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I suspect that California is going to backpedal on this pretty quickly. Uber and Lyft are popular. Going back to taxis is going to be very unpopular. IMO, if t
by woeirua 6y ago
I suspect that California is going to backpedal on this pretty quickly. Uber and Lyft are popular. Going back to taxis is going to be very unpopular.
IMO, if the California Republican party was smart they would make this a wedge issue in the next election. "Elect us, and we'll make it possible to use Uber again."
- x3n0ph3n3 6y agoThe State of California doesn't care about workers, they care about the tens to hundreds of millions of dollars they want from payroll and unemployment taxes, in addition to revenue from automatic withholdings for people whom would otherwise be below the reporting limit.
- CPLX 6y agoThose things seem like reasonable things for a government to care about.
- compycom 6y agoI think it's reasonable for a government to crack down on businesses where the entire operational structure is designed to subvert that government's tax code and regulations.
- agentdrtran 6y agoI swear people forget how Uber got popular in the first place.
- BadassFractal 6y agoBy providing a service that was more convenient, safer and affordable than the alternatives protected by regulatory rent-seeking.
- AgloeDreams 6y agoLol. Haha. You mean, overcrowding a market with underpaid positions, sold with lies and marketing to make them sound better than they are, to force people with full time jobs out of work so that people could get a ride in a vehicle with no safety, security, (or originally) background verification while doing all they could to cheat regulations, driver and user privacy, tax laws, climate change, and eventually, now, rent-seek, to boost stock prices to pad Vegas parties and investor portfolios. Modern ride sharing is not sustainable, environmentally friendly, or a 'job' and this doesn't exempt the bad behaviors by taxi companies, but understand this is the end destination of capitalism invading a regulated economy.
- matmann2001 6y agoPlaying devil's advocate here, but how do you think they managed to make a more affordable solution? If you think it's entirely due to their technology, I'm afraid you'd be mistaken.
- BadassFractal 6y agoNot obvious, but entirely plausible. I'd be curious to see what a more sustainable pricing would look like on the consumer's end.
- deleted 6y ago[deleted]
- matmann2001 6y agoMore than plausible. The fact that Uber does not generate profit means they are effectively subsidizing rides with VC and IPO funds.
- x3n0ph3n3 6y agoWho do you think ends up paying that money? Uber/Lyft? Not a chance! This cost always gets passed down the the individuals in the form of smaller cuts of the pie.
- malandrew 6y agoSCOTUS came to a different conclusion in Gregory v Helvering. https://en.wikipedia.org/wiki/Gregory_v._Helvering https://en.wikipedia.org/wiki/Gregory_v._Helvering Government doesn't exist to collect taxes. They are there to provide governance. Taxes are a necessary evil that should be kept to a minimum to provide the service of governance. If someone can come up with a legal operational structure that gets around taxes then that the government didn't do its job. It's only easy to get around taxes when the taxes aren't closely tied to the service the government is providing. i.e. when you taxing one individual or business for a service provided to other individuals or businesses.
- compycom 6y ago> If someone can come up with a legal operational structure that gets around taxes then that the government didn't do its job. Right, they passed a law, AB5, to better do that job.
- joshuamorton 6y agoWait, the SC ruled in favor of the government in that case, overruling the district court.
- malandrew 6y ago"The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted."
- joshuamorton 6y agoFrom the ruling that the SC upheld: "To dodge the shareholders' taxes is not one of the transactions contemplated as corporate "reorganizations." And from the SC ruling: "The whole undertaking, though conducted according to the terms of [the statute], was in fact an elaborate and devious form of conveyance masquerading as a corporate reorganization, and nothing else. ... [T]he transaction upon its face lies outside the plain intent of the statute. To hold otherwise would be to exalt artifice above reality and to deprive the statutory provision in question of all serious purpose." If there's no business purpose beyond tax avoidance, the government can indeed hold you to the higher tax rate. I don't think that's what happened here, i think there are legitimate non-tax reasons for Uber/Lyft's structure, but it's not a completely unreasonable take to disagree with that. And even if not, the government is free to change the law to fix things, which it did.
- adrr 6y agoThey care about the burden these employees put on the system when they get sick or injured which costs tax money. Most people don't use Uber or Lyft, why should they have to subsidize these companies.
- Daishiman 6y agoThat sounds very good.
- JMTQp8lwXL 6y agoWho forced Lyft to shut down? Was it the state, or did they freely choose to cease operations? Obviously, spin will characterize this in any way that's advantageous. But nobody 'forced' Lyft to close.
