14 ms·

California sues Uber and Lyft, claiming workers are misclassified

• jedberg 7y ago
  I feel bad for the drivers that are being taken advantage of, but AB5 was a terribly written law with good intentions (aren't they all?). The big companies they were obviously targeting have the resources to get around it, but in the meantime it killed independent journalism in the state, as an example. I know a few journalists who can no longer work in CA, despite liking the system they had. The publications won't touch them for fear of violating AB5. There are lots of other folks in CA who like being contractors who are finding it much harder now, because the people hiring them are afraid of running afoul of AB5 but also can't afford to hire them as employees. They really need to scrap AB5 and rewrite it, now that they've seen how much it missed the mark. AB5 has had a chilling effect on 1099 work in California.
  • cjlars 7y ago
    Regulators created the 1099 / W-2 distinction for a reason. There are probably good reasons to adjust the rules to take into account the so called gig economy, but making 1099 nearly illegal is not a net regulatory improvement when considering all the collateral damage. One option that seems very reasonable to me would be to introduce a third option: Employee (W-2), Independent Contractor (1099), Dependent Contractor (new gig economy group).
    • elliekelly 7y ago
      What would be the distinction between "employee" and "dependent contractor"? Unemployment benefits? Health insurance? Minimum wage?
      • jedberg 7y ago
        I suspect dependent contractor and hourly worker would effectively merge. Both would get benefits if they work enough hours. The difference would be whether the boss picks the work hours or you do.
        • cjlars 7y ago
          The big issues would be when worker starts and ends, self direction in terms of how they do the job (and associated liability), worker's comp, unemployment insurance, and tools / vehicles (I.e. should Uber be required to pay ~50 cents per mile to it's drivers. W-2 says yes, 1099 says no).
    • RangerScience 7y ago
      "Dependent contractor" feels exceptionally well-named. Props to you!
    • jedberg 7y ago
      > One option that seems very reasonable to me would be to introduce a third option: ... Dependent Contractor (new gig economy group). Yeah that's my preferred option too if we must keep the system, but it has a lot of the same problems. Small orgs don't have the resources to hire lawyers to figure out if they can do 1099 or "new thing", and so it will still have the same chilling effect on 1099 work.
      • toomuchtodo 7y ago
        There should be a chilling effect on some types of employment arrangements where avoidance of worker protections and ancillary compensation was occurring.
        • jedberg 7y ago
          Sure but don't do it by mandating what kind of contracts people can enter into. Do it by supporting social services so that they don't have to accept bad contracts.
          • toomuchtodo 7y ago
            I think we are destined to agree to disagree. Evidence has shown that people will be economically coerced into contracts, or are not educated enough to understand the consequences of the contract (gig drivers not knowing how little they're making) and the social services currently do not exist to protect them, nor are they likely to be spun up. Sure, journalists get the short end of the stick, as well as gig workers who don't need the income and just want to do it part time. Edge cases are unfortunate.
            • jedberg 7y ago
              > and the social services currently do not exist to protect them Exactly. Fix that problem instead.
              • toomuchtodo 7y ago
    • AaronFriel 7y ago
      Repeated below but this comment seems more pertinent: Can the California state legislature create a new federal class of worker? I keep seeing this in threads, but I don't understand the rationale. The United States Federal Government recognizes W-2 and 1099 filings, the State of California cannot invent a new Federal filing status or amend the United States Code, correct?
      • jedberg 7y ago
        No but they can create a new state classification and then make the employer do a 1099 for that person federally but treat them differently under state law.
      • cjlars 7y ago
        I believe you're correct that federal intervention would be the best outcome here.
        • jeffdavis 7y ago
          I disagree. The federal distinction is mainly for federal taxes. The state is not just concerned with taxes, it's also concerned with other labor laws, so it may need to distinguish differently.
          • cjlars 7y ago
            I mean, you would need both right? You want consistent tax treatment the whole way through and obviously state worker protections would be the main thing. What am I missing?
