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Being a contractor does not automatically put you in a bad position relative to your client, because you can negotiate the details of that contract. As a result

by db48x 9y ago

Being a contractor does not automatically put you in a bad position relative to your client, because you can negotiate the details of that contract. As a result it can be both lucrative and extremely rewarding. Of course I'm sure Uber will simply not agree to any modifications of their standard contract, but they do have competitors that the drivers could go to. Oh, and contractors should always set up an individual 401k; it has the same tax benefits as you'd get as an employee, and then some.

jon_richards 9y ago
I think the primary issue is that Uber provides incentives in the contract for "employee-like" behaviour. Imagine an extreme case where minimum wage is $8/hour and I'm offering a contracting job that comes out to $0/hour before incentives. If people work 8 hours a day on the schedule I want and do everything else that employees have to do, I give them $4/hour. Now most of my workers will be just as good as employees, but at half minimum wage. They say "I'm working like an employee, I should get minimum wage." I say "They have all the freedom a contractor has, they aren't employees." Sure, in this scenario there are still people happy to work an hour here and there and earn the $2/hour or whatever it comes out to, but this isn't about whether those people exist or in what proportion. This is about the people who feel compelled by Uber's incentives to treat themselves as employees of Uber without receiving the legally mandated protections and benefits afforded to employees. This also isn't about supply/demand, the free market, and whether people want to work for that $4/hour or not. The fact that we have minimum wage in the first place is proof that the country has made a decision to not leave employment terms to natural equilibria.
- roenxi 9y ago
  The situation is an interesting case of economic realities quietly trumping political ideology. Uber thinks they are offering a reasonable deal. The people doing the work obviously think that it is the best deal they have available. The government is going to need to stamp down pretty heavily to stop that, because the actors in this situation have no particular incentive to change anything.
  - makomk 9y ago
    If the companies that offer their employees enough to live on are driven out of business by companies like Uber, then of course it will be the best deal they have available.
  - sokoloff 9y ago
    In general, I don't think I want the government to be in the business of stamping out the best deal that individuals have available. I know in this case, the assumption is that the deal offered will magically get substantially better. I don't think that generally works nearly as well as the abstract arguers argue.
    - Slansitartop 9y ago
      > In general, I don't think I want the government to be in the business of stamping out the best deal that individuals have available. That's interesting framing. What if the "best deal that individuals have available" is objectively bad for them, exploitative, or one more step down in a "race to the bottom"? IIRC, The Grapes of Wrath described several "best deal[s] that individuals [had] available."
      - jon_richards 9y ago
        Not the parent commenter, but I've often thought it's the government's job to prevent the tragedy of the commons. That's pretty much explicitly "stamping out the best deal that individuals have available".
      - sokoloff 9y ago
        I'd prefer that, to the extent that they get involved, government work to provide better options rather than attempt to legislate away (what some people judge to be) bad options. [1] An analogy that I think fits is the availability of abortions. For an individual pregnant woman who wishes to terminate the pregnancy, many people [likely including her] would view the option of having an abortion as an objectively bad yet best deal available outcome. It would be preferable to a wide swath of people's opinion had she never become pregnant in the first place, via education, wider availability of free/trivial cost birth control, whatever. In aggregate, the world would be a better place if the rate of abortion was reduced via these means (less physical and emotional stress, etc). That doesn't extend to banning abortions, for that doesn't help the particular individual woman. [1] - It is chiefly for this reason that I prefer something like a UBI over a minimum wage law. If someone's labor is only able to create $4 of value per hour, I would rather let them choose to do that than not be allowed or be forced to do that only as an entrepreneur. To reduce the amount of desperation that might "force" someone to do that, UBI takes some of the economic pressure off.
jjoonathan 9y ago
Uber drivers are in a bad position relative to their client. The contractor loophole lets Uber exploit that fact much farther than it would otherwise be able to, effectively undoing a century of hard-won labor rights progress. We are blaming contracting law for the latter, not the former. > Oh, and contractors should always set up an individual 401k You say that like you think they don't know the option exists. That's not why they don't do it. They don't do it because they don't have the money to do it, which is the real problem.
tyingq 9y ago
Aside from the 401k, you need health insurance too. I can tell you from experience that your cost per month as a tiny company is MUCH higher than being an employee at a larger company.

