9 ms·

This seems like it could also torpedo their Contractor vs. Employee argument. Contractors get to set rates, employees don't. So you can't say they're contracto

by radcon 7y ago

This seems like it could also torpedo their Contractor vs. Employee argument. Contractors get to set rates, employees don't. So you can't say they're contractors AND accuse them of committing fraud when they try to set their own rates. Now if only someone would develop an app that does this for entire cities. The app could be their version of a union.

leereeves 7y ago
Under the theory that Uber/Lyft employees are contractors and allowed to set prices, wouldn't coordinating ("conspiring") to do so en masse be considered price fixing? Personally I think they should be considered employees, but a pro-management federal prosecutor could make some trouble for them.
- dpflan 7y ago
  This is an interesting dynamic - the colluding drivers wait for Lyft/Uber to determine the surge pricing and the point-person for the drivers informs of the price increase to a target that is acceptable. Now how does the pricing affect the demand for the rides? Will a Lyft user switch to Uber if the collusion is affecting only 1 application (vice versa too)?
- calimac 7y ago
  would they have to have more control over the liquidity of the market to be price fixing?
- codedokode 7y ago
  I don't think they are allowed to set prices. Furthermore, they are probably somehow punished if they don't accept the orders that app offers.
  - gsnedders 7y ago
    They aren't, and the furthermore is also true beyond a certain percentage. This is part of the reason why in a number of jurisdictions the courts have ruled that the drivers aren't independent contractors.
  - thebradbain 7y ago
    Uber and Lyft don’t let their drivers set rates, but the argument (and law) is that they should — since Uber won a judgement saying their drivers were contractors, not employees, their drivers, then, are legally entitled the right to charging their own rate. For a lot of intents and purposes Uber/Lyft wanted drivers to be classified as contractors so they wouldn’t be subject to laws re: minimum wage for employees, but it seems also don’t want to be subject to all laws re: contracting (price negotiation). Barring some extreme measure of lobbying for and passing a law that carves out an entirely new employment classification for the gig economy, Uber/Lyft/etc have to comply with at least one of the existing classifications.
    - dnautics 7y ago
      Have you ever done contract coding? You don't always get to set the rates, because the rate for the contract is posted, and the other side is not going to negotiate.
      - thebradbain 7y ago
        I think in that case though it’s fine (even expected) because I can choose to take or not take it and find work elsewhere as a freelancer — the pro-labor argument with Uber/Lyft is that it’s systemic versus freelance work between two individuals is personal.
        dnautics 7y ago
        having been an uber/lyft driver professionally for a year and half, I could definitely choose to take or not take it a find work elsewhere. Yes there were incentives to not reject too many, but that's true of general contracting work, too.
      - robmaister 7y ago
        The thing about contracting is you don't have to take the job if they aren't willing to negotiate. If no one wants to build your website for $5, then the client is either going to have to pay more, or not make a website. All of the drivers around that airport incur roughly the same costs for gas, wear and tear, rent, etc. So while you might find someone halfway across the world to build your website for $5, you won't be able to do the same for your driver between the airport and your hotel.
- eropple 7y ago
  That's an interesting question. I'm not a lawyer, but I'd be interested in the answer. From a technical perspective it seems that they'd need significantly more control over product liquidity generally, rather than locally, for it to apply; from a moral perspective it doesn't seem like a reasonable appellation at all and that the closest equivalent is labor organization--and it's worth noting that companies are not obligated to negotiate with labor organizations on behalf of contractors in the same way they are employees, but contractors are allowed to organize. Contractor labor, such as SAG, IATSE, etc. do it regularly. Practically, the impact of a hundred airport drivers deciding to "strike" is so small that a non-mendacious prosecutor probably wouldn't even look at it. But there's a lot of mendacity around Washington, so who knows.
  - rayiner 7y ago
    Note that unions are specifically exempt from antitrust laws. So just because some conduct would be legal if a union did it doesn’t mean it’s legal without an actual union in place.
- Tade0 7y ago
  At least in Uber's case this seems to have been an emergent thing originally, as in: drivers independently of each other found under which conditions the prices were surging and acted appropriately.
- return1 7y ago
  Assuming that it is, can they do something about it ?
- rayiner 7y ago
  I think you can make an argument that it’s bid rigging. Uber/Lyft pricing can be viewed as an auction where the surge price is the market clearing price. Conspiring with others to not accept bids below a floor could probably be prosecuted as a bid rigging conspiracy.
  - jdmichal 7y ago
    I don't see how it could be bid rigging, when the drivers are not even able to bid. Short of what the article discusses, they must take whatever Uber / Lyft give them. If anything, this seems more akin to actual negotiation / refusal to work at the proposed price. Which, if they are contractors, is perfectly acceptable, no?
