Inside Uber and DoorDash's Push To Win the Most Expensive Ballot Race in California History (wsj.com) 91
Uber, Lyft and DoorDash are spending tens of millions of dollars and flooding voters with messages in a neck-and-neck battle to preserve their current business model in California. From a report: The companies, along with other gig-economy giants like Postmates and Instacart , have contributed nearly $200 million to persuade voters to approve a ballot measure that would exempt them from a new state law requiring businesses to reclassify contract workers as employees. That amount, the most ever raised for a California ballot question, according to Ballotpedia, suggests how pivotal the vote will be for companies reliant on a labor model in which workers are summoned at the touch of an app. The opposition, which has raised far less -- roughly $19 million, largely from labor unions -- says the companies have flourished on the backs of gig workers without providing them the protections that most employees receive. Victory for Uber, Lyft, DoorDash and others would let stand the companies' business models in their home state of 40 million people. If voters reject the Proposition 22 measure, the companies would be compelled to offer their drivers broad employment benefits, such as minimum wage, paid sick leave and unemployment assistance, that would weigh heavily on their already money-losing bottom lines.
What the hell is Uber doing with their money? (Score:5, Funny)
Are they just throwing really fantastic (Uber fantastic?) parties every weekend for their executives or something? It's hard to believe that they are really paying their software developers so much money as to sink the company.
Re:What the hell is Uber doing with their money? (Score:5, Interesting)
Can someone explain how Uber is losing money?
They blew a lot of money on their self-driving car research fiasco. You know the people on top are cashing out like bandits. The rest of the money goes to subsidizing the rides. If they had to price the rides correctly to make a profit no one would use Uber, cabs would be cheaper. The whole initial plan of Uber was to burn money and grab marketshare as fast as possible and hope/pray that self-driving cars would show up before investors(gamblers) would stop giving them money.
Re:What the hell is Uber doing with their money? (Score:5, Informative)
I agree with most of the above, but would like to add a correction/opinion. Common people like myself tend to buy into the 'fluffy' mission statements of these companies. "We're out to change transportation", "We want to make the world a better pace," "Do no evil" and so on. But for most start-ups the real plan is literally just to make the initial investors richer. Full stop. The original investors in Uber have pretty much extracted all of their profit and left the premises.
As a continuing entity some poor sap (well still rich actually) has to take the 'business model' formed pre-IPO and try their best to make it work. But as everyone correctly has pointed out, the current model is money losing one. So it's either robot cars or increase prices and hope people are so used to taking Ubers they will pay higher prices. Plus corporate layoffs. Covid of course is an unwelcome surprise, and California state politicians are likewise an unwelcome variable adding stresses to their 'business model'
It's not the mission statement people liked (Score:1)
Common people like myself tend to buy into the 'fluffy' mission statements of these companies. "We're out to change transportation", "We want to make the world a better pace," "Do no evil" and so on
People people know those mean nothing.
The reason why Uber/Lyft caught on, was because the service was all around much better than taxis or buses.
It was cheaper than taxis, and you could determine the price at the end.
It was technologically way more advanced, making it easy to get a ride from anywhere to anywhere,
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The reason why Uber/Lyft caught on, was because the service was all around much better than taxis or buses.
It was cheaper than taxis, and you could determine the price at the end.
It was technologically way more advanced, making it easy to get a ride from anywhere to anywhere, without interacting with human who could mis-interpret an address.
Where I live the regular taxi companies have this, so it was not something unique to Uber or Lyft. The only thing that gave them an "edge" was pricing since they didn't pay the taxes and skirted the law.
Frankly it was even better for the drivers, who were not under the thumb of a highly corrupt taxi industry but could set whatever hours they liked and work in areas they liked.
Citation needed. How many taxi drivers converted to Uber drivers and how did their income change, as well as their social security? The only thing I have seen is that it is not possible to get a living wage off Uber if you are to work 8-hour work days, 5 days a week. Not if you factor in the cost of your own
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The early investors are doing fine [fortune.com] because their investments went up in value massively and they cashed out some of ithatt and used it for other things. It's the later investors that are paying for the ongoing development.
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The early investors are doing fine [fortune.com] because their investments went up in value massively and they cashed out some of ithatt and used it for other things. It's the later investors that are paying for the ongoing development.
Yep. IPOs are ponzi schemes. The important people get paid out quick, the later investors have to hope that there will always be a greater fool to give them money.
