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United States Businesses

Uber, Lyft Prevail To Keep California Workers Independent (apnews.com) 156

Posted by msmash from the how-about-that dept.
Uber, Lyft and other app-based ride-hailing and delivery services prevailed at the ballot box in their expensive gamble to keep drivers classified as independent contractors. From a report: The titans of the so-called gig economy bankrolled the most expensive ballot measure in California history to exempt drivers from being classified as company employees eligible for benefits and job protections. The measure had more than 58% of the nearly 11 million votes counted so far. Proposition 22 pitted the gig companies, including DoorDash, Postmates and Instacart, against labor unions. More than $225 million was spent -- the vast majority by the companies.

The ballot question overrides lawmakers and the courts to keep drivers independent and able to set their own hours. If the companies' had lost, it would have upended their business model and San Francisco-based Uber and Lyft had threatened to pull out of California. The landmark state labor law known known as AB5 threatened to upend the app-based businesses, which offers flexibility to drivers to work whenever they choose. But drivers forgo protections like minimum wage, overtime, health insurance and reimbursement for expenses. Labor-friendly Democrats in the Legislature passed the law last year to expand a 2018 ruling by the California Supreme Court that limited businesses from classifying certain workers as independent contractors.
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Uber, Lyft Prevail To Keep California Workers Independent More

Uber, Lyft Prevail To Keep California Workers Independent

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  • In other words (Score:4, Insightful)

    by smooth wombat ( 796938 ) on Wednesday November 04, 2020 @10:44AM (#60683316) Journal
    More than $225 million was spent -- the vast majority by the companies.

    These companies have (had) the money to pay their people, but instead chose to spend that money to prevent from having to pay their people.

    • That's not true either. These companies, especially Uber, are operating in the red and can only function through continual investment. If they spent all of that money on employee compensation it still wouldn't bring their employees (known as contractors) up to a living wage. That's how you can tell that these companies are scams.

    • More than $225 million was spent -- the vast majority by the companies.

      It's the finest legislation money can buy.

    • It's ads in general - a big percentage of what you pay for everything is money you give them to spend on convincing you to buy it.

      Seemingly we'd be better off paying less for things we bought because we chose them, instead of paying more for things we were nagged to choose. But, it evidently doesn't work out that way.

    • Uber (just Uber alone) had 6.9 billion trips in 2019 [1]. Even if Uber spent all $225 million, that would be the equivalent of spending $0.03 per trip. Uber (alone) also has 5 million drivers [2] and I can assure you that the money they would have to spend on those drivers -- if they were considered employees -- would exceed $51 per driver.

      In other words, a $51 "investment" per driver or $0.03 "investment" per trip is well worth the money for Uber (and Lyft) because "the money to pay their people" would GRE

    • And the people had a choice of whether to fuck themselves. I think we can be disappointed in pretty much all of America today, not only in corporations.

  • Good, it was a BS case... (Score:3, Insightful)

    by PortHaven ( 242123 ) on Wednesday November 04, 2020 @11:10AM (#60683468) Homepage

    Uber/Lyft
    - use own vehicle
    - work your own hours
    - choose your own routes

    Sounds like a contractor to me. Government sues.

    Government Contractors
    - have to use our equipment
    - have to be at our site
    - have to work when we tell you too

    Sounds like an employee to me. Government does jack-$|-|

    • Re:Good, it was a BS case... (Score:5, Insightful)

      by phalse phace ( 454635 ) on Wednesday November 04, 2020 @01:12PM (#60683982)

      Uber/Lyft
      - use own vehicle
      - work your own hours
      - choose your own routes

      Sounds like a contractor to me. Government sues.

      Shouldn't independent contractors be able to set their own rates?

      Uber, Lyft, Grubhub, et al don't allow that.

      If your pay rate is set by someone else, aren't you an employee?