    - lisper 7y ago
      > they must take whatever Uber / Lyft give them No, they don't. No one is putting a gun to their head and forcing them to work. Uber/Lyft's offer is take-it-or-leave-it, but leaving it is always an option.
      - perennate 7y ago
        That leaving is an option is what the parent comment is saying ("refusal to work at the proposed price"). The drivers in the article are refusing to drive at the non-surge price, and when the price surges, they find the price acceptable and so take the rides. The part of parent comment that you quoted is just about how the take-it-or-leave-it nature leaves no middle ground (bidding).
        lisper 7y ago
        But that is false. Acceptance or refusal of an offer is bidding. It's essentially an auction: Lyft/Uber asks, "Does anyone want to sell at $X? No? OK, how about $X+1?" etc. What the drivers are doing is not bidding, it is colluding to hide the true market price, i.e. what the lowest bidder would actually be willing to accept. That is illegal. Please note that my sympathies are very much with the drivers. Their situation sucks and needs to be improved. But breaking the law is not the way to improve it.
- i_am_proteus 7y ago
  Is it considered price-fixing if a union that works mostly contracts (e.g. electricians) sets a labor price? This seems to be a standard practice.
- Jommi 7y ago
  Why do you think they should be employees?
- radcon 7y ago
  On that note, does it make a difference that they're collectively refusing work rather than collectively setting prices? Uber and Lyft are still the ones actually setting the price. In the end I don't think it will matter, Uber and Lyft could probably code around this pretty easily if it started to affect their bottom line. When they see 100+ drivers in the same place go offline within X seconds of each other, it's a pretty clear indication that there's coordinated action taking place. They probably have enough data from drivers' phones to see that they're sitting still waiting to go back online. I just hope they don't decide to make an example out of these drivers by banning them...
  - lazerpants 7y ago
    Seems like they could just force a delay of [x] time between individual driver logins. Call it a server side issue or something and make it so each driver can only re-login once every 15 minutes. Then by the time the surge worked the drivers instigating it would be locked out of participating.
  - xyzzyz 7y ago
    Refusing to sell a product or a service below a specific price is literally what setting prices is.
    - toomuchtodo 7y ago
      Sounds like forced labor to me.
  - snowwrestler 7y ago
    While both companies provided consumer-friendly press statements, I would not assume that Lyft or Uber actually cares if this is happening. After all, they also make more money per ride under the scheme. As long as there are enough customers willing to pay the extra cost during surge pricing, drivers and Uber/Lyft would both win. Speaking of price-fixing.. Competition is what usually keeps prices low in ride-sharing; if Lyft is too expensive, more people will use Uber. But if the drivers of both apps all trigger surge pricing together (in both platforms simultaneously) then it is possible that both platforms will make more money until the fake surge ends.
- askafriend 7y ago
  Taxi Cab Drivers were not employees either. Why do Uber and Lyft need to take on the drivers as employees all of a sudden? I'm not saying they shouldn't be, but just curious why the seemingly sudden change in opinion from some people?
- chrischen 7y ago
  A union is basically collusion/price fixing.
mikeryan 7y ago
Contractors get to set rates, employees don't. So you can't say they're contractors AND accuse them of committing fraud when they try to set their own rates. This isn't how it works? Rates of pay are mutually agreed upon between an employer and employee regardless of classification.
- thebradbain 7y ago
  I think the pro-labor argument is Uber doesn’t even consider / allow negotiating their standard contract for rate-setting. IIRC Microsoft got in trouble in the early 2000s for doing something similar in having separate standardized pay-scales for contractors depending on how long they’ve contracted with Microsoft, and no option to negotiate, and the labor board argued that Microsoft was trying to shoehorn contractor-employment law into employee roles without the legal protections and tax burdens of employment rights
  - dnautics 7y ago
    Yeah, that makes sense, because the rate of the contract should only depend on the content of the job. And contractors should be able to compete for those jobs. That's certainly the case for Lyft/Uber.
- learc83 7y ago
  They're not just talking about how much of the fee that drivers get to keep, but the rate they charge riders. >Uber sees itself as an “agent” acting to connect the actual “merchant,” the driver, and the customer. [1] Under the theory Uber is operating on, it's weird that drivers can't directly set rates with riders. 1. https://www.marketwatch.com/story/uber-an-early-adopter-of-new-revenue-recognition-rules-believes-it-has-secs-blessing-of-its-business-model-2017-10-25 https://www.marketwatch.com/story/uber-an-early-adopter-of-n...
  - mikeryan 7y ago
    This has no bearing on whether drivers are employees or contractors however.
ryandrake 7y ago
This is basically the contractor setting his rate... through an interface that the app designers did not specifically design for. If a driver wants to work for $20, and the offered rate is currently $10, what’s the difference between them a) typing $20 into a text field and hitting a “request” button vs. b) turning a switch off and waiting for the app to increment the rate little by little up to $20?

