25 ms·

U.S. Labor Secretary throws support behind classifying gig workers as employees

442 points by alexrustic 5y ago

alexrustic 5y ago
See also CNBC article about this: Uber, Lyft, DoorDash stocks fall sharply after U.S. Labor secretary says gig workers should be classified as employees https://www.cnbc.com/2021/04/29/uber-lyft-doordash-stocks-fall-on-concern-over-gig-worker-regulation.html https://www.cnbc.com/2021/04/29/uber-lyft-doordash-stocks-fa...
vegetablepotpie 5y ago
> These companies are making profits and revenue Are they though? Uber said in its 2019 SEC filing that they may not make a profit [1], and while the company says profitability is around the corner, they have not yet turned that corner. Not saying that Uber or any “gig economy” companies should continue to classify their workers as contractors, but if your business model does not generate a profit despite not providing benefits to your workers, one has to ask how viable that business model is. While I understand the long game is to use self driving cars, this is not a proven technology. It’s a problem that may be solved in the next few years, but there’s no guarantee. Imagine investing in fusion energy, which has been just a few decades away for the last fifty or so years. While sometimes the long play does work out, such as with Amazon, where you end up with a behemoth that dominates its market, you have to wait a long time to start seeing returns. I wonder if these long term, risky investment opportunities are a sign that the exponential growth in the economy that we’ve become accustomed to is slowing down and becoming more S shaped. I can imagine this being a world where wealth does not come from growing and generating more wealth, but from political and bureaucratic maneuvering (like worker classification) to give workers less benefits and distribute the wealth higher up the class hierarchy. [1] https://investorplace.com/2019/04/seriously-uber-never-turn-profit/ https://investorplace.com/2019/04/seriously-uber-never-turn-...
- Ericson2314 5y ago
  > Not saying that Uber or any “gig economy” companies should continue to classify their workers as contractors, but if your business model does not generate a profit despite not providing benefits to your workers, one has to ask how viable that business model is. Yes exactly. > I wonder if these long term, risky investment opportunities are a sign that the exponential growth in the economy that we’ve become accustomed to is slowing down and becoming more S shaped. We do have a demand and growth problem, but let's step back a bit. - Gig companies growing and paying net sub minimum wage will make growth worse: we live in a consumer economy and less purchasing power for the people will sap the rest of the economy. - carshare/taxis are inefficient in strictly material terms: cars take up too much space, one driver per person is ridiculous overhead. Bikeshare and buses and trains both immensely improve on both of those. Fundamentally Uber is the low productivity result of our terrible urban planning: a tax we now all pay. Maybe there is some deep societal reason we cannot prop up aggregate demand, but I don't think so: let the helicopter money begin! But Uber is worse than no stimulus because it low productive and wage deflating. The only good thing is in it's subsidization phase a bunch of Saudi money was dispersed to regular people, but once that ends the legacy is further eroded labor norms.
- AlotOfReading 5y ago
  The long term play isn't to use self driving vehicles anymore. Uber sold off ATG and Lyft just got rid of Level 5. They're dependent on others delivering commercial SDCs for them and anyone with the technical chops to do that isn't going to find the infrastructure of a ride-share service very difficult. As Uber and Lyft have both demonstrated, it's also straightforward to sell VC dollars for pennies to build up transport market share. The dominant theme of leading AV companies seems to be massive capitalizations, so it's hard to imagine the ride-share incumbents being highly competitive there either. It's hard to imagine a situation where their most profitable markets don't get immediately disrupted, leaving Uber and Lyft to figure out profitability with only the long tail low margin areas SDCs won't be deployed to for years afterwards.
- paulpauper 5y ago
  The stock price is sure acting otherwise. I think uber's businesis cash flow positive, simialr to Amazon and Tesla, but that cap-ex and other non-recurring expenses are erroding profitability.
gkop 5y ago
Cue the comments from highly-skilled white collar professionals, grieving that W-2 employment is oppressive.
deleted 5y ago
[deleted]
splatcollision 5y ago
“If a business can’t pay a living wage, should it be a business?” - https://annehelen.substack.com/p/the-capitalism-is-broken-economy https://annehelen.substack.com/p/the-capitalism-is-broken-ec...
- tick_tock_tick 5y ago
  Absolutely it 100% it should be I don't even see the argument that it shouldn't. The idea that you would be blocked for working a job because it doesn't meet some government idea of enough pay is crazy.
  - minimuffins 5y ago
    A business that pays poverty wages is insufficiently socially useful imo. We do too much for it; it does too little for us. > some government idea of enough pay Misleading. There is an objective amount of pay that is or is not enough to live on in a given place. The government tries to guess at this sometimes, for the purpose of setting min wage, but that value is objective and exists independently. It's not some arbitrary bureaucratic thing.
    - throwawayboise 5y ago
      Not everyone who works does it for the goal of "living on" that one job. Some people work for supplemental income. Some people (teens) work for spending money and to gain experience. Some people (retirees) work for something to do other than sit at home. If all jobs had to pay enough to "live on" then most of the people above would be able to work at all, because the jobs simply would not exist.
      - minimuffins 5y ago
        You are setting up a scenario where we have to choose between: A) teens and retirees having access to low paying scut work jobs B) eradicating wage slavery for non-teen, non-retirees by making it illegal for employers to pay poverty wages I don't know if it's really such a simple binary opposition, but if it is, B for me.
jandrese 5y ago
I'm waiting for the inevitable backlash when Uber starts cutting drivers off after 39 hours in a week to avoid having them classified as full time. I'm expecting this to increase fares, but currently there is a lot of room between Uber's fares and traditional taxi fares so even if they went up 20 or 30% they would still be a fair bit cheaper.
- mandelbrotwurst 5y ago
  It might increase fares, although I'm wondering if that effect might be mitigated somewhat as drivers simply move hours worked whatever the cap is to some competing platform like Lyft. My hope is that we'll eventually get to the point where we'll be able stand up a decentralized alternative that will allow us to cut out the Uber middleman.
- miketery 5y ago
  It'd be interesting to look at pricing by city. I bet they implement predatory pricing, i.e. undercut in small markets to crush competition, then raise prices. Regardless in NYC Ubers tend to be about the same or more expensive during normal hours. And significantly more expensive during peak times. How much of the surge pricing goes towards the drivers pay? I'd wager margins are excellent for Uber during surge pricing. There will come a day when each city will operate it's own system to facilitate app based taxis (will be on some standard protocol), and Uber a central entity out of SF won't be competitive or will be taxed out. Why let an entity extract X% of each ride out of its economy? Not worth it.
  - sethhochberg 5y ago
    In NYC, your Uber driver is professionally licensed as a taxi/limousine driver and driving a vehicle that is registered as a for-hire vehicle. I'd bet this alone helps close the cost gap between rideshare and taxi, since there's nothing "rideshare" about it really - you're still paying for a professional driver with licensing costs, vehicle registration costs, extra insurances, sometimes even vehicle modifications, etc. These debates about Uber/Lyft/etc employment status always seem to omit that there are two very distinct classes of people finding work with these services - one group is doing it part time in their personal vehicles, and the other group is doing it full-time in commercial vehicles. The interests of those two groups don't necessarily align.
908B64B197 5y ago
Interesting how pre-Uber, nobody in the (medallion) taxi business was an employee either. But going against it would have probably upset some local donators. Now that it's "evil big tech" it's fashionable to bash on it.
- jrsj 5y ago
  And we all know tech companies & their investors don’t give money to politicians /s
  - wutbrodo 5y ago
    From the parent comment: > But going against it would have probably upset some *local* donators In what way is it sensible to classify big tech as a _local_ donor? Hell, the very term itself implies very wide reach.
    - jrsj 5y ago
      The implication seemed to be that it was somehow unreasonable to either see big tech as evil (which imo it often is) and suggested that they were somehow less politically influential or protected than local taxi businesses. In my opinion the opposite is true. Uber (and big tech generally) is often worse than what it’s replacing, and a hell of a lot more powerful politically. They don’t just take advantage of laws or have laws that favor them, they blatantly ignore laws with little to no consequence. There was some negative attention to taxis before Uber even existed, but because the problem was on a much smaller scale not much attention was paid to it.
      - wutbrodo 5y ago
        I think you're projecting a lot of loaded meaning onto the claim, in the presence of interpretations that don't require making such broad assumptions. Parent commenter could easily have meant that corruption when it comes from local entities is something that the public doesn't have good antibodies for, because of the classic "diffuse costs, concentrated benefits" problem. By contrast, putting an issue under the umbrella of "big tech" unites a lot of people under the same vague banner, as people are mad at big <industry> for any number of reasons, especially an industry as far-reaching as tech. This incentivizes politicians to care about an issue that their pocketbooks would otherwise prefer to ignore. (Note that this analysis is neutral wrt the actual goodness of policy, but that's just a basic feature of democracy) It's pretty simplistic to interpret comments only through the lens of "big tech good? No, big tech bad" when a narrower point is being made. >There was some negative attention to taxis before Uber even existed, but because the problem was on a much smaller scale not much attention was paid to it. This lines up pretty cleanly
eplanit 5y ago
Biden wants to expand labor unions, so this isn't a surprise.
mjevans 5y ago
A progressive labor department and policy would at least require a proportion of benefits based on a proportion of a full time job. An even more progressive policy would be to make all non-wage benefits provided by the government, so that the contract between employee and employer could be simplified and the jobs field level with lower resistance for taking new opportunity.
