20 ms·

Update on AB5

181 points by dawhizkid 7y ago

gzu 7y ago
Perfect way to eliminate the competition via regulatory lock out
- landcoctos 7y ago
  It's not really sharing anyway.
  - tracker1 7y ago
    Yeah, the term really got me when I first heard about Uber... my thoughts was it was more like a near-demand carpool service to pull together extra passengers for where you were going anyway (for a small fee). Reality it's more like a Taxi service with private vehicles. Still wouldn't mind seeing another ride share app with carpooling as the focus.
    - DaiPlusPlus 7y ago
      Waze Carpool
    - jfk13 7y ago
      Yes, calling it "ride-sharing" has always been disingenuous at best. I suspect the idea was to make it sound more small-scale and personal, less formal and commercial, so that people wouldn't feel it needs regulation or oversight as much as a commercial transportation service.
- olliej 7y ago
  No, AB5 simply requires that they compete fairly with all other transit systems that recognize their employees as employees. The reality is that all these “gig economy” companies are only able to compete by unfairly claiming that their employees are somehow not their employees.
  - favorited 7y ago
    They're not even able to compete. Neither Uber nor Lyft are profitable.
SauciestGNU 7y ago
I think the proper classification of drivers is likely an existential threat to Uber, and they are responding as such. I find it highly unlikely that a court would find transportation to be outside the scope of Uber's business. Although you have to almost admire the sheer brazenness in their admission that they will not adhere to the law.
- buboard 7y ago
  > I find it highly unlikely that a court would find transportation to be outside the scope of Uber's business TBH considering the language of the bill, it s very plausible to say that driving people around is not "their usual course". The same way that google is not an advertiser, and airbnb is not a hotel chain.
  - reaperducer 7y ago
    That's like saying Yellow Cab is not a taxi company because the drivers are independent contractors who lease their cars from the company, and it doesn't actually drive anyone around. And yes, Uber does lease cars to its drivers.
    - buboard 7y ago
      Or that e-bay is not a fashion store. (I think u re referring to a probably tiny part of uber that leases cars to drivers)
      - lonelappde 7y ago
        Ebay matches sellers (who choose what to sell) with buyers (who choose what to buy). Uber tells drivers where to go, and when, if the driver agrees to do the work. Uber regulates the kind of cars acceptable, and regulates who does the work. Your Uber driver can't subcontract the drive to another driver.
        buboard 7y ago
eridius 7y ago
> drivers’ work is outside the usual course of Uber’s business What... how... I don't even know where to begin with this.
- gotoeleven 7y ago
  Cool I look forward to Uber drivers showing up with a rickshaw or giving piggy back rides.
  - scarejunba 7y ago
    Uber in India offers autorickshaws. And I've got a vague memory of seeing rickshaws/pedicabs in Seattle (but this could be a false memory).
- kd22 7y ago
  > which is serving as a technology platform for several different types of digital marketplaces. Pretty clever wording by Uber here, I'd say. Although does not make sense to me.
- cbdumas 7y ago
  Uber's position here seems to be that they are a technology company that connects drivers with things that need to be driven from A to B (people, restaurant orders, etc.). Not sure I buy that but it sounds like they're willing to ask the courts to decide on that if this goes into law.
- clairity 7y ago
  i'm guessing they would claim they are an ridsharing platform, with the purpose of allowing drivers and riders to find each other and facilitate the transaction, rather than a taxi service. the problem with that argument is that they have a lot of control of the driver side of the platform, directly through pricing and indirectly through ratings and access.
- mason55 7y ago
  Uber's argument is that the core of their business is the technology which allows them to act as a two-sided marketplace and logistics company, connecting and routing physical goods and people. Connecting riders and drivers is one thing which takes advantage of their technology but their are others. Connecting riders and scooters, connecting couriers to restaurants and hungry people, connecting people who want to go to the Hamptons with helicopters, etc. Uber will argue that it has nothing to do with the driving part and the driving is just one of the many uses of their technology. The difficult part of that argument will be that they have so many rules and regulations that they place on drivers and rides that's it's hard to argue they're just providing a hands-off matching & logistics service.
aznpwnzor 7y ago
> Our proposal avoids the potential harm of forcing drivers to be employees, whether or not they want to—and the vast majority tell us they don’t want to be. > Contrary to some of the rhetoric we’ve heard, AB5 does not automatically reclassify any rideshare drivers from independent contractors to employees. This may seem like an immediate contradiction, but I guess they've reframed it so their proposal is actually in line with AB5? great pr-speak > But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces. Also seems like they will continue to thwart where they can (which I can't blame them for really) but seems aggressive to note. This reads more like a shareholder update, which makes sense.
- smacktoward 7y ago
  I read it differently: > Governor Newsom has already committed to sign AB5, which would go into effect in January 2020. Because we continue to believe drivers are properly classified as independent... drivers will not be automatically reclassified as employees, even after January of next year... > Uber and Lyft together have already transferred $60 million into a campaign committee account, and we are open to investing more to put us in the strongest position possible to run a winning campaign... We are confident that California voters and the millions of riders and drivers who use Uber will step up to protect these important work opportunities. Translation: "We're betting that we can get a ballot initiative passed legalizing what we do faster than the State of California can bust us for violating AB5."
  - shkkmo 7y ago
    You may have missed this part: > Importantly, our ballot measure will not ask voters to exempt us from AB5, even though nearly every other industry in California that works with independent contractors received an exemption from the ABC test through special amendments I mentioned earlier. Instead, we will ask voters to support the pro-driver policies we have advocated for: giving drivers access to benefits and an earnings floor and retaining the flexible access to on-demand work they enjoy today. It doesn't sound like the proposal is intended avoid compliance with AB5 but to create conditions where new bills that make the ABC test harder pass will have less support.
shawndellysse 7y ago
Are they really trying to claim that Uber is not a transportation company but instead "a technology platform for several different types of digital marketplaces"? I guess we do live in a post-truth era.
- sharkmerry 7y ago
  This is how they've always been. Uber's "customers" are the drivers. They are buying access to the platform, thats how they categorize driver bonuses and incentives to "marketing" expenses apparently
- joeyrideout 7y ago
  The post was written by their CLO. They are not trying to claim as such, they are succeeding. I am not a lawyer, but I don't think this legal interpretation of the company is a lie. It seems like the classification is constantly under scrutiny. A legal falsehood like you claim it is would've fallen apart by now.
  - FireBeyond 7y ago
    Lawyers argue all the time. It's not a legal truth because their chief attorney says so. They are entitled to claim (within reason) as much as anyone else is. And, of course, they will claim the most favorable definition. In other situations, notably when they are arguing against entrenched transit/transport interests, they "become" a transport company. It's a question of which hat fits the day.
    - dymk 7y ago
      FTA: > But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces. Previous rulings have found his statement to be accurate. So you don't have to take his word for it, you can take a judge's.
npmaile 7y ago
As someone who drives Uber on occasion when I'm a little bored and looking for something to do, I think it's great that I'm not an Uber employee. I can do 10 hours or I can do 0 hours based on nothing but my own whim. I don't have a problem with people organizing to get a better deal for themselves, but I like the way it works now. I've worked for companies that misclassify workers, and Uber isn't it as far as I understand. I may be convinced otherwise, but I don't see it.
- shawndellysse 7y ago
  Yeah, in your case it would make perfect sense to consider you an independent contractor instead of an employee. I guess the issue arises when we got people working full-time hours but still being classified as an independent contractor.
  - koolba 7y ago
    > I guess the issue arises when we got people working full-time hours but still being classified as an independent contractor. Why though? There's plenty of contractors in other industries that work exclusively for a single client, often for 40+ hours per week. In technology in particular it's more common than having multiple concurrent clients (per person, not per consultancy).
    - sharkmerry 7y ago
      And some of those probably should be classified as employees.
    - kwhitefoot 7y ago
      In some countries there are limits on how long a company can employ a contractor. I can't find it at the moment but I think that here (Norway) it is something like four years. After that the contractor is supposed to be either let go or offered permanent employment. Perhaps someone more familiar with the rules could chip in, I've only been contracting for a short period. I think the situation is somewhat similar in the US except that instead of a legal maximum the contract must specify an explicit end date after which there must be a break in employment.
ProAm 7y ago
>Bringing drivers access to robust portable benefits like sick leave and injury protection; What? Those are embarassing offers. > Our proposal avoids the potential harm of forcing drivers to be employees, whether or not they want to—and the vast majority tell us they don’t want to be I would love to see the data behind the 'vast majority'
- djrogers 7y ago
  I'd bet the huge percentage of drivers that simultaneously do Lyft and Uber would not like being an employee of one or the other, as their employer would prevent that.
kaesar14 7y ago
What's the defense of a business model that loses bucketloads of money despite not treating their drivers with the dignity they deserve? Both Uber and Lyft are not going to be killed by regulation, they're going to be killed for being shitty businesses.
ajkjk 7y ago