      • This is the biggest problem. Uber and Lyft inserted themselves as middlemen between the drivers and riders and they buy rides from drivers at prices they decide upon and sell rides at prices they decide upon. This is the exploitative part of the market. The riders should be able to set their prices like AirBnB hosts can set their rates. This is the only logical ay for this business to work. They app should give you list of say 5 nearby drivers, with their rates, cars and ratings.

        • You are 100% right, and unfortunately, now it is illegal to make an app that works the way you describe. You must instead adopt Uber's business model according to Prop 22. "Because app".
      • In my understanding, they are offered a bid: if they do not accept the rate, they do not take the ride. If that's correct, then they are setting their own rate and functioning as a normal contractor would in an oversupplied industry.
    • If that is a federal contractors you are breaking the FAR (Federal Acquisition Regulations).
      Government contracts don't require that you use their equipment but they will require that you meet the government accreditation which the company you work for will not want to expense so they specify you will use the government provided.
      Location will usually be specified as being provided by the customer aka government, so that it is not an additional expense to the contractor. If you are working out of your empl

    • Sounds like a contractor to me.

      That's only because you don't understand what the legal definition of a contractor is. Ultimately your thoughts and opinions count for nothing.

    • The people railing against Prop. 22 don't understand it. They are just taking a reactionary anti-business stance on what has been politicized as a left/right labor issue. It is not that straightforward. If you read the actual text of the proposition, it is a very good outcome for drivers:
      * Drivers get a minimum wage (120% state threshold), which is something AB-5 proponents wanted from the beginning
      * Drivers get occupational accident insurance, another benefit AB-5 proponents w

      • Re:Good, it was a BS case... (Score:4, Informative)

        by yassa2020 ( 6703044 ) on Wednesday November 04, 2020 @03:26PM (#60684504)

        * Drivers get a minimum wage (120% state threshold),

        There's is literally ZERO effective change from how they were doing it before. Only time from pickup to drop off is counted. The rates were already higher than minimum wage for that time. At issue was the time that Uber *directs* employees to when and where wait, and then doesn't pay them for that time.

        * Drivers get occupational accident insurance,

        Again, limited, and already what they had before the law.

        * Drivers get a generous health insurance subsidy.

        This part is new, but it is a pittance, it is by no stretch of the word generous.

        There are a few things AB-5 proponents did not get,

        AB-5 was stupid. The people for AB-5 were arguing for a few basic union things, not all of the myriad of things that Uber does that makes their relationship employee-like.

        Oh, and AB-5 was deliberately crafted to go after ride-sharing companies.

        Again, irrelevant. AB-5 was stupid. That doesn't make the things Uber was doing to treat their drivers like employees just vanish.

        • Not sure I'm understanding your comment.

          * Drivers get a minimum wage (120% state threshold),

          There's is literally ZERO effective change from how they were doing it before. Only time from pickup to drop off is counted. The rates were already higher than minimum wage for that time. At issue was the time that Uber *directs* employees to when and where wait, and then doesn't pay them for that time.

          So, if Uber rates are already paying above the minimum wage, what does classifying them as an employee gain? Nothing, aside from providing benefits that make no sense for an Uber driver (ex: unemployment). And I dispute your claim about directed waits. Uber does not force drivers to wait in the sense that a taxi has to wait (ex: airports, curbside). The only waiting a driver has to do is when they have accepted a passenger and that passenger isn't quite ready yet, and

          • Proposition 22 was an attempt to provide some of the things AB-5 was asking for, but in a more sensible way. I think they achieved that, so anybody advocating for AB-5 should be in support of Prop 22, for the most part.

            This is my main contention with your understanding of the situation. The people advocating for AB-5 were not the drivers for Uber but rather the unions for taxis and the low-information politicians who were convinced by the prospect of more tax revenues in their hurting budgets. The first group is very much against prop 22 and the second group is, well, idiots being played, so what they think doesn't matter. Prop 22 was clearly a giveaway for the corps. It was their entire wishlist, their dream come true. Y

            • You may be right. I don’t really know who was advocating for what, but what is the better solution you are proposing? Earlier you had said drivers should be treated as employees, which sounded like you were in favor of AB-5. If you aren’t, what is your actual proposal? If drivers are against both Prop 22 and AB-5, what are they for?