Re:What the hell is Uber doing with their money? (Score:4, Insightful)
Taxi drivers know that it's practically impossible to hold them responsible, so they take any opportunity they can to defraud the rider. Uber will get more expensive, but Taxis will never come back unless they adopt the Uber app and customer support model.
Re:What the hell is Uber doing with their money? (Score:4, Informative)
-R&D, particularly on self-driving cars.
-Undercutting the cost of taxis and competitors.
-and Political campaigns, apparently.
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They just spent another few millions in lobbying
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Can someone explain how Uber is losing money? .
It's simple. They subsidize the rides so that we continue to take them. It's incredibly hard to hold onto market share, since anyone can burn $$ to attract customers.
In London, as an example, Uber had become semi-dominant. But now there's Bolt, Ola, Free Now, not to mention older ones like AddLee and the famous black cabs. Without subsidising Uber rides, I'm not taking them. When I'm getting 50% discounts, it's not the driver giving me a freebie, it's Uber burning investor money to attract me.
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Please explain to me where/what the "subsidy" is you mention.
I"ve heard this, but no one has explained what this subsidy is.
I mean, They have programmers, etc..that run the app.
They get the $ for a ride and they keep part and give the driver a cut.
They don't pay for the car, its fuel, nor its maintenance, that is on the driver/owner of the car working with them.
So, it seems to me th
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Please explain to me where/what the "subsidy" is you mention.
I"ve heard this, but no one has explained what this subsidy is.
I mean, They have programmers, etc..that run the app.
They get the $ for a ride and they keep part and give the driver a cut.
They don't pay for the car, its fuel, nor its maintenance, that is on the driver/owner of the car working with them.
So, it seems to me that all they need to pay for, is the Uber staff, physical overhead where they have offices, etc.
This seems to be something fairly easy to fix if they aren't making enough on their cut to run their part of the business.
They should cut staff (I can't imagine it takes THAT many folks to maintain the system)...and do whatever to fix it on their end.
But where is the subsidy and who gets paid this subsidy you mention?
Thanks in advance!
The price they charge per ride isn't enough to cover all of that overhead you mention. So to artificially keep the cost per ride down, the require constant injects of capital, such as from investors.
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Again not sure why people here are so ignorant, but the problem is right in this step you list here:
They get the $ for a ride and they keep part and give the driver a cut.
The basic problem is that the driver's cut is greater than the $ they got for the ride. In other words, the "they keep part", the value of the "part" is negative.
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I can't image it takes an army of folks to maintain the system....and especially with folks working form home, likely not much need for any office space, etc.
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Can someone explain how Uber is losing money?.
For one thing, the Uber don't make money because they choose growth over profit.
But it's also because they want to avoid paying 35% percent in US corporate tax, while the money is stashed [fortune.com] in the Netherlands through complex tax avoidance schemes.
And then, not only do these taxes (that they don't pay), don't serve the American democracy and the American people, but even worse, when Uber doesn't agree with people's elected representatives, they use $200 millions in stash money to try to convince voters direct
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I don't know if this is a joke, but they are paying their employees more than they are charging for the rides. That is why they are losing money.
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I know several people who driver uber. They do not get paid more for the rides than the people are charged.
Uber is just massively inefficient on their internal overall spend which, afaik, is largely lobbying and advertising. $200mm would pay for a lot of employee benefits, but it's still 'cheaper' as a one-time cost and to avoid a precedent that other states can adopt.
I genuinely hope they lose that vote. Even if it means Uber goes poof.
Well if they have the money for this... (Score:3)
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correction (Score:2)
Victory for Uber, Lyft, DoorDash and others would require any app-based company to follow their companies' current business models in their home state of 40 million people.
FTFY
Uber spent $200 million dollars (Score:5, Insightful)
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Well, Uber has over 200k drivers in Cali, so that works out to roughly $1k per driver. So still cheaper than simply paying them a real wage and treating them as an employee.
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Agreed, and TBH I think they can still afford it...BUT it would increase liability and reduce (future) profits/stock price. Can't have THAT happening. Think of the hedge fund managers who might not get a new Bentley next year!
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I already voted: 'Yes' on Prop 22 (Score:3)
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If voters reject the Proposition 22 measure, the companies would be compelled to offer their drivers broad employment benefits, such as minimum wage, paid sick leave and unemployment assistance, that would weigh heavily on their already money-losing bottom lines.
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This is what happens when coffee doesn't hit me fast enough in the morning. xD
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Please drink your coffee before you go out on the 3rd.
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Actually all the votes are on the same ballot, so if they voted on 22 they also voted on everything else that will be decided Nov 3 already.