I feel like it's pretty clear that gig economy jobs don't neatly fit in either of the existing categories of workers: they're not quite employees (you can clearly work or not work whenever you want) or contractors (you clearly have very little negotiating power or information in choosing your work or guaranteeing your wages). Attempts to munge them into one of those categories are just doomed; a new category is needed. Failing that, if they are to be counted as individual contractors they should be able to negotiate like those: without one-sided deceptive deals.
- mymythisisthis 7y ago
  The simple solution is to ban the use of contractor workers in the taxi industry. It's too precarious of a job, and one that many people rely on for a sole source of income. This would take the pressure of other industries that use independent contractors, such as tech. Right now a couple of bad actors like Uber, are ruining the independent contractor category of work. Forcing states to put more laws in place.
- FartyMcFarter 7y ago
  I think you might be on to something here.
- stefan_ 7y ago
  You are just repeating the Uber party line that somehow "employment" is antithetical to flexible work hours. It's frightening to see people just lap that up because it happens to coincide with their day job. But nothing in labor law prevents a company like Uber from "disrupting work" and offering that flexibility to employees.
  - hn_throwaway_99 7y ago
    The current employee model as codified in our tax and legal system definitely has lots of assumptions around only having a single W2 employer. Certaintly not impossible, but definitely not a good fit. I agree with the OP, and I am not just "repeating the Uber party line". I believe 3 categories of work are needed: 1. Employee (e.g. current W2), where you have a single full-time employer who is primarily responsible for your wages and benefits. 2. Independent Contractor, where the IC has full control over their rates, where they do the work, their tools, etc. 3. "Flexible" employee, where the employee has full control over their hours and availability, and to work for multiple employers, but doesn't have control over rates or how the work is done.
kwindla 7y ago
Could someone knowledgeable about employment law explain what will change for Uber/Lyft drivers if the companies are forced to reclassify them as employees? The post talks about "potential harm" and says that how many hours drivers have to work and whether they can work for competitors at the same time "would all change." Is that right?
- the-pigeon 7y ago
  This is just a PR post by Uber. Don't take any of it as fact. No one knows the true impact of this. Companies will find lots of interesting ways to follow the letter of the law but not the spirit of it. As they always do. If you really want speculation on it then find someone who's actually a lawyer and not directly affected by it (so they aren't biased). Which I haven't seen yet. (Detailed writeup on why speculation on things like this is almost always wrong http://larvatus.com/michael-crichton-why-speculate/ http://larvatus.com/michael-crichton-why-speculate/ )
- HALtheWise 7y ago
  There are some other excellent explanations in this thread, but it boils down to the idea that if drivers are employees, the company starts to care about how much they work. For example, if they work more than 40 hours in a single week, they need overtime pay. That means that a driver today who decides to work 80 hours one week and take a vacation the next would (if classified as an employee) be costing Uber a lot of money, so they will probably need to ban that behavior to stay competitive. From an employees perspective, this means they have less flexibility in their work schedule.
Animats 7y ago
Because we continue to believe drivers are properly classified as independent, and because we’ll continue to be responsive to what the vast majority of drivers tell us they want most—flexibility—drivers will not be automatically reclassified as employees, even after January of next year. We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now. But we will also continue to advocate for the independence and choice that drivers tell us again and again in surveys, polls, focus groups, and personal conversations that they value most. Uber management is not going to get the message until top management goes to jail for contempt of court.
- ilaksh 7y ago
  There is nothing about providing benefits to people who meet the criteria for employment that prevents Uber from allowing drivers choice. They will not be able to keep as many drivers or allow infinite drivers to sign up, and they will not be able to pay benefits to people who only work a very small amount per week (I assume this is in the law). But beyond that, there is absolutely no reason they cannot or should not continue to let drivers sign in and out when they want.
  - SomewhatLikely 7y ago
    What should they do to drivers who don't meet their minimum hours needed to pay for the benefits in a given week? Fire them? Immediately? Should it be a warning? How many warnings do you get? Meanwhile is Uber/Lyft still on the hook for all the benefits? How can they avoid these flaky drivers? Better screening upfront such as an interview? How will drivers feel when they get a notification they have to drive 8 hours today or they'll get a warning because it's the end of the week and they are short. What if it's a slow day and Uber doesn't need more drivers today? It would make more sense to spread drivers hours out of over the week. The relationship starts to sound drastically different for both parties. Especially for the 45% of drivers working less than 10 hours currently who will have to find other side jobs or go without.
    - ilaksh 7y ago
dawhizkid 7y ago
Uber's defense is that it is licensing lead generation software to drivers, and that it just takes a commission from each trip as payment for use of its software. In many ways, I can see it. I think the issue lies in a lot of Uber's current policies around drivers e.g. very strict rules around cancellations. If Uber was just a lead generation provider then it shouldn't care or intervene if a driver decides they don't want a job, but depending on the scenario you can be punished if you don't want to take a job. Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.
- SilasX 7y ago
  Yeah, even being charitable, I don't see how Uber's model[1] is remotely reasonable. They pretty clearly take direct control over the relationship. The rider deals with Uber, and the driver deals with Uber. Nothing at all like the ebay/fiverr "hey find someone to link up with" model. [1] Edit: To clarify, I mean "the model they're promoting of what their core business is", i.e. the claim that "they're a lead-gen platform they license out"; I'm not saying they're business model is financially non-viable.
  - 8ytecoder 7y ago
    In fact, I'd argue that's the primary reason why Uber/Lyft got popular in the first place. At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. If Uber can't enforce something similar, why should I use Uber?
    - deleted 7y ago
      [deleted]
    - seanmcdirmid 7y ago
      > At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. Most of us don’t have such great experiences with taxis as you do. “Legally bound” still leaves a lot of wiggle room for really crappy experiences.
bww 7y ago
tl;dr "Bill clearly aimed specifically at us doesn't apply to us."
justapassenger 7y ago
Would love to see source data that Uber is referencing (I know it's not possible, as it's highly guarded secret) - I suspect they cherry pick it a lot. "In the US, 92% of drivers drive less than 40 hours per week, and 45% of drivers drive less than 10 hours per week. [...] We will continue to defend the innovation that makes that kind of choice, flexibility, and independence a reality for over 200,000 drivers in California". 1. Does this distribution looks in California, not across whole US? Why talk about two different cases, unless you cherry pick? 2. How does this % look like, when we look at drivers that work for more than few months?
- gibolt 7y ago
  It doesn't clearly state if those durations are during an active ride, also including time to pickup, or including time active waiting for a pickup task. This subtlety could drastically change the data interpretation.
- skybrian 7y ago
  This is percentage of drivers, not percentage of hours worked. It would make sense that there are lot of drivers that don't drive very often. They might even have stopped driving altogether, but didn't cancel their account. It's like a website talking about total users that ever signed up, instead of 7-day active users.
- dtrailin 7y ago
  A very clever thing they're doing is conflating being an employee with not having flexible hours, as if part time jobs don't exist. Fast food chains don't hire independent contractors and yet lots of people have flexible shifts.
  - darkwizard42 7y ago
    Not exactly...consider the following problem: Fast food chain is busy from 12 AM - 2 AM, 5 PM - 7 PM. These shifts may be desirable or undesirable because of the time they occur. To be able to get the "easy" shifts (slow ones) at 10 PM or something, they can make it so that you HAVE to take a part of the other shifts... If you can't, you don't meet their eligibility and you lose your job. If you are an employee in a shift based business, you definitely give up some rights to having completely flexible work hours.
deleted 7y ago
[deleted]
dmitrygr 7y ago
So basically their tactic is to eke out a few more years out of their business model as their fight with California over the classification slowly snakes its way through the courts to the California supreme court, and hope that in the meantime they can come up with a better business model? It is actually not a terribly bad idea. They have the money to pay for the slow court battle, and it is strictly cheaper than complying.
- ilaksh 7y ago
  They already lost in the California Supreme Court.
  - dmitrygr 7y ago
    Dynamex lost (Dynamex Operations West, Inc. v. Superior Court), which caused AB5 to be written. Uber did not yet lose (or even get sued) over this yet IIRC
tyxodiwktis 7y ago
When the ACA passed, mandating that large employers offer health insurance to all full time employees, there was a massive push by large employers in retail and food service to cap people's hours and make sure very few qualified as full time. This was because health insurance costs employers about $10k per employee per year, and if you are paying someone $10/hr ($20k/yr at 40hrs a week), raising labor costs 50% is a nonstarter. An outcome like that may be possible here as an unintended consequence, with Uber and Lyft capping most drivers at 20hrs a week, and full time drivers splitting their time between the two (20hrs for each).
- Animats 7y ago
  Yes, that needs to prorate based on hours worked, rather than being a threshold.
- avocado4 7y ago
  Real solution is universal healthcare.
  - dehrmann 7y ago
    The problem is that health care is attached to employment. The solution might take the form of universal health care, it might be not-so-universal private health care, it might be some hybrid. But don't gloss over what the problem is because you'll lose common ground with people and end up arguing over the solution and not agreeing that there's a problem.