by radcon 7y ago

leereeves 7y ago

Under the theory that Uber/Lyft employees are contractors and allowed to set prices, wouldn't coordinating ("conspiring") to do so en masse be considered price fixing? Personally I think they should be considered employees, but a pro-management federal prosecutor could make some trouble for them.

dpflan 7y ago
This is an interesting dynamic - the colluding drivers wait for Lyft/Uber to determine the surge pricing and the point-person for the drivers informs of the price increase to a target that is acceptable. Now how does the pricing affect the demand for the rides? Will a Lyft user switch to Uber if the collusion is affecting only 1 application (vice versa too)?
calimac 7y ago
would they have to have more control over the liquidity of the market to be price fixing?
codedokode 7y ago
I don't think they are allowed to set prices. Furthermore, they are probably somehow punished if they don't accept the orders that app offers.
- gsnedders 7y ago
  They aren't, and the furthermore is also true beyond a certain percentage. This is part of the reason why in a number of jurisdictions the courts have ruled that the drivers aren't independent contractors.
- thebradbain 7y ago
  Uber and Lyft don’t let their drivers set rates, but the argument (and law) is that they should — since Uber won a judgement saying their drivers were contractors, not employees, their drivers, then, are legally entitled the right to charging their own rate. For a lot of intents and purposes Uber/Lyft wanted drivers to be classified as contractors so they wouldn’t be subject to laws re: minimum wage for employees, but it seems also don’t want to be subject to all laws re: contracting (price negotiation). Barring some extreme measure of lobbying for and passing a law that carves out an entirely new employment classification for the gig economy, Uber/Lyft/etc have to comply with at least one of the existing classifications.
  - dnautics 7y ago
    Have you ever done contract coding? You don't always get to set the rates, because the rate for the contract is posted, and the other side is not going to negotiate.
    - thebradbain 7y ago
      I think in that case though it’s fine (even expected) because I can choose to take or not take it and find work elsewhere as a freelancer — the pro-labor argument with Uber/Lyft is that it’s systemic versus freelance work between two individuals is personal.
      - dnautics 7y ago
        having been an uber/lyft driver professionally for a year and half, I could definitely choose to take or not take it a find work elsewhere. Yes there were incentives to not reject too many, but that's true of general contracting work, too.
    - robmaister 7y ago
      The thing about contracting is you don't have to take the job if they aren't willing to negotiate. If no one wants to build your website for $5, then the client is either going to have to pay more, or not make a website. All of the drivers around that airport incur roughly the same costs for gas, wear and tear, rent, etc. So while you might find someone halfway across the world to build your website for $5, you won't be able to do the same for your driver between the airport and your hotel.
eropple 7y ago
That's an interesting question. I'm not a lawyer, but I'd be interested in the answer. From a technical perspective it seems that they'd need significantly more control over product liquidity generally, rather than locally, for it to apply; from a moral perspective it doesn't seem like a reasonable appellation at all and that the closest equivalent is labor organization--and it's worth noting that companies are not obligated to negotiate with labor organizations on behalf of contractors in the same way they are employees, but contractors are allowed to organize. Contractor labor, such as SAG, IATSE, etc. do it regularly. Practically, the impact of a hundred airport drivers deciding to "strike" is so small that a non-mendacious prosecutor probably wouldn't even look at it. But there's a lot of mendacity around Washington, so who knows.
- rayiner 7y ago
  Note that unions are specifically exempt from antitrust laws. So just because some conduct would be legal if a union did it doesn’t mean it’s legal without an actual union in place.
Tade0 7y ago
At least in Uber's case this seems to have been an emergent thing originally, as in: drivers independently of each other found under which conditions the prices were surging and acted appropriately.
return1 7y ago
Assuming that it is, can they do something about it ?
rayiner 7y ago
I think you can make an argument that it’s bid rigging. Uber/Lyft pricing can be viewed as an auction where the surge price is the market clearing price. Conspiring with others to not accept bids below a floor could probably be prosecuted as a bid rigging conspiracy.
- jdmichal 7y ago
  I don't see how it could be bid rigging, when the drivers are not even able to bid. Short of what the article discusses, they must take whatever Uber / Lyft give them. If anything, this seems more akin to actual negotiation / refusal to work at the proposed price. Which, if they are contractors, is perfectly acceptable, no?
  - lisper 7y ago
    > they must take whatever Uber / Lyft give them No, they don't. No one is putting a gun to their head and forcing them to work. Uber/Lyft's offer is take-it-or-leave-it, but leaving it is always an option.
    - perennate 7y ago
      That leaving is an option is what the parent comment is saying ("refusal to work at the proposed price"). The drivers in the article are refusing to drive at the non-surge price, and when the price surges, they find the price acceptable and so take the rides. The part of parent comment that you quoted is just about how the take-it-or-leave-it nature leaves no middle ground (bidding).
      - lisper 7y ago
        But that is false. Acceptance or refusal of an offer is bidding. It's essentially an auction: Lyft/Uber asks, "Does anyone want to sell at $X? No? OK, how about $X+1?" etc. What the drivers are doing is not bidding, it is colluding to hide the true market price, i.e. what the lowest bidder would actually be willing to accept. That is illegal. Please note that my sympathies are very much with the drivers. Their situation sucks and needs to be improved. But breaking the law is not the way to improve it.
i_am_proteus 7y ago
Is it considered price-fixing if a union that works mostly contracts (e.g. electricians) sets a labor price? This seems to be a standard practice.
Jommi 7y ago
Why do you think they should be employees?
radcon 7y ago
On that note, does it make a difference that they're collectively refusing work rather than collectively setting prices? Uber and Lyft are still the ones actually setting the price. In the end I don't think it will matter, Uber and Lyft could probably code around this pretty easily if it started to affect their bottom line. When they see 100+ drivers in the same place go offline within X seconds of each other, it's a pretty clear indication that there's coordinated action taking place. They probably have enough data from drivers' phones to see that they're sitting still waiting to go back online. I just hope they don't decide to make an example out of these drivers by banning them...
- lazerpants 7y ago
  Seems like they could just force a delay of [x] time between individual driver logins. Call it a server side issue or something and make it so each driver can only re-login once every 15 minutes. Then by the time the surge worked the drivers instigating it would be locked out of participating.
- xyzzyz 7y ago
  Refusing to sell a product or a service below a specific price is literally what setting prices is.
  - toomuchtodo 7y ago
    Sounds like forced labor to me.
- snowwrestler 7y ago
  While both companies provided consumer-friendly press statements, I would not assume that Lyft or Uber actually cares if this is happening. After all, they also make more money per ride under the scheme. As long as there are enough customers willing to pay the extra cost during surge pricing, drivers and Uber/Lyft would both win. Speaking of price-fixing.. Competition is what usually keeps prices low in ride-sharing; if Lyft is too expensive, more people will use Uber. But if the drivers of both apps all trigger surge pricing together (in both platforms simultaneously) then it is possible that both platforms will make more money until the fake surge ends.
askafriend 7y ago
Taxi Cab Drivers were not employees either. Why do Uber and Lyft need to take on the drivers as employees all of a sudden? I'm not saying they shouldn't be, but just curious why the seemingly sudden change in opinion from some people?
chrischen 7y ago
A union is basically collusion/price fixing.