            • jeffdavis 7y ago
              I don't see why that's helpful. W2 employees would be treated the same as now. 1099 employees would be treated the same from a federal standpoint, but separated into two groups from a state standpoint.
    • mycall 7y ago
      If we are talking matrices, should there be an Independent Employee? Somehow I see this as another loophole.
      • jedberg 7y ago
        I see Independent Employee as code for hourly worker, and I see hourly worker and dependent contractors being basically the same, other than who chooses what hours one works.
      • Izkata 7y ago
        I see it more as a tree: Work for money -|-- employee |-- contractor -|--- independent | \--- dependent | \-- youtube ad revenue / patreon / other?
    • vadym909 7y ago
      Whats the difference between dependent contractor and W2? What do they get and what do they don't?
    • lhorie 7y ago
      That's basically what Uber has been pushing for
    • walshemj 7y ago
      Probably as the government don't like the little guy or gal actually working as a real self employed contractor - see IR35 in the UK (oh but self employed layers that's fine )
    • malandrew 7y ago
      If someone works for two companies such as both Lyft and Uber are they still a dependent contractor? If you have more than one source of income that seems to be mutually exclusive with being dependent, no? What's the criteria for determining whether someone is a dependent contractor? I'm not against the idea, but it's important to have clear unambiguous criteria.
  • toomuchtodo 7y ago
    I don't think you make a sufficient enough case that AB5 should be scraped, merely that some folks (freelance journalists) were happy with the status quo to the detriment of wide swaths of gig workers (Uber, Lyft drivers). I'll support a third worker category once gig platforms aggressively support the safety nets (universal healthcare, some sort of income protection besides unemployment) those classified workers would need. Until I see Uber and Lyft yelling as loudly for Medicare for All as Bernie Sanders, let them crumble under a torrent of damages at the hands of the court. Go for the cash reserves while they still have them.
    • rtx 7y ago
      Why let things crumble and not nationalize them. California can easily buy or capture them both and provide a better service. All these gig workers will become public sector employees.
      • toomuchtodo 7y ago
        I'm not against nationalizing when necessary (PG&E), but California could probably deploy a similar digital transportation market system without absorbing the toxicity that is Uber.
      • xyzzyz 7y ago
        Just like the Muni or BART, which is such a good service it’s driving Uber and Lyft out of business.
        • r00fus 7y ago
          Right, because a taxi app and mass-transit are the same scale of solution.
    • jedberg 7y ago
      The existence of AB5 has had a chilling effect on all 1099 work in the state. That should be the argument against scraping it or at least amending it significantly. > let them crumble under a torrent of damages at the hands of the court That's the problem though. Uber/Lyft can weather the storm with their cash reserves, many of the other companies can't. So they just bow out of the system entirely because they can't afford the risk nor the lawyers to even figure out if they are at risk.
  • TheChaplain 7y ago
    No need to scrap it, but instead use amendments.
  • deleted 7y ago
    [deleted]
  • sieabahlpark 7y ago
    That's the problem with 99% of the laws they make. They attempt to write with good intentions, but completely lack the awareness of how such a law would be enforced. In their eyes, the journalists should have been FT employees. Uber and Lyft have the capital to fight it and it's not like other states don't exist. CA isn't worth it if they can't make money here. Would really make the new carpool lot they did for LAX a waste of money.
    • jedberg 7y ago
      > CA isn't worth it if they can't make money here. When they write laws like this they know that CA represents 10% of the population and more than 10% of the wealth of the nation. No company would pull out of CA like that and they know it.
      • elliekelly 7y ago
        And CA is a regulatory leader but not usually an outlier in the long run. They might currently be the only state classifying gig workers as employees but I can guarantee other states will soon follow.
        • thaumasiotes 7y ago
          > CA is a regulatory leader but not usually an outlier in the long run. This comment was typed on a keyboard manufactured with chemicals known to the state of California to cause cancer. While sitting in a chair manufactured with chemicals known to the state of California to cause cancer. At a computer manufactured with chemicals known to the state of California to cause cancer. And the cables supplying power to that computer were also manufactures with chemicals known to the state of California to cause cancer.