- delfinom 7y ago
  >raising labor costs 50% is a nonstarter. This is where one can say sure. But in reality with the lack of public healthcare, it's just hiding an large cost on society when the person ends up running up medical bills and is unable to pay.
igurari 7y ago
For those interested in understanding the underlying case law that AB5 codifies (a decision called Dynamex Operations West, Inc. v. Superior Court), my company, Judicata, published a visual (and tech-enabled) explanation of the decision when it was first published: https://blog.judicata.com/understanding-dynamex-the-california-supreme-courts-response-to-silicon-valley-cdf281d75d2e https://blog.judicata.com/understanding-dynamex-the-californ... Whether or not Uber drivers are employees or contractors under Dynamex and the ABC test is an open question, but the Uber explanation of the bill's impact is more or less correct.
- choppaface 7y ago
  One of the tests is: “that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact” Since Uber rates drivers, does background checks, sets the routes, leases cars, etc., how does Uber plan to avoid this check? Do ratings sort drivers, or is Uber effectively creating a credential that governs the driver? What does the distribution of driver activity look like? It’s hard to believe an all-or-nothing determination will hold. Surely some fraction of most-active drivers will end up getting called employees. It’s one thing to explain the law (and case law) and yet another to provide an explanation with evidence. The latter is what we need (especially as voters), yet the former is what lawyers like to peddle because it makes them money. Uber’s post is almost 100% legalese. CEO Dara had an opportunity to make a grounded statement here, but didn’t.
Camillo 7y ago
I would be interested in hearing a principled defense of the exception that was granted to other industries. Would anyone care to try?
- henryfjordan 7y ago
  Some of the exceptions were for professions like Lawyers, Accountants, and Professional Engineers. There are already well established protocols for interacting with these people, so let's not complicate things with AB-5. I'm sure some of the exemptions are not so cool though.
  - pishpash 7y ago
    What have established protocols got to do with anything? The question at hand is, is Dynamex a good, widely applicable test or not? Yes or no? If it is, then use it. If it isn't, something is severely broken, which you plainly see with so many exemptions, and it should not be used.
DeusExMachina 7y ago
> Our current offer represents a new progressive framework that includes: > Establishing — for the first time ever — a guaranteed minimum earnings standard > So as you can see, we are not arguing for the status quo. Well, ok. The real question though is why. Only companies with massive investments can afford to burn cash to keep the price to the final user as low as Uber's. Such regulation would reduce the number of competitors appearing on the market.
lacker 7y ago
I think the law will be bad for the people it affects, so this is good news for Uber drivers. Uber isn't operating at a profit, so they don't have extra margin to pass on in the form of extra driver pay or employee benefits. If Uber has to shrink their business in California or exit entirely, that won't be good for drivers either. It reminds me of before my software engineering career, when I was working at The Gap. The job wasn't great, but a lot of people really needed more hours. Unfortunately, there was a rule that nobody could work more than 29 hours a week. Everyone hated it. Employees hated it the most because if they needed extra money they couldn't take an extra shift. The managers hated it too because it was just more rules for them to deal with. Apparently, this rule existed because there was a law saying that past 30 hours a week, employees had to get some extra benefits. Gap corporate just changed the job to avoid that law. As a result, that job got worse, and nobody got more benefits. Just unintended consequences.
- SnarkAsh 7y ago
  They're getting off lightly. Uber demonstrates why we need a corporate death penalty. Serial lawbreaker Travis Kalanick should be in prison for the rest of his life, most of his criminal conspirators on the board should be there with him, and the company should be dissolved and forgotten. Recall that among their hundreds of other crimes, there are actual conspiracies to conceal criminal activities from law enforcement. This is not "breaking things and moving quick", this is a multibilliondollar international conspiracy that has escaped justice for far too long. Off with his head.
  - crakenzak 7y ago
    what did kalanick do that's worthy of life in prison? genuinely curious
    - dlp211 7y ago
      Broke the law in nearly every major US City for one. Does he deserve prison for this, that is a complicated question, but I'd have had no problem with destroying Uber as an entity.
pslam 7y ago
Uber's defense fails The Duck Test. They are describing a job, people doing a job, people paying for a job, and people taking a cut of the profits. They just don't use those words. I suspect if/when this gets to a higher court, the whole thing will come crashing down, because to allow Uber's weaselly redefinition of common terms, would be to allow other classes of employment to similarly become unprotected.
- kstrauser 7y ago
  I totally agree. I'm neutral on Uber, but their advertising is that you book an Uber ride. You don't use Uber to find a driver you like and then hire that driver from now on. Basically, the drivers are treated as the fungible part of providing service to the passengers. Contrast with Airbnb where owners can treat it like an advertising network to market their rental room, and it's totally reasonable to expect that a good experience will lead to more business for that homeowner specifically, not just the app in general.
  - velosol 7y ago
    I would think in addition we'd have to see the ability to book with a specific driver for a future ride for 'lead generation' to hold up.
  - carlob 7y ago
    As a matter of fact I know of one person who met a driver through Uber and decided to hire them daily to get to their job without going through Uber ever again. I think that this is extremely rare and that everything in Uber is set up to prevent something like this. Same thing goes for Airbnb and the obfuscation of emails.
    - staticautomatic 7y ago
      It used to be more common. Back when it was all town cars, and up through the early days of UberX, I frequently got business cards and phone numbers from my drivers.
    - 7y ago
JMTQp8lwXL 7y ago
Uber's former mission statement: > "Transportation as reliable as running water, everywhere for everyone" Sounds like transportation is their core business to me.
- sneak 7y ago
  A mission statement is not a product or service offering. Google doesn’t sell “the world’s information”, for example.
  - ablerman 7y ago
    Sure it does, it just doesn't sell it to you. You are not the purchaser of the information, you are providing the information that's being sold.
    - kinkrtyavimoodh 7y ago
      Google does not sell information to anyone. Please don't spread outright falsehoods.
  - dragonwriter 7y ago
    > Google doesn’t sell “the world’s information” No, it exchanges it for attention, which it sells, but an exchange of the world's information for other valuable commodities is key to it's business model.
627467 7y ago
this is probably going to be labeled as a naive view, but to me it's clear that no one cares about the spirit of the sharing economy (not even corps like uber or airbnb): no one should be dedicating 100% of their "work time" to ubering... nor buying up properties to rent it out as airbnb permanently... I thought it was about unused/wasted time/resources that could be shared (for some profit). Corps likely airbnb and uber should probably go back to building their platforms to promote occasional resource assignment rather than permanent.
- helloayo 7y ago
  That's because these companies have purposefully misrepresented themselves as part of the sharing economy despite the fact that their core business models are nothing like Freecycle or Couchsurfer, or even like casual carpooling.
- paulcole 7y ago
  > I thought it was about unused/wasted time/resources that could be shared (for some profit). This is the fiction sold by AirBnB, Uber, etc. You just can’t grow forever (as these companies require) by “sharing.” Do you think investors would continue to happily light billions on fire if Uber didn’t have huge ambitions? This is very similar to Etsy. Founded as a handmade marketplace until they realized not enough people make stuff by hand to keep growing. Now it’s just a mass-produced shit shop just like every other place.
dawhizkid 7y ago
I wonder what'd the courts would say if Uber decided to charge a nominal fee (say $1/year) for the driver app in the App Store? That would make it more obvious that it's a piece of software that is being licensed by drivers for lead generation.
40acres 7y ago
Why aren't other industries up in arms about this? I work for Intel and we have a ton of contractors, so does Google. Under 'A' of the 'ABC' test, it seems to me that most contractors for these companies would now be employees.
- glitcher 7y ago
  I'm not familiar with the details of the bill, but in this letter from the uber CLO it mentions: > due to eleventh-hour amendments to the bill, many industries are now exempt from the new ABC test that AB5 will codify into state law Anyone have information on the exemptions added to the bill, specifically if it exempts most of the big tech companies?
- ocdtrekkie 7y ago
  Aren't most contractors for major tech companies employees of another company though? This specifically refers to independent contractors.
- pkaye 7y ago
  The bill specifically excepts a bunch of professions (doctors, lawyers, engineers...) Secondly the contractors for most of these Intel/Google, etc are employed by someone else.
xxxpupugo 7y ago
As regards to the hour claim, if the law goes into effects, what would happen to those drivers who can't drive 40 hours per week?
- s1artibartfast 7y ago
  If the court rules that Uber drivers are employees per the AB5, my guess is there will be no more drivers with 40 hours a week. Ride sharing companies will just do what fast food has done and cap working hours at 29 per week to avoid healthcare benefits. This will also mean that neither uber or lyft can capture the market, because they will need each-other to supplement hours to the drivers.
lr 7y ago
Honestly, would the, "three important points" have even been a remote consideration of Uber, Lyft, etc., if this legislation was was not even proposed (let alone passed) in the first place? This sounds a lot like someone apologizing and saying they are deeply sorry, only after they are caught doing something wrong.
lr 7y ago
They continue to use the term "rideshare", which just boggles my mind. So, I guess "share" in this case means that Uber is "sharing" a "cut" of the proceeds with the driver. Maybe they should call it, "fareshare" (but then that would be a play on words that turns out to be an oxymoron).
- duskwuff 7y ago
