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I've never understood how Uber/Lyft gets away with calling drivers independent contractors. If they were independent contractors shouldn't each driver be able t

by lvspiff 11y ago

I've never understood how Uber/Lyft gets away with calling drivers independent contractors. If they were independent contractors shouldn't each driver be able to set their own rate and then the company factor in their cut? The model right now seems more like the taxi companies - You drive for uber/lyft you play by their rules/rates - thats not much of a freelance model.

prostoalex 11y ago
Ability to set rates does not define the employer-employee relationship. Uber/Lyft are lead generators to driver's (highly successful and thriving) transportation business. Every once in a while they will present a new customer willing to pay a certain rate, the driver can accept or reject that request. If the driver is too busy serving other (higher-paying) customers acquired via other channels, they can sign off from Uber/Lyft with no repercussions. In that sense they don't differ much from lead generators for other businesses (plumbers, roofers, landmowers).
- Elepsis 11y ago
  I'm not aware of lead generators in other businesses (with the exception of mostly-unsuccessful Uber-for-x startups like Homejoy) that set the pricing for the services to be provided. Do you have any examples?
  - prostoalex 11y ago
    You're right, my experience stems from Homejoy-like services. The ones I had in mind were 1-800-DENTIST and similar, but looks like they steer away from specific pricing, and so do Amazon and RedBeacon. Franchise owners are independent businesses, which doesn't prevent McDonald's and KFC from advertising $5 special and requiring franchisees to accept that rate. Large trucking companies are attracting independent owners/operators at advertised mileage rates with a "take-it-or-leave-it" implication. The owner/operator stays independent while accepting a truck load at a pre-determined rate. On a broader scale though, nothing prevents me from posting a Craigslist ad "Looking for a ride to the airport this Saturday, my budget is $40". It does not constitute an employer-employee relationship, and an argument could be had that Uber/Lyft are just proxies for posting and fulfilling such requests. Extend that to moving, plumbing, etc. Or am I completely off?
    - tomcam 11y ago
      You're a little off on the franchisee thing. Franchisees are not required to accept price suggestions from corporate. That's why the $5 promos are always accompanied by the "valid only at participating stores" fine print.
- jroseattle 11y ago
  > they don't differ much from lead generators for other businesses (plumbers, roofers, landmowers). There is significant difference. I'm not privy to their requirements, but as I understand it drivers have to commit to a certain amount of rides in a month, availability at certain times (peak periods), and must meet certain criteria in execution of rides. IIRC, it's the dictation of how a job is performed, time schedules, etc. that have caused the courts to consider whether or not drivers are employees.
  - superuser2 11y ago
    From where do you get the idea that Uber requires any sort of time commitment or schedule? Not doing that is the basis of its argument that drivers are contractors. All contractor relationships include meeting certain criteria in the execution of the work. If you "contact" with someone in a way that doesn't give them any obligations, it's just a gift.
    - prostoalex 11y ago
      jroseattle is probably referring to Uber's attempt to add liquidity on the supply side by forcing higher-class vehicles to take lower-class fares (or else!) https://pando.com/2014/09/04/uber-continues-to-screw-its-partners-now-by-forcing-uber-black-drivers-accept-uberx-fares/ https://pando.com/2014/09/04/uber-continues-to-screw-its-par... There are also rumors of required percentage of accepted requests (i.e. they don't want the drivers to be logging in and sitting idly), but I can't find a link handy. Both of these practices, if continued, are likely to land Uber in hot water, so my (uneducated) guess is that it's no longer happening in US jurisdiction.