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I mean, there are other jobs and no one is holding a gun to their heads...even in this pandemic.
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Why should grown adults NOT be able to make their own decisions about if they want a contract job or not?
Because as a society, we've decided that certain behaviors lead to outcomes that are bad and we don't let people do those things? The fact that you don't understand this makes me think that you don't like civilization very much. Why don't just run off to someplace where ol' debbil gov'mint don't bother you so much? What? There is no place like that? Color me shocked that most people have a better notion
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But the US was built as a society about the individual that was free, free to make their own decisions, etc.
Unlike Eurpose and other places...we have not been a society based on the collective, but of the individual ...which is TRUE freedom.
Why do you want to destroy what made the US a leader in the world to date?
Of course there are no absolutes, but you are seeming to want t
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Libertarianism only works when there's a frontier to expand into. As soon as people have to settle together because there's nowhere left to run, they have to live with the external costs of everyone else's actions. It's a charming philosophical position, but it doesn't scale under the conditions the vast majority of people live under now.
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You keep saying things like freedom but ignore the reality that we live in.
The very definition of society is 'aggregate of people living together' thus the opposite of the individual mandate you're trying to pass off as 'freedom'.
If you want to quip about 'what made the US a leader' then you might look back 50-100 years. Corporations taking over government, passing laws purely out of self interest and greed, billionaires popping up left and right taking control of entire industries or even our forums for s
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But the US was built as a society about the individual that was free, free to make their own decisions, etc.
So if I can trick you into a life where I'm taking advantage of you, giving you little-to-nothing in return, and more-or-less trapping you in it financially, that's perfectly okay with you? You'll just accept it all with a smile, "Please, sir, may I have another?"
You're a so-called 'Libertarian', aren't you? Here's the thing about you guys: you express attitudes like that, but you're always assuming that YOU will be the one on top all the time, never the one who is taken advantage of, always the Nobleman L
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So, you're saying that most adult US citizens have no intelligence whatsoever, and can be fooled or trapped in the manner you describe?
No, people CAN think for themselves and if they want to earn a little side cash with driving Ubar or doing other gig work, why not let them?
I think the average person is smart enough wh
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Because it causes harm. It harms those who don't have other viable income options or their other income isn't sufficient. Because it harms cities and taxpayers who have to pay for social welfare programs, healthcare, etc. for these same people. Because it harms society as a whole intentionally and permissibly undervaluing people and enforcing the trend that paying people a non-livable wage is somehow OK.
Because ALL of those things are happening on the backs of poor people while wealthy investors make lit
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What I LOL at with so many of these Libertarian types, is what they seem to want is a return to Feudalism; but like everyone I've ever met who talked about how Feudalism wasn't such a bad thing, they always assume they'll be the Nobleman Lo
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Why YES I have.
I've worked over a decade as a direct 1099 IT contractor and I loved it.
I know my worth and I've negotiated bill rates that more than covered my expenses, and made me able to have not only a very healthy amount of disposable income, but also allowed me to put a good bit of money back
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FFS my newneighbors are from Algeria, and that seems to be how they support their family. They're nice people and they work hard (and the wife makes awesome food); I don't want to see them get screwed over.
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This is not caused by those who vote against Prop 22, but by those who enacted AB5 in the first place. Please, do not shift blame.
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opening it up to every field out there that doesn't require licensing.
Not really. There was a time when many professions and activities were not licensed or regulated i.e. food and auto safety in early 1900s. And marketeers selling the latest tech such as radiation belts.
Why are people surprised? (Score:1)
gig economy is employee like control but not pay (Score:2)
gig economy is employee like control but not the pay of that and it lots of cases that is under min wage.
But when it costs $0/hr to have big staff of ready to work now people is nice. Now to make them get min wage you will have less staff and people may need sign up for shifts but the good thing is if on your shift its very dead then you get your min wage for sitting ready to work vs may maybe getting the calls needed to at least make min for the your work time.
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some gig jobs want people to sign up for shifts / be ready at the site and if you are on one with No Orders you may get paid as low as $0 for that one.
Uber does not show the full ride info as some don't take long runs that may put them out of zone with an long return trip with no pay.
instacart had 1099'ers that are asked to sign up for shifts and sit at store waiting for a order.
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The whole concept of gig economy is broken to start.
If you don't want to hire someone full time because you have a small job, you pay them MORE (e.g. what consulting used to be and partly still is) per hour for their expertise.
You "should" get paid MORE per unit of work when it's 'gigs' or consulting or similar sporadic work...and less unit of work but generally more overall if you're doing it full time.