- clairity 5y ago
  yes, discontinuities (benefits cutoffs) lead to gaming. i'm heavily in favor of removing discontinuities like this, where entities are incentivized to essentially cheat others (i.e., promotes greed). for instance, every tax policy (rates, credits, deductions, etc.) should be continuous functions rather than a set of cliffs.
- briandear 5y ago
  That shifts the costs on to me, the taxpayer, but not necessarily an Uber customer, for non-wage benefits. Why should I, the non-Ubering taxpayer have to pay benefits for an Uber driver? That isn’t “progressive,” that’s shifting a cost from the two people engaged in a contractual transaction to everyone who doesn’t necessarily have any interest in the transaction. If an Uber driver needs health insurance, that cost would be part of the calculus of deciding to drive for Uber. If the government provided it, the taxes required would also become part of that calculus. The deadweight loss from taxation can’t be ignored. Not to mention it isn’t my job to provide non-wage benefits to support Uber or a driver. That’s between them. Literally not my problem. If the Uber driver isn’t taxed proportional to their consumption of benefits, then I the taxpayer am forced to subsidize the profit of both Uber and the driver. If the driver has to pay for his own non-wage benefits, than that would be part of their determination of accepting the offered wage or not.
  - alistairSH 5y ago
    The problem in the current scenario is the drivers needs health insurance, but Uber isn't supplying it (nor are they paying a high enough wage to buy insurance on the open market), so tax-payers are stuck footing the bill anyways.
burlesona 5y ago
This is just such a weird fight. As someone who freelanced for long stretches of time, I think there are a lot of positives about freelance / gig work, and I also think that the majority of people who take these jobs understand the position they’re in and are happy with it. They chose to freelance and drive for Uber for reasons. The legit concern is whether Uber or any other freelance company misleads its gig workers on their earnings, and to me the best solution to that is not to force reclassify them as employees or prohibit gig work, but to regulate transparency in compensation. For example, require freelance employers to include expense tracking and calculate workers earnings after expenses. That by itself would fix most of the problems for the percentage of gig workers who don’t realize they’re extracting depreciation from their car more so than getting paid by Uber. The other issues of healthcare, etc., the US needs to solve at a societal level, not an employer level. I think humans have a right to health care. But I don’t think people have a right to a particular job, nor an entitlement for that employer to provide a particular mix of benefits. This idea that we need to provide our social contract / safety net exclusively via employers is so strange to me, compared to simply owning that if we want these to be rights of our citizens then the government should be providing them as tax-paid services.
- anigbrowl 5y ago
  Thing is most of the regulatory infrastructure you describe already exists in employment law. The broad societal proposals you describe would necessitate a radical reappraisal of contract law and a lot of other things. To use the popular 'ship of state' metaphor, it would be sort of like dramatically reconfiguring an aircraft carrier while it's at sea.
  - grok22 5y ago
    I guess that is what is happening here...fixing any problems using the existing model instead of trying to figure out new ways of fixing the problems to fix the new model of employment in some industries.
  - jjk166 5y ago
    We elect lawmakers, not lawkeepers. It is their job to update the laws to keep pace with society, not restrict society so existing laws remain useful. In the 'ship of state' metaphor, we're never going to be closer to a drydock and we need a hospital ship not an aircraft carrier.
jandrewrogers 5y ago
It seems backward that the government, instead of fixing government policy and laws that disadvantage independent workers, wants to force independent workers to become employees so that the government doesn't have to fix anything. It is abdication of responsibility for social outcomes. Many gig workers explicitly do not want to become employees, as there are many disadvantages to doing so. In these cases, the only people that benefit are the politicians that can go on ignoring the real problems.
- lotsofpulp 5y ago
  It makes sense if you realize that everyone wants everyone else to have a minimum quality of life, but everyone is also trying to pay/sacrifice the least to achieve it. We want employers to provide benefits, as opposed to the government because that means higher taxes. Then you put a million exclusions and tax deductions and other loopholes, so no one knows what they're really getting, but we can say we did something and that benefits do exist to serve as arguments against broadly, easily accessible benefits to serve as a floor on quality of life.
  - giantg2 5y ago
    "It makes sense if you realize that everyone wants everyone else to have a good quality of life, but everyone is also trying to pay/sacrifice the least to achieve it." And what defines a good quality of life depends on who you ask.
    - treeman79 5y ago
      What about people that can not handle a normal job? I have a chronic condition and for a year the only reason family didn’t end up on street is because of gig jobs. Most days 12-16 hours a day in bed essentially blind in horrific pain. But sometimes totally fine. Disability straight up laughed at me.
      - zepto 5y ago
        This. so much policy is designed around the idea that people should work a 9-5 at a corporation, without any consideration for the fact that this simply doesn’t support a lot of people’s needs. We need more flexibility not less. Ironically this completely flies in the face of any motion or ‘diversity and inclusion’.
seany 5y ago
I really hope what every they end up doing here doesn't screw over all the people that really want to be part time contract workers like AB5 did.
heavyset_go 5y ago
It blows my mind that these platforms refuse to let workers set their own rates, choose their clients, choose how the work gets done, where the work gets done and how the work gets done. Those are the defining characteristics of what makes a worker a contractor or not. Instead, platforms like Uber dictate rates, dictate how, where and when the work gets done, and penalize workers if they don't take the clients Uber wants them to take. Uber even dictates what cars they can and can't use.
- nerdponx 5y ago
  Sounds like a definining characteristic of monopsony, which you could argue makes the difference between contractor and employee somewhat irrelevant.
  - heavyset_go 5y ago
    Yes, I also agree with this sentiment.
- Jonanin 5y ago
  This is a blatantly false characterization. Uber workers can decide when and how to work.
  - heavyset_go 5y ago
    > The defining aspect of these gig worker jobs is that independent contractors _can_ decide when and how to work. So the workers can negotiate when, how and for how much they'll work for their clients? I've got an '01 sedan collecting dust, can I decide that's how I'm going to pick up my clients via Uber? When I worked as a contractor, it didn't matter that I used some shitty laptop or OS to get my work done, because I had the freedom to decide how and where I completed my work. Workers using Uber are denied that freedom.
    - kevincox 5y ago
      > it didn't matter that I used some shitty laptop or OS to get my work done This isn't a reasonable comparison. Your shitty laptop or OS was likely not part of the product. If I want a website I don't care what your laptop looks like. If I am being driven somewhere I certainly care about what condition the car is in.
baby 5y ago
This reminds me of how SF killed the electric scooter business. This is why we can't have nice things. America wants you to own a car, and drive it.
- temp667 5y ago
  Which is nuts - they were so popular and efficient. Was it the taxi companies who wanted them gone or uber? Uber I'm sure did a lot better business once you couldn't grab a scooter.
  - duckfang 5y ago
    I'm glad to see most Limes and Birds gone. More often than not, they ended up in roads, across sidewalks blocking access, thrown in parking spots, in lakes rivers and other deep-enough bodies of water, thrown off parking structures, and more. And in my city, both Bird and Lime came in the city on flatbed trucks between 4-5AM and offloaded them en masse. Where I come from, that's abandoning trash. Had they work with the city, this rollout couold have gone loads smoother and not start by trashing the public commons... But in reality, thats what Silly-con valley companies do - they exfiltrate good will and good things like public commons and take it for themselves, all the while screaming that they're being wronged when people take, disassemble, throw in trash their littered goods.
    - baby 5y ago
      Every time I read a comment like this, that seems to ignore the amount of space, noise, and danger cars bring to a city, I just can’t believe it was written in right faith.
      - duckfang 5y ago
        Why should a private company be able to: 1. Store private goods permanently on the public commons? 2. Hinder the use of the public commons for long-term? 3. Treat the public commons as a refuse-dump? 4. Privatize the gains while socialize the losses? Do we need something better in terms of overall transport? Of course we do. But dumping them off a flatbed truck at 4AM and YOLO'ing is not how you do it either. But it is how you get myself and people like me loading them into dumpsters to be hauled away.
vsskanth 5y ago
Elephant in the room here is tying benefits to employment.
tick_tock_tick 5y ago
Fix the fact that health insurance, retirement program, etc are all tied to traditional employment rather than forcing everyone into a square box.
- nerdponx 5y ago
  Yes, this! People need more stable access to basic needs: healthcare, education, food, water, housing, communications (some kind of basic phone & internet access). This will necessarily lead to greater labor market mobility and therefore greater market power by labor providers (i.e. employees and contractors).
- oramit 5y ago
  Indeed - this is the real problem. We've bolted on so many things to the employee/employer relationship that should not be there. It's no surprise that contractor vs full time questions become so fraught when as a matter of policy, we've made that distinction hugely important. I want there to be more flexibility in work arrangements. That would be awesome, but the only way to make that work is to sever Health care and retirement plans from employment.
- kevincox 5y ago