  That's an interesting point, actually. Uber and Lyft do both support shared rides (which they call Uber Pool and Lyft Line, respectively), but my understanding is that the vast majority of their rides are not actually "shared".
gerardnll 7y ago
We don’t need your company precarizing workers. I hope your government puts an end to all these startups getting rich (or trying) by having a business model based on paying sh*t to its workers. ‘In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business...’ Ooh I see, these (2/3) are documents from an ARBITRATION procedure. Another stupid tactics you make your WORKERS sign. I won’t even waste my time reading all that crappy pr post.
deleted 7y ago
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basch 7y ago
I think there is more truth to their argument than people are giving them credit for. It seems like an in bad faith perspective to not give their claim some credence. It makes YOUR argument stronger to first make the best version of Ubers argument before rebutting it. Does it make me a Microsoft employee if I use Outlook to conduct business? Does it make me an Ebay employee if I sell things through ebay? Until Uber eliminates the ability for drivers to drive Uber and Lyft simultaneously, and bounce between the services at will, I DO view it as drivers paying for 1) a dispatch and messaging service 2) payment processing 3) insurance 4) a resume host 5) a customer funnel. Thats more than just a technology or software company, Uber sells transportation services to drivers. The fact alone that they can have two messaging/dispatch apps open at once, on two phones, makes me question, which company do you think the driver works for? Both simultaneously? Just the one that the passenger is from? Is having both Uber and Lyft open looking for passengers any different than listing something I have for sale on Etsy, Ebay and Amazon, and pulling the listing once it sells out?
- dzader 7y ago
  > Does it make me a Microsoft employee if I use Outlook to conduct business? If Microsoft is the one paying you, and dictating how you use Outlook, what you can say, who you talk to you - then yes, it does.
  - darkwizard42 7y ago
    Except Uber doesn't dictate how you use the app, they set parameters on how you can use it. They also don't tell you that you HAVE to take all rides, but if you do not meet a quality bar or are abusing their product then they can kick you off it / revoke your access... The only difference here is the payment. And to that end, if Outlook supported the ability to transfer money then it still wouldn't make Microsoft your employer...
    - dzader 7y ago
      > Except Uber doesn't dictate how you use the app, they set parameters on how you can use it. a distinction without a difference. if you don't follow their parameters they kick you off, which feels a lot like dictating how its used to me
matz1 7y ago
The government seems to be solving the wrong issue. Shouldn't the government instead fix the Whatever it is that makes being classified as contractor suck in the first place?
dragonwriter 7y ago
I like how they both claim that the law does not actually apply to them, and that they are exploring working with Lyft and others on a statewide ballot measure in response to the law (clearly, implicitly, a referendum to reverse it.) They are careful to avoid making the self-contradiction explicit, but the implication is clear.
FfejL 7y ago
Uber: AB5 doesn't affect us. Also Uber: We are prepared to spend $60M to stop it.
jher17 7y ago
Uber’s disrespect for the law is astonishing. I hope California cracks down on them hard for not complying.
supernova87a 7y ago
What I have a hard time understanding is the 3rd of the 3 tests that determine if a person can be classified as independent contractor. [1] I understand A & B, but as for C, why does someone's normal job have to be in that same line of work to be considered an independent contractor? What does whether a person is a driver professionally, or a teacher making money on the side, determine whether they're performing work as a contractor? Maybe someone more expert can explain. ------- [1] ABC Test that all 3 conditions must be satisfied for worker to be considered a contractor: "... (a) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; and (b) that the worker performs work that is outside the usual course of the hiring entity’s business; and (c) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”
djsumdog 7y ago
Wow, just .. wow. I thought it was going to be Uber's plan of coming under compliance of AB5 and sugar coating the entire thing to made them sound like some honorable people. But no, they're still scum. You get half way through and you realize it's just business as usual. We're going to ignore, fight and not give a shit about the law. The build up to this legislation was that it was specifically around companies like Lyft, Uber, Dolly, etc. To argue against this just shows how desperate the company is to not give up anything. Personally I stopped using Uber in 2016 and never looked back. I'd rather pay more for a Lyft. If both of them disappear tomorrow, there will always be Taxis; and maybe cities will finally start building out real mass transit like America has needed for decades, instead of hanging on to the brain-dead dream of a self-driving cab.
- Axsuul 7y ago
  Honestly, how much did you use taxis before Uber/Lyft came around?
dclusin 7y ago
Seems like it will bring uber & lyft's cost basis in line with cab drivers, making the latter group competitive again.
RcouF1uZ4gsC 7y ago
It seems Wall Street is not all that worried about AB5. https://finance.yahoo.com/quote/UBER/ https://finance.yahoo.com/quote/UBER/ Looking at the 5 day stock trends, it seems up compared to last week.
- duskwuff 7y ago
  AB5 didn't appear out of nowhere, and its passage didn't come as a surprise. The potential impact of AB5 on Uber's business would have been priced into the stock as the bill progressed through the legislature.
- coolspot 7y ago
  Newsom hints a deal - https://www.marketwatch.com/story/uber-lyft-stocks-surge-after-wsj-report-california-governor-wants-to-keep-negotiating-regardless-of-ab-5-outcome-2019-09-11 https://www.marketwatch.com/story/uber-lyft-stocks-surge-aft...
shkkmo 7y ago
The reporting around this law is absurd. Despite how it is covered, the law notably fails to do ANYTHING to help gig employees as it just codifies existing case law. What this law does do is carve out exceptions in that case law so that gig employees have LESS protection. This law could have been paired with other real protections for gig employees but that did not happen. No minimum wage guarantee extensions, no rights to organize, no improvements in access to the safety net...etc How do people let our politicians get away with claiming they are protecting people with a bill that does nothing but erode those protections?
- shkkmo 7y ago
  I guess it might be considered a protection in that it won out against bills like AB71 that would have reversed the Dynamex precedent.
Legogris 7y ago
I can read between the lines an assumption that Uber will do the bare minimum required by law while exercising all restrictions on drivers they are legally allowed to. How can they be for self-organization of drivers (as states in the release) while battling in other state courts for prohibiting unions? If they want to allow drivers to also drive for other platforms (again, from the text), just don’t enforce such clauses in employment contracts. They’re talking about all the changes they supposedly want to see while the only thing stopping it from happening is Uber deciding not to. As if being an employee must mean a rigid schedule and inflexible working hours.
tsycho 7y ago
IIUC, AB5 might end up making Uber a monopoly in California (and US if other states follow suit) via regulatory capture. Currently, most drivers seem to drive for both Uber and Lyft (based on their cars having stickers for both). But if classified as employees, and being guaranteed a minimum wage, then Uber/Lyft might require them to be exclusively available. As a result, the drivers will have to choose either Uber and Lyft and since Uber has more market share, they will likely choose Uber and Lyft will be squeezed out. What am I missing/misunderstanding above?
- ma2rten 7y ago
  Lyft can simply offer more money and accept lower margins.
  - eloff 7y ago
    So can Uber, that's just a race to the bottom.
    - ma2rten 7y ago
      Assuming that Uber has a competitive advantage because of their brand, and both Uber and Lyft are rational actors who want to maximize their profits, they will end up in a state where Uber has higher margins than Lyft.
      - cryptoz 7y ago
        > Assuming that Uber has a competitive advantage because of their brand Woah - I see Lyft as the one with the competitive advantage due to Uber's brand. Uber is toxic while Lyft is seen as friendly.
        deleted 7y ago
        [deleted]
- maxerickson 7y ago
jasonhansel 7y ago
Summary: "This bill does absolutely nothing to affect us. But please don't pass it, or at least let us compromise, since it would affect us so much." Seems a little bit contradictory?
jasonhansel 7y ago
> We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now. Translation: "We want to help our workers by fighting against their own attempts to assert their legal rights. We will do so in special courts where we hire and pay the judges. This will be perfectly fair."
paggle 7y ago
It’s nuts for Uber to talk about their “offer.” They don’t make the offer, the voters do.
xivzgrev 7y ago
That is a clever argument that they are in business of lead generation. But if that was true then the consumer wouldn’t know Uber, they would know x ride share service. The problem with Uber is they also control the end user experience and pricing, so it’s a real stretch to argue they are not in the business of providing rides to customers. Honestly I think their argument could be bolstered a lot if they made a simple change. Imagine you call an Uber, then your app tells you billy wants your job. You can see he is 4.5 star rated with 1000 rides, he is est 3 min away, and he wants $15. Do you accept? If so Uber connects you. If not Uber goes back to finding someone else. With that change Uber removes itself from being in the business of rideshare, and now is in business of connecting drivers with riders (as they’ve claimed all along). They need to let drivers dictate prices and ask users to choose.
- Lucadg 7y ago
  It could work. Airbnb does that and still kind of manages to control prices by favouring listings which conform to Pricing Tips in the search results.
ausbah 7y ago
Uber always positions itself to be whatever is most advantageous for it given the current situation. Just a "technology-based platform", no, they are a just a modern taxi company that uses a tech platform. I think for many "big tech" companies there needs to be a paradigm shift in how society views them, not as pure tech companies that produce technology solely for technology's sake, but like Uber - companies that use tech as a means to an end of a another business (in most cases). Facebook as a news company, Amazon as a retailer, Airbnb as a short term rental unit provider, etc. (these aren't all necessarily accurate descriptions).