If something is worth getting done, it should be worth paying a livable wage to do it. Or else it doesn'
Bankuptcy, hard (Score:1)
I hope Uber et. al. go bankrupt in a way that loses their investors all of their money. That way, future investors will think twice before investing in companies that rely on exploitation to have a sustainable business.
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I guess we'll see a lot more drunk drivers back on the roads again if Uber/Lyft disappears.
Their existence caused DWI instnaces to drop....because it is reasonably priced and convenient.
This will have a number of domino effects on many businesses.
These are all grown adults, they can make their own decisions on if they want to do this contract job or not.
I mean, it isn't like this is really a full time job for most, it is a quick way to choose to make a little side money o
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I guess you got the propaganda flyer from Mothers Against Drunk Drivers too.
If Uber leaves CA someone/something will fill the vacuum.
Uber has done a LOT of sketchy stuff in the past and I doubt it's changed. Just search Reddit for Uber and see how they are pushing notifications to drivers to vote 'Yes'.
I'm not really a union person but I think that some industries need one to help with representation. It's just that Uber likes to skit the rules whenever possible.
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Maybe. Or maybe not. [theverge.com]
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Straw man, fear mongering.
You presume that lowering DUI's is solely the magic of Uber. You ignore anything else that uber impacts negatively. You equally ignore (or are ignorant to) the large number of people who don't view driving uber as 'a little side money'. Just because people can 'choose' to work for uber doesn't mean uber should be able to dictate abusive terms. It's the same reason we have (had) a reasonable minimum wage, worker safety protections, etc. etc. etc. The only difference is Uber has
Uber needs data sharecroppers (Score:2)
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Prop 13 was citizen revolt against California Legislature and Governor NOT being able to control spending. If the legislature had done their job, Prop 13 would not be needed. Then only flaw with Prop 13 was for corporations that have properties that are never sold, just leased to new users.
Uncontrolled School bonds are still increasing property taxes.
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Prop 13 was citizen revolt against California Legislature and Governor NOT being able to control spending. If the legislature had done their job, Prop 13 would not be needed. Then only flaw with Prop 13 was for corporations that have properties that are never sold, just leased to new users.
Uncontrolled School bonds are still increasing property taxes.
No, that's not the only flaw — not by a long shot. The whole law is one big flaw. It unduly shifts the tax burden in a way that unfairly penalizes anyone buying a home, whether they are trying to get out of the rental market, moving into California for the first time, or just moving to closer houses when they change jobs. It discourages home buying and encourages renting. AND it results in corporations that hold real estate forever and lease it.
And on top of that, it completely broke California's
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Fixing the corporate loophole is a good start, but we really should overturn the whole thing and replace it with a more sensible, targeted law that moves property tax valuations towards their actual expected market value when sold, phased in over ten years, while simultaneously adding increasingly large discounts for people with low AGI, also phased in over ten years.
I do not trust the taxman to be honest when assessing the "actual expected market value". My past experience during the hard times of 2008-2011, when the housing market value saw a significant drop yet the counties barely adjusted the tax basis, shows how they're just greedy and callous.
Repealing Prop13 is just a money grab attempt; government is salivating at the thought of how much money they could get their hands on, only to waste it on more ridiculous pet projects.
Prop15 is a sneaky attempt to sever one
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Fixing the corporate loophole is a good start, but we really should overturn the whole thing and replace it with a more sensible, targeted law that moves property tax valuations towards their actual expected market value when sold, phased in over ten years, while simultaneously adding increasingly large discounts for people with low AGI, also phased in over ten years.
I do not trust the taxman to be honest when assessing the "actual expected market value". My past experience during the hard times of 2008-2011, when the housing market value saw a significant drop yet the counties barely adjusted the tax basis, shows how they're just greedy and callous.
Even in 2010 and 20111, with the exception of the top end of the market, housing prices didn't really drop that much, largely because sellers held rather than selling. So it shows no such thing.
Repealing Prop13 is just a money grab attempt; government is salivating at the thought of how much money they could get their hands on, only to waste it on more ridiculous pet projects.
Prop15 is a sneaky attempt to sever one of the two legs Prop13 stands on. Vote NO on Prop15!
Even most conservatives in California think that granting businesses Prop 13 protection was a mistake. The ads you see pushing back against this change are mostly funded by companies that own lots of real estate. When the total property tax bill paid by residents has grown from being about the same as the total co
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Even in 2010 and 20111, with the exception of the top end of the market, housing prices didn't really drop that much, largely because sellers held rather than selling. So it shows no such thing.