mikeryan 7y ago

Contractors get to set rates, employees don't. So you can't say they're contractors AND accuse them of committing fraud when they try to set their own rates. This isn't how it works? Rates of pay are mutually agreed upon between an employer and employee regardless of classification.

thebradbain 7y ago
I think the pro-labor argument is Uber doesn’t even consider / allow negotiating their standard contract for rate-setting. IIRC Microsoft got in trouble in the early 2000s for doing something similar in having separate standardized pay-scales for contractors depending on how long they’ve contracted with Microsoft, and no option to negotiate, and the labor board argued that Microsoft was trying to shoehorn contractor-employment law into employee roles without the legal protections and tax burdens of employment rights
- dnautics 7y ago
  Yeah, that makes sense, because the rate of the contract should only depend on the content of the job. And contractors should be able to compete for those jobs. That's certainly the case for Lyft/Uber.
learc83 7y ago
They're not just talking about how much of the fee that drivers get to keep, but the rate they charge riders. >Uber sees itself as an “agent” acting to connect the actual “merchant,” the driver, and the customer. [1] Under the theory Uber is operating on, it's weird that drivers can't directly set rates with riders. 1. https://www.marketwatch.com/story/uber-an-early-adopter-of-new-revenue-recognition-rules-believes-it-has-secs-blessing-of-its-business-model-2017-10-25 https://www.marketwatch.com/story/uber-an-early-adopter-of-n...
- mikeryan 7y ago
  This has no bearing on whether drivers are employees or contractors however.

ryandrake 7y ago

This is basically the contractor setting his rate... through an interface that the app designers did not specifically design for. If a driver wants to work for $20, and the offered rate is currently $10, what’s the difference between them a) typing $20 into a text field and hitting a “request” button vs. b) turning a switch off and waiting for the app to increment the rate little by little up to $20?