  This is the weirdest thing to me. Why do I get whatever health plan my employer selected? I shouldn't have to switch jobs to change my health insurance. And sometimes there is a delay before your coverage starts at the new pace, or I want to take a couple of months off. Now I have no coverage! This is nonsense. It seems that the main argument for it is that companies have more negotiating power, but that seems like it would largely change if there was a significant market for individual/family health insurance where competition can actually exist between the people who are benefiting. Employment should be simple, I do work and they pay me. Instead so many critical aspects of my life are tied to it as you mention.
- standardUser 5y ago
  We disincentivize starting business (anti-entrepreneurial), work hour flexibly (anti-family), working independently (anti-individualism) and instead heavily incentivize reporting to a boss, on their schedule, at their chosen location, and getting paid only whatever you can convince them to pay you.
citilife 5y ago
This is a super weird stance to be honest... Imagine if I sell my book on Amazon. Is Amazon the employer or my publisher? If I rent my home out on AirBnB, is AirBnB by land lord or realtor? If I offer to fix plumbing via craigslist, is craigslist my employer? So, if I offer to much of my services on a platform am I to be employed by that platform? The drivers of Uber and Lyft have opted not to be employees before. There seems to be some sort of political agenda here (maybe increase in taxes?), because no one seems to want this.
- ceejayoz 5y ago
  Only the plumber is a contractor/employer scenario. The rest of the examples are irrelevant. Individual plumbers are often contractors. If they work for a larger plumbing company, they'd be an employee. There are specific criteria at play here: https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation https://www.irs.gov/newsroom/understanding-employee-vs-contr... > A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised. Uber sets the driver standards, how the work should be done, policies, pricing, etc. They clearly have some aspects of an employer/employee relationship. The line's a little blurry in spots; I can see both sides of the argument, and I'd say it's clear the law didn't anticipate this scenario.
  - citilife 5y ago
    What is a contractor? They are person or company leasing labor aka providing services. The other items I listed were both services and goods. The point is that you shouldn't force a platform to employ or act as anything other than what it is (a routing system). Uber is not directly employing people, it's connecting customers to produces of a service (taxis, effectively). It's also acting as the payment processor and price setter. Everyone can know what they're getting / paying ahead of time. It's a transaction.
    - ceejayoz 5y ago
      > They are person or company leasing labor aka providing services. The formal definition - see the IRS link - is substantially more complex than that. I provide services to the company that employs me. I am not a contractor.
throwaway823882 5y ago
Gig working only exists because our economy is rooted on income inequality. If people could get a regular job that paid a living wage, they wouldn't be working 14 hours a day for 3 different companies just to make ends meet. Gig companies are the 21st century robber barons.
- tick_tock_tick 5y ago
  Gig workers only exist because the state has tied more and more programs like 401k and health insurance into employment. The fact that you can't hire someone without also worrying about health insurance is insane. That is what needs to be fixed I don't want my employer involved at all in my personal health care.
  - ckocagil 5y ago
    So you're proposing we go back to the 19th century?
    - tick_tock_tick 5y ago
      What do you even mean? I just don't want my employer involved in government retirement programs or my health insurance. "Benefits" from employers are just nicely constructed traps to make it hard to retire or switch jobs.
  - throwaway823882 5y ago
    Gig working started with Uber as an extension of cab driving. Cab drivers do not get 401k and health insurance. So it makes no sense at all that gig working would only exist because companies didn't want to pay benefits. Your pizza delivery guy wasn't getting benefits either. Neither your waiter, or bartender. However, Uber and other companies did start right after the dot-com recession, when people needed to both save money, and make extra money. It turns out a lot of people needed to do both. Sure, there were advantages over the previous incumbents (cabs suck), but that's not why there are so many drivers. Ask your Uber or Lyft drivers sometime how often they work. Many of them, since the early years, told me they work as many hours as they can, for as many companies as they can, just to make ends meet. Of course they're paying for their car and all that themselves, too, so it's not like they're getting ahead. And they definitely would rather not be driving for 14 hours a day. These companies exploit people in an unequal system in order to make profits.
TechBro8615 5y ago
Has anyone asked the gig workers how they feel about this? Do they want to be W2 employees? Perhaps the real problem is that the IRS makes it such a massive PITA to be a contractor. You need to withhold your own taxes, pay nearly 30% of your money to the government, etc. Nobody likes that, and unsurprisingly, a lot of contractors fail to meet the requirements. You know who really doesn't like it? The IRS. When most of the population is on W2 employment, the IRS has a constant revenue stream of payroll taxes and automatically withheld income taxes coming into its coffers every pay cycle. But with contractors, the IRS only gets that money once a year, and often times they're missing a piece of it. Also – just putting this out there – a population of contractors would have much more power in a hypothetical "tax boycott" than a population of employees. I could imagine some social movement convincing all the contractors in the country to boycott the IRS and skip paying taxes one year. I doubt "the government" is anywhere near competent enough to conspire against this possibility, but the existential risk is there. Surely they would prefer that the peasants don't realize the power of collective tax resistance.
- balefrost 5y ago
  But with contractors, the IRS only gets that money once a year, and often times they're missing a piece of it. I don't know the entirety of the tax law, but I believe that you're supposed to make estimated tax payments quarterly. https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes https://www.irs.gov/businesses/small-businesses-self-employe...
  - deleted 5y ago
    [deleted]
  - deleted 5y ago
    [deleted]
  - TechBro8615 5y ago
    I'd like to see a poll of how many ICs actually do that. I bet it's < 50%.
    - 5y ago
duxup 5y ago
I remember when 'gig economy' first was talked about, it was about professional type digital nomad type stuff .... but when I think of it now it's just a bunch of folks delivering food and driving people around.
- pram 5y ago
  I think it’s because early adopters had success (same with things funded via Patreon) and then the resulting bandwagon and influx of labor competition made it a race to the bottom.
steven_bishop 5y ago
How would working for competing apps work ? Would drivers be considered employees of both Uber and Lyft ? Do they have to log a certain amount of miles driven in order to qualify as an employee ? I'm interested in seeing how this all works out.
ajkjk 5y ago
Would love to see the whole concept of 'employees' blasted away and replaced with something more flexible.
- minimuffins 5y ago
  Since I'm in the employee class and not the employing class, I would like to see the opposite.
  - ajkjk 5y ago
    I mean, me too, but it's insane that it's a binary where you either "are a contractor" or "are an employee". if you took this framework away and replaced it with a more flexible one (ideally decoupled from healthcare..) people would invent all kinds of other mutually beneficial relations.
mrtksn 5y ago
Everyone knows that they are workers, right? Not just random workers that do something else every day, workers on their own devices but workers for a company and they works the way that company says. Why not start from here and work on the employment laws to allow for the flexibility or whatever works for that kind of employment? Why pretend that an Uber driver is a businessmen that may actually expend his/her business or go through other company stages? Obviously that's not happening, therefore they should have the rights and obligations of a worker, not a business.
- briandear 5y ago
  > Obviously that's not happening Do we know that to be true?
  - mrtksn 5y ago
    Yes, for all the gig jobs that I'm aware of. If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck. Last time I checked, Uber wouldn't let you simply fulfil your duties of transporting people the way you find fit, for example. It's really not a B2B relationship in any meaningful way. For those who do, sure. They are not gig workers, they are contractors.
- mattm 5y ago
  I think really what is needed is a new employment classification to deal with gig workers. It's clear that they're somewhere in the middle between an employee and contractor/freelancer.
  - topkai22 5y ago
    Definitely, although the legislative slog that would present makes me believe it'll be tough to get there. Part of the Uber/Lyft "ickiness" factor is that you have a giant company that has defined a "contracting" relationship with 100s of thousands of individuals. That is big power and capcity differential. Its not unreasonable to expect that the gig service companies be required to provide more services for their drivers than, say, local independent window washer who contracts individually with many businesses. Automatic tax payments, minimum wage for callouts and depreciation payments for self provided equipment are not unreasonble past a certain scale point. That being said, the people I've known personally who have drove for Uber/Lyft (around 4, so a small number admitadly) really were doing it just for a bit of extra cash on the side and would not have wanted or been able to be an employee of Uber/Lyft.
SllX 5y ago
Counter-proposal: move the BLS and OSHA* under Commerce; abolish the remainder of the United States Department of Labor. *Are there any more remaining worthwhile agencies under Labor? I’m going from memory here.
LatteLazy 5y ago
The whole world is going this way. The UK just brought in IR35 to force as many people to be employees as possible. But I don't want to be an employee. I was much happier when I started contracting instead.
novok 5y ago
I think the major issue with classifying gig workers as employees is how the company cannot practically deduct the cost of the gig worker's equipment that they bring to the job. In the USA there is a lot of idle car stock that is leveraged to make something like doordash and uber work, and with this employment change if the workers could also deduct their vehicle costs as part of doing the job, I would foresee a lot less resistance from the industry. I also don't think the 'employees' are going to get benefits either way, if this passed then their hours would be limited to the benefits threshold time like a lot of other low income jobs do now today, and they would be forced to work for 2 of the gig companies, who now will put strict scheduling on them making it a huge pain the ass. In the end, nobody will be happy with the outcome and everyone would be worse off, except the government with some more tax revenue, or less because gig companies buying equipment will probably deduct more in total.
