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The requirements for contractors are (known as the ABC test)[0][1]: 1) Part A of the test requires that the worker is free from the control and direction of th

The requirements for contractors are (known as the ABC test)[0][1]: 1) Part A of the test requires that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and 2) Part B of the test requires that the worker performs work that is outside the usual course of the hiring entity’s business; and 3) Part C of the test requires that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. 4) The contractor must actually be in business for themselves. [0] - https://www.californiaemploymentlawreport.com/2019/03/understanding-the-abc-test-for-independent-contractors-in-california/ https://www.californiaemploymentlawreport.com/2019/03/unders... [1] - https://www.dir.ca.gov/dlse/faq_independentcontractor.htm https://www.dir.ca.gov/dlse/faq_independentcontractor.htm

manfredo 6y ago
1) Uber drivers are totally at liberty to set their own hours, and drive in location of their choice ( destination are chosen by Uber, but a worker is at liberty to drive in San Jose one day and San Francisco the next). 2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service. 3) Drivers are independent workers, in business for themselves. 4) Same as above. With these criteria it unambiguously seems to be the case that ride share drivers are independent contractors. I struggle to see how one could make the case that they are employees.
- nostoc 6y ago
  > The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service. That is some serious mental gymnastic.
  - manfredo 6y ago
    No, it's not. Is Apple in the business of producing records because it runs iTunes? No, it's in the business of software (and hardware), and some of that software is used to sell music. Trying to claim that a software service to run a marketplace to sell X is the same thing as actually running a business of building or doing X takes some mental gymnastics.
    - gamblor956 6y ago
      It takes some seriously bizarre mental gymnastics to call Uber/Lyft "marketplaces" when they don't provide any of the hallmarks of a marketplace, such as the option to select between multiple "stores" (aka drivers) or let drivers compete by offering their own prices. Even more importantly, with an actual marketplace, you don't transact with the marketplace--you transact with the stores. And with respect to your Apple analogy: Apple doesn't claim to be in the business of making music, just selling it. Uber/Lyft do claim to be in the transportation/food delivery businesses, and it's literally all over their legally binding SEC filings that the provide to investors every few weeks. If it quacks like a duck, and it walks like a duck, and it swims like a duck, you can call it a digital platform all you like but it's still a duck.
      - manfredo 6y ago
        No, the Apple analogy is entirely accurate. Apple is in the music business. But it's not in the business of making music, it's in the business of selling music. Apple is in the music business in the same vein that a record shop is in the music business. Uber is in the personal transportation business, at a broader high level. It's in the business of operating a market for rides. Just like how a record store doesn't actually compose and record the music it sells, Uber isn't in the business of actually driving people around. That task is fulfilled by independent workers, who use the platform Uber and Lyft operate to find customers. Can you point out in said SEC filings where Uber says, "our company's primary business is operating motor vehicles to transport customers"? As in, actually driving their own cars? Because from what I've read they're very careful about describing their business as operating a marketplace for drivers to conduct their own businesses.
        gamblor956 6y ago
        We agree that Apple is just selling music, not making it. We disagree on how analogy that applies to Uber. On its 10K, Uber identifies "gross bookings" as its primary revenue stream. Not "net bookings" or "commissions" or "marketplace fees." Gross bookings. Meaning that it treats all of the income from a ride as its own income, meaning that it's primary business activity is providing transportation services. The same is true for Lyft. If they want to claim to be technology companies that only make their money from marketplace fees/commissions, they're free to do so but they'll need to change their financial and legal filings to match (and possibly their fare structures as well, since there's a mismatch between what riders pay and what drivers actually get). The reason they haven't done so is because that amount would be a lot smaller than the gross bookings number, but they can't have it both ways.