              • I don’t really know who was advocating for what, but what is the better solution you are proposing?

                The free market, sans AB5 and prop 22. Too late for that now.

                Earlier you had said drivers should be treated as employees,

                I don't know what gave you that idea. The issue isn't how they should be treated so much as how they are treated. The control exerted by the app corps is employee-like. With prop 22 passed now, they are classified as "independent contractors" by statue even though they will be treated almost the exact same as before it passed.

                If drivers are against both Prop 22 and AB-5, what are they for?

                Most that I know, if educated enough to understand all the ins and outs, are for being actually treated as independent cont

                • The free market, sans AB5 and prop 22. Too late for that now.

                  I actually agree with you about that, but as you say it’s too late now. My only real defense of Prop 22 is that while it sought to overturn AB-5, it did provide some concessions. Other than that, though, I agree, classification as an employee vs contractor doesn’t meaningfully change anything.

                  I don't know what gave you that idea. The issue isn't how they should be treated so much as how they are treated. The control exerted by the app corps is employee-like.

                  I see, I misunderstood you earlier. I think the discrepancy in our viewpoints is that I don’t think Uber’s actions are overly restrictive. I mean yes, you do have to operate within some constrai

    • Re: (Score:2)

      by mbkennel ( 97636 )

      Usually the government contractors are a large entity that sign a contract. The people doing the labor are regular employees of that contractor.

  • The obvious question: why only app-based drivers? (Score:5, Insightful)

    by Cajun Hell ( 725246 ) on Wednesday November 04, 2020 @12:16PM (#60683786) Homepage Journal

    Why was this ballot measure written to only cover app-based drivers, rather than all professions (and means of contact)?

    Is there something special about driving and app-based placing of orders, in particular?

    I think I understand why a majority of voters think force should be used against employers to provide worker's comp, time off, etc. What nobody (until YOU reply?) has explained, is why a majority also thinks that app-based drivers are such a specific and unusual exception.

    If you're an app-based maid, the exception doesn't make sense, right? And if you're a hailed or voice-called driver, the exception also doesn't make sense, right? But if you're an app-based driver, then the usual rationale for designating you as an employee is inapplicable so we need an exception, right?

    This seems very arbitrary to me and I'd love for a CA voter to walk this humble idiot through it.

    • Re:The obvious question: why only app-based driver (Score:4, Interesting)

      by OrangeTide ( 124937 ) on Wednesday November 04, 2020 @01:33PM (#60684046) Homepage Journal

      Why was this ballot measure written to only cover app-based drivers, rather than all professions (and means of contact)?

      Sponsered.

      Is there something special about driving and app-based placing of orders, in particular?

      Deep pockets.

      This seems very arbitrary to me and I'd love for a CA voter to walk this humble idiot through it.

      It boils down to two simple things. The ballot measure exists because Uber, Lyft and others used their influence to get it there. And the media didn't bother forming an opinion and covering this measure because it wasn't interesting or "newsworthy". This lead to voters not forming an opinion on it until the 5 seconds before they checked YES on the ballot.

      To steal a phrase from an evil conservative radio host: these are low-information voters.

      Anyone thinking that California is a liberal leftist socialists state needs to realize that we have corporations pulling our strings like any other red-blooded capitalist. We may talk like liberals, but it's just virtue signaling, when the rubber meets the road we're ready to exploit workers for profit and weaken unions just like everyone else.

      • I doubt that's the cause. Prop 16 was heavily sponsored and lobbied for, outspending the opposition by a ratio of 40 to 3. Yet it failed to pass anyways. This was probably the electorate just saying no to AB5. The whole point of AB5 was like that scene in Austin Powers where Dr. Evil asks everybody to leave, then says "not you" to everybody but mini-me. AB5 did the "not you" to everybody but lyft and uber. Basically the whole point of AB5 was to target them while pretending to target the gig economy in gene

    • The obvious answer: it was the creators of these apps that bankrolled the entire effort. He who signs the checks also gets to write the law.