underseacables 5y ago
What about giving them the option: they can be employees or independent contractors?
- gnopgnip 5y ago
  Should people be able to agree to work for less than minimum wage? Who is impacted by this, who ultimately bears the cost?
noarchy 5y ago
Though not quite the same scene as gig work, the matter of classification has long been an issue in the tech scene, at least where I am in Canada. That said, I think some clamping-down has occurred of late. Recruiters used to openly solicit 'incorporated' developers, despite the actual working conditions being almost entirely equivalent to that of an employee: hours set by the employer, requirements to be on-site, often sitting beside full time employees, etc.
jeremynixon 5y ago
Instead of ensuring that health care benefits are independent of corporate attachments, Marty Walsh continues to destroy useful distinctions in a system that congress refuses to appropriately reform. Sad.
MR4D 5y ago
I think there should be an immediate opt-out of this - if you own your own LLC, S-Corp, etc, then it should be explicit under the law that any work you do using that entity is a contractor to any other entity.
jameslk 5y ago
Self-employed workers are offered several huge tax benefits by being self-employed: 1. Writing off business expenses (gas, vehicle wear and tear, etc) 2. The Qualified Business Income deduction of 20% 3. Larger contributions to tax-favorable retirement funds Employment eliminates this in addition to adding several additional taxes (workers comp, unemployment, etc). These expenses are passed down to the employee in the form of reductions in wages. So the implications of making large populations of self employed workers actually employed has great tax benefits for the government, at the expense of the worker.
- gher-shyu3i 5y ago
  Shhh, don't spoil the socialist utopia with reality.
  - astura 5y ago
    Employers being expected to follow labor laws is a "socialist utopia" now?
    - gher-shyu3i 5y ago
      The government doesn't want to do its job. Nothing to do with labor laws.
Animats 5y ago
It's not a "shift in policy". It's what US labor law says. It just hasn't been enforced properly.
siruva07 5y ago
Most gig workers should be given the opportunity to become franchise owners, not employees and lose their independence. That could also solve the equity discrepancy, and give the workers real ownership upside.
makosdv 5y ago
I feel like we should be trying to phase out this special "employee" classification that the gov't defined instead of expanding it.
superbatfish 5y ago
In most discussions around this topic, Uber and Lyft are highlighted as typical examples. This article is no exception. But it includes the following quote from Labor Secretary Marty Walsh: >“These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that's what we are about in America. But we also want to make sure that success trickles down to the worker,” he said. If he's referring to Uber and Lyft specifically, then he's mistaken. Uber and Lyft remain breathtakingly unprofitable. Would that fact change the way people think about this issue? I think it does... and advocates for reform think it does, too. Otherwise, why would they keep making this "mistake" when they talk about this issue? As a side note: it's pretty poor journalism on Reuters' part to include that quote without any context or criticism, especially since they mention Uber and Lyft by name in the opening paragraph. Or, if he wasn't talking about Uber and Lyft, then Reuters' presentation makes him look like a liar, or at least embarrassingly misinformed. (He's the Labor Secretary after all -- he ought to know what he's talking about.)
jeezzbo 5y ago
Employees, by structure of tax code, pay Government taxes prior to receiving their own salary. Corporations pay Government for access to labor market in form of tax on employees. People who own their own labor, like much of the innate structure of "Rights" that exist in lieu of Government administration, like 1st, 2nd, etc.. only pay the Government after all expenses have been deducted from revenue, and the self has been paid. This inherent structural shift, between the owner and the owned, is the fundamental source of tension being pulled at by this view of labor market. The Government owns its labor pool. People own root authority over a Government "of, by, for" those people. This is the fault line of civil Society, as presently defined in Constitutional literature. The actual source of American Sovereignty of course, demonstrated by John Hancock and peers, and recursively denied to all that followed, is directly personal. In other words, Amrica, and all Sovereign labor is issued by self-Sovereign authority, or else this dream never exists. Employees opt-out of this inherent structure, and by acting thus, degrade the labor market as defined by this labor Secretary. The Government can't pay for infinite wars and debt without employees paying the Government before their own lives. Structure yields results.. administrative enslavement -to- employment came about, at great human cost fought via war, and owners were victorious on both sides of history.. structure yields results..
kingsuper20 5y ago
After doing God's work upvoting anything that's grey, whether I agree or not.... Having hit this kind of thing when the Great State of California got interested in contractors a few years back I have to say that the cynic in me tends to come out on these issues. So many people have a personal interest in this general issue, large companies who don't use contractors, large companies who do, health insurance mavens, the state wanting to extract a few bucks in things like unemployment insurance, people in the grievance industry, politicians generally, I think you basically can't trust any heartfelt opinions on the way-things-oughta-be.
superbatfish 5y ago
Here's a great podcast on this question (regarding Uber and Lyft drivers specifically), from Julia Galef: http://rationallyspeakingpodcast.org/show/episode-255-are-uber-and-lyft-drivers-being-exploited.html http://rationallyspeakingpodcast.org/show/episode-255-are-ub... She interviews three experts on the subject. Here's the description of the episode: >How much do Uber and Lyft drivers really earn, after expenses? Are they getting a raw deal by being classified as 'independent contractors' instead of employees? I explore the debate over these questions with three guests: Louis Hyman (Cornell), Veena Dubal (UC Hastings College of the Law), and Harry Campbell (The Rideshare Guy).
llboston 5y ago
Not surprised. Marty Walsh is a former Union boss. https://en.wikipedia.org/wiki/Marty_Walsh_(politician) https://en.wikipedia.org/wiki/Marty_Walsh_(politician)
volandovengo 5y ago
I happen to have co-founded a company (Wrapbook) that makes it easy to work with gig-based workers as employees. The entertainment space long ago settled this fight and classifies everyone as employees, not as contractors, even when they work a single day. This fight has nothing to do with independence and only has to do with employers trying to save some 15% of an employee's wage in taxes & keep themselves off the hook if people get injured on the job. The savings are real - somebody making $1000 a day - classified as an employee, costs an additional estimated $150. You can pay short term workers as employees pretty easily (we facilitate it).
flerchin 5y ago
Look I really don't care what their arrangements are. Can I get someone to drive me to the airport from an app? Great, I'll pay what it charges. If the law says they have to do X and Y for those workers, I expect those costs to be passed along to me, and I'll gladly pay them.
myko 5y ago
A lot of these problems stem from healthcare being tied to jobs, which makes zero sense.
xyzzy21 5y ago
Be aware: contractors and other workers fall into this category of "gig workers" - this will end 1099-based work as well.
stjohnswarts 5y ago
It's odd because most of the drivers I've talked to don't want to be "employees" but they do want all the typical employee benefits even though the corp that pays them would have no way of anticipating ROI in any given driver? Can they just say "enjoy your own scedule, but you have to work a minimum of X hours this week or lose your benefits" otherwise it's an odd thing to ask of companies.
throwaway189262 5y ago
Let us remember that big tech companies like Microsoft, Google, Facebook generally have 49.9% of their employees contractors. Why nearly 50%? Because that the highest amount you can have without additional liability. If they could get away with it, far more than 50% would be contractors. The gig loophole benefits only super rich corporations. It's crazy to see so many people defending it. The sole purpose is undermining a century of worker protections. Technology has made it easy to tweak jobs just enough so they fall under contractor status. When these laws were written nobody could imagine systems where work is reassigned in seconds. The rules about flexible schedules etc we made for a different time. I've driven for rideshare. It's not like freelancing at all. You can't turn down rides. Can't set your prices. Can't choose your clients. Can't do your own advertising. You can only drive certain models and years of cars. There's rules about modifications you can do and how you treat customers. You have little to no control once you "sign on". It's a regular job with flexible hours
- whoknew1122 5y ago
  100% percent of the reason I didn't go work 'for' Microsoft was that I'd be a temp-to-possibly-hire contractor. And from the former contractors I'd talked to (one recommended by the recruiter!), it was clear contractors were treated like second-class citizens by Microsoft. From what I was told, contractors couldn't participate in networking events or even get free food employees got because Microsoft was sued for misclassifying workers. So instead of reforming their business model they just switched to a model where they made clear contractors were contractors--by treating them like trash. Fuck that.
  - valdiorn 5y ago
    this is not isolated to microsoft, or the US. Everywhere I've worked, the contractors we've had have been treated like second class citizens. The smart ones even insist on it. Why? Because if they are allowed to enjoy the amenities of a normal staff member (free snacks, invite to company events, etc.) they run the risk of being classed as employees... which is bad news for everybody, not just the company. If you as a contractor are found to be incorrectly classified, that can mean a massive accounting headache, loss of tax benefits, possibly being required to enroll in a union, and lots more. I've worked in Iceland and the UK, for 5 different companies, each one employing lots of contractors. All of them avoid these benefits for said reason. You can read up on IR35 if you want to know more about the UK rules (although it's been recently revamped making contracting a lot less appealing).
wavepruner 5y ago
I've never met a HN commenter who is critical of gig work who is actually a gig worker, like myself. Do you exist? Or is it always a bunch of privileged people blathering on about a situation they have no first-hand experience in?