I know that the plural of anecdote is not data, but my experience in the middle of the Bay Area doesn't fit at all your rosy narrative. The value of my home dropped by about 20% (as assessed by the bank when I tried to refinance), while the County acknowledged 5% drop; of course, when the market rebounded, the County was very quick to get back to the original trend of keeping increasing the tax base like nothing happened.
Even most conservatives in California think that granting businesses Prop 13 protection was a mistake. The ads you see pushing back against this change are mostly funded by companies that own lots of real estate. When the total property tax bill paid by residents has grown from being about the same as the total commercial property tax bill in 1970 to being a whopping 2.4x as much now (because of companies holding and leasing rather than selling), and when those savings are mostly going into the pockets of stockholders outside the state of California, it's pretty clear that the "leg" you're talking about is screwing California taxpayers.
Again, the only time when a fair assessment can be made about the value of a property i
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Even in 2010 and 20111, with the exception of the top end of the market, housing prices didn't really drop that much, largely because sellers held rather than selling. So it shows no such thing.
I know that the plural of anecdote is not data, but my experience in the middle of the Bay Area doesn't fit at all your rosy narrative. The value of my home dropped by about 20% (as assessed by the bank when I tried to refinance), while the County acknowledged 5% drop; of course, when the market rebounded, the County was very quick to get back to the original trend of keeping increasing the tax base like nothing happened.
Just as you don't trust the government, I don't trust banks. When the economy is down, it is in their best interests to assess extremely conservatively, because if you lose your shirt and can't pay the bills, they're stuck with it. :-)
Even most conservatives in California think that granting businesses Prop 13 protection was a mistake. The ads you see pushing back against this change are mostly funded by companies that own lots of real estate. When the total property tax bill paid by residents has grown from being about the same as the total commercial property tax bill in 1970 to being a whopping 2.4x as much now (because of companies holding and leasing rather than selling), and when those savings are mostly going into the pockets of stockholders outside the state of California, it's pretty clear that the "leg" you're talking about is screwing California taxpayers.
Again, the only time when a fair assessment can be made about the value of a property is when it's sold. Everything else is arbitrary.
On this, we agree.
I don't watch ads, but I'm looking at who is pushing for Prop15: realtors and government people who can't wait to get their hands on a huge windfall to piss it in the wind with their pet projects. I am sure that they're pushing this just to right a wrong, no self-serving interests in it, no Sir!
No, it's really not just realtors and government people, unless by "government people", you mean educators, first responders, etc. And yes, it is in their best interests, but that doesn't mean that it isn't also in the general public's best interests.
What would be the impact on the companies affected? that is mentioned nowhere in the Voter's pamphlet I received, only how much money can be extracted. Pure greed.
Really
Call me selfish (Score:2)
but if Uber gets a special exception to the rules, then I want my own exception too. Maybe software engineers should get a half rate discount on California property tax, if I were more self-serving I'd be up for that proposition in exchange for what Uber wants.
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May not be possible (Score:2)
It is entirely possible that the Uber/Lyft business model is impossible to earn money with while paying drivers a "fair" ( whatever that is) wage.
And that Taxi companies figured this out a long time ago.
Business begins
Business is regulated heavily
Business learns to adjust or dies.
NEW IMPROVED business (Plus internet!!)
Business (Plus internet!!) is cheaper, seems successful.
Business(Plus internet!!) is heavily regulated. --WE ARE HERE NOW--.
Business learns to adjust or dies.
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Or... (Score:2)
Or...
ah, CA tech titans, hoist with their own petards (Score:2)
They lean left in all their politics, and back all the left-leaning politicians. Those politicians get elected and dominate the political systems of the state by far more than even super majorities, and even rig the election systems to make it unlikely there will ever again be a non-Democrat elected to statewide office. Those politicians are in bed with all the labor unions however, and THEY want EVERYBODY to be unionized, so they push for laws favoring unionization (which is what AB5 was all about; the sta
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To add to what you said, AB5 is also about state tax revenue.
Uber + Lyft have about 2 Million drivers in the US, I don't know how many in CA, but probably ~200,000. Uber writes 1099-MISC tax forms for all of them, so that state can see the $$$ changing hands. The majority of the drivers don't bother filing taxes, let alone paying taxes. So you have a hundred thousand small-time tax evaders who are not worth going after for the $500 bucks they didn't report. And they are typically in a social class where the
Wages down due to legal spending (Score:2)
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Give the Corporations time, they will be offering zero wages in return for NOT having you beaten to death
They've done it before