      - swyman 11y ago
        I might be a bit slow on this one, but I don't see the problem with even a strictly enforced requirement for ride acceptance given that the driver's app is "on". Uber's business is in efficiently matching available drivers with riders, and adjusting the market price based upon the relative supplies. Drivers with the app "on" but not actually accepting rides messes with their price offering on both sides of the equation. At the margin, riders pay less in surge with an artificially inflated supply of rides, and the drivers on the other side receive less in surge pricing. Is there something I'm missing here?
- ThomPete 11y ago
  Lead generators to drivers? Why can they then decide which car you should buy? Why aren't you allowed to hire sub-contractors? Why can't the driver just set their own price? If they where just lead generators then uber would take a cut of whatever price the drivers decided to take for their ride but the actual price negotiation would be between the driver and the customer. So not it's unfortunately not that simple.
  - baddox 11y ago
    > Why can they then decide which car you should buy? Why aren't you allowed to hire sub-contractors? Why can't the driver just set their own price? Any lead generator can choose who they deliver leads to, right? Uber can't literally force any individual to buy a certain type car, but they can choose to not do business with people unless they have a certain type of car.
    - ThomPete 11y ago
      Which makes them more than simply a lead generator. Add to that some of the other things and it's obvious that it's anything but a simple lead generator. For examples why should they care if I hire subcontractors?
      - swyman 11y ago
        Sorry to just jump in here, but I'm not getting why not allowing subcontractors matters. Isn't that still under the "lead generators can pick the terms they offer" umbrella? Have a reasonably decent car, do the job yourself, maintain a certain level of customer satisfaction. These all seem like relatively reasonable terms under which to offer contract work.
        ThomPete 11y ago
        I don't know of that umbrella that is. Got any examples?
      - baddox 11y ago
- tyingq 11y ago
  >Ability to set rates does not define the employer-employee relationship. It could. In the US, there's no hard/fast definition that gets down to that level of detail. The IRS says: "In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered" Certainly "who sets the rates" would be a consideration.
- s73v3r 11y ago
  "Ability to set rates does not define the employer-employee relationship." By itself, no, but it is one of the larger pieces of it. "In that sense they don't differ much from lead generators for other businesses (plumbers, roofers, landmowers)." Except lead generators for those other businesses don't have any say in how much you charge.
TheGRS 11y ago
I always figured the other shoe would drop for companies like Uber and Airbnb. Their model works really well in a vacuum where they are not stepping on anyone else's toes, but now that they have scaled, their business model is starting to put strain on existing industries. I really like the solutions their businesses bring to the table, but one of the reasons they work so well is because they completely circumvent existing laws and regulations.
- r00fus 11y ago
  I think the main reason Uber/Lyft have made it this far is that "taxi drivers" in general aren't politically connected at a state/national level, so can't compete with the funds that Uber has thrown at "community building" to sway legislators.
JoshTriplett 11y ago
> If they were independent contractors shouldn't each driver be able to set their own rate Not at all. Companies often put out contract proposals to a variety of contractors saying "we'll pay X for this work, take it or leave it". That doesn't suddenly make those contractors into employees.
deleted 11y ago
[deleted]

