California passes landmark bill that threatens to upend companies like Uber and Lyft

[Bullseye]

I smell that the Uber independent contractor system, and many others like it, is a scam. That I acknowledge they are legally independents does not change my message. There is nothing "independent" about that arrangement any more than as an employee. An employee has more independence by having more rights that an Uber independent doesn't have and is thus taken advantage of by Uber. Sure, an Uber driver can run "their" business as they see fit. As long as what they see fit is how Uber wants them to run their business. They're about as independent as a driverless taxi.

Having had my own construction business, if I went to my independents with any kind or arrangement as Uber has, they'd tell me to stuff it. Same with the others.

Except contractors like Uber can choose when and where to work, a lot do it as a side hustle to make a little more money. What this may hurt more than Uber or Lyft are barber shops and hair salons - as employees the shop is responsible for payroll taxes, workman's comp, and myriad other employment laws.

 

[PoS]

California passes Assembly Bill 5 for gig workers



Its my opinion that with very few exceptions, the people where the rubber hits the road aren’t making any money. Independent contactorship can work in lots of areas, but it takes big sales with low overhead. Uber snd Lyft make the money, the driver/owner gets the squeeze.

If Uber drivers werent making any money, then they wouldnt be doing it...

 

[bluesmoke]

Except contractors like Uber can choose when and where to work, a lot do it as a side hustle to make a little more money. What this may hurt more than Uber or Lyft are barber shops and hair salons - as employees the shop is responsible for payroll taxes, workman's comp, and myriad other employment laws.

Under the bill, workers will only be considered independent contractors if their employer can prove three things. First, the employer must prove that the worker is not under “the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.” Second, the employer must also prove that the worker “performs work that is outside the usual course of the hiring entity’s business.” Finally, the employer must prove that “[t]he person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”

THAT sounds like an independent contractor to me. If you give something a label, make sure it fits the label. Do you think the above is not a fitting description of an independent contractor?

 

[Stealers Wheel]

Under the bill, workers will only be considered independent contractors if their employer can prove three things. First, the employer must prove that the worker is not under “the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.” Second, the employer must also prove that the worker “performs work that is outside the usual course of the hiring entity’s business.” Finally, the employer must prove that “[t]he person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”

THAT sounds like an independent contractor to me. If you give something a label, make sure it fits the label. Do you think the above is not a fitting description of an independent contractor?

Rideshare drivers are under no obligation to pick up any given customer. They use their own cars. They set their own hours. They pay their own expenses (tax deductible, I might add). All Uber does is cover the insurance and the app. It is clearly an independent contractor arrangement.

I was recently in San Diego and used rideshares several times each day. I never waited more than eight minutes for a driver to appear.

 

[Noodlegawd]

California passes Assembly Bill 5 for gig workers



Its my opinion that with very few exceptions, the people where the rubber hits the road aren’t making any money. Independent contactorship can work in lots of areas, but it takes big sales with low overhead. Uber snd Lyft make the money, the driver/owner gets the squeeze.

Tax collectors don’t like independents because they often end up owing, and cant pay. And regular taxi companies are getting hammered.

So we shall see. Uber and Lyft had better bring out the check books, ‘cause Daddy is hungry.

Awesome. I guess it's back to rickety, smelly taxis in CA. Yay for us!

 

[Waddy]

I smell that the Uber independent contractor system, and many others like it, is a scam. That I acknowledge they are legally independents does not change my message. There is nothing "independent" about that arrangement any more than as an employee. An employee has more independence by having more rights that an Uber independent doesn't have and is thus taken advantage of by Uber. Sure, an Uber driver can run "their" business as they see fit. As long as what they see fit is how Uber wants them to run their business. They're about as independent as a driverless taxi.

Having had my own construction business, if I went to my independents with any kind or arrangement as Uber has, they'd tell me to stuff it. Same with the others.

