2017. Non-profits are a fantastic scam.

      https://projects.propublica.or... [propublica.org]

    • A few years ago, both companies left Austin, TX. Took a few weeks for Ride|Austin to spin up and take their place. It's still in business as a non-profit that keeps the money local. If these two leave California, they can be quickly replaced. The model for how to do that already exists.

      Not to mention the infestation of scooters in Austin. I was there last year for a wedding and the damn things were everywhere. People were riding them on the road, lane splitting (illegal in Texas), hopping onto the sidewalk for a bit, then jumping back into the road. There were people on scooters weaving in and out between pedestrians and strewn all over the sidewalks downtown as well.

    • Ride Austin shutting down as of June 15th... https://www.masstransitmag.com... [masstransitmag.com]
    • it never occurred to me to just make Uber/Lyft public utilities.
  • Lyft and Uber need California more than California needs Lyft and Uber. That's a hollow threat, IMO.

  • by clawsoon ( 748629 ) on Thursday August 13, 2020 @11:40AM (#60397625)

    One of the reasons that Scandinavian countries got to be so nice for the people living there was that wage compression pushed out industries with low productivity and raised profits in high productivity industries. Uber and Lyft - when you consider the entire industry, not just the fiction that the companies claim of them being mere software services and not taxi companies - are in low-productivity industries which would be even more unprofitable than they already are if they had to pay reasonable wages.

    The economy makes everyone's lives better when it leads to higher productivity. What Uber and Lyft do is make some people's lives better by making other people's lives worse. It's the fake version of higher productivity, where more production of goods and services is achieved only by making people work harder and longer for less.

  • I'm not sure if it means much for Uber or Lyft. Last time I checked, they didn't make any money anyway so I bet they'll actually lose less money by exiting the market. If the other states follow up with similar laws these companies may be able to really cut their losses and their stock will skyrocket!

  • by Joe_Dragon ( 2206452 ) on Thursday August 13, 2020 @12:03PM (#60397719)

    London should force them to pass the knowledge!

  • by Socguy ( 933973 ) on Thursday August 13, 2020 @07:27PM (#60399615)
    When your supposedly new business model boils down to not paying labour at the going rate, that's just a house of cards waiting to collapse.

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