          • elliekelly 7y ago
            Yes, I see those disclosures regularly even though I don't live in California. Off the top of my head I also have California to thank for leading the way on: - Puppy mill bans - Clean, smoke-free air at work and in bars & restaurants - Tanning booth restrictions for minors - Single-use plastic bag bans - Gay conversion therapy bans California was also the first state to label Roundup as a known carcinogen. Years before the landmark cancer judgment against Monsanto. So it seems Cal/EPA knows what they're talking about and is providing valuable information not just to their constituents but to the rest of the country as well.
  • kryogen1c 7y ago
    > I feel bad for the drivers that are being taken advantage of I have no idea why people think this. You know how people stop driving? They just don't do it. There's no contract to break, there's no boss to tell. They just stop. In fact, they have to go out of their way to drive! It is entirely volunteer work, every single time. It's the same thing people used to say about Walmart destroying mom-and-pop stores, but Walmart doesn't do anything. If they build a Walmart, nothing happens until people flock to work there, and again nothing happens until people flock to shop there.
    • reaperducer 7y ago
      It is entirely volunteer work, every single time After so many hours of your stomach grumbling, you accept bad work involuntarily.
      • kryogen1c 7y ago
        > you accept bad work involuntarily. Someone always says this, but its an emotional, irrational non-argument and hard to respond. Your argument is that someone unemployed and starving found a job where they could feed themselves - but its not a good enough job? What exactly is your argument?
        • jedberg 7y ago
          > Your argument is that someone unemployed and starving found a job where they could feed themselves Ah but that's the rub. They still can't feed themselves, but it's the only job in town, and some money is better than no money. If we don't create a set of rules that prevents the behavior of places like Walmart, it allows them to create a monopoly of available jobs in an area by being the only one who can operate profitably (or can absorb a loss until all other choices are gone). At that point they can create jobs that aren't good enough, but also leave no other choice.
          • kryogen1c 7y ago
            > They still can't feed themselves [...] some money is better than no money. I dont see how the first half changes the argument, as the second half points out. > If we don't create a set of rules that prevents the behavior of places like Walmart We have rules. Monopoly-busting is a fundamental role of the government. Corporations can accrue more power than their surrounding communities, as history has shown. Besides, other corporations oppose the actions of Walmart, keeping them in check - capitalism!
  • mixmastamyk 7y ago
    It also destroyed music gigs until they were partially exempted, let’s see if it is enough.
    • tedivm 7y ago
      Music gigs were exempted while the bill was being made. When AB5 passed it included those exemptions- at no point were music gigs every restricted.
      • lyricaljoke 7y ago
        The exemptions were very imperfect. Even if musicians and certain types of performers were exempted, this legislation has had an enormous effect on theater organizations, for example, especially at the semi-professional / community level. It's typical for these orgs, which have very limited budget, to hire actors and the creative team (set designers, lighting designers, sound etc.) as 1099 workers. The money is simply not there to be able to pay everybody at an hourly rate for the amount of time that's actual spent on these projects, and the outcome has been that many theater companies are unsure whether they can continue to operate at all. Unless the thinking has changed recently and my understanding is out of date, this is a situation that continues to be worrying to both theater artists and directors of theater orgs.
      • mixmastamyk 7y ago
        https://variety.com/2020/music/news/california-gig-economy-assembly-bill-5-ab5-musicians-1234583320/ https://variety.com/2020/music/news/california-gig-economy-a...
  • tedivm 7y ago
    Don't forget that AB5 was a response to the California Supreme Court. The court made a ruling that would have classified a lot more people as employees, and then the legislature wanted to clarify that for businesses so they wrote AB5. The California Supreme Court ruling went into affect in January. Without AB5 things would be even more confusing now than it would have otherwise been, and the legislature is already looking at fixes to the law to deal with the other issues that have come up.