You've obviously never owned a franchise business like MacDonald's. You OWN the restaurant but must follow MacDonald's rules. An Uber driver OWNS their business but must follow Uber's guidelines. An employee is NEVER independent, even if they get some benefits. Face it; many people don't want to be "employees". They LIKE the freedom. That should not be taken away from them. You want employees so bad, start a taxi company and hire by the hour with full benefits. No one will stop you. But leave other people alone. Please.

 

[Mason66]

If I am not mistaken, many newspapers (including the liberal Los Angeles Times) have protested this law, saying that if they have to treat the people who deliver newspapers as employees instead of contractors, then some of those smaller newspapers will go out of business.


Of course, print newspapers are rapidly disappearing anyway.

Even this 82-year-old no longer subscribes to the print edition of the Los Angeles Times, just the e-newspaper version.

What do you use for the bottom of the birdcage or to smack the dogs nose with?

 

[TheParser]

What do you use for the bottom of the birdcage or to smack the dogs nose with?

You are so right.

There many uses for old newspapers.

By the way, I have just read that California has just given a year's exemption to newspapers regarding their part-time delivery people.

But I heard that Uber and other ridesharing companies will probably have to cut the size of their workforce. Of course, the regular taxicab companies here in Los Angeles are cheering.

By the way, it is believed that our subway system here in Los Angeles does not run to the airport because of "contributions" to local politicians by the taxicab industry.






Have a nice weekend!

 

[ElChupacabra]

Baloney. I did subcontracting construction work for years, and wouldn't have it any other way. Very, very few homebuilders have enough work to keep a tile crew, or an electrical crew, or a plumbing crew busy 40 hours or more per week. As a subcontractor you work for several builders at one time, align your schedule with theirs, and move from job to job. It makes zeo sense to try to keep a tile crew on a permanent payroll. And you make more money subcontracting. My youngest son has a full time computer oriented job, yet he contracts for work with a variety of companies who need software written. He makes very good money at this part time and can choose what he works on. I know several people who bought vans and deliver packages. They also make great money. Some people just thrive better under the subcontracting system.

It can definitely work in certain scenarios; consultants and what you described are perfect examples. The concern is for companies which keep "permalancers" who are definitely more employee than just a contractor. I worked at a Fortune 500 company which had many of those until NY cracked down. The people who I worked with who were in that status weren't happy about it because they didn't have the flexibility that a sub contractor does.

 

[Moderate Right]

I happen to love both. In my community (and in every other community I've used them) they are faster responding, their cars are new and clean, the drivers are safe and friendly, and they cost less than taxis.

Each driver is rated by the customer at each ride. If a driver gets low ratings, all the other customers know it before they get in the car and can cancel the ride and order another for no cost. I love that. Can't do any of that with a taxi. If a share ride driver consistently gets poor ratings, the company remedies the problem or they fire the driver. The app allows and even encourages the customer feedback immediately. If there was something wrong with the ride, the company wants to know about it right now. Also, the customers are also rated by the drivers, so a crappy customer (belligerent, dirty, rude, no tipper, etc.) won't have drivers responding quickly when they summon a ride. Everyone has built-in incentives to be on their best behavior.

Maybe this sounds like I am shilling for ride share companies, but I assure you I am not. I'm just a very satisfied customer.

I don't challenge the fact that they are very popular. I've actually been in a Lyft ride with someone else who uses it all the time. OK experience. I just find it kind of funny that people who lean left seem to like them to a higher degree and then the left try to attack them and put them out of business. Lyft makes no profits now and yet the left think they can screw them over without consequences.

 

[Stealers Wheel]

I don't challenge the fact that they are very popular. I've actually been in a Lyft ride with someone else who uses it all the time. OK experience. I just find it kind of funny that people who lean left seem to like them to a higher degree and then the left try to attack them and put them out of business. Lyft makes no profits now and yet the left think they can screw them over without consequences.

As others have written, I think the taxis are 100% behind this. Uber and Lyft are killing them with their new business model.

That reminds me of another consumer benefit of ridesharing: The customer and the driver both know exactly what the fare will be before the ride takes place. There is no incentive for the driver to "long haul" the customer, as taxis are well known to do all over the country.