    • Soon, all Taxi-drivers will become app-based. It doesn't have to be a GOOD app, just an app of some sort.

    • I'm a Califofornia voter!

      Why was this ballot measure written to only cover app-based drivers, rather than all professions (and means of contact)?

      That's easy, and you could have just searched for this. Uber, Lyft, and DoorDash each paid $30 million into a campaign to write and pass this law. They have no shame.

      I think I understand why a majority of voters think force should be used against employers to provide worker's comp, time off, etc. What nobody (until YOU reply?) has explained, is why a majority also thinks that app-based drivers are such a specific and unusual exception.

      In the weeks leading up to the election, I was getting multiple texts daily expressing support for this law from "drivers for Uber" or other people claiming to be working via an app. Reading the news a bit, it seems many of these folks were actually workers for the app companies (and of course, the app companies have t

    • >Why was this ballot measure written to only cover app-based drivers, rather than all professions (and means of contact)?

      Because it was written by Uber, Lyft, etc.

      It would have been much better if it had just overturned AB5 (which is an absolutely horrendous bill) and continued using the nationwide standards for 1099 contractors, but I think that they figured that since they were writing the bill, they could make it extra special just for them. It's really the fault of the Democrats who tried irrationall

  • Apparently when you ask people to choose between paying people fairly and getting cheap rides they will choose cheap rides.
    Big shock.

    Coming next, the vote for "Everyone making less than $100k gets a check for $10,000 from someone making over $200,000"

  • Worst possible outcome (Score:4, Interesting)

    by istartedi ( 132515 ) on Wednesday November 04, 2020 @01:15PM (#60683992) Journal

    AB-5 was passed to curb these companies. Now they get an exception, but AB-5 is still on the books for others. Unless the legislature decides to do a wholesale repeal of AB-5, we just get more bloated law with special carve-outs. I know someone personally who isn't a driver, and AB-5 was screwing with their business. Where's their carve-out? Nowhere, because they couldn't bankroll the biggest initiative campaign ever.

    I just have to throw up my hands and sigh over all the people that voted for this.

    • I just have to throw up my hands and sigh over all the people that voted for this.

      You sigh over that. The rest of us are wondering what the 63million people were thinking yesterday in bewilderment. From the outside it looks like America is actively trying to screw itself over. I'm genuinely impressed.

      • Feels even worse on the inside.

        This is OT, but I am clearly seeing how poisonous social media is. Not in the Russian/N. Korea, name your bogeyman way. But in 'a people will do anything to make a buck' on the internet, and these small time snake oil salesmen go 'viral' based on us human still having that lizard part of brains that jacks into that sales pitch, triggers the appropriate fear response and suddenly its neighbor against neighbor. Google/Faceback/Twitter are happy to oblige because, hey it's jus

      • Dude, I've seen Australian politics. You have no platform from which to throw stones.

    • AB-5 was passed to curb these companies. Now they get an exception, but AB-5 is still on the books for others. Unless the legislature decides to do a wholesale repeal of AB-5, we just get more bloated law with special carve-outs.

      Well, that's the thing, isn't it? We already had a bloated law with over 100 industry-specific exceptions and it was abundantly clear Uber, Lyft, and DoorDash specifically were never, ever going to get equal treatment. Sacramento kept adding new exemptions in an attempt to keep hurting U/L/DD and avoiding harm to other industries.

      My fondest hope is the legislature realizes this is a forelorn hope and they just go ahead and repeal AB5. It's not going to facilitate organizing ride sharing drivers so the union

  • If you're not going to even research the bullshit placed in front of you?

  • Well let's see. You've got work whenever, wherever you want, for as long as you want, with your own equipment aka a contractor
    vs
    Wouldn't it be nice if we gave them benefits? What do we have to exaggerate and lie about to make that happen? Welcome to far left logic.