    • henryfjordan 7y ago
      This line of reasoning assumes that the legislature couldn't have made up a third class of worker instead of lumping everyone as either an employee or a contractor. The courts cannot write law in the same way the legislature can, and so was much more restricted in what they could order. AB5 is just unimaginative.
      • AaronFriel 7y ago
        Can the California state legislature create a new federal class of worker? I keep seeing this in threads, but I don't understand the rationale. The United States Federal Government recognizes W-2 and 1099 filings, the State of California cannot invent a new Federal filing status or amend the United States Code, correct?
        • henryfjordan 7y ago
          You know, I haven't heard that argument being raised yet. That's an interesting point. I think California could have said "pay gig workers with a W-2 but you don't need to give them all the exact same benefits as employees (health insurance, 401k, disability)”. Basically I'm not sure that it matters much, but you are correct in that California cannot amend federal law.
          • jedberg 7y ago
            If anything you would want them to say "pay them with a 1099 but also you must follow these extra rules beyond the federal 1099 rules". If you make them W2, then there are a bunch of federal rules you have to follow that may not make sense.
  • jeffbee 7y ago
    The correct solution to the problem AB5 wanted to solve is single-payer universal health care.
    • jedberg 7y ago
      This is true. And a minimum income or UBI.
      • lotsofpulp 7y ago
        Yes, it makes no sense for an employer to have to worry about people’s problems outside of work matters. Makes everything unnecessarily complex, but it does a good job hiding costs from taxpayers and letting governments blame employers for lack of social safety nets.
    • r00fus 7y ago
      Yes, AB5 is a band-aid, but if that's all that is possible (politically speaking, it's become a third-rail) then you use the remedy you have at hand or are able to fabricate. CA may be holding out for some increase of the public safety net at the Federal level in 2021 post-election, and might be forced to move on it's own if things don't turn out as desired.
      • closeparen 7y ago
        It’s only a remedy if it leads to these positions continuing to exist and also adding health insurance. With no insurance and no income you are strictly less able to access healthcare.
    • malandrew 7y ago
      Portable health insurance also fits the bill.
  • ryanmarsh 7y ago
    AB5 was a terribly written law with good intentions (aren't they all?) I'm not convinced of that (all laws are made with good intentions) any more. In retrospect, I don't know what I ever based that belief on.
  • gnopgnip 7y ago
    Independent journalists can incorporate and offer services b2b, or they can be hired as employees. If the work isn't worth enough for employers to pay minimum wage and a share of taxes that is really a problem with capitalism more than this specific distinction.
    • Mirioron 7y ago
      Or it shows how much (little) people care for the work of independent journalists.
    • jedberg 7y ago
      > Independent journalists can incorporate and offer services b2b Not under AB5 they can't. You can't hire a corporation as a contractor if they are in the same line of business as you are. If you're a newspaper you can't hire a journalist or a "journalism company" under AB5.
      • gnopgnip 7y ago
        Under AB5 the business to business exemption allows independent contracts who incorporate or otherwise form a business(including sole proprietorship) to avoid the new ABC test if they meet certain criteria. Being in the same line of business affects some of the criteria, but no single factor is dispositive.
  • mapgrep 7y ago
    > AB5 was a terribly written law with good intentions (aren't they all?). Not at all. How many bills have you read? Did you study political science? Have you not seen how you’ve personally benefited from the laws (and case law) on the books? Or could you be perhaps overgeneralizing? > it killed independent journalism in the state This seems patently false given that I read lots of independent journalism from California journalists every day. Maybe you are conflating independent journalism, the sort that exists in an organization devoted to practicing journalism that is not subordinated to the interests of another organization, with freelance journalism. (And you’d still be wrong, but at least choosing the right words. “Independent journalism” has a longstanding meaning.)
    • gjs278 7y ago
      no you’re confusing it. and you know the right answer too. don’t comment next time, nobody here appreciates your pedantry.