442 points by alexrustic 5y ago

See also CNBC article about this: Uber, Lyft, DoorDash stocks fall sharply after U.S. Labor secretary says gig workers should be classified as employees https://www.cnbc.com/2021/04/29/uber-lyft-doordash-stocks-fall-on-concern-over-gig-worker-regulation.html https://www.cnbc.com/2021/04/29/uber-lyft-doordash-stocks-fa...

vegetablepotpie 5y ago

> These companies are making profits and revenue Are they though? Uber said in its 2019 SEC filing that they may not make a profit [1], and while the company says profitability is around the corner, they have not yet turned that corner. Not saying that Uber or any “gig economy” companies should continue to classify their workers as contractors, but if your business model does not generate a profit despite not providing benefits to your workers, one has to ask how viable that business model is. While I understand the long game is to use self driving cars, this is not a proven technology. It’s a problem that may be solved in the next few years, but there’s no guarantee. Imagine investing in fusion energy, which has been just a few decades away for the last fifty or so years. While sometimes the long play does work out, such as with Amazon, where you end up with a behemoth that dominates its market, you have to wait a long time to start seeing returns. I wonder if these long term, risky investment opportunities are a sign that the exponential growth in the economy that we’ve become accustomed to is slowing down and becoming more S shaped. I can imagine this being a world where wealth does not come from growing and generating more wealth, but from political and bureaucratic maneuvering (like worker classification) to give workers less benefits and distribute the wealth higher up the class hierarchy. [1] https://investorplace.com/2019/04/seriously-uber-never-turn-profit/ https://investorplace.com/2019/04/seriously-uber-never-turn-...

Ericson2314 5y ago
> Not saying that Uber or any “gig economy” companies should continue to classify their workers as contractors, but if your business model does not generate a profit despite not providing benefits to your workers, one has to ask how viable that business model is. Yes exactly. > I wonder if these long term, risky investment opportunities are a sign that the exponential growth in the economy that we’ve become accustomed to is slowing down and becoming more S shaped. We do have a demand and growth problem, but let's step back a bit. - Gig companies growing and paying net sub minimum wage will make growth worse: we live in a consumer economy and less purchasing power for the people will sap the rest of the economy. - carshare/taxis are inefficient in strictly material terms: cars take up too much space, one driver per person is ridiculous overhead. Bikeshare and buses and trains both immensely improve on both of those. Fundamentally Uber is the low productivity result of our terrible urban planning: a tax we now all pay. Maybe there is some deep societal reason we cannot prop up aggregate demand, but I don't think so: let the helicopter money begin! But Uber is worse than no stimulus because it low productive and wage deflating. The only good thing is in it's subsidization phase a bunch of Saudi money was dispersed to regular people, but once that ends the legacy is further eroded labor norms.
AlotOfReading 5y ago
The long term play isn't to use self driving vehicles anymore. Uber sold off ATG and Lyft just got rid of Level 5. They're dependent on others delivering commercial SDCs for them and anyone with the technical chops to do that isn't going to find the infrastructure of a ride-share service very difficult. As Uber and Lyft have both demonstrated, it's also straightforward to sell VC dollars for pennies to build up transport market share. The dominant theme of leading AV companies seems to be massive capitalizations, so it's hard to imagine the ride-share incumbents being highly competitive there either. It's hard to imagine a situation where their most profitable markets don't get immediately disrupted, leaving Uber and Lyft to figure out profitability with only the long tail low margin areas SDCs won't be deployed to for years afterwards.
paulpauper 5y ago
The stock price is sure acting otherwise. I think uber's businesis cash flow positive, simialr to Amazon and Tesla, but that cap-ex and other non-recurring expenses are erroding profitability.

gkop 5y ago

Cue the comments from highly-skilled white collar professionals, grieving that W-2 employment is oppressive.

deleted 5y ago

[deleted]

splatcollision 5y ago

“If a business can’t pay a living wage, should it be a business?” - https://annehelen.substack.com/p/the-capitalism-is-broken-economy https://annehelen.substack.com/p/the-capitalism-is-broken-ec...

tick_tock_tick 5y ago
Absolutely it 100% it should be I don't even see the argument that it shouldn't. The idea that you would be blocked for working a job because it doesn't meet some government idea of enough pay is crazy.
- minimuffins 5y ago
  A business that pays poverty wages is insufficiently socially useful imo. We do too much for it; it does too little for us. > some government idea of enough pay Misleading. There is an objective amount of pay that is or is not enough to live on in a given place. The government tries to guess at this sometimes, for the purpose of setting min wage, but that value is objective and exists independently. It's not some arbitrary bureaucratic thing.
  - throwawayboise 5y ago
    Not everyone who works does it for the goal of "living on" that one job. Some people work for supplemental income. Some people (teens) work for spending money and to gain experience. Some people (retirees) work for something to do other than sit at home. If all jobs had to pay enough to "live on" then most of the people above would be able to work at all, because the jobs simply would not exist.
    - minimuffins 5y ago
      You are setting up a scenario where we have to choose between: A) teens and retirees having access to low paying scut work jobs B) eradicating wage slavery for non-teen, non-retirees by making it illegal for employers to pay poverty wages I don't know if it's really such a simple binary opposition, but if it is, B for me.

jandrese 5y ago

I'm waiting for the inevitable backlash when Uber starts cutting drivers off after 39 hours in a week to avoid having them classified as full time. I'm expecting this to increase fares, but currently there is a lot of room between Uber's fares and traditional taxi fares so even if they went up 20 or 30% they would still be a fair bit cheaper.

mandelbrotwurst 5y ago
It might increase fares, although I'm wondering if that effect might be mitigated somewhat as drivers simply move hours worked whatever the cap is to some competing platform like Lyft. My hope is that we'll eventually get to the point where we'll be able stand up a decentralized alternative that will allow us to cut out the Uber middleman.
miketery 5y ago
It'd be interesting to look at pricing by city. I bet they implement predatory pricing, i.e. undercut in small markets to crush competition, then raise prices. Regardless in NYC Ubers tend to be about the same or more expensive during normal hours. And significantly more expensive during peak times. How much of the surge pricing goes towards the drivers pay? I'd wager margins are excellent for Uber during surge pricing. There will come a day when each city will operate it's own system to facilitate app based taxis (will be on some standard protocol), and Uber a central entity out of SF won't be competitive or will be taxed out. Why let an entity extract X% of each ride out of its economy? Not worth it.
- sethhochberg 5y ago
  In NYC, your Uber driver is professionally licensed as a taxi/limousine driver and driving a vehicle that is registered as a for-hire vehicle. I'd bet this alone helps close the cost gap between rideshare and taxi, since there's nothing "rideshare" about it really - you're still paying for a professional driver with licensing costs, vehicle registration costs, extra insurances, sometimes even vehicle modifications, etc. These debates about Uber/Lyft/etc employment status always seem to omit that there are two very distinct classes of people finding work with these services - one group is doing it part time in their personal vehicles, and the other group is doing it full-time in commercial vehicles. The interests of those two groups don't necessarily align.

908B64B197 5y ago

Interesting how pre-Uber, nobody in the (medallion) taxi business was an employee either. But going against it would have probably upset some local donators. Now that it's "evil big tech" it's fashionable to bash on it.

jrsj 5y ago
And we all know tech companies & their investors don’t give money to politicians /s
- wutbrodo 5y ago
  From the parent comment: > But going against it would have probably upset some *local* donators In what way is it sensible to classify big tech as a _local_ donor? Hell, the very term itself implies very wide reach.
  - jrsj 5y ago
    The implication seemed to be that it was somehow unreasonable to either see big tech as evil (which imo it often is) and suggested that they were somehow less politically influential or protected than local taxi businesses. In my opinion the opposite is true. Uber (and big tech generally) is often worse than what it’s replacing, and a hell of a lot more powerful politically. They don’t just take advantage of laws or have laws that favor them, they blatantly ignore laws with little to no consequence. There was some negative attention to taxis before Uber even existed, but because the problem was on a much smaller scale not much attention was paid to it.
    - wutbrodo 5y ago
      I think you're projecting a lot of loaded meaning onto the claim, in the presence of interpretations that don't require making such broad assumptions. Parent commenter could easily have meant that corruption when it comes from local entities is something that the public doesn't have good antibodies for, because of the classic "diffuse costs, concentrated benefits" problem. By contrast, putting an issue under the umbrella of "big tech" unites a lot of people under the same vague banner, as people are mad at big <industry> for any number of reasons, especially an industry as far-reaching as tech. This incentivizes politicians to care about an issue that their pocketbooks would otherwise prefer to ignore. (Note that this analysis is neutral wrt the actual goodness of policy, but that's just a basic feature of democracy) It's pretty simplistic to interpret comments only through the lens of "big tech good? No, big tech bad" when a narrower point is being made. >There was some negative attention to taxis before Uber even existed, but because the problem was on a much smaller scale not much attention was paid to it. This lines up pretty cleanly

eplanit 5y ago

Biden wants to expand labor unions, so this isn't a surprise.

