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If she does win the case then wouldn't Uber and Lyft simply give less of a percentage of earnings per ride to their drivers to compensate for the change of cost

If she does win the case then wouldn't Uber and Lyft simply give less of a percentage of earnings per ride to their drivers to compensate for the change of cost? Would Uber and Lyft make more if they had their drivers on a similar model to a pizza delivery driver ($4.50/h + tips)?

toomuchtodo 11y ago
> If she does win the case then wouldn't Uber and Lyft simply give less of a percentage of earnings per ride to their drivers to compensate for the change of cost? Uber and Lyft would need to pay hourly wages, along with all of the associated taxes due. > Would Uber and Lyft make more if they had their drivers on a similar model to a pizza delivery driver ($4.50/h + tips)? Uber and Lyft's entire business model is built on the independent contractor model. I don't believe they could reach profitability in any scenario with human drivers if they have to pay them as stipulated by IRS regulations.
- SilasX 11y ago
  >Uber and Lyft would need to pay hourly wages, along with all of the associated taxes due. Not true. You can be an employee with a non-hourly pay structure. Just one of many misconceptions batted around about the implications of driver reclassification, along with (these aren't all false per se, just not-necessarily-true): - Drivers would have to get the Uber-paid lavish health care plan that developers there get. - Driver cash payments would remain the same and not be reduced. - Drivers would get fixed work schedules. - Drivers would value the compensation package that includes employee benefits but has lower cash pay, over the compensation they get now. - Uber would have to provide the vehicles. - The economic incidence of FICA taxes would shift to Uber (not how economic incidence works[1]). Again, the employee/contractor distinction depends on a number of factors; you can be classified as an employee without meeting all of criteria. [1] Good explanation: https://www.reddit.com/r/badeconomics/comments/422av5/some_good_old_fashioned_101level_errors_on/cz73e8g https://www.reddit.com/r/badeconomics/comments/422av5/some_g...
  - toomuchtodo 11y ago
    I agree those are all things that should happen. But can Uber be profitable in that configuration? I would argue not, but maybe they pull it off.
    - SilasX 11y ago
      My point was that the reclassification as employees does not imply that any of those would be true (very unlikely for a few, false as a matter of law in at least one). You can't just assume that the change would achieve this state where workers get strictly more benefits and Uber's profits are sucked out. You need to take into account how much they can cut driver cash payments in that circumstance (i.e. paying them via benefits), where the economic incidence of car costs and FICA taxes currently lies, what the law says about piecework, etc.
ams6110 11y ago
Since when is this the pizza delivery model? Granted it's been more than 20 years, but when I delivered pizza I got a hourly wage (which was higher than minimum), commission (called "mileage") on each delivery to compensate for use of my car, plus any tips. Mileage was paid in cash at the end of each shift, and of course tips were cash. Wages were paid every two weeks.

toomuchtodo 11y ago

> If she does win the case then wouldn't Uber and Lyft simply give less of a percentage of earnings per ride to their drivers to compensate for the change of cost? Uber and Lyft would need to pay hourly wages, along with all of the associated taxes due. > Would Uber and Lyft make more if they had their drivers on a similar model to a pizza delivery driver ($4.50/h + tips)? Uber and Lyft's entire business model is built on the independent contractor model. I don't believe they could reach profitability in any scenario with human drivers if they have to pay them as stipulated by IRS regulations.

SilasX 11y ago
>Uber and Lyft would need to pay hourly wages, along with all of the associated taxes due. Not true. You can be an employee with a non-hourly pay structure. Just one of many misconceptions batted around about the implications of driver reclassification, along with (these aren't all false per se, just not-necessarily-true): - Drivers would have to get the Uber-paid lavish health care plan that developers there get. - Driver cash payments would remain the same and not be reduced. - Drivers would get fixed work schedules. - Drivers would value the compensation package that includes employee benefits but has lower cash pay, over the compensation they get now. - Uber would have to provide the vehicles. - The economic incidence of FICA taxes would shift to Uber (not how economic incidence works[1]). Again, the employee/contractor distinction depends on a number of factors; you can be classified as an employee without meeting all of criteria. [1] Good explanation: https://www.reddit.com/r/badeconomics/comments/422av5/some_good_old_fashioned_101level_errors_on/cz73e8g https://www.reddit.com/r/badeconomics/comments/422av5/some_g...
- toomuchtodo 11y ago
  I agree those are all things that should happen. But can Uber be profitable in that configuration? I would argue not, but maybe they pull it off.
  - SilasX 11y ago
    My point was that the reclassification as employees does not imply that any of those would be true (very unlikely for a few, false as a matter of law in at least one). You can't just assume that the change would achieve this state where workers get strictly more benefits and Uber's profits are sucked out. You need to take into account how much they can cut driver cash payments in that circumstance (i.e. paying them via benefits), where the economic incidence of car costs and FICA taxes currently lies, what the law says about piecework, etc.

ams6110 11y ago

Since when is this the pizza delivery model? Granted it's been more than 20 years, but when I delivered pizza I got a hourly wage (which was higher than minimum), commission (called "mileage") on each delivery to compensate for use of my car, plus any tips. Mileage was paid in cash at the end of each shift, and of course tips were cash. Wages were paid every two weeks.