Update on AB5

181 points by dawhizkid 7y ago

gzu 7y ago

Perfect way to eliminate the competition via regulatory lock out

landcoctos 7y ago
It's not really sharing anyway.
- tracker1 7y ago
  Yeah, the term really got me when I first heard about Uber... my thoughts was it was more like a near-demand carpool service to pull together extra passengers for where you were going anyway (for a small fee). Reality it's more like a Taxi service with private vehicles. Still wouldn't mind seeing another ride share app with carpooling as the focus.
  - DaiPlusPlus 7y ago
    Waze Carpool
  - jfk13 7y ago
    Yes, calling it "ride-sharing" has always been disingenuous at best. I suspect the idea was to make it sound more small-scale and personal, less formal and commercial, so that people wouldn't feel it needs regulation or oversight as much as a commercial transportation service.
olliej 7y ago
No, AB5 simply requires that they compete fairly with all other transit systems that recognize their employees as employees. The reality is that all these “gig economy” companies are only able to compete by unfairly claiming that their employees are somehow not their employees.
- favorited 7y ago
  They're not even able to compete. Neither Uber nor Lyft are profitable.

SauciestGNU 7y ago

I think the proper classification of drivers is likely an existential threat to Uber, and they are responding as such. I find it highly unlikely that a court would find transportation to be outside the scope of Uber's business. Although you have to almost admire the sheer brazenness in their admission that they will not adhere to the law.

buboard 7y ago
> I find it highly unlikely that a court would find transportation to be outside the scope of Uber's business TBH considering the language of the bill, it s very plausible to say that driving people around is not "their usual course". The same way that google is not an advertiser, and airbnb is not a hotel chain.
- reaperducer 7y ago
  That's like saying Yellow Cab is not a taxi company because the drivers are independent contractors who lease their cars from the company, and it doesn't actually drive anyone around. And yes, Uber does lease cars to its drivers.
  - buboard 7y ago
    Or that e-bay is not a fashion store. (I think u re referring to a probably tiny part of uber that leases cars to drivers)
    - lonelappde 7y ago
      Ebay matches sellers (who choose what to sell) with buyers (who choose what to buy). Uber tells drivers where to go, and when, if the driver agrees to do the work. Uber regulates the kind of cars acceptable, and regulates who does the work. Your Uber driver can't subcontract the drive to another driver.
      - buboard 7y ago

eridius 7y ago

> drivers’ work is outside the usual course of Uber’s business What... how... I don't even know where to begin with this.

gotoeleven 7y ago
Cool I look forward to Uber drivers showing up with a rickshaw or giving piggy back rides.
- scarejunba 7y ago
  Uber in India offers autorickshaws. And I've got a vague memory of seeing rickshaws/pedicabs in Seattle (but this could be a false memory).
kd22 7y ago
> which is serving as a technology platform for several different types of digital marketplaces. Pretty clever wording by Uber here, I'd say. Although does not make sense to me.
cbdumas 7y ago
Uber's position here seems to be that they are a technology company that connects drivers with things that need to be driven from A to B (people, restaurant orders, etc.). Not sure I buy that but it sounds like they're willing to ask the courts to decide on that if this goes into law.
clairity 7y ago
i'm guessing they would claim they are an ridsharing platform, with the purpose of allowing drivers and riders to find each other and facilitate the transaction, rather than a taxi service. the problem with that argument is that they have a lot of control of the driver side of the platform, directly through pricing and indirectly through ratings and access.
mason55 7y ago
Uber's argument is that the core of their business is the technology which allows them to act as a two-sided marketplace and logistics company, connecting and routing physical goods and people. Connecting riders and drivers is one thing which takes advantage of their technology but their are others. Connecting riders and scooters, connecting couriers to restaurants and hungry people, connecting people who want to go to the Hamptons with helicopters, etc. Uber will argue that it has nothing to do with the driving part and the driving is just one of the many uses of their technology. The difficult part of that argument will be that they have so many rules and regulations that they place on drivers and rides that's it's hard to argue they're just providing a hands-off matching & logistics service.

aznpwnzor 7y ago

> Our proposal avoids the potential harm of forcing drivers to be employees, whether or not they want to—and the vast majority tell us they don’t want to be. > Contrary to some of the rhetoric we’ve heard, AB5 does not automatically reclassify any rideshare drivers from independent contractors to employees. This may seem like an immediate contradiction, but I guess they've reframed it so their proposal is actually in line with AB5? great pr-speak > But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces. Also seems like they will continue to thwart where they can (which I can't blame them for really) but seems aggressive to note. This reads more like a shareholder update, which makes sense.

smacktoward 7y ago
I read it differently: > Governor Newsom has already committed to sign AB5, which would go into effect in January 2020. Because we continue to believe drivers are properly classified as independent... drivers will not be automatically reclassified as employees, even after January of next year... > Uber and Lyft together have already transferred $60 million into a campaign committee account, and we are open to investing more to put us in the strongest position possible to run a winning campaign... We are confident that California voters and the millions of riders and drivers who use Uber will step up to protect these important work opportunities. Translation: "We're betting that we can get a ballot initiative passed legalizing what we do faster than the State of California can bust us for violating AB5."
- shkkmo 7y ago
  You may have missed this part: > Importantly, our ballot measure will not ask voters to exempt us from AB5, even though nearly every other industry in California that works with independent contractors received an exemption from the ABC test through special amendments I mentioned earlier. Instead, we will ask voters to support the pro-driver policies we have advocated for: giving drivers access to benefits and an earnings floor and retaining the flexible access to on-demand work they enjoy today. It doesn't sound like the proposal is intended avoid compliance with AB5 but to create conditions where new bills that make the ABC test harder pass will have less support.

shawndellysse 7y ago

Are they really trying to claim that Uber is not a transportation company but instead "a technology platform for several different types of digital marketplaces"? I guess we do live in a post-truth era.

sharkmerry 7y ago
This is how they've always been. Uber's "customers" are the drivers. They are buying access to the platform, thats how they categorize driver bonuses and incentives to "marketing" expenses apparently
joeyrideout 7y ago
The post was written by their CLO. They are not trying to claim as such, they are succeeding. I am not a lawyer, but I don't think this legal interpretation of the company is a lie. It seems like the classification is constantly under scrutiny. A legal falsehood like you claim it is would've fallen apart by now.
- FireBeyond 7y ago
  Lawyers argue all the time. It's not a legal truth because their chief attorney says so. They are entitled to claim (within reason) as much as anyone else is. And, of course, they will claim the most favorable definition. In other situations, notably when they are arguing against entrenched transit/transport interests, they "become" a transport company. It's a question of which hat fits the day.
  - dymk 7y ago
    FTA: > But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces. Previous rulings have found his statement to be accurate. So you don't have to take his word for it, you can take a judge's.

npmaile 7y ago

As someone who drives Uber on occasion when I'm a little bored and looking for something to do, I think it's great that I'm not an Uber employee. I can do 10 hours or I can do 0 hours based on nothing but my own whim. I don't have a problem with people organizing to get a better deal for themselves, but I like the way it works now. I've worked for companies that misclassify workers, and Uber isn't it as far as I understand. I may be convinced otherwise, but I don't see it.

shawndellysse 7y ago
Yeah, in your case it would make perfect sense to consider you an independent contractor instead of an employee. I guess the issue arises when we got people working full-time hours but still being classified as an independent contractor.
- koolba 7y ago
  > I guess the issue arises when we got people working full-time hours but still being classified as an independent contractor. Why though? There's plenty of contractors in other industries that work exclusively for a single client, often for 40+ hours per week. In technology in particular it's more common than having multiple concurrent clients (per person, not per consultancy).
  - sharkmerry 7y ago
    And some of those probably should be classified as employees.
  - kwhitefoot 7y ago
    In some countries there are limits on how long a company can employ a contractor. I can't find it at the moment but I think that here (Norway) it is something like four years. After that the contractor is supposed to be either let go or offered permanent employment. Perhaps someone more familiar with the rules could chip in, I've only been contracting for a short period. I think the situation is somewhat similar in the US except that instead of a legal maximum the contract must specify an explicit end date after which there must be a break in employment.