  • bdamm 7y ago
    Totally agree. I had the insanity of a consultant living in Maryland, working for a company HQ'd in Washington, visiting development centers in California, and with a contract governed in California, needing to create a company so we could be 100% clear of AB5, and rehoming the renewed contract out of Washington, just so we could satisfy a bunch of HR pencil necks. What a pile of short hits.
  • bsder 7y ago
    The "correct" solution is that for every 40 hours of human work a company should be required to pay for a health plan and some number of hours of vacation and time off or get fined. And, if they subcontract, they are responsible for the subcontractor paying that or both get fined. People with professional degrees and a spouse who pays their healthcare. No big deal. Certify it and document it. Life goes on. Janitorial company that likes to employ cash off the books. Yeah, that's gonna get hammered. Uber and Lyft--certify it or get out.
    • jedberg 7y ago
      Someone drives 40 hours for Uber one week, and then goes away for two months. How much health care do they get? Do they get cash or a week of benefits? How much cash? Same as the W2 employees but prorated? Technically even full time W2 employees don't have to get health insurance or paid time off. So what if they company doesn't offer insurance or PTO to their employees. Are they off the hook? Your system sounds good but unfortunately isn't tenable. Ironically, if we had single payer healthcare that was funded by taxes, the entire thing would be moot. You'd pay into health care based on what you earned, and you'd get out the same as everyone else.
      • bsder 7y ago
        > Someone drives 40 hours for Uber one week, and then goes away for two months. How much health care do they get? Do they get cash or a week of benefits? One week of health benefits into the common pool. I would prefer that the driver get it. I am also okay with it being used to pay for the healthcare of the indigent who show up at an emergency room (which is what the driver will present as, eventually). > Technically even full time W2 employees don't have to get health insurance Huh? Your employer doesn't have to provide it. But I'm pretty sure that people being required to carry health insurance was one of the provisions of the ACA. I have to file a form with my taxes showing coverage. Has that changed? > Ironically, if we had single payer healthcare that was funded by taxes, the entire thing would be moot. This is misdirection. That doesn't solve the fact that Uber and Lyft drivers are being paid below minimum wage. That ALSO needs to be fixed.
• thoraway1010 7y ago
  Can lyft drivers work for uber? I've seen that happen I think. This seems different than google employees working for microsoft - which I think would be prohibited. If these workers are misclassified will they have to work for just one company? Will uber/lyft then be able to set their working hours?
  • atq2119 7y ago
    You raise an interesting point. It seems that having a legal framework in which gig economy workers can work for multiple companies may be important to facilitate competition between those companies. If the workers are locked to a single company, then entry to the market becomes much more difficult for new competitors. I definitely want gig workers to be paid fairly and to enjoy a generous social safety net, but it's good to keep such potential unintended consequences in mind as well.
  • PopeDotNinja 7y ago
    If you mean historically, drivers have worked for both Uber and Lyft. I don't what would happen if they became W-2 employees. Being in W-2 sounds kind of like simultaneously working at Taco Bell and Burger King, running between restaurants depending on which has more customers.
  • gnopgnip 7y ago
    CA employment law does not allow a company to universally ban moonlighting and fire you unlike most other states. They can only do that if it interferes with your work, or it creates a conflict of interest
    • bhupy 7y ago
      Typically employees are prohibited from simultaneously working for competing companies, due to conflicts of interest. Do you think that an Uber driver driving for Lyft can be construed as a "conflict of interest"?
      • hamandcheese 7y ago
• thoraway1010 7y ago
  You can read Uber and Lyfts proposed solution here: Earnings Guarantee: Drivers always receive at least an amount equal to 120% of minimum wage, plus 30 cents per mile compensation toward expenses, with the potential to earn more and no limits on how much drivers can make. Health care Health care contribution equal to 100 percent of the average employer payment toward a Covered California Plan, or $367 per month to a driver on average. Drivers start earning this amount at 15 hours per week and reach the full amount at 25 hours per week Drivers can earn multiple contributions from multiple companies Occupational accident insurance to cover on-the-job injuries Automobile accident and liability insurance It looks like this may be settled at the ballot box. https://protectdriversandservices.com/get-the-facts/ https://protectdriversandservices.com/get-the-facts/ Full initiative: https://www.oag.ca.gov/system/files/initiatives/pdfs/19-0026A1%20%28App-Based%20Drivers%29.pdf https://www.oag.ca.gov/system/files/initiatives/pdfs/19-0026...
