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> Why would you have to work at least 40 hours a week? Because if you work less than that then the employee does not generate enough revenue to pay for the ove

> Why would you have to work at least 40 hours a week? Because if you work less than that then the employee does not generate enough revenue to pay for the overhead cost of benefits. > There is such a thing as a part-time employee In fact most low-rung jobs try to keep employees under full-time to avoid the extra benefits that FTEs qualify for. If that's the case with Uber drivers then they don't get benefits either. And on top of that, the company will probably have to cap drivers' hours in order to keep them from qualifying for benefits. > Or, put it another way, if Uber required its drivers to work 40 hours a week and this resulted in unhappy drivers, what makes you think anyone would want to drive for Uber in the first place? They wouldn't. That's my point. If this legislation goes into effect, then driving for Uber will not be a viable employment option for many current drivers because of the loss of work flexibility.

inferiorhuman 7y ago
Because if you work less than that then the employee does not generate enough revenue to pay for the overhead cost of benefits. That's not how things work at a low wage job. Beyond a threshold (around 30 hours) employers are hit with extra mandates (e.g. health insurance). If that's the case with Uber drivers then they don't get benefits either. And on top of that, the company will probably have to cap drivers' hours in order to keep them from qualifying for benefits. That's not true either. Being classed as an employee will mean that the drivers qualify for unemployment insurance, that Uber will pay half of some of the taxes typically levied on wages, oh and having W2 wages will qualify you for a tax-advantaged IRA (retirement account). There are some other perks as well depending on the locality. Being an employee versus contractor comes with a number of benefits that aren't health insurance.
- ac29 7y ago
  > having W2 wages will qualify you for a tax-advantaged IRA (retirement account) You don't need W2 income to contribute to an IRA, any "earned income" is suitable. 1099 income is fine.
- manfredo 7y ago
  The whole idea of "unemployment insurance" for an Uber driver is not compatible with their business model. This isn't a factory where workers come in at 9 and leave at 5 and you either have a job or you don't. Uber drivers set their own hours. What would unemployment insurance for an Uber or Lyft driver look like? If you get less than X rides per hour you get unemployment insurance? Regardless, let me make this simpler because we seem to be getting lost on tangents. Each Uber driver bring in $X revenue per hour. For each Uber driver there are $Y hourly expenses (almost certainly dominated by the drivers' wages). So for every hour of work each Uber driver generates $X - $Y dollars for Uber. But that's not the whole situation. Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and each driver has a $50 a week overhead cost. So Uber drivers have to drive for 10 hours a week to make even. Benefits almost always take the form of overhead costs. So now lets say these overhead costs go up from $50 a week to $150 a week. Now each driver needs to drive for at least 30 hours a week to break even. Uber now has a strong incentive to get rid of the drivers working less than that amount because they're costing the company more in expenses than they're bringing in. Money doesn't appear out of nowhere. If Uber drivers are getting more benefits, then that costs money and that money needs to come from somewhere. It's either going to be lower pay, less flexible hours, or something we're not thinking of. There's no having your cake and eating it too.
  - inferiorhuman 7y ago
    Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and each driver has a $50 a week overhead cost. So Uber drivers have to drive for 10 hours a week to make even. No, you're talking about Uber breaking even — not the drivers. If you're worried about the drivers, how much does their individual health insurance cost versus a group plan for a large company like Uber? How about the rates they'd get with an IRA versus a 401k that only a W2 employee is eligible for? The employee's share of the costs go down when they are classified as an employee and not an individual contractor. You're conflating the costs of driving for Uber (most of which Uber has shifted to their pseudo-employees) with the costs to run Uber. Uber itself loses money on every ride, it's entirely subsidized with VC money. That's why their stated goal is to develop autonomous vehicles and dump the drivers ASAP.
kllrnohj 7y ago
> Because if you work less than that then the employee does not generate enough revenue to pay for the overhead cost of benefits. Nonsense. If this were true part-time jobs wouldn't exist, but they do. There's no shortage of stories of people working at major retailers and being unable to get >29 hours / week because the employer doesn't want them crossing into full-time status (IRS defines this at 30 hours, many companies follow this for benefits purposes as well).

inferiorhuman 7y ago

Because if you work less than that then the employee does not generate enough revenue to pay for the overhead cost of benefits. That's not how things work at a low wage job. Beyond a threshold (around 30 hours) employers are hit with extra mandates (e.g. health insurance). If that's the case with Uber drivers then they don't get benefits either. And on top of that, the company will probably have to cap drivers' hours in order to keep them from qualifying for benefits. That's not true either. Being classed as an employee will mean that the drivers qualify for unemployment insurance, that Uber will pay half of some of the taxes typically levied on wages, oh and having W2 wages will qualify you for a tax-advantaged IRA (retirement account). There are some other perks as well depending on the locality. Being an employee versus contractor comes with a number of benefits that aren't health insurance.

ac29 7y ago
> having W2 wages will qualify you for a tax-advantaged IRA (retirement account) You don't need W2 income to contribute to an IRA, any "earned income" is suitable. 1099 income is fine.
manfredo 7y ago
The whole idea of "unemployment insurance" for an Uber driver is not compatible with their business model. This isn't a factory where workers come in at 9 and leave at 5 and you either have a job or you don't. Uber drivers set their own hours. What would unemployment insurance for an Uber or Lyft driver look like? If you get less than X rides per hour you get unemployment insurance? Regardless, let me make this simpler because we seem to be getting lost on tangents. Each Uber driver bring in $X revenue per hour. For each Uber driver there are $Y hourly expenses (almost certainly dominated by the drivers' wages). So for every hour of work each Uber driver generates $X - $Y dollars for Uber. But that's not the whole situation. Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and each driver has a $50 a week overhead cost. So Uber drivers have to drive for 10 hours a week to make even. Benefits almost always take the form of overhead costs. So now lets say these overhead costs go up from $50 a week to $150 a week. Now each driver needs to drive for at least 30 hours a week to break even. Uber now has a strong incentive to get rid of the drivers working less than that amount because they're costing the company more in expenses than they're bringing in. Money doesn't appear out of nowhere. If Uber drivers are getting more benefits, then that costs money and that money needs to come from somewhere. It's either going to be lower pay, less flexible hours, or something we're not thinking of. There's no having your cake and eating it too.
- inferiorhuman 7y ago
  Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and each driver has a $50 a week overhead cost. So Uber drivers have to drive for 10 hours a week to make even. No, you're talking about Uber breaking even — not the drivers. If you're worried about the drivers, how much does their individual health insurance cost versus a group plan for a large company like Uber? How about the rates they'd get with an IRA versus a 401k that only a W2 employee is eligible for? The employee's share of the costs go down when they are classified as an employee and not an individual contractor. You're conflating the costs of driving for Uber (most of which Uber has shifted to their pseudo-employees) with the costs to run Uber. Uber itself loses money on every ride, it's entirely subsidized with VC money. That's why their stated goal is to develop autonomous vehicles and dump the drivers ASAP.

kllrnohj 7y ago

> Because if you work less than that then the employee does not generate enough revenue to pay for the overhead cost of benefits. Nonsense. If this were true part-time jobs wouldn't exist, but they do. There's no shortage of stories of people working at major retailers and being unable to get >29 hours / week because the employer doesn't want them crossing into full-time status (IRS defines this at 30 hours, many companies follow this for benefits purposes as well).