 

[Moderate Right]

As others have written, I think the taxis are 100% behind this. Uber and Lyft are killing them with their new business model.

That reminds me of another consumer benefit of ridesharing: The customer and the driver both know exactly what the fare will be before the ride takes place. There is no incentive for the driver to "long haul" the customer, as taxis are well known to do all over the country.

I'm not so sure that taxis are behind liberal legislation attacking rideshare companies. To me it just sounds like typical liberal policies that aren't thought out thoroughly. They always think that business owners are a bottomless pit of money and they've all got vacation homes and yachts and do nothing but screw the little guy.

 

[prometeus]

Then pay Uber a cut.

Actually Uber pays them a cut, a very small one.

They contract with Uber of their own free will. That is the definition of an independent contractor.

So do employees and they are not contractors.

These types of jobs allow people to join the workforce on their own terms.

That does not make a contractor. A contractor sets his or her own pricing.

A friend of my wife's is a hairdresser. She simply rents a chair from the owner of the shop.

IN some states that is illegal.

Makes her own appointments, pays the owner a fixed rent, and makes a good living.

That is a small business not a contractor.

 

[Waddy]

Actually Uber pays them a cut, a very small one.

So do employees and they are not contractors.

That does not make a contractor. A contractor sets his or her own pricing.

IN some states that is illegal.

That is a small business not a contractor.

None of your points are valid. Uber driving is an independent operation. The driver contracts with Uber, sets their own hours, have their own tools, pay their own expenses, can choose their customers. That is an independent operation. YOU may not like it, but leave those that do alone; they like the freedom.

 

[dixon01767]

I drove a yellow cab in 1978 as an independent contractor. There was no employment option.

 

[Stealers Wheel]

I'm not so sure that taxis are behind liberal legislation attacking rideshare companies. To me it just sounds like typical liberal policies that aren't thought out thoroughly. They always think that business owners are a bottomless pit of money and they've all got vacation homes and yachts and do nothing but screw the little guy.

The taxis thought they had a strangle hold on the legislature in my state (they do have strangle hold on the local city councils). They pushed hard for legislation to effectively keep ride sharing out of the state. They wanted the state to require ride shares to require massive and expensive safety inspections of the cars (something the taxis don't have to do) and require individual drivers to secure ten million dollar liability policies. However, when the legislature's legal counsel advised them they would lose big time in the courts, the legislature dropped their plans.

 

[Spartacus FPV]

Independent contracting is a scam to get around having to hire employees. You are anything but independent.

That's bull****, I'm an independent contractor and I love it.

If I were to offer painting services on craigslist, am I then an employee of craigslist? You don't understand the gig economy at all.

 

[Lord Tammerlain]

If Uber drivers werent making any money, then they wouldnt be doing it...

Having read about it last night

Excluding Uber Black, after expenses the majority of Uber drivers are making from $10-14/hr. Uber Black is up around $24/hr. Those of course do not include taxes or medical costs which a FT and some PT jobs would likely cover. It also does not include driver bonus's.

As a side gig to supplement income from a job that does have benefits, it can be a reasonable job. If not the person would be better off working FT at Burger King.


Of course the income the drivers are getting now will not be there in a few years. Uber needs to make more money, it is losing 1 billion on revenues of 3 billion. Easiest way to reduce driver payouts.

I have used it once, the driver was using a Tesla Model X, a rather expensive car to use as a ride share vehicle

 

[prometeus]

None of your points are valid.

Really? Because you say so?

Uber driving is an independent operation.

How is it independent? They do not pick up "hail" passengers, but are "given" the passenger and destination and the fare. They can no set their own prices.

The driver contracts with Uber

How is that different than an employment contract?

sets their own hours

So do countless employees.

have their own tools, pay their own expenses

You mean cars, so what?

can choose their customers.

How so?

That is an independent operation.

Not necessarily.

YOU may not like it, but leave those that do alone; they like the freedom.

My liking or disliking has no bearing on it. Facts and reality remain and by the looks of it the drivers do not like it either.