by db48x 9y ago

jon_richards 9y ago

I think the primary issue is that Uber provides incentives in the contract for "employee-like" behaviour. Imagine an extreme case where minimum wage is $8/hour and I'm offering a contracting job that comes out to $0/hour before incentives. If people work 8 hours a day on the schedule I want and do everything else that employees have to do, I give them $4/hour. Now most of my workers will be just as good as employees, but at half minimum wage. They say "I'm working like an employee, I should get minimum wage." I say "They have all the freedom a contractor has, they aren't employees." Sure, in this scenario there are still people happy to work an hour here and there and earn the $2/hour or whatever it comes out to, but this isn't about whether those people exist or in what proportion. This is about the people who feel compelled by Uber's incentives to treat themselves as employees of Uber without receiving the legally mandated protections and benefits afforded to employees. This also isn't about supply/demand, the free market, and whether people want to work for that $4/hour or not. The fact that we have minimum wage in the first place is proof that the country has made a decision to not leave employment terms to natural equilibria.

roenxi 9y ago
The situation is an interesting case of economic realities quietly trumping political ideology. Uber thinks they are offering a reasonable deal. The people doing the work obviously think that it is the best deal they have available. The government is going to need to stamp down pretty heavily to stop that, because the actors in this situation have no particular incentive to change anything.
- makomk 9y ago
  If the companies that offer their employees enough to live on are driven out of business by companies like Uber, then of course it will be the best deal they have available.
- sokoloff 9y ago
  In general, I don't think I want the government to be in the business of stamping out the best deal that individuals have available. I know in this case, the assumption is that the deal offered will magically get substantially better. I don't think that generally works nearly as well as the abstract arguers argue.
  - Slansitartop 9y ago
    > In general, I don't think I want the government to be in the business of stamping out the best deal that individuals have available. That's interesting framing. What if the "best deal that individuals have available" is objectively bad for them, exploitative, or one more step down in a "race to the bottom"? IIRC, The Grapes of Wrath described several "best deal[s] that individuals [had] available."
    - jon_richards 9y ago
      Not the parent commenter, but I've often thought it's the government's job to prevent the tragedy of the commons. That's pretty much explicitly "stamping out the best deal that individuals have available".
    - sokoloff 9y ago
      I'd prefer that, to the extent that they get involved, government work to provide better options rather than attempt to legislate away (what some people judge to be) bad options. [1] An analogy that I think fits is the availability of abortions. For an individual pregnant woman who wishes to terminate the pregnancy, many people [likely including her] would view the option of having an abortion as an objectively bad yet best deal available outcome. It would be preferable to a wide swath of people's opinion had she never become pregnant in the first place, via education, wider availability of free/trivial cost birth control, whatever. In aggregate, the world would be a better place if the rate of abortion was reduced via these means (less physical and emotional stress, etc). That doesn't extend to banning abortions, for that doesn't help the particular individual woman. [1] - It is chiefly for this reason that I prefer something like a UBI over a minimum wage law. If someone's labor is only able to create $4 of value per hour, I would rather let them choose to do that than not be allowed or be forced to do that only as an entrepreneur. To reduce the amount of desperation that might "force" someone to do that, UBI takes some of the economic pressure off.

jjoonathan 9y ago

Uber drivers are in a bad position relative to their client. The contractor loophole lets Uber exploit that fact much farther than it would otherwise be able to, effectively undoing a century of hard-won labor rights progress. We are blaming contracting law for the latter, not the former. > Oh, and contractors should always set up an individual 401k You say that like you think they don't know the option exists. That's not why they don't do it. They don't do it because they don't have the money to do it, which is the real problem.

tyingq 9y ago

Aside from the 401k, you need health insurance too. I can tell you from experience that your cost per month as a tiny company is MUCH higher than being an employee at a larger company.