ProAm 7y ago

>Bringing drivers access to robust portable benefits like sick leave and injury protection; What? Those are embarassing offers. > Our proposal avoids the potential harm of forcing drivers to be employees, whether or not they want to—and the vast majority tell us they don’t want to be I would love to see the data behind the 'vast majority'

djrogers 7y ago
I'd bet the huge percentage of drivers that simultaneously do Lyft and Uber would not like being an employee of one or the other, as their employer would prevent that.

kaesar14 7y ago

What's the defense of a business model that loses bucketloads of money despite not treating their drivers with the dignity they deserve? Both Uber and Lyft are not going to be killed by regulation, they're going to be killed for being shitty businesses.

ajkjk 7y ago

I feel like it's pretty clear that gig economy jobs don't neatly fit in either of the existing categories of workers: they're not quite employees (you can clearly work or not work whenever you want) or contractors (you clearly have very little negotiating power or information in choosing your work or guaranteeing your wages). Attempts to munge them into one of those categories are just doomed; a new category is needed. Failing that, if they are to be counted as individual contractors they should be able to negotiate like those: without one-sided deceptive deals.

mymythisisthis 7y ago
The simple solution is to ban the use of contractor workers in the taxi industry. It's too precarious of a job, and one that many people rely on for a sole source of income. This would take the pressure of other industries that use independent contractors, such as tech. Right now a couple of bad actors like Uber, are ruining the independent contractor category of work. Forcing states to put more laws in place.
FartyMcFarter 7y ago
I think you might be on to something here.
stefan_ 7y ago
You are just repeating the Uber party line that somehow "employment" is antithetical to flexible work hours. It's frightening to see people just lap that up because it happens to coincide with their day job. But nothing in labor law prevents a company like Uber from "disrupting work" and offering that flexibility to employees.
- hn_throwaway_99 7y ago
  The current employee model as codified in our tax and legal system definitely has lots of assumptions around only having a single W2 employer. Certaintly not impossible, but definitely not a good fit. I agree with the OP, and I am not just "repeating the Uber party line". I believe 3 categories of work are needed: 1. Employee (e.g. current W2), where you have a single full-time employer who is primarily responsible for your wages and benefits. 2. Independent Contractor, where the IC has full control over their rates, where they do the work, their tools, etc. 3. "Flexible" employee, where the employee has full control over their hours and availability, and to work for multiple employers, but doesn't have control over rates or how the work is done.

kwindla 7y ago

Could someone knowledgeable about employment law explain what will change for Uber/Lyft drivers if the companies are forced to reclassify them as employees? The post talks about "potential harm" and says that how many hours drivers have to work and whether they can work for competitors at the same time "would all change." Is that right?

the-pigeon 7y ago
This is just a PR post by Uber. Don't take any of it as fact. No one knows the true impact of this. Companies will find lots of interesting ways to follow the letter of the law but not the spirit of it. As they always do. If you really want speculation on it then find someone who's actually a lawyer and not directly affected by it (so they aren't biased). Which I haven't seen yet. (Detailed writeup on why speculation on things like this is almost always wrong http://larvatus.com/michael-crichton-why-speculate/ http://larvatus.com/michael-crichton-why-speculate/ )
HALtheWise 7y ago
There are some other excellent explanations in this thread, but it boils down to the idea that if drivers are employees, the company starts to care about how much they work. For example, if they work more than 40 hours in a single week, they need overtime pay. That means that a driver today who decides to work 80 hours one week and take a vacation the next would (if classified as an employee) be costing Uber a lot of money, so they will probably need to ban that behavior to stay competitive. From an employees perspective, this means they have less flexibility in their work schedule.

Animats 7y ago

Because we continue to believe drivers are properly classified as independent, and because we’ll continue to be responsive to what the vast majority of drivers tell us they want most—flexibility—drivers will not be automatically reclassified as employees, even after January of next year. We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now. But we will also continue to advocate for the independence and choice that drivers tell us again and again in surveys, polls, focus groups, and personal conversations that they value most. Uber management is not going to get the message until top management goes to jail for contempt of court.

ilaksh 7y ago
There is nothing about providing benefits to people who meet the criteria for employment that prevents Uber from allowing drivers choice. They will not be able to keep as many drivers or allow infinite drivers to sign up, and they will not be able to pay benefits to people who only work a very small amount per week (I assume this is in the law). But beyond that, there is absolutely no reason they cannot or should not continue to let drivers sign in and out when they want.
- SomewhatLikely 7y ago
  What should they do to drivers who don't meet their minimum hours needed to pay for the benefits in a given week? Fire them? Immediately? Should it be a warning? How many warnings do you get? Meanwhile is Uber/Lyft still on the hook for all the benefits? How can they avoid these flaky drivers? Better screening upfront such as an interview? How will drivers feel when they get a notification they have to drive 8 hours today or they'll get a warning because it's the end of the week and they are short. What if it's a slow day and Uber doesn't need more drivers today? It would make more sense to spread drivers hours out of over the week. The relationship starts to sound drastically different for both parties. Especially for the 45% of drivers working less than 10 hours currently who will have to find other side jobs or go without.
  - ilaksh 7y ago

dawhizkid 7y ago

Uber's defense is that it is licensing lead generation software to drivers, and that it just takes a commission from each trip as payment for use of its software. In many ways, I can see it. I think the issue lies in a lot of Uber's current policies around drivers e.g. very strict rules around cancellations. If Uber was just a lead generation provider then it shouldn't care or intervene if a driver decides they don't want a job, but depending on the scenario you can be punished if you don't want to take a job. Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.

SilasX 7y ago
Yeah, even being charitable, I don't see how Uber's model[1] is remotely reasonable. They pretty clearly take direct control over the relationship. The rider deals with Uber, and the driver deals with Uber. Nothing at all like the ebay/fiverr "hey find someone to link up with" model. [1] Edit: To clarify, I mean "the model they're promoting of what their core business is", i.e. the claim that "they're a lead-gen platform they license out"; I'm not saying they're business model is financially non-viable.
- 8ytecoder 7y ago
  In fact, I'd argue that's the primary reason why Uber/Lyft got popular in the first place. At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. If Uber can't enforce something similar, why should I use Uber?
  - deleted 7y ago
    [deleted]
  - seanmcdirmid 7y ago
    > At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. Most of us don’t have such great experiences with taxis as you do. “Legally bound” still leaves a lot of wiggle room for really crappy experiences.

bww 7y ago

tl;dr "Bill clearly aimed specifically at us doesn't apply to us."

justapassenger 7y ago

Would love to see source data that Uber is referencing (I know it's not possible, as it's highly guarded secret) - I suspect they cherry pick it a lot. "In the US, 92% of drivers drive less than 40 hours per week, and 45% of drivers drive less than 10 hours per week. [...] We will continue to defend the innovation that makes that kind of choice, flexibility, and independence a reality for over 200,000 drivers in California". 1. Does this distribution looks in California, not across whole US? Why talk about two different cases, unless you cherry pick? 2. How does this % look like, when we look at drivers that work for more than few months?

gibolt 7y ago
It doesn't clearly state if those durations are during an active ride, also including time to pickup, or including time active waiting for a pickup task. This subtlety could drastically change the data interpretation.
skybrian 7y ago
This is percentage of drivers, not percentage of hours worked. It would make sense that there are lot of drivers that don't drive very often. They might even have stopped driving altogether, but didn't cancel their account. It's like a website talking about total users that ever signed up, instead of 7-day active users.
dtrailin 7y ago
A very clever thing they're doing is conflating being an employee with not having flexible hours, as if part time jobs don't exist. Fast food chains don't hire independent contractors and yet lots of people have flexible shifts.
- darkwizard42 7y ago
  Not exactly...consider the following problem: Fast food chain is busy from 12 AM - 2 AM, 5 PM - 7 PM. These shifts may be desirable or undesirable because of the time they occur. To be able to get the "easy" shifts (slow ones) at 10 PM or something, they can make it so that you HAVE to take a part of the other shifts... If you can't, you don't meet their eligibility and you lose your job. If you are an employee in a shift based business, you definitely give up some rights to having completely flexible work hours.

deleted 7y ago

[deleted]

dmitrygr 7y ago

So basically their tactic is to eke out a few more years out of their business model as their fight with California over the classification slowly snakes its way through the courts to the California supreme court, and hope that in the meantime they can come up with a better business model? It is actually not a terribly bad idea. They have the money to pay for the slow court battle, and it is strictly cheaper than complying.

ilaksh 7y ago
They already lost in the California Supreme Court.
- dmitrygr 7y ago
  Dynamex lost (Dynamex Operations West, Inc. v. Superior Court), which caused AB5 to be written. Uber did not yet lose (or even get sued) over this yet IIRC

tyxodiwktis 7y ago

When the ACA passed, mandating that large employers offer health insurance to all full time employees, there was a massive push by large employers in retail and food service to cap people's hours and make sure very few qualified as full time. This was because health insurance costs employers about $10k per employee per year, and if you are paying someone $10/hr ($20k/yr at 40hrs a week), raising labor costs 50% is a nonstarter. An outcome like that may be possible here as an unintended consequence, with Uber and Lyft capping most drivers at 20hrs a week, and full time drivers splitting their time between the two (20hrs for each).