  • yhoneycomb 7y ago
    > Drivers start earning this amount at 15 hours per week willing to bet they'll just cap everyone at 15 hrs/wk
    • save_ferris 7y ago
      Yep, the companies’ ability to distribute the workload doesn’t get as much discussion when these kinds of proposals are thrown around, but that’s exactly what gives them so much leverage when trying to determine how much value to extract from the system.
    • FireBeyond 7y ago
      Mmhmm, how many other corporations do exactly the same thing? "Benefits kick in at 30hrs / week" Oh, you're scheduled for 28 hours every week and no more, no matter how short staffed we are? Sucks to be you.
      • frockington1 7y ago
        "Benefits kick in at 30hrs / week" is a direct result of the ACA. At the time I was working retail and saw that one coming. I have no idea if politicians are dumber than an 18 year old, or just don't care
• nightshadetrie 7y ago
  Kicking a man when he's down (IMO this is probably the hardest time for a compromise. It could even lead to lose-lose with the company going under.)
• sunaurus 7y ago
  Can somebody explain the argument against companies like Uber and Lyft being able to provide "gig platforms"? And where should the line be drawn? For example, web browsers are also apps that facilitate different kinds of transactions, but surely nobody wants Google to be responsible for paying benefits to anybody whose services can be bought through Chrome.
  • jeffbee 7y ago
    Uber sets the price. Uber drivers have no ability to set price other than choosing to not use the platform. Uber drivers do not form relationships with Uber riders; they are assigned randomly, by Uber. Uber drivers do not enjoy most of the aspects we associate with truly independent contractors.
    • sunaurus 7y ago
      Great answer, thanks! I still don't think it makes sense for Uber (as a tech company) to start employing their own drivers, but maybe the current system isn't great either.
      • p0sixlang 7y ago
        Saying Uber is simply a tech company is basically doublespeak. Uber doesn't sell their app.. Uber maintains partnership with businesses, and managers their business using technology. Why shouldn't Uber employ their drivers, who power their app just as much as the developers who created it.
        • bhupy 7y ago
          Because that's a line of thinking that doesn't really have a well defined limiting principle. Amazon doesn't sell their app...it maintains partnership with businesses, and manages their business using technology. Why shouldn't Amazon employ their retailers, who power their app just as much as the developers who created it? Also: Uber is set to announce 25% layoffs, but not a single driver will be affected by this. To the extent that Uber drivers are "out of work", it's because there are no riders requesting rides — but that's a direct relationship between buyer and seller. Instead, the strongest argument in favor of classifying Uber drivers as employees is the fact that they are unable to set their own prices. On the flip side, Uber has been gradually rolling out a new feature that allows drivers to do just that, which makes that argument moot.
• LatteLazy 7y ago
  What's the actual plan here? Ban services like Uber? I am not comment on whether that's a good idea, I'm just asking as it doesn't seem anyone can operate this sort of business and comply...
  • SpicyLemonZest 7y ago
    California regulators think Uber is just being greedy and could operate fine with drivers as employees. There's no plan for what'll happen if they're wrong.
    • LatteLazy 7y ago
      Thanks. The plan does seem to be for them to put up and shut up as far as I can tell. I wonder what Uber will do? Suspend all services?
      • Barrin92 7y ago
        > I wonder what Uber will do? Raise prices, stop subsidizing their rides, shift some resources from marketing and tech to the people who actually drive the cars? Plenty of options.
        • LatteLazy 7y ago
          We will see I guess. Do they need to supply cars too?
          • Barrin92 7y ago
            Not sure if they'd need to supply cars but my guess would be they'd need to reimburse drivers for costs associated with work like repairs.