mjevans 5y ago

A progressive labor department and policy would at least require a proportion of benefits based on a proportion of a full time job. An even more progressive policy would be to make all non-wage benefits provided by the government, so that the contract between employee and employer could be simplified and the jobs field level with lower resistance for taking new opportunity.

clairity 5y ago
yes, discontinuities (benefits cutoffs) lead to gaming. i'm heavily in favor of removing discontinuities like this, where entities are incentivized to essentially cheat others (i.e., promotes greed). for instance, every tax policy (rates, credits, deductions, etc.) should be continuous functions rather than a set of cliffs.
briandear 5y ago
That shifts the costs on to me, the taxpayer, but not necessarily an Uber customer, for non-wage benefits. Why should I, the non-Ubering taxpayer have to pay benefits for an Uber driver? That isn’t “progressive,” that’s shifting a cost from the two people engaged in a contractual transaction to everyone who doesn’t necessarily have any interest in the transaction. If an Uber driver needs health insurance, that cost would be part of the calculus of deciding to drive for Uber. If the government provided it, the taxes required would also become part of that calculus. The deadweight loss from taxation can’t be ignored. Not to mention it isn’t my job to provide non-wage benefits to support Uber or a driver. That’s between them. Literally not my problem. If the Uber driver isn’t taxed proportional to their consumption of benefits, then I the taxpayer am forced to subsidize the profit of both Uber and the driver. If the driver has to pay for his own non-wage benefits, than that would be part of their determination of accepting the offered wage or not.
- alistairSH 5y ago
  The problem in the current scenario is the drivers needs health insurance, but Uber isn't supplying it (nor are they paying a high enough wage to buy insurance on the open market), so tax-payers are stuck footing the bill anyways.

burlesona 5y ago

This is just such a weird fight. As someone who freelanced for long stretches of time, I think there are a lot of positives about freelance / gig work, and I also think that the majority of people who take these jobs understand the position they’re in and are happy with it. They chose to freelance and drive for Uber for reasons. The legit concern is whether Uber or any other freelance company misleads its gig workers on their earnings, and to me the best solution to that is not to force reclassify them as employees or prohibit gig work, but to regulate transparency in compensation. For example, require freelance employers to include expense tracking and calculate workers earnings after expenses. That by itself would fix most of the problems for the percentage of gig workers who don’t realize they’re extracting depreciation from their car more so than getting paid by Uber. The other issues of healthcare, etc., the US needs to solve at a societal level, not an employer level. I think humans have a right to health care. But I don’t think people have a right to a particular job, nor an entitlement for that employer to provide a particular mix of benefits. This idea that we need to provide our social contract / safety net exclusively via employers is so strange to me, compared to simply owning that if we want these to be rights of our citizens then the government should be providing them as tax-paid services.

anigbrowl 5y ago
Thing is most of the regulatory infrastructure you describe already exists in employment law. The broad societal proposals you describe would necessitate a radical reappraisal of contract law and a lot of other things. To use the popular 'ship of state' metaphor, it would be sort of like dramatically reconfiguring an aircraft carrier while it's at sea.
- grok22 5y ago
  I guess that is what is happening here...fixing any problems using the existing model instead of trying to figure out new ways of fixing the problems to fix the new model of employment in some industries.
- jjk166 5y ago
  We elect lawmakers, not lawkeepers. It is their job to update the laws to keep pace with society, not restrict society so existing laws remain useful. In the 'ship of state' metaphor, we're never going to be closer to a drydock and we need a hospital ship not an aircraft carrier.

jandrewrogers 5y ago

It seems backward that the government, instead of fixing government policy and laws that disadvantage independent workers, wants to force independent workers to become employees so that the government doesn't have to fix anything. It is abdication of responsibility for social outcomes. Many gig workers explicitly do not want to become employees, as there are many disadvantages to doing so. In these cases, the only people that benefit are the politicians that can go on ignoring the real problems.

lotsofpulp 5y ago
It makes sense if you realize that everyone wants everyone else to have a minimum quality of life, but everyone is also trying to pay/sacrifice the least to achieve it. We want employers to provide benefits, as opposed to the government because that means higher taxes. Then you put a million exclusions and tax deductions and other loopholes, so no one knows what they're really getting, but we can say we did something and that benefits do exist to serve as arguments against broadly, easily accessible benefits to serve as a floor on quality of life.
- giantg2 5y ago
  "It makes sense if you realize that everyone wants everyone else to have a good quality of life, but everyone is also trying to pay/sacrifice the least to achieve it." And what defines a good quality of life depends on who you ask.
  - treeman79 5y ago
    What about people that can not handle a normal job? I have a chronic condition and for a year the only reason family didn’t end up on street is because of gig jobs. Most days 12-16 hours a day in bed essentially blind in horrific pain. But sometimes totally fine. Disability straight up laughed at me.
    - zepto 5y ago
      This. so much policy is designed around the idea that people should work a 9-5 at a corporation, without any consideration for the fact that this simply doesn’t support a lot of people’s needs. We need more flexibility not less. Ironically this completely flies in the face of any motion or ‘diversity and inclusion’.

seany 5y ago

I really hope what every they end up doing here doesn't screw over all the people that really want to be part time contract workers like AB5 did.

heavyset_go 5y ago

It blows my mind that these platforms refuse to let workers set their own rates, choose their clients, choose how the work gets done, where the work gets done and how the work gets done. Those are the defining characteristics of what makes a worker a contractor or not. Instead, platforms like Uber dictate rates, dictate how, where and when the work gets done, and penalize workers if they don't take the clients Uber wants them to take. Uber even dictates what cars they can and can't use.

nerdponx 5y ago
Sounds like a definining characteristic of monopsony, which you could argue makes the difference between contractor and employee somewhat irrelevant.
- heavyset_go 5y ago
  Yes, I also agree with this sentiment.
Jonanin 5y ago
This is a blatantly false characterization. Uber workers can decide when and how to work.
- heavyset_go 5y ago
  > The defining aspect of these gig worker jobs is that independent contractors _can_ decide when and how to work. So the workers can negotiate when, how and for how much they'll work for their clients? I've got an '01 sedan collecting dust, can I decide that's how I'm going to pick up my clients via Uber? When I worked as a contractor, it didn't matter that I used some shitty laptop or OS to get my work done, because I had the freedom to decide how and where I completed my work. Workers using Uber are denied that freedom.
  - kevincox 5y ago
    > it didn't matter that I used some shitty laptop or OS to get my work done This isn't a reasonable comparison. Your shitty laptop or OS was likely not part of the product. If I want a website I don't care what your laptop looks like. If I am being driven somewhere I certainly care about what condition the car is in.

baby 5y ago

This reminds me of how SF killed the electric scooter business. This is why we can't have nice things. America wants you to own a car, and drive it.

temp667 5y ago
Which is nuts - they were so popular and efficient. Was it the taxi companies who wanted them gone or uber? Uber I'm sure did a lot better business once you couldn't grab a scooter.
- duckfang 5y ago
  I'm glad to see most Limes and Birds gone. More often than not, they ended up in roads, across sidewalks blocking access, thrown in parking spots, in lakes rivers and other deep-enough bodies of water, thrown off parking structures, and more. And in my city, both Bird and Lime came in the city on flatbed trucks between 4-5AM and offloaded them en masse. Where I come from, that's abandoning trash. Had they work with the city, this rollout couold have gone loads smoother and not start by trashing the public commons... But in reality, thats what Silly-con valley companies do - they exfiltrate good will and good things like public commons and take it for themselves, all the while screaming that they're being wronged when people take, disassemble, throw in trash their littered goods.
  - baby 5y ago
    Every time I read a comment like this, that seems to ignore the amount of space, noise, and danger cars bring to a city, I just can’t believe it was written in right faith.
    - duckfang 5y ago
      Why should a private company be able to: 1. Store private goods permanently on the public commons? 2. Hinder the use of the public commons for long-term? 3. Treat the public commons as a refuse-dump? 4. Privatize the gains while socialize the losses? Do we need something better in terms of overall transport? Of course we do. But dumping them off a flatbed truck at 4AM and YOLO'ing is not how you do it either. But it is how you get myself and people like me loading them into dumpsters to be hauled away.

vsskanth 5y ago

Elephant in the room here is tying benefits to employment.

tick_tock_tick 5y ago

Fix the fact that health insurance, retirement program, etc are all tied to traditional employment rather than forcing everyone into a square box.