Animats 7y ago
Yes, that needs to prorate based on hours worked, rather than being a threshold.
avocado4 7y ago
Real solution is universal healthcare.
- dehrmann 7y ago
  The problem is that health care is attached to employment. The solution might take the form of universal health care, it might be not-so-universal private health care, it might be some hybrid. But don't gloss over what the problem is because you'll lose common ground with people and end up arguing over the solution and not agreeing that there's a problem.
delfinom 7y ago
>raising labor costs 50% is a nonstarter. This is where one can say sure. But in reality with the lack of public healthcare, it's just hiding an large cost on society when the person ends up running up medical bills and is unable to pay.

igurari 7y ago

For those interested in understanding the underlying case law that AB5 codifies (a decision called Dynamex Operations West, Inc. v. Superior Court), my company, Judicata, published a visual (and tech-enabled) explanation of the decision when it was first published: https://blog.judicata.com/understanding-dynamex-the-california-supreme-courts-response-to-silicon-valley-cdf281d75d2e https://blog.judicata.com/understanding-dynamex-the-californ... Whether or not Uber drivers are employees or contractors under Dynamex and the ABC test is an open question, but the Uber explanation of the bill's impact is more or less correct.

choppaface 7y ago
One of the tests is: “that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact” Since Uber rates drivers, does background checks, sets the routes, leases cars, etc., how does Uber plan to avoid this check? Do ratings sort drivers, or is Uber effectively creating a credential that governs the driver? What does the distribution of driver activity look like? It’s hard to believe an all-or-nothing determination will hold. Surely some fraction of most-active drivers will end up getting called employees. It’s one thing to explain the law (and case law) and yet another to provide an explanation with evidence. The latter is what we need (especially as voters), yet the former is what lawyers like to peddle because it makes them money. Uber’s post is almost 100% legalese. CEO Dara had an opportunity to make a grounded statement here, but didn’t.

Camillo 7y ago

I would be interested in hearing a principled defense of the exception that was granted to other industries. Would anyone care to try?

henryfjordan 7y ago
Some of the exceptions were for professions like Lawyers, Accountants, and Professional Engineers. There are already well established protocols for interacting with these people, so let's not complicate things with AB-5. I'm sure some of the exemptions are not so cool though.
- pishpash 7y ago
  What have established protocols got to do with anything? The question at hand is, is Dynamex a good, widely applicable test or not? Yes or no? If it is, then use it. If it isn't, something is severely broken, which you plainly see with so many exemptions, and it should not be used.

DeusExMachina 7y ago

> Our current offer represents a new progressive framework that includes: > Establishing — for the first time ever — a guaranteed minimum earnings standard > So as you can see, we are not arguing for the status quo. Well, ok. The real question though is why. Only companies with massive investments can afford to burn cash to keep the price to the final user as low as Uber's. Such regulation would reduce the number of competitors appearing on the market.

lacker 7y ago

I think the law will be bad for the people it affects, so this is good news for Uber drivers. Uber isn't operating at a profit, so they don't have extra margin to pass on in the form of extra driver pay or employee benefits. If Uber has to shrink their business in California or exit entirely, that won't be good for drivers either. It reminds me of before my software engineering career, when I was working at The Gap. The job wasn't great, but a lot of people really needed more hours. Unfortunately, there was a rule that nobody could work more than 29 hours a week. Everyone hated it. Employees hated it the most because if they needed extra money they couldn't take an extra shift. The managers hated it too because it was just more rules for them to deal with. Apparently, this rule existed because there was a law saying that past 30 hours a week, employees had to get some extra benefits. Gap corporate just changed the job to avoid that law. As a result, that job got worse, and nobody got more benefits. Just unintended consequences.

SnarkAsh 7y ago
They're getting off lightly. Uber demonstrates why we need a corporate death penalty. Serial lawbreaker Travis Kalanick should be in prison for the rest of his life, most of his criminal conspirators on the board should be there with him, and the company should be dissolved and forgotten. Recall that among their hundreds of other crimes, there are actual conspiracies to conceal criminal activities from law enforcement. This is not "breaking things and moving quick", this is a multibilliondollar international conspiracy that has escaped justice for far too long. Off with his head.
- crakenzak 7y ago
  what did kalanick do that's worthy of life in prison? genuinely curious
  - dlp211 7y ago
    Broke the law in nearly every major US City for one. Does he deserve prison for this, that is a complicated question, but I'd have had no problem with destroying Uber as an entity.

pslam 7y ago

Uber's defense fails The Duck Test. They are describing a job, people doing a job, people paying for a job, and people taking a cut of the profits. They just don't use those words. I suspect if/when this gets to a higher court, the whole thing will come crashing down, because to allow Uber's weaselly redefinition of common terms, would be to allow other classes of employment to similarly become unprotected.

kstrauser 7y ago
I totally agree. I'm neutral on Uber, but their advertising is that you book an Uber ride. You don't use Uber to find a driver you like and then hire that driver from now on. Basically, the drivers are treated as the fungible part of providing service to the passengers. Contrast with Airbnb where owners can treat it like an advertising network to market their rental room, and it's totally reasonable to expect that a good experience will lead to more business for that homeowner specifically, not just the app in general.
- velosol 7y ago
  I would think in addition we'd have to see the ability to book with a specific driver for a future ride for 'lead generation' to hold up.
- carlob 7y ago
  As a matter of fact I know of one person who met a driver through Uber and decided to hire them daily to get to their job without going through Uber ever again. I think that this is extremely rare and that everything in Uber is set up to prevent something like this. Same thing goes for Airbnb and the obfuscation of emails.
  - staticautomatic 7y ago
    It used to be more common. Back when it was all town cars, and up through the early days of UberX, I frequently got business cards and phone numbers from my drivers.
  - 7y ago

JMTQp8lwXL 7y ago

Uber's former mission statement: > "Transportation as reliable as running water, everywhere for everyone" Sounds like transportation is their core business to me.

sneak 7y ago
A mission statement is not a product or service offering. Google doesn’t sell “the world’s information”, for example.
- ablerman 7y ago
  Sure it does, it just doesn't sell it to you. You are not the purchaser of the information, you are providing the information that's being sold.
  - kinkrtyavimoodh 7y ago
    Google does not sell information to anyone. Please don't spread outright falsehoods.
- dragonwriter 7y ago
  > Google doesn’t sell “the world’s information” No, it exchanges it for attention, which it sells, but an exchange of the world's information for other valuable commodities is key to it's business model.

627467 7y ago

this is probably going to be labeled as a naive view, but to me it's clear that no one cares about the spirit of the sharing economy (not even corps like uber or airbnb): no one should be dedicating 100% of their "work time" to ubering... nor buying up properties to rent it out as airbnb permanently... I thought it was about unused/wasted time/resources that could be shared (for some profit). Corps likely airbnb and uber should probably go back to building their platforms to promote occasional resource assignment rather than permanent.

helloayo 7y ago
That's because these companies have purposefully misrepresented themselves as part of the sharing economy despite the fact that their core business models are nothing like Freecycle or Couchsurfer, or even like casual carpooling.
paulcole 7y ago
> I thought it was about unused/wasted time/resources that could be shared (for some profit). This is the fiction sold by AirBnB, Uber, etc. You just can’t grow forever (as these companies require) by “sharing.” Do you think investors would continue to happily light billions on fire if Uber didn’t have huge ambitions? This is very similar to Etsy. Founded as a handmade marketplace until they realized not enough people make stuff by hand to keep growing. Now it’s just a mass-produced shit shop just like every other place.

dawhizkid 7y ago

I wonder what'd the courts would say if Uber decided to charge a nominal fee (say $1/year) for the driver app in the App Store? That would make it more obvious that it's a piece of software that is being licensed by drivers for lead generation.

40acres 7y ago

Why aren't other industries up in arms about this? I work for Intel and we have a ton of contractors, so does Google. Under 'A' of the 'ABC' test, it seems to me that most contractors for these companies would now be employees.

glitcher 7y ago
I'm not familiar with the details of the bill, but in this letter from the uber CLO it mentions: > due to eleventh-hour amendments to the bill, many industries are now exempt from the new ABC test that AB5 will codify into state law Anyone have information on the exemptions added to the bill, specifically if it exempts most of the big tech companies?
ocdtrekkie 7y ago
Aren't most contractors for major tech companies employees of another company though? This specifically refers to independent contractors.
pkaye 7y ago
The bill specifically excepts a bunch of professions (doctors, lawyers, engineers...) Secondly the contractors for most of these Intel/Google, etc are employed by someone else.

xxxpupugo 7y ago

As regards to the hour claim, if the law goes into effects, what would happen to those drivers who can't drive 40 hours per week?

s1artibartfast 7y ago
If the court rules that Uber drivers are employees per the AB5, my guess is there will be no more drivers with 40 hours a week. Ride sharing companies will just do what fast food has done and cap working hours at 29 per week to avoid healthcare benefits. This will also mean that neither uber or lyft can capture the market, because they will need each-other to supplement hours to the drivers.

lr 7y ago

Honestly, would the, "three important points" have even been a remote consideration of Uber, Lyft, etc., if this legislation was was not even proposed (let alone passed) in the first place? This sounds a lot like someone apologizing and saying they are deeply sorry, only after they are caught doing something wrong.

lr 7y ago

They continue to use the term "rideshare", which just boggles my mind. So, I guess "share" in this case means that Uber is "sharing" a "cut" of the proceeds with the driver. Maybe they should call it, "fareshare" (but then that would be a play on words that turns out to be an oxymoron).

duskwuff 7y ago
That's an interesting point, actually. Uber and Lyft do both support shared rides (which they call Uber Pool and Lyft Line, respectively), but my understanding is that the vast majority of their rides are not actually "shared".