        • bhupy 7y ago
          > stop subsidizing their rides They don't subsidize their rides on a per unit basis. The driver expects to earn a base fare + some amount based no distance + time, and Uber takes a 20% cut from that. The actual marginal cost to providing a second ride, for Uber, is maps licensing, server costs, and maybe marketing promotion costs for that market. The loss that Uber makes, instead, is because the amount that they pull in from the service fee isn't enough to cover the facilities and corporate salaries (they have 27,000 employees). Uber rides were "adjusted EBITDA" profitable for 2 straight quarters before this — take "adjusted EBITDA" with a grain of salt, but it's also not "nothing". Instead, Uber will almost certainly have to raise prices. We all collectively pay for the Uber drivers' welfare, but rather than having it be progressively paid for through taxation, it will be regressively paid for through price increases that disproportionately impact the poor / middle class.
• outlace 7y ago
  So if you are reclassified as an employee of Lyft then can you still decide how many hours you work? What if you want to work 40 hrs a week for 2 weeks, then travel the world for 2 months and come back and work 10 hrs a week for Uber. How can a company possible deal with compensating health insurance etc for situations like these?
• amacneil 7y ago
  If the goal of AB5 was to force Uber/Lyft to pay benefits for drivers, why did the legislation not focus directly on mandating companies to contribute towards healthcare expenses for all 1099 contractors (similar to SF mandates), rather than trying to force them all the classify their drivers as W2 employees? It seems like the latter path has many more unwanted side effects (e.g. many drivers do not want full time employment with required hours etc).
• cft 7y ago
  This is an important case for the future of the small business and bootstrapped startups outside of the sanctioned VC ecosystem. I know that my bootstrapped software company would not have made it without 1099s and multiple contractors. In the proposed regime, I would either have to shut it down or seek VC funding- but the market niche was not big enough.
  • smeyer 7y ago
    Can you elaborate a bit on how your company used 1099s, whether they'd be classified as employees under law, and why that classification would/wouldn't be reasonable? I think it's reasonable to say that companies that can't be started without treating their employees fairly shouldn't be started, and that improvements in regulations around employee treatment may impact which businesses are started. That said, I assume you weren't mistreating workers so am curious to hear more.
    • cft 7y ago
      I initially hired Berkeley and MIT interns as contractors and one of them worked for us as a contractor for a year while on leave of absence. He was paid about 6700/mo. I would be envious when I myself was a sophomore to get paid this much. But he lived with his parents mostly, getting health insurance through his family as he was 20 and he got 1099s from us. Another one was paid about 7500/mo, also on 1099. This was five or six years ago. I did not have enough money to commit to an employee long term back then, although none of these interns were terminated by me- they all went on doing other things, I am in touch with most of them and they are thankful for my recommendation letters and references for Google, Amazon, etc where they are working now. In the past, it was market that decided whether a business should exist or not, and that involved the decisions of the employees or contractors to work there. But now you are proposing a new, "fair treatment" decision process, that is extraneous to the market. Has this been successfully tried before, in any country that has become wealthy due to such business selection process?
      • smeyer 7y ago
        The United States already does what I'm proposing, it's just a question of implementation. For example, the minimum wage dictates that if your business is only profitable when you pay employees $5 an hour your business doesn't exist. Capitalism in the US isn't so unfettered that only the market determines whether businesses exist. Some countries have stricter regulations around employee treatment (France started mandating paid vacation in the 1930s) and some have less strict (Singapore doesn't have a minimum wage), but this isn't some new idea.
• renewiltord 7y ago
  If you're on Upwork, it's pretty easy to shift to non-Californians. There are also lots more of them and you can switch them up if you're worried about hitting the 35 hour cap. Fortunately, not too much of a problem. I just stopped hiring Californians there.
• Plasmoid 7y ago
  The only thing California cares about is having these companies collect and remit payroll tax. It's too much to work to chase down 200,000 contractors for $500, so they want Uber to just cut them a cheque.