- nrmitchi 6y ago
  > 2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service. This seems like _quite_ a stretch. With that logic you can make any modern company a "technology business" or a "logistics business", and suddenly everything a company does is outside of their core business.
- gamblor956 6y ago
  1) True. But until about 1 month ago, Uber drivers didn't get to set their own rates, and they were punished for not accepting rides. Moreover, a key issue for this test is that Uber matches drivers to riders, so the normal independence that would be expected from a "platform" does not exist. 2) I laughed so hard I scared my neighbor's dog. Uber is a transportation service that happens to use technology (in the form of software) to provide it's service. Have you read their SEC filings or any of their other legal documents? In their own legally binding filings, they describe their primary business as providing transportation and food delivery services, not as a "platform" for whatever. 3 and 4) This is false, but it's a tricky point. Under AB5, it's not enough to just drive for multiple companies; a driver must satisfy certain legal formalities related to being in business for themselves, like setting up a legal entity, getting their own insurance, etc., to prove they are "customarily engaged" in the business. (Note that points 3 and 4 were distinct in the case law but were combined in AB5.) Most drivers haven't done this.
  - manfredo 6y ago
    So now Craigslist needs to be regulated as an automobile dealer because it hooks up people selling cars to each other? Is Apple in the business of recording music because it runs iTunes? Does DoorDash need to have their offices inspected for food safety because they run a market for food delivery. No. Craigslist operates a platform for selling cars, it doesn't actually sell cars itself. Apple doesn't actually make music (unless they runs studio they I don't know about), they run a market for artists and record companies to sell their own music. DoorDash operates a platform for restaurants to sell food, it doesn't actually sell food itself. Contrary to your insistence otherwise, running a platform that connects buyers and sellers of something is not the same thing as actually providing that good or service yourself. People say that it takes mental gymnastics to arrive at this conclusion. I see the opposite: how do you manage to convince yourself that people writing code at Uber are in the same line of business as getting behind the wheel of a taxi? How do people convince themselves that a PM at DoorDash works at a restaurant? Also, you misstate (or rather, only partially state) the description of their business in SEC filings. They describe themselves operating a market for food delivery and personal transportation. They are in the business of transportation and food delivery, but they are a in a different layer than the people actually driving cars. This is akin to saying Expedia is in the airline business. Yes, but they sell airline tickets they don't fly planes. Calling Uber a taxi company makes a out as much sense as saying Expedia is an airline. And for 3 & 4 this could easily be resolved by having driver set up their own LLCs. But I'm not convinced this is actually a requirement. Plenty of people are contractors and fill out 1099s without operating their own LLC or partnership or some other type of company.
- hundchenkatze 6y ago
  > 2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service. What good is all that software and technology if a driver doesn't pick me up when I request a ride. Uber very much depends on drivers to perform their core function.
  - manfredo 6y ago
    Absolutely. This actually a type of relationship that many businesses have. Most hair salons don't actually employ any hairdresser. They employ the people that clean the shop, and run the register. But the hairdresser themselves are independent and lease a stall in the shop. The salon very much depends on the independent hairdressers to function. Pointing out that Uber would cease to function without independent contractors is entirely correct, but does nothing to demonstrate that that these workers should be categorized as employees rather than contractors.