gerardnll 7y ago

We don’t need your company precarizing workers. I hope your government puts an end to all these startups getting rich (or trying) by having a business model based on paying sh*t to its workers. ‘In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business...’ Ooh I see, these (2/3) are documents from an ARBITRATION procedure. Another stupid tactics you make your WORKERS sign. I won’t even waste my time reading all that crappy pr post.

deleted 7y ago

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basch 7y ago

I think there is more truth to their argument than people are giving them credit for. It seems like an in bad faith perspective to not give their claim some credence. It makes YOUR argument stronger to first make the best version of Ubers argument before rebutting it. Does it make me a Microsoft employee if I use Outlook to conduct business? Does it make me an Ebay employee if I sell things through ebay? Until Uber eliminates the ability for drivers to drive Uber and Lyft simultaneously, and bounce between the services at will, I DO view it as drivers paying for 1) a dispatch and messaging service 2) payment processing 3) insurance 4) a resume host 5) a customer funnel. Thats more than just a technology or software company, Uber sells transportation services to drivers. The fact alone that they can have two messaging/dispatch apps open at once, on two phones, makes me question, which company do you think the driver works for? Both simultaneously? Just the one that the passenger is from? Is having both Uber and Lyft open looking for passengers any different than listing something I have for sale on Etsy, Ebay and Amazon, and pulling the listing once it sells out?

dzader 7y ago
> Does it make me a Microsoft employee if I use Outlook to conduct business? If Microsoft is the one paying you, and dictating how you use Outlook, what you can say, who you talk to you - then yes, it does.
- darkwizard42 7y ago
  Except Uber doesn't dictate how you use the app, they set parameters on how you can use it. They also don't tell you that you HAVE to take all rides, but if you do not meet a quality bar or are abusing their product then they can kick you off it / revoke your access... The only difference here is the payment. And to that end, if Outlook supported the ability to transfer money then it still wouldn't make Microsoft your employer...
  - dzader 7y ago
    > Except Uber doesn't dictate how you use the app, they set parameters on how you can use it. a distinction without a difference. if you don't follow their parameters they kick you off, which feels a lot like dictating how its used to me

matz1 7y ago

The government seems to be solving the wrong issue. Shouldn't the government instead fix the Whatever it is that makes being classified as contractor suck in the first place?

dragonwriter 7y ago

I like how they both claim that the law does not actually apply to them, and that they are exploring working with Lyft and others on a statewide ballot measure in response to the law (clearly, implicitly, a referendum to reverse it.) They are careful to avoid making the self-contradiction explicit, but the implication is clear.

FfejL 7y ago

Uber: AB5 doesn't affect us. Also Uber: We are prepared to spend $60M to stop it.

jher17 7y ago

Uber’s disrespect for the law is astonishing. I hope California cracks down on them hard for not complying.

supernova87a 7y ago

What I have a hard time understanding is the 3rd of the 3 tests that determine if a person can be classified as independent contractor. [1] I understand A & B, but as for C, why does someone's normal job have to be in that same line of work to be considered an independent contractor? What does whether a person is a driver professionally, or a teacher making money on the side, determine whether they're performing work as a contractor? Maybe someone more expert can explain. ------- [1] ABC Test that all 3 conditions must be satisfied for worker to be considered a contractor: "... (a) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; and (b) that the worker performs work that is outside the usual course of the hiring entity’s business; and (c) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”

djsumdog 7y ago

Wow, just .. wow. I thought it was going to be Uber's plan of coming under compliance of AB5 and sugar coating the entire thing to made them sound like some honorable people. But no, they're still scum. You get half way through and you realize it's just business as usual. We're going to ignore, fight and not give a shit about the law. The build up to this legislation was that it was specifically around companies like Lyft, Uber, Dolly, etc. To argue against this just shows how desperate the company is to not give up anything. Personally I stopped using Uber in 2016 and never looked back. I'd rather pay more for a Lyft. If both of them disappear tomorrow, there will always be Taxis; and maybe cities will finally start building out real mass transit like America has needed for decades, instead of hanging on to the brain-dead dream of a self-driving cab.

Axsuul 7y ago
Honestly, how much did you use taxis before Uber/Lyft came around?

dclusin 7y ago

Seems like it will bring uber & lyft's cost basis in line with cab drivers, making the latter group competitive again.

RcouF1uZ4gsC 7y ago

It seems Wall Street is not all that worried about AB5. https://finance.yahoo.com/quote/UBER/ https://finance.yahoo.com/quote/UBER/ Looking at the 5 day stock trends, it seems up compared to last week.

duskwuff 7y ago
AB5 didn't appear out of nowhere, and its passage didn't come as a surprise. The potential impact of AB5 on Uber's business would have been priced into the stock as the bill progressed through the legislature.
coolspot 7y ago
Newsom hints a deal - https://www.marketwatch.com/story/uber-lyft-stocks-surge-after-wsj-report-california-governor-wants-to-keep-negotiating-regardless-of-ab-5-outcome-2019-09-11 https://www.marketwatch.com/story/uber-lyft-stocks-surge-aft...

shkkmo 7y ago

The reporting around this law is absurd. Despite how it is covered, the law notably fails to do ANYTHING to help gig employees as it just codifies existing case law. What this law does do is carve out exceptions in that case law so that gig employees have LESS protection. This law could have been paired with other real protections for gig employees but that did not happen. No minimum wage guarantee extensions, no rights to organize, no improvements in access to the safety net...etc How do people let our politicians get away with claiming they are protecting people with a bill that does nothing but erode those protections?

shkkmo 7y ago
I guess it might be considered a protection in that it won out against bills like AB71 that would have reversed the Dynamex precedent.

Legogris 7y ago

I can read between the lines an assumption that Uber will do the bare minimum required by law while exercising all restrictions on drivers they are legally allowed to. How can they be for self-organization of drivers (as states in the release) while battling in other state courts for prohibiting unions? If they want to allow drivers to also drive for other platforms (again, from the text), just don’t enforce such clauses in employment contracts. They’re talking about all the changes they supposedly want to see while the only thing stopping it from happening is Uber deciding not to. As if being an employee must mean a rigid schedule and inflexible working hours.

tsycho 7y ago

IIUC, AB5 might end up making Uber a monopoly in California (and US if other states follow suit) via regulatory capture. Currently, most drivers seem to drive for both Uber and Lyft (based on their cars having stickers for both). But if classified as employees, and being guaranteed a minimum wage, then Uber/Lyft might require them to be exclusively available. As a result, the drivers will have to choose either Uber and Lyft and since Uber has more market share, they will likely choose Uber and Lyft will be squeezed out. What am I missing/misunderstanding above?

ma2rten 7y ago
Lyft can simply offer more money and accept lower margins.
- eloff 7y ago
  So can Uber, that's just a race to the bottom.
  - ma2rten 7y ago
    Assuming that Uber has a competitive advantage because of their brand, and both Uber and Lyft are rational actors who want to maximize their profits, they will end up in a state where Uber has higher margins than Lyft.
    - cryptoz 7y ago
      > Assuming that Uber has a competitive advantage because of their brand Woah - I see Lyft as the one with the competitive advantage due to Uber's brand. Uber is toxic while Lyft is seen as friendly.
      - deleted 7y ago
        [deleted]
maxerickson 7y ago

jasonhansel 7y ago

Summary: "This bill does absolutely nothing to affect us. But please don't pass it, or at least let us compromise, since it would affect us so much." Seems a little bit contradictory?

jasonhansel 7y ago

> We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now. Translation: "We want to help our workers by fighting against their own attempts to assert their legal rights. We will do so in special courts where we hire and pay the judges. This will be perfectly fair."

paggle 7y ago

It’s nuts for Uber to talk about their “offer.” They don’t make the offer, the voters do.

xivzgrev 7y ago

That is a clever argument that they are in business of lead generation. But if that was true then the consumer wouldn’t know Uber, they would know x ride share service. The problem with Uber is they also control the end user experience and pricing, so it’s a real stretch to argue they are not in the business of providing rides to customers. Honestly I think their argument could be bolstered a lot if they made a simple change. Imagine you call an Uber, then your app tells you billy wants your job. You can see he is 4.5 star rated with 1000 rides, he is est 3 min away, and he wants $15. Do you accept? If so Uber connects you. If not Uber goes back to finding someone else. With that change Uber removes itself from being in the business of rideshare, and now is in business of connecting drivers with riders (as they’ve claimed all along). They need to let drivers dictate prices and ask users to choose.

Lucadg 7y ago
It could work. Airbnb does that and still kind of manages to control prices by favouring listings which conform to Pricing Tips in the search results.

ausbah 7y ago

Uber always positions itself to be whatever is most advantageous for it given the current situation. Just a "technology-based platform", no, they are a just a modern taxi company that uses a tech platform. I think for many "big tech" companies there needs to be a paradigm shift in how society views them, not as pure tech companies that produce technology solely for technology's sake, but like Uber - companies that use tech as a means to an end of a another business (in most cases). Facebook as a news company, Amazon as a retailer, Airbnb as a short term rental unit provider, etc. (these aren't all necessarily accurate descriptions).