by lvspiff 11y ago

prostoalex 11y ago

Ability to set rates does not define the employer-employee relationship. Uber/Lyft are lead generators to driver's (highly successful and thriving) transportation business. Every once in a while they will present a new customer willing to pay a certain rate, the driver can accept or reject that request. If the driver is too busy serving other (higher-paying) customers acquired via other channels, they can sign off from Uber/Lyft with no repercussions. In that sense they don't differ much from lead generators for other businesses (plumbers, roofers, landmowers).

Elepsis 11y ago
I'm not aware of lead generators in other businesses (with the exception of mostly-unsuccessful Uber-for-x startups like Homejoy) that set the pricing for the services to be provided. Do you have any examples?
- prostoalex 11y ago
  You're right, my experience stems from Homejoy-like services. The ones I had in mind were 1-800-DENTIST and similar, but looks like they steer away from specific pricing, and so do Amazon and RedBeacon. Franchise owners are independent businesses, which doesn't prevent McDonald's and KFC from advertising $5 special and requiring franchisees to accept that rate. Large trucking companies are attracting independent owners/operators at advertised mileage rates with a "take-it-or-leave-it" implication. The owner/operator stays independent while accepting a truck load at a pre-determined rate. On a broader scale though, nothing prevents me from posting a Craigslist ad "Looking for a ride to the airport this Saturday, my budget is $40". It does not constitute an employer-employee relationship, and an argument could be had that Uber/Lyft are just proxies for posting and fulfilling such requests. Extend that to moving, plumbing, etc. Or am I completely off?
  - tomcam 11y ago
    You're a little off on the franchisee thing. Franchisees are not required to accept price suggestions from corporate. That's why the $5 promos are always accompanied by the "valid only at participating stores" fine print.
jroseattle 11y ago
> they don't differ much from lead generators for other businesses (plumbers, roofers, landmowers). There is significant difference. I'm not privy to their requirements, but as I understand it drivers have to commit to a certain amount of rides in a month, availability at certain times (peak periods), and must meet certain criteria in execution of rides. IIRC, it's the dictation of how a job is performed, time schedules, etc. that have caused the courts to consider whether or not drivers are employees.
- superuser2 11y ago
  From where do you get the idea that Uber requires any sort of time commitment or schedule? Not doing that is the basis of its argument that drivers are contractors. All contractor relationships include meeting certain criteria in the execution of the work. If you "contact" with someone in a way that doesn't give them any obligations, it's just a gift.
  - prostoalex 11y ago
    jroseattle is probably referring to Uber's attempt to add liquidity on the supply side by forcing higher-class vehicles to take lower-class fares (or else!) https://pando.com/2014/09/04/uber-continues-to-screw-its-partners-now-by-forcing-uber-black-drivers-accept-uberx-fares/ https://pando.com/2014/09/04/uber-continues-to-screw-its-par... There are also rumors of required percentage of accepted requests (i.e. they don't want the drivers to be logging in and sitting idly), but I can't find a link handy. Both of these practices, if continued, are likely to land Uber in hot water, so my (uneducated) guess is that it's no longer happening in US jurisdiction.
    - swyman 11y ago
      I might be a bit slow on this one, but I don't see the problem with even a strictly enforced requirement for ride acceptance given that the driver's app is "on". Uber's business is in efficiently matching available drivers with riders, and adjusting the market price based upon the relative supplies. Drivers with the app "on" but not actually accepting rides messes with their price offering on both sides of the equation. At the margin, riders pay less in surge with an artificially inflated supply of rides, and the drivers on the other side receive less in surge pricing. Is there something I'm missing here?
ThomPete 11y ago
Lead generators to drivers? Why can they then decide which car you should buy? Why aren't you allowed to hire sub-contractors? Why can't the driver just set their own price? If they where just lead generators then uber would take a cut of whatever price the drivers decided to take for their ride but the actual price negotiation would be between the driver and the customer. So not it's unfortunately not that simple.
- baddox 11y ago
  > Why can they then decide which car you should buy? Why aren't you allowed to hire sub-contractors? Why can't the driver just set their own price? Any lead generator can choose who they deliver leads to, right? Uber can't literally force any individual to buy a certain type car, but they can choose to not do business with people unless they have a certain type of car.
  - ThomPete 11y ago
    Which makes them more than simply a lead generator. Add to that some of the other things and it's obvious that it's anything but a simple lead generator. For examples why should they care if I hire subcontractors?
    - swyman 11y ago
      Sorry to just jump in here, but I'm not getting why not allowing subcontractors matters. Isn't that still under the "lead generators can pick the terms they offer" umbrella? Have a reasonably decent car, do the job yourself, maintain a certain level of customer satisfaction. These all seem like relatively reasonable terms under which to offer contract work.
      - ThomPete 11y ago
        I don't know of that umbrella that is. Got any examples?
    - baddox 11y ago
tyingq 11y ago
>Ability to set rates does not define the employer-employee relationship. It could. In the US, there's no hard/fast definition that gets down to that level of detail. The IRS says: "In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered" Certainly "who sets the rates" would be a consideration.
s73v3r 11y ago
"Ability to set rates does not define the employer-employee relationship." By itself, no, but it is one of the larger pieces of it. "In that sense they don't differ much from lead generators for other businesses (plumbers, roofers, landmowers)." Except lead generators for those other businesses don't have any say in how much you charge.

TheGRS 11y ago

I always figured the other shoe would drop for companies like Uber and Airbnb. Their model works really well in a vacuum where they are not stepping on anyone else's toes, but now that they have scaled, their business model is starting to put strain on existing industries. I really like the solutions their businesses bring to the table, but one of the reasons they work so well is because they completely circumvent existing laws and regulations.

r00fus 11y ago
I think the main reason Uber/Lyft have made it this far is that "taxi drivers" in general aren't politically connected at a state/national level, so can't compete with the funds that Uber has thrown at "community building" to sway legislators.

JoshTriplett 11y ago

> If they were independent contractors shouldn't each driver be able to set their own rate Not at all. Companies often put out contract proposals to a variety of contractors saying "we'll pay X for this work, take it or leave it". That doesn't suddenly make those contractors into employees.

deleted 11y ago

[deleted]