manfredo 6y ago

1) Uber drivers are totally at liberty to set their own hours, and drive in location of their choice ( destination are chosen by Uber, but a worker is at liberty to drive in San Jose one day and San Francisco the next). 2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service. 3) Drivers are independent workers, in business for themselves. 4) Same as above. With these criteria it unambiguously seems to be the case that ride share drivers are independent contractors. I struggle to see how one could make the case that they are employees.

nostoc 6y ago
> The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service. That is some serious mental gymnastic.
- manfredo 6y ago
  No, it's not. Is Apple in the business of producing records because it runs iTunes? No, it's in the business of software (and hardware), and some of that software is used to sell music. Trying to claim that a software service to run a marketplace to sell X is the same thing as actually running a business of building or doing X takes some mental gymnastics.
  - gamblor956 6y ago
    It takes some seriously bizarre mental gymnastics to call Uber/Lyft "marketplaces" when they don't provide any of the hallmarks of a marketplace, such as the option to select between multiple "stores" (aka drivers) or let drivers compete by offering their own prices. Even more importantly, with an actual marketplace, you don't transact with the marketplace--you transact with the stores. And with respect to your Apple analogy: Apple doesn't claim to be in the business of making music, just selling it. Uber/Lyft do claim to be in the transportation/food delivery businesses, and it's literally all over their legally binding SEC filings that the provide to investors every few weeks. If it quacks like a duck, and it walks like a duck, and it swims like a duck, you can call it a digital platform all you like but it's still a duck.
    - manfredo 6y ago
      No, the Apple analogy is entirely accurate. Apple is in the music business. But it's not in the business of making music, it's in the business of selling music. Apple is in the music business in the same vein that a record shop is in the music business. Uber is in the personal transportation business, at a broader high level. It's in the business of operating a market for rides. Just like how a record store doesn't actually compose and record the music it sells, Uber isn't in the business of actually driving people around. That task is fulfilled by independent workers, who use the platform Uber and Lyft operate to find customers. Can you point out in said SEC filings where Uber says, "our company's primary business is operating motor vehicles to transport customers"? As in, actually driving their own cars? Because from what I've read they're very careful about describing their business as operating a marketplace for drivers to conduct their own businesses.
      - gamblor956 6y ago
        We agree that Apple is just selling music, not making it. We disagree on how analogy that applies to Uber. On its 10K, Uber identifies "gross bookings" as its primary revenue stream. Not "net bookings" or "commissions" or "marketplace fees." Gross bookings. Meaning that it treats all of the income from a ride as its own income, meaning that it's primary business activity is providing transportation services. The same is true for Lyft. If they want to claim to be technology companies that only make their money from marketplace fees/commissions, they're free to do so but they'll need to change their financial and legal filings to match (and possibly their fare structures as well, since there's a mismatch between what riders pay and what drivers actually get). The reason they haven't done so is because that amount would be a lot smaller than the gross bookings number, but they can't have it both ways.
nrmitchi 6y ago
> 2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service. This seems like _quite_ a stretch. With that logic you can make any modern company a "technology business" or a "logistics business", and suddenly everything a company does is outside of their core business.
gamblor956 6y ago
1) True. But until about 1 month ago, Uber drivers didn't get to set their own rates, and they were punished for not accepting rides. Moreover, a key issue for this test is that Uber matches drivers to riders, so the normal independence that would be expected from a "platform" does not exist. 2) I laughed so hard I scared my neighbor's dog. Uber is a transportation service that happens to use technology (in the form of software) to provide it's service. Have you read their SEC filings or any of their other legal documents? In their own legally binding filings, they describe their primary business as providing transportation and food delivery services, not as a "platform" for whatever. 3 and 4) This is false, but it's a tricky point. Under AB5, it's not enough to just drive for multiple companies; a driver must satisfy certain legal formalities related to being in business for themselves, like setting up a legal entity, getting their own insurance, etc., to prove they are "customarily engaged" in the business. (Note that points 3 and 4 were distinct in the case law but were combined in AB5.) Most drivers haven't done this.
- manfredo 6y ago
  So now Craigslist needs to be regulated as an automobile dealer because it hooks up people selling cars to each other? Is Apple in the business of recording music because it runs iTunes? Does DoorDash need to have their offices inspected for food safety because they run a market for food delivery. No. Craigslist operates a platform for selling cars, it doesn't actually sell cars itself. Apple doesn't actually make music (unless they runs studio they I don't know about), they run a market for artists and record companies to sell their own music. DoorDash operates a platform for restaurants to sell food, it doesn't actually sell food itself. Contrary to your insistence otherwise, running a platform that connects buyers and sellers of something is not the same thing as actually providing that good or service yourself. People say that it takes mental gymnastics to arrive at this conclusion. I see the opposite: how do you manage to convince yourself that people writing code at Uber are in the same line of business as getting behind the wheel of a taxi? How do people convince themselves that a PM at DoorDash works at a restaurant? Also, you misstate (or rather, only partially state) the description of their business in SEC filings. They describe themselves operating a market for food delivery and personal transportation. They are in the business of transportation and food delivery, but they are a in a different layer than the people actually driving cars. This is akin to saying Expedia is in the airline business. Yes, but they sell airline tickets they don't fly planes. Calling Uber a taxi company makes a out as much sense as saying Expedia is an airline. And for 3 & 4 this could easily be resolved by having driver set up their own LLCs. But I'm not convinced this is actually a requirement. Plenty of people are contractors and fill out 1099s without operating their own LLC or partnership or some other type of company.
hundchenkatze 6y ago
> 2) The drivers are outside of Uber's business. Uber is a software and technology company, not a taxi service. What good is all that software and technology if a driver doesn't pick me up when I request a ride. Uber very much depends on drivers to perform their core function.
- manfredo 6y ago
  Absolutely. This actually a type of relationship that many businesses have. Most hair salons don't actually employ any hairdresser. They employ the people that clean the shop, and run the register. But the hairdresser themselves are independent and lease a stall in the shop. The salon very much depends on the independent hairdressers to function. Pointing out that Uber would cease to function without independent contractors is entirely correct, but does nothing to demonstrate that that these workers should be categorized as employees rather than contractors.