  • I have zero doubt (Score:5, Insightful)

    by holophrastic ( 221104 ) on Wednesday November 04, 2020 @02:24PM (#60684234)

    As I've said before. Not only are they independent contractors, they are actually entrepreneurs. They use Uber's software as a toolset, just like a painter uses Benjamin Moore paint, but isn't employed by Benjamin Moore.

    But that's not the point.

    The point is that we have employment laws for a good reason. It's not because "Employment" has any special meaning. It's simply because it's very easy for people above a threshold to take extreme advantage of people below a threshold. That threshold can be anything -- education, finances, time, or in this case significance.

    Uber drivers are, by their very design, completely replaceable. Instantly, and without consideration. Indeed, that's the point.

    In this society, we pay wages not based on the value of the work done, and not based on the difficulty of the work. Your nurses and teachers don't get paid more than your landscaper, and your plumber doesn't get paid more than your web designer. In this society, we pay wages based on how easily we can train a replacement. It's always been that simple. Ball-player, zero dollars. MBA ball player, millions.

    The gig economy is scary -- given current employment laws. It's the waitress of the future. Near-zero qualifications required to enter. Near-zero room for advancement. Below minimum wage somehow legally.

    Those kinds of jobs are great. It's an easy way for a 17-year old, busy with school, to earn $20 a day, with the chance to earn $100 on harder days. Excellent. The problems come with the fact that the 25-year old has no way out.

    The 25-year old, now done school, needs more than $100 a day. But they have absolutely no way to progress. They are forced to start from scratch in a new career, or keep fighting as a driver forever.

    The one and only reason that we have employment laws is to stop otherwise-perfectly-legal actions from the slippery-slope of stuckness.

    Forget about whether or not Uber drivers are independent. The question is only this: should a few hundred-thousand, soon to be a few million, working people have absolutely zero career protections? That's it.

    Should they all be able to lose their jobs at any second?
    Should they all be able to suddenly go bankrupt?
    Should they all be able to have no minimum wage?
    Should there suddenly be able to be twice as many of them? What about half as many?

    That's the one and only question. Think about it. Then get back to me.

    I'm an entrepreneur. Have been for thirty years. As a result, I'm "qualified" for absolutely nothing. I have no degrees, no credentials, and absolutely no references. I fought to attain my success. I continue to fight to keep it. I knew I was doing exactly that. I don't think most of these drivers know all that. I don't think they're in any position to know it. That's a problem. Similarly, I'm sure that half of them do it because they are in dire straits. That usually means they don't have the ability to choose based on research. They have more important issues to fight. And that means it is so easy to take advantage of them. And that usually means someone is doing just that. Welcome to payday loans -- a lesson in how to take advantage of people simply because they don't have the capacity (time, energy, opportunity) to understand the fine-print. It's not criminal to make millions of dollars by convincing people to starve their children. It's just evil.

    And that's why people need protecting. And that's why employment laws must exist. And that's why Uber drivers can't remain independent.

    So, in my view, you have a choice. Make them "employees", because they need the same protections that actual employees need, or make them regulated members of an industry association that negotiates for the very same protections.

    Or, there's a third option. Don't protect them. Let [ultimately] millions of hard-working people risk and lose everything without even realizing it's their own damned fault, and have your entire society weakened as a result.

    Your country isn't mine. Still, last night, I had three scotches and a vodka. Your stress spreads internationally.

    • Uber drivers are, by their very design, completely replaceable. Instantly, and without consideration. Indeed, that's the point.

      It cuts both ways. A driver can stop driving after the current ride, never to be heard from again. The companies are disposable to the drivers, also by design.

      Those kinds of jobs are great. It's an easy way for a 17-year old, busy with school, to earn $20 a day, with the chance to earn $100 on harder days. Excellent. The problems come with the fact that the 25-year old has no way out.

      The 25-year old, now done school, needs more than $100 a day. But they have absolutely no way to progress.