• theaceoface 7y ago
  AB5 is a terrible law that was only passed because of corrupt union power in California.
• namesbc 7y ago
  There are jobs where independent contractor vs. employee classification is difficult, but Uber and Lyft are the most straightforward classification. Of course, taxi drivers are employees of taxi companies. What other industry are the primary workers not considered employees?
• theaceoface 7y ago
  There is a massive wave of layoffs in the tech industry and the Californian government seems content to gleefully drive the knife in further.
• pembrook 7y ago
  The journalists covering this issue have consistently gotten it wrong. They have the power to direct the attention of millions to the solution, yet continue to miss the forest through the trees and get swept up in the us vs. them techlash BS. Uber and Lyft are not screwing over workers. Our system of government is screwing over workers by not providing the benefits of every other developed nation with similar tax rates for the average person. Companies and workers (whether as a collective or as individuals) should be free to arrange employment simply around time and money. The fact that this is impossible indicates a problem with the system itself, not with the individual actors in the system.
  • bhupy 7y ago
    > Our system of government is screwing over workers by not providing the benefits of every other developed nation with similar tax rates for the average person. I would argue that the system is fine, the government just did the wrong thing here. If the same group of voters that passed AB5, instead passed a bill guaranteeing some minimum basic income, or even some state-tax funded single payer healthcare system, then we wouldn't even be in this predicament.
    • pembrook 7y ago
      What happens to your healthcare as a Californian the minute you travel out of state? Something so important should not be in the hands of states. There's a reason we don't have every state building separate armies and nuclear arsenals. Why have them create their own disparate patchwork of healthcare approaches? The strength of any nation's economy relies on the health of its citizens, as we are now learning the hard way.
      • bhupy 7y ago
        > What happens to your healthcare as a Californian the minute you travel out of state? The same thing that happens to your healthcare when you travel out of country — this is an edge case that systems don't typically have to adjust for. California's single payer healthcare system could even guarantee travel health insurance up to a certain amount. It's something that happens so rarely that the state can probably cover it. The vast majority of healthcare costs go towards non-emergency care, anyway. > Something so important should not be in the hands of states. There's a reason we don't have every state building separate armies and nuclear arsenals. Why have them create their own disparate patchwork of healthcare approaches? Well we're not talking about armies or nuclear arsenals here. Decentralized healthcare isn't a novel concept, that's how it works in the European Union: there are open borders, no need for work visas between states, and yet they all have different healthcare systems with varying degrees of generosity. In Switzerland, healthcare is a matter entirely left to the Cantons and is outside the purview of the Federal government. In Canada, the single payer system is Provincial, and came about exactly like this: as a so-called "patchwork". Saskatchewan was the first Province to offer single payer in 1947, followed by Alberta in 1951, etc. By 1961, all Provinces had some form of a single payer healthcare system. > The strength of any nation's economy relies on the health of its citizens, as we are now learning the hard way. Sure, but we're at an electoral deadlock at the Federal level, partly owing to the structural nature of the Federal government that heavily encourages doing things at the State and local level. The political will to do this exists in many States, it's just a matter of executing on it.
• kkotak 7y ago
  If AB5 was written for protecting the workers then they should've been given an opt-out option for those who don't need/want a change.
• okareaman 7y ago
  This really sucks. I guess I'll be out of job soon. It was a retirement gig to supplement my income working part time on my schedule. The Uber/Lyft drivers who whined constantly about being taken advantage of were incompetent drivers who played right into the hands of very strong California unions and their political allies in Sacto. Incompetent as in, one of their driver spokesman in San Francisco went on TV complaining about how he only made $67 a 12 hour shift in the City. To only make $67 a day in SF you either have to be very lazy, very picky about rides, very mentally slow with personality problems or some combination of all. The type of person who can't wait to file workman's comp so they can sit home and watch daytime TV ruined it for the rest of us. It was fun while it lasted. I have some great memories. I guess I'll go back to programming for extra cash.