nerdponx 5y ago
Yes, this! People need more stable access to basic needs: healthcare, education, food, water, housing, communications (some kind of basic phone & internet access). This will necessarily lead to greater labor market mobility and therefore greater market power by labor providers (i.e. employees and contractors).
oramit 5y ago
Indeed - this is the real problem. We've bolted on so many things to the employee/employer relationship that should not be there. It's no surprise that contractor vs full time questions become so fraught when as a matter of policy, we've made that distinction hugely important. I want there to be more flexibility in work arrangements. That would be awesome, but the only way to make that work is to sever Health care and retirement plans from employment.
kevincox 5y ago
This is the weirdest thing to me. Why do I get whatever health plan my employer selected? I shouldn't have to switch jobs to change my health insurance. And sometimes there is a delay before your coverage starts at the new pace, or I want to take a couple of months off. Now I have no coverage! This is nonsense. It seems that the main argument for it is that companies have more negotiating power, but that seems like it would largely change if there was a significant market for individual/family health insurance where competition can actually exist between the people who are benefiting. Employment should be simple, I do work and they pay me. Instead so many critical aspects of my life are tied to it as you mention.
standardUser 5y ago
We disincentivize starting business (anti-entrepreneurial), work hour flexibly (anti-family), working independently (anti-individualism) and instead heavily incentivize reporting to a boss, on their schedule, at their chosen location, and getting paid only whatever you can convince them to pay you.

citilife 5y ago

This is a super weird stance to be honest... Imagine if I sell my book on Amazon. Is Amazon the employer or my publisher? If I rent my home out on AirBnB, is AirBnB by land lord or realtor? If I offer to fix plumbing via craigslist, is craigslist my employer? So, if I offer to much of my services on a platform am I to be employed by that platform? The drivers of Uber and Lyft have opted not to be employees before. There seems to be some sort of political agenda here (maybe increase in taxes?), because no one seems to want this.

ceejayoz 5y ago
Only the plumber is a contractor/employer scenario. The rest of the examples are irrelevant. Individual plumbers are often contractors. If they work for a larger plumbing company, they'd be an employee. There are specific criteria at play here: https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation https://www.irs.gov/newsroom/understanding-employee-vs-contr... > A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised. Uber sets the driver standards, how the work should be done, policies, pricing, etc. They clearly have some aspects of an employer/employee relationship. The line's a little blurry in spots; I can see both sides of the argument, and I'd say it's clear the law didn't anticipate this scenario.
- citilife 5y ago
  What is a contractor? They are person or company leasing labor aka providing services. The other items I listed were both services and goods. The point is that you shouldn't force a platform to employ or act as anything other than what it is (a routing system). Uber is not directly employing people, it's connecting customers to produces of a service (taxis, effectively). It's also acting as the payment processor and price setter. Everyone can know what they're getting / paying ahead of time. It's a transaction.
  - ceejayoz 5y ago
    > They are person or company leasing labor aka providing services. The formal definition - see the IRS link - is substantially more complex than that. I provide services to the company that employs me. I am not a contractor.

throwaway823882 5y ago

Gig working only exists because our economy is rooted on income inequality. If people could get a regular job that paid a living wage, they wouldn't be working 14 hours a day for 3 different companies just to make ends meet. Gig companies are the 21st century robber barons.

tick_tock_tick 5y ago
Gig workers only exist because the state has tied more and more programs like 401k and health insurance into employment. The fact that you can't hire someone without also worrying about health insurance is insane. That is what needs to be fixed I don't want my employer involved at all in my personal health care.
- ckocagil 5y ago
  So you're proposing we go back to the 19th century?
  - tick_tock_tick 5y ago
    What do you even mean? I just don't want my employer involved in government retirement programs or my health insurance. "Benefits" from employers are just nicely constructed traps to make it hard to retire or switch jobs.
- throwaway823882 5y ago
  Gig working started with Uber as an extension of cab driving. Cab drivers do not get 401k and health insurance. So it makes no sense at all that gig working would only exist because companies didn't want to pay benefits. Your pizza delivery guy wasn't getting benefits either. Neither your waiter, or bartender. However, Uber and other companies did start right after the dot-com recession, when people needed to both save money, and make extra money. It turns out a lot of people needed to do both. Sure, there were advantages over the previous incumbents (cabs suck), but that's not why there are so many drivers. Ask your Uber or Lyft drivers sometime how often they work. Many of them, since the early years, told me they work as many hours as they can, for as many companies as they can, just to make ends meet. Of course they're paying for their car and all that themselves, too, so it's not like they're getting ahead. And they definitely would rather not be driving for 14 hours a day. These companies exploit people in an unequal system in order to make profits.

TechBro8615 5y ago

Has anyone asked the gig workers how they feel about this? Do they want to be W2 employees? Perhaps the real problem is that the IRS makes it such a massive PITA to be a contractor. You need to withhold your own taxes, pay nearly 30% of your money to the government, etc. Nobody likes that, and unsurprisingly, a lot of contractors fail to meet the requirements. You know who really doesn't like it? The IRS. When most of the population is on W2 employment, the IRS has a constant revenue stream of payroll taxes and automatically withheld income taxes coming into its coffers every pay cycle. But with contractors, the IRS only gets that money once a year, and often times they're missing a piece of it. Also – just putting this out there – a population of contractors would have much more power in a hypothetical "tax boycott" than a population of employees. I could imagine some social movement convincing all the contractors in the country to boycott the IRS and skip paying taxes one year. I doubt "the government" is anywhere near competent enough to conspire against this possibility, but the existential risk is there. Surely they would prefer that the peasants don't realize the power of collective tax resistance.

balefrost 5y ago
But with contractors, the IRS only gets that money once a year, and often times they're missing a piece of it. I don't know the entirety of the tax law, but I believe that you're supposed to make estimated tax payments quarterly. https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes https://www.irs.gov/businesses/small-businesses-self-employe...
- deleted 5y ago
  [deleted]
- deleted 5y ago
  [deleted]
- TechBro8615 5y ago
  I'd like to see a poll of how many ICs actually do that. I bet it's < 50%.
  - 5y ago

duxup 5y ago

I remember when 'gig economy' first was talked about, it was about professional type digital nomad type stuff .... but when I think of it now it's just a bunch of folks delivering food and driving people around.

pram 5y ago
I think it’s because early adopters had success (same with things funded via Patreon) and then the resulting bandwagon and influx of labor competition made it a race to the bottom.

steven_bishop 5y ago

How would working for competing apps work ? Would drivers be considered employees of both Uber and Lyft ? Do they have to log a certain amount of miles driven in order to qualify as an employee ? I'm interested in seeing how this all works out.

ajkjk 5y ago

Would love to see the whole concept of 'employees' blasted away and replaced with something more flexible.

minimuffins 5y ago
Since I'm in the employee class and not the employing class, I would like to see the opposite.
- ajkjk 5y ago
  I mean, me too, but it's insane that it's a binary where you either "are a contractor" or "are an employee". if you took this framework away and replaced it with a more flexible one (ideally decoupled from healthcare..) people would invent all kinds of other mutually beneficial relations.

mrtksn 5y ago

Everyone knows that they are workers, right? Not just random workers that do something else every day, workers on their own devices but workers for a company and they works the way that company says. Why not start from here and work on the employment laws to allow for the flexibility or whatever works for that kind of employment? Why pretend that an Uber driver is a businessmen that may actually expend his/her business or go through other company stages? Obviously that's not happening, therefore they should have the rights and obligations of a worker, not a business.

briandear 5y ago
> Obviously that's not happening Do we know that to be true?
- mrtksn 5y ago
  Yes, for all the gig jobs that I'm aware of. If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck. Last time I checked, Uber wouldn't let you simply fulfil your duties of transporting people the way you find fit, for example. It's really not a B2B relationship in any meaningful way. For those who do, sure. They are not gig workers, they are contractors.
mattm 5y ago
I think really what is needed is a new employment classification to deal with gig workers. It's clear that they're somewhere in the middle between an employee and contractor/freelancer.
- topkai22 5y ago
  Definitely, although the legislative slog that would present makes me believe it'll be tough to get there. Part of the Uber/Lyft "ickiness" factor is that you have a giant company that has defined a "contracting" relationship with 100s of thousands of individuals. That is big power and capcity differential. Its not unreasonable to expect that the gig service companies be required to provide more services for their drivers than, say, local independent window washer who contracts individually with many businesses. Automatic tax payments, minimum wage for callouts and depreciation payments for self provided equipment are not unreasonble past a certain scale point. That being said, the people I've known personally who have drove for Uber/Lyft (around 4, so a small number admitadly) really were doing it just for a bit of extra cash on the side and would not have wanted or been able to be an employee of Uber/Lyft.

SllX 5y ago

Counter-proposal: move the BLS and OSHA* under Commerce; abolish the remainder of the United States Department of Labor. *Are there any more remaining worthwhile agencies under Labor? I’m going from memory here.

LatteLazy 5y ago

The whole world is going this way. The UK just brought in IR35 to force as many people to be employees as possible. But I don't want to be an employee. I was much happier when I started contracting instead.

novok 5y ago

I think the major issue with classifying gig workers as employees is how the company cannot practically deduct the cost of the gig worker's equipment that they bring to the job. In the USA there is a lot of idle car stock that is leveraged to make something like doordash and uber work, and with this employment change if the workers could also deduct their vehicle costs as part of doing the job, I would foresee a lot less resistance from the industry. I also don't think the 'employees' are going to get benefits either way, if this passed then their hours would be limited to the benefits threshold time like a lot of other low income jobs do now today, and they would be forced to work for 2 of the gig companies, who now will put strict scheduling on them making it a huge pain the ass. In the end, nobody will be happy with the outcome and everyone would be worse off, except the government with some more tax revenue, or less because gig companies buying equipment will probably deduct more in total.

underseacables 5y ago

What about giving them the option: they can be employees or independent contractors?

gnopgnip 5y ago
Should people be able to agree to work for less than minimum wage? Who is impacted by this, who ultimately bears the cost?

noarchy 5y ago

Though not quite the same scene as gig work, the matter of classification has long been an issue in the tech scene, at least where I am in Canada. That said, I think some clamping-down has occurred of late. Recruiters used to openly solicit 'incorporated' developers, despite the actual working conditions being almost entirely equivalent to that of an employee: hours set by the employer, requirements to be on-site, often sitting beside full time employees, etc.

jeremynixon 5y ago

Instead of ensuring that health care benefits are independent of corporate attachments, Marty Walsh continues to destroy useful distinctions in a system that congress refuses to appropriately reform. Sad.