      Uh, they went to school. That ought to have prepared them for a career with higher prospects. If it didn't, they wasted their time in class. But that's not your real point.

      Drivers need to be realistic. Driving a car isn't a difficult or especially valuable skill, not like the skill required to start a company. It doesn't strike me as reasonable to exp

  • Mixed feelings (Score:3)

    by Carrier Lifetime ( 6166666 ) on Wednesday November 04, 2020 @02:44PM (#60684312)

    I have mixed feelings about this. While yes, the drivers have flexibility when to work and when not to work they are putting a lot of unpaid miles and hours trying to position themselves where the demand is the highest. Sometimes a ride will take them way out, where they are not very likely to get a new ride, and they do idle a lot.

    On the other hand they are not really employees. They are more of an independent business selling a service, question is who are they selling the service to? Uber and Lyft or riders? They cannot set the prices, like AirBnB hosts. In a way, Uber is buying seats in their cars at rates Uber decides, and sells them to rides at rates which Uber decides.

    • Uber is buying seats in their cars at rates Uber decides, and sells them to rides at rates which Uber decides.

      This is what makes them employees. Oh well. It got redefined now, thanks to low information voters and low information journalists. The headline of TFS is exactly the kind of bias that made it pass.

    • as an 1099 uber driver I want to do an Taxicab Confessions show in my car as an 1099 uber can't say no.

  • Sad day for app developers (Score:3)

    by yassa2020 ( 6703044 ) on Wednesday November 04, 2020 @03:06PM (#60684412)
    You must now have at least 3 million in cash if you want to make an app in California. Not only that, but you have no choice but to use Uber's exploitative and immoral business model, now matter how opposed you are to it, or how much it makes your skin crawl. They codified their *exact* business model into law, the very definition of regulatory capture.

    • You must now have at least 3 million in cash if you want to make an app in California.

      Huh? I can write an app in my spare time and upload it to an app store for virtually nothing. What do I need $3 million for? And why would it matter if I'm in California or New Caledonia?

      Not only that, but you have no choice but to use Uber's exploitative and immoral business model...

      Sure you do. Go work at McDonalds, WalMart, Amazon, the local construction contractor, or any of a million other low-skill, low pay jobs. Oh wait, those don't have anything like the schedule or location flexibilty of a gig job. Dang. That ride sharing job isn't looking so bad compared to your other options.

      I was listening t

      • Huh? I can write an app in my spare time and upload it to an app store for virtually nothing. What do I need $3 million for? And why would it matter if I'm in California or New Caledonia?

        Do you not understand that Prop 22 is now law? California law. And now you have to obey that law. *whooosh*

        I was listening to an interview the other day. The subject made the point that you don't make people better off by taking away their options.

        And yet that's exactly what prop 22 does for app makers. Your only option now is to use Uber's business model. No other options. Are you that dense?

        • I was listening to an interview the other day. The subject made the point that you don't make people better off by taking away their options.

          And yet that's exactly what prop 22 does for app makers. Your only option now is to use Uber's business model. No other options. Are you that dense?

          No, not dense, just baffled by your inability to say what you mean. "Write an app" != "Start a ride sharing company". What moron thinks those are even vaguely similar?

          Are we done insulting each other? Good.

          You're right, Prop 22 is a terrible proposition. Normally I'd never consider voting for it. Leaving AB5 intact was worse. In my perfect world, Prop 22 would have simply repealed AB5. Problem is, the toadies in Sacramento immediately pass it again so that wasn't an option. Next best would maybe be to repea

          • "Write an app" != "Start a ride sharing company".

            prop 22 doesn't say ride sharing company. It says "app-based company". Sound stupid? Because it is.

  • I got an email from Uber the day before election day. This is because I was an Uber customer once. The email subject line is "Drivers deserve better". That just cracks me up. If you know they deserve better than why don't you treat them better? But no, we have to pass a law for you to treat them better... mmhmm.

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