- rsweeney21 6y agoTheir business model is on-demand transportation. The business model doesn't work if the workforce is not also on-demand. I don't think that's spin, but maybe society decides that we don't like on-demand businesses.
- JMTQp8lwXL 6y ago> The business model doesn't work if the workforce is not also on-demand. Have they tried it to confirm it 'doesn't work'? Maybe rideshare companies need to reduce their cut, and start putting more of that money into the driver's pocket. Doesn't mean it can't be a profitable business, though possibly low-margin. Have they tried paring back development costs, marketing costs, etc?
- graerg 6y agoThey're already losing money as is...
- nemothekid 6y agoConverting someone to an employee means a lot more than just paying them more. There is entirely new infrastructure that has to exist now.
- JMTQp8lwXL 6y agoLyft already has the infrastructure in place, as they already have employees.
- nemothekid 6y ago
- deleted 6y ago[deleted]
- fullshark 6y agoMaybe in normal times, but in pandemic times who knows? Most things are shut down right now, add uber/lyft to the list and see if people actually care.
- fizzled 6y agoIn Portland, Radio Cab has an Android/iOS app. I switched to them once they modernized. In this case, Lyft/Uber caused taxis to improve infrastructure. That's a win.
- hpcjoe 6y agoCompetition tends to force organizations to evolve to meet the threat. That is, unless some government intervenes in the market, distorting the effect. Then you get a distorted market with inefficient allocation of resources. Seems to happen quite a bit in monoideological areas.
- nodesocket 6y agoDrivers choose to make their living with Lyft and Uber. California is starting to feel the repercussions of their far left policies. It hurts consumers (fare prices rise), stifles innovation, pushes entrepreneurs out of the state, and the irony is it ended up hurting the drivers.
- meatmanek 6y agoLyft _chose_ to hurt the drivers instead of complying with the law. This is a transparent ploy by Lyft and Uber to try and extort the state into changing the law by holding their drivers' livelihoods ransom.
- nodesocket 6y agoOr perhaps it's basic business and economics. Lyft and Uber's business is built on the assumption that drivers provide on-demand transportation. The business model doesn't work if the workforce is not also on-demand. Instead of vilifying companies, perhaps it might be beneficial to understand the business aspects of decisions instead of jumping to conclusions based on knee jerk emotional outrage.
- tjr225 6y agoDid their business model work even when their workforce was on-demand?
- Acrobatic_Road 6y agoLyft isn't a charity and should not be expected to operate in an unprofitable market.
- ojbyrne 6y agoNeither Lyft nor Uber has ever made a profit. Drivers aren't the only ones being fleeced.
- deleted 6y ago[deleted]
- stefan_ 6y agoCalifornia literally paid billions in unemployment to rideshare drivers during Corona, funds that Uber and Lyft didn't contribute a cent to, but you feel it's sensible Republican policy to declare "next year, we'll do it all over again"?
- bosswipe 6y agoRepublican party is completely dead in California. Last time they had some power they kept manufacturing crises and shutting down the government. After Trump they've gone all in on the national Republican party's white-hot hatred of the state.
- electricviolet 6y agoA couple of years ago, the Quebec government introduced additional restrictions on ridesharing companies. Uber got up on their soapbox and said they were pulling out of Quebec. The government called their bluff and basically said "Okay, bye" and Uber backpedaled. I wouldn't be surprised if the same thing happens here.
- totalZero 6y agoThis happened in Sep 2017. Then, the transport minister for Quebec changed in Oct 2017, and Uber said later in Oct that they would not pull out because they saw an opportunity for constructive dialogue with the new transport minister. By the time Bill 17 was passed in 2019 and Uber became officially legal beyond its pilot project, taxi drivers were protesting the Quebec government's actions. https://montreal.ctvnews.ca/uber-is-officially-allowed-in-quebec-as-province-passes-taxi-reform-law-1.4632378 https://montreal.ctvnews.ca/uber-is-officially-allowed-in-qu... I wouldn't describe what happened in Quebec as a loss for Uber.
- mdorazio 6y agoYou're assuming competitors with actually viable business models weren't waiting for exactly this opportunity. Spoiler: https://www.cnbc.com/2020/08/19/uber-and-lyft-competitors-prepare-to-grab-market-share-in-california.html https://www.cnbc.com/2020/08/19/uber-and-lyft-competitors-pr...