MR4D 5y ago

I think there should be an immediate opt-out of this - if you own your own LLC, S-Corp, etc, then it should be explicit under the law that any work you do using that entity is a contractor to any other entity.

jameslk 5y ago

Self-employed workers are offered several huge tax benefits by being self-employed: 1. Writing off business expenses (gas, vehicle wear and tear, etc) 2. The Qualified Business Income deduction of 20% 3. Larger contributions to tax-favorable retirement funds Employment eliminates this in addition to adding several additional taxes (workers comp, unemployment, etc). These expenses are passed down to the employee in the form of reductions in wages. So the implications of making large populations of self employed workers actually employed has great tax benefits for the government, at the expense of the worker.

gher-shyu3i 5y ago
Shhh, don't spoil the socialist utopia with reality.
- astura 5y ago
  Employers being expected to follow labor laws is a "socialist utopia" now?
  - gher-shyu3i 5y ago
    The government doesn't want to do its job. Nothing to do with labor laws.

Animats 5y ago

It's not a "shift in policy". It's what US labor law says. It just hasn't been enforced properly.

siruva07 5y ago

Most gig workers should be given the opportunity to become franchise owners, not employees and lose their independence. That could also solve the equity discrepancy, and give the workers real ownership upside.

makosdv 5y ago

I feel like we should be trying to phase out this special "employee" classification that the gov't defined instead of expanding it.

superbatfish 5y ago

In most discussions around this topic, Uber and Lyft are highlighted as typical examples. This article is no exception. But it includes the following quote from Labor Secretary Marty Walsh: >“These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that's what we are about in America. But we also want to make sure that success trickles down to the worker,” he said. If he's referring to Uber and Lyft specifically, then he's mistaken. Uber and Lyft remain breathtakingly unprofitable. Would that fact change the way people think about this issue? I think it does... and advocates for reform think it does, too. Otherwise, why would they keep making this "mistake" when they talk about this issue? As a side note: it's pretty poor journalism on Reuters' part to include that quote without any context or criticism, especially since they mention Uber and Lyft by name in the opening paragraph. Or, if he wasn't talking about Uber and Lyft, then Reuters' presentation makes him look like a liar, or at least embarrassingly misinformed. (He's the Labor Secretary after all -- he ought to know what he's talking about.)

jeezzbo 5y ago

Employees, by structure of tax code, pay Government taxes prior to receiving their own salary. Corporations pay Government for access to labor market in form of tax on employees. People who own their own labor, like much of the innate structure of "Rights" that exist in lieu of Government administration, like 1st, 2nd, etc.. only pay the Government after all expenses have been deducted from revenue, and the self has been paid. This inherent structural shift, between the owner and the owned, is the fundamental source of tension being pulled at by this view of labor market. The Government owns its labor pool. People own root authority over a Government "of, by, for" those people. This is the fault line of civil Society, as presently defined in Constitutional literature. The actual source of American Sovereignty of course, demonstrated by John Hancock and peers, and recursively denied to all that followed, is directly personal. In other words, Amrica, and all Sovereign labor is issued by self-Sovereign authority, or else this dream never exists. Employees opt-out of this inherent structure, and by acting thus, degrade the labor market as defined by this labor Secretary. The Government can't pay for infinite wars and debt without employees paying the Government before their own lives. Structure yields results.. administrative enslavement -to- employment came about, at great human cost fought via war, and owners were victorious on both sides of history.. structure yields results..

kingsuper20 5y ago

After doing God's work upvoting anything that's grey, whether I agree or not.... Having hit this kind of thing when the Great State of California got interested in contractors a few years back I have to say that the cynic in me tends to come out on these issues. So many people have a personal interest in this general issue, large companies who don't use contractors, large companies who do, health insurance mavens, the state wanting to extract a few bucks in things like unemployment insurance, people in the grievance industry, politicians generally, I think you basically can't trust any heartfelt opinions on the way-things-oughta-be.

superbatfish 5y ago

Here's a great podcast on this question (regarding Uber and Lyft drivers specifically), from Julia Galef: http://rationallyspeakingpodcast.org/show/episode-255-are-uber-and-lyft-drivers-being-exploited.html http://rationallyspeakingpodcast.org/show/episode-255-are-ub... She interviews three experts on the subject. Here's the description of the episode: >How much do Uber and Lyft drivers really earn, after expenses? Are they getting a raw deal by being classified as 'independent contractors' instead of employees? I explore the debate over these questions with three guests: Louis Hyman (Cornell), Veena Dubal (UC Hastings College of the Law), and Harry Campbell (The Rideshare Guy).

llboston 5y ago

Not surprised. Marty Walsh is a former Union boss. https://en.wikipedia.org/wiki/Marty_Walsh_(politician) https://en.wikipedia.org/wiki/Marty_Walsh_(politician)

volandovengo 5y ago

I happen to have co-founded a company (Wrapbook) that makes it easy to work with gig-based workers as employees. The entertainment space long ago settled this fight and classifies everyone as employees, not as contractors, even when they work a single day. This fight has nothing to do with independence and only has to do with employers trying to save some 15% of an employee's wage in taxes & keep themselves off the hook if people get injured on the job. The savings are real - somebody making $1000 a day - classified as an employee, costs an additional estimated $150. You can pay short term workers as employees pretty easily (we facilitate it).

flerchin 5y ago

Look I really don't care what their arrangements are. Can I get someone to drive me to the airport from an app? Great, I'll pay what it charges. If the law says they have to do X and Y for those workers, I expect those costs to be passed along to me, and I'll gladly pay them.

myko 5y ago

A lot of these problems stem from healthcare being tied to jobs, which makes zero sense.

xyzzy21 5y ago

Be aware: contractors and other workers fall into this category of "gig workers" - this will end 1099-based work as well.

stjohnswarts 5y ago

It's odd because most of the drivers I've talked to don't want to be "employees" but they do want all the typical employee benefits even though the corp that pays them would have no way of anticipating ROI in any given driver? Can they just say "enjoy your own scedule, but you have to work a minimum of X hours this week or lose your benefits" otherwise it's an odd thing to ask of companies.

throwaway189262 5y ago

Let us remember that big tech companies like Microsoft, Google, Facebook generally have 49.9% of their employees contractors. Why nearly 50%? Because that the highest amount you can have without additional liability. If they could get away with it, far more than 50% would be contractors. The gig loophole benefits only super rich corporations. It's crazy to see so many people defending it. The sole purpose is undermining a century of worker protections. Technology has made it easy to tweak jobs just enough so they fall under contractor status. When these laws were written nobody could imagine systems where work is reassigned in seconds. The rules about flexible schedules etc we made for a different time. I've driven for rideshare. It's not like freelancing at all. You can't turn down rides. Can't set your prices. Can't choose your clients. Can't do your own advertising. You can only drive certain models and years of cars. There's rules about modifications you can do and how you treat customers. You have little to no control once you "sign on". It's a regular job with flexible hours

whoknew1122 5y ago
100% percent of the reason I didn't go work 'for' Microsoft was that I'd be a temp-to-possibly-hire contractor. And from the former contractors I'd talked to (one recommended by the recruiter!), it was clear contractors were treated like second-class citizens by Microsoft. From what I was told, contractors couldn't participate in networking events or even get free food employees got because Microsoft was sued for misclassifying workers. So instead of reforming their business model they just switched to a model where they made clear contractors were contractors--by treating them like trash. Fuck that.
- valdiorn 5y ago
  this is not isolated to microsoft, or the US. Everywhere I've worked, the contractors we've had have been treated like second class citizens. The smart ones even insist on it. Why? Because if they are allowed to enjoy the amenities of a normal staff member (free snacks, invite to company events, etc.) they run the risk of being classed as employees... which is bad news for everybody, not just the company. If you as a contractor are found to be incorrectly classified, that can mean a massive accounting headache, loss of tax benefits, possibly being required to enroll in a union, and lots more. I've worked in Iceland and the UK, for 5 different companies, each one employing lots of contractors. All of them avoid these benefits for said reason. You can read up on IR35 if you want to know more about the UK rules (although it's been recently revamped making contracting a lot less appealing).

wavepruner 5y ago

I've never met a HN commenter who is critical of gig work who is actually a gig worker, like myself. Do you exist? Or is it always a bunch of privileged people blathering on about a situation they have no first-hand experience in?