 

[prometeus]

The taxis thought they had a strangle hold on the legislature in my state (they do have strangle hold on the local city councils). They pushed hard for legislation to effectively keep ride sharing out of the state. They wanted the state to require ride shares to require massive and expensive safety inspections of the cars (something the taxis don't have to do) and require individual drivers to secure ten million dollar liability policies. However, when the legislature's legal counsel advised them they would lose big time in the courts, the legislature dropped their plans.

The taxi industry with the medallions crap is/was nothing more than a legalized racket.

 

[prometeus]

That's bull****, I'm an independent contractor and I love it.

If I were to offer painting services on craigslist, am I then an employee of craigslist? You don't understand the gig economy at all.

Are you told which house to paint and for how much?

 

[JasperL]

As others have written, I think the taxis are 100% behind this. Uber and Lyft are killing them with their new business model.

That reminds me of another consumer benefit of ridesharing: The customer and the driver both know exactly what the fare will be before the ride takes place. There is no incentive for the driver to "long haul" the customer, as taxis are well known to do all over the country.

Part of the problem there is they lose money on every ride. In late 2018, they earned about $12 billion in gross bookings, and lost about a $billion. Another way to look at it is Uber's share of bookings was about $3 billion, and a $billion in losses. Thanks to $billions in venture capital and now their IPO, they can fund those losses for a long time. Taxi companies cannot fairly "compete" with a company that intentionally runs negative net margins, and plans to do so for the foreseeable future, perhaps another decade.

So part of it is the better business model, but you can't fairly ascribe the entire problem to that. Put simply, their competitors don't have a pile of investor money to fund their losses and these mostly small businesses must pay their drivers, fleet upkeep, etc. out of current receipts plus a profit for the owners NOW, not what might happen in profits 5-10 years into the future.

 

[Lord Tammerlain]

Part of the problem there is they lose money on every ride. In late 2018, they earned about $12 billion in gross bookings, and lost about a $billion. Another way to look at it is Uber's share of bookings was about $3 billion, and a $billion in losses. Thanks to $billions in venture capital and now their IPO, they can fund those losses for a long time. Taxi companies cannot fairly "compete" with a company that intentionally runs negative net margins, and plans to do so for the foreseeable future, perhaps another decade.

So part of it is the better business model, but you can't fairly ascribe the entire problem to that. Put simply, their competitors don't have a pile of investor money to fund their losses and these mostly small businesses must pay their drivers, fleet upkeep, etc. out of current receipts plus a profit for the owners NOW, not what might happen in profits 5-10 years into the future.

If and more likely when their self driving program fails (due to other companies getting there first ) Uber will collapse in market value. It will support the self driving program for as long as possible to keep the illusion of being a tech company rather than a "taxi service". When that happens its market cap will go from 56 billion (worth more than GM or Ford to something more like 5 billion

 

[Waddy]

Really? Because you say so?

How is it independent? They do not pick up "hail" passengers, but are "given" the passenger and destination and the fare. They can no set their own prices.

How is that different than an employment contract?

So do countless employees.

You mean cars, so what?

How so?

Not necessarily.

My liking or disliking has no bearing on it. Facts and reality remain and by the looks of it the drivers do not like it either.

Fail again. An Uber driver is exactly the definition of an independent contractor. You may not like it, but that's the facts.

 

[bluesmoke]

Rideshare drivers are under no obligation to pick up any given customer. They use their own cars. They set their own hours. They pay their own expenses (tax deductible, I might add). All Uber does is cover the insurance and the app. It is clearly an independent contractor arrangement.

I was recently in San Diego and used rideshares several times each day. I never waited more than eight minutes for a driver to appear.

And the California law clearly defines what is an independent contractor. Do you think the definition is wrong? Do you think it is a better definition than what is current? If not, why? As a construction contractor, I paid for my own insurance and bond. THAT's independent. Most of the drivers that don't like the law are part-timers that may not be able to get the hours that work for them. I take full-time committed drivers over part-timers.