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If Uber and Lyft don't win their proposition, they can either agree to classify their drivers as employees, or some company that is willing to classify drivers

by not2b 6y ago

If Uber and Lyft don't win their proposition, they can either agree to classify their drivers as employees, or some company that is willing to classify drivers that way will take over the market. People are commenting as if app-based ride share will no longer be available. It might cost more, but it wouldn't be much more.

Judgmentality 6y ago
> People are commenting as if app-based ride share will no longer be available. It might cost more, but it wouldn't be much more. Uber lost $8.5 billion dollars in 2019. Think about that. Uber is losing the better part of a billion dollars every month. They are hemmorrhaging money at their current prices. It will cost a lot more for this to be profitable when you consider how much more expensive this will make the drivers.
- omgwtfbyobbq 6y ago
  A quick search puts them at 6.9 billion rides in 2019, so profitability should come with a $2/ride increase. I think their current rates are a lot, so their current rates plus $2 are also a lot, but I think most riders would tolerate it.
  - Judgmentality 6y ago
    This is ignoring how much more expensive it will be if the drivers are employees. I don't know how much that is, but I'd imagine in addition to those $2 it would likely add another 30% or so to the total cost (someone more knowledgeable please chime in with a better estimate). Of course that's assuming you're operating at Uber's scale (there are still overhead costs), but since prices go up you aren't, so now the prices need to go up even more! I don't know where the equilibrium point is, I just know it's higher than what Uber is charging. My extremely hand-wavy guess is rides would need to cost around 50% more.
    - bufferoverflow 6y ago
      > I don't know how much that is, but I'd imagine There's your problem. I think you need to go and research and see how much an employee costs to the employer in CA. In terms of taxes, overhead, accounting, insurance, and everything else CA demands.
  - rgossiaux 6y ago
    If that was only in the US or other wealthy economies, maybe. But they're an international company. Some of those rides are in places where a $2 increase doubles the price of the ride. I think it would be more revealing to compare with their total receipts and see the % change that would be required.
    - bufferoverflow 6y ago
      The proposition is California-specific. Will not change anything outside of CA.
      - rgossiaux 6y ago
        This comment thread is discussing Uber's profitability and how much they'd need to raise prices to break even independent of Prop 22.
bhb916 6y ago
But what about the driver who doesn't want to be classified as an employee? What right do they have? Less trite - my nephew is in his mid-twenties and appreciates the flexibility that food delivery and ride sharing allows him. Is legislation that outlaws that an improvement?
- wpietri 6y ago
  What makes you think Uber and Lyft won't find ways for flexible employment? It's one of their big draws. I'd expect more faith in market-driven innovation here on HN. I've been an independent contractor for large parts of my professional life; I think it can be a great setup when it's truly independent. But for decades companies have been ramping up fake contracting, where it's just employment but worse.
fairity 6y ago
> It might cost more, but it wouldn't be much more. It will cost substantially more. Employment taxes and benefits alone add another 30% to Uber's cost structure. On top of that, paying drivers for downtime (which will be inevitable in an employment model) will add who knows how much more. I wouldn't be surprised if prices rise by 50%+ in suburbs.
- coolspot 6y ago
  They don’t have to make drivers employees, they can treat them as contractors if they follow limitations on how to work with a contractor.
  - fairity 6y ago
    One of the limitations of AB5 is that: The worker is performing work tasks that are outside the usual course of the company’s business activities. It’s hard to see how they can claim drivers as contractors under this guideline

by not2b 6y ago

Judgmentality 6y ago

> People are commenting as if app-based ride share will no longer be available. It might cost more, but it wouldn't be much more. Uber lost $8.5 billion dollars in 2019. Think about that. Uber is losing the better part of a billion dollars every month. They are hemmorrhaging money at their current prices. It will cost a lot more for this to be profitable when you consider how much more expensive this will make the drivers.

omgwtfbyobbq 6y ago
A quick search puts them at 6.9 billion rides in 2019, so profitability should come with a $2/ride increase. I think their current rates are a lot, so their current rates plus $2 are also a lot, but I think most riders would tolerate it.
- Judgmentality 6y ago
  This is ignoring how much more expensive it will be if the drivers are employees. I don't know how much that is, but I'd imagine in addition to those $2 it would likely add another 30% or so to the total cost (someone more knowledgeable please chime in with a better estimate). Of course that's assuming you're operating at Uber's scale (there are still overhead costs), but since prices go up you aren't, so now the prices need to go up even more! I don't know where the equilibrium point is, I just know it's higher than what Uber is charging. My extremely hand-wavy guess is rides would need to cost around 50% more.
  - bufferoverflow 6y ago
    > I don't know how much that is, but I'd imagine There's your problem. I think you need to go and research and see how much an employee costs to the employer in CA. In terms of taxes, overhead, accounting, insurance, and everything else CA demands.
- rgossiaux 6y ago
  If that was only in the US or other wealthy economies, maybe. But they're an international company. Some of those rides are in places where a $2 increase doubles the price of the ride. I think it would be more revealing to compare with their total receipts and see the % change that would be required.
  - bufferoverflow 6y ago
    The proposition is California-specific. Will not change anything outside of CA.
    - rgossiaux 6y ago
      This comment thread is discussing Uber's profitability and how much they'd need to raise prices to break even independent of Prop 22.

bhb916 6y ago

But what about the driver who doesn't want to be classified as an employee? What right do they have? Less trite - my nephew is in his mid-twenties and appreciates the flexibility that food delivery and ride sharing allows him. Is legislation that outlaws that an improvement?

wpietri 6y ago
What makes you think Uber and Lyft won't find ways for flexible employment? It's one of their big draws. I'd expect more faith in market-driven innovation here on HN. I've been an independent contractor for large parts of my professional life; I think it can be a great setup when it's truly independent. But for decades companies have been ramping up fake contracting, where it's just employment but worse.

fairity 6y ago

> It might cost more, but it wouldn't be much more. It will cost substantially more. Employment taxes and benefits alone add another 30% to Uber's cost structure. On top of that, paying drivers for downtime (which will be inevitable in an employment model) will add who knows how much more. I wouldn't be surprised if prices rise by 50%+ in suburbs.

coolspot 6y ago
They don’t have to make drivers employees, they can treat them as contractors if they follow limitations on how to work with a contractor.
- fairity 6y ago
  One of the limitations of AB5 is that: The worker is performing work tasks that are outside the usual course of the company’s business activities. It’s hard to see how they can claim drivers as contractors under this guideline