8 ms·

The lawyer taking on Uber and the rest of the on-demand economy

83 points by ph0rque 12y ago

lotsofmangos 12y ago
Proponents of on-demand startups argue the Craigslist side of the analogy. In their view, these workers do have more independent agency than a typical employee, and therefore are properly classified as contractors. After all, Uber drivers and Homejoy cleaners aren’t required to work a certain number of hours per week, and they set their own schedules, even though some companies try to steer them to busy times by incentivizing them with “surge pricing.” I have been an employee without being required to work a set amount of hours per week, is called a zero hours contract and didn't make me any less of an employee, it just meant it was really difficult to plan anything.
- SeanDav 12y ago
  Zero hours contracts are just another method that companies use to avoid paying employee benefits. This is precisely the type of behaviour that is being targeted by this lawyer. You have the responsibilities of being an employee but the company does not have a corresponding duty to you as an employer.
  - lotsofmangos 12y ago
    I had a funny conversation when I left after they repeatedly failed to provide working equipment while still wanting the job done. I told them I wouldn't be coming back and they told me that my contract required me to give notice and that I would have to turn up to work for two more weeks on whichever shifts they wanted. I pointed out that the contract also stated that I had zero hours contracted and that shifts had to be agreed on a week by week basis, so if they really wanted I could give them 2 weeks notice but for that 2 weeks I would not be agreeing to do any more than the hours they had written on the contract. I also asked if they could go and count them for me.
- joopxiv 12y ago
  I've had zero hours contracts as well. My working hours were still scheduled in. All it did for me was when I was sick for a few weeks, they just stopped scheduling me in so I would receive sick pay. Uber drives can at any given point in time get in their car, log in and start accepting rides.
- antihero 12y ago
  Thing is, the difference between this and zero-hours contracts is that with zero-hours, it tends to be the employer setting the hours, whereas with Uber, the driver sets their own hours. If you wanted to work a standard 9-6, you could. If you wanted to work longer, then you get paid for that too (unless there are zero passengers). All of the Uber drivers I've talked too seemed really happy about it as it gave them the flexibility to do what they wanted.
Tloewald 12y ago
Actually it seems to me like she is utterly correct and Uber is fucked if there's any justice in our legal system.
michaelt 12y ago
If cases like Liss-Riordan’s are successful, on-demand companies would have to pay overtime, deductions from wages, and, in California, the expenses incurred by their service providers. Those costs would mount into the millions, and proponents of the on-demand economy worry that they could force successful companies out of business. Surely taxes and expenses still have to be paid, and the "independent contractors" set their prices accordingly? I mean, either Uber pays an independent contractor $10, they pay $2 in tax and $3 in expenses and end up with $5 in their pocket; or Uber pays out $2 for tax, $3 for expenses, and pays the employee $5. In both cases, Uber pays $10 total and the driver takes home $5. I assume Uber's business model doesn't rely on contractors tax-dodging or skimping on vehicle maintenance! So why should they worry about the reclassification putting them out of business?
- pyrois 12y ago
  Well, it sounds like they maybe shouldn't be: > “Uber and Lyft can survive classifying drivers as employees,” she says. “It might cost them a little more, but it’s a successful concept. It’s not going to go away because we are trying to enforce the rules > And several on-demand companies, such as the house cleaning start-up MyClean and the food delivery service Munchery, already treat their workers as W-2 employees. These companies’ labor costs are higher than their 1099-dependent rivals, but they get additional benefits, such as being able to train their workers and hold them to consistent schedules. I wonder if Uber is fighting this because it will cut into profit margins and raise overhead costs, rather than because it is an existential threat. There seems to be two different opinions presented in the article (though I'm not educated enough in this area to be able to tell which one is closer to being right).
  - amyjess 12y ago
    > I wonder if Uber is fighting this because it will cut into profit margins and raise overhead costs, rather than because it is an existential threat. Uber is a young company, and they have yet to learn what most mature companies have learned. Big businesses like regulations. They don't mind jumping through whatever hoops are imposed by regulations, because they can afford to drop the money on it, they can treat the cost of compliance as part of the cost of doing business and pass it on to the consumer, while their smaller competitors can't afford to pay for compliance. The competition gets priced out of the market, and big businesses sweep up all the customers who would've gone with the smaller competition, making regulation a net financial gain for them. The only big businesses you'll see who don't like regulation are monopolists and near-monopolists, like ISPs. Look at the hissy fit the big ISPs are throwing over Net Neutrality. Why are they so upset? Because there's no real competition, no smaller players who will be priced out of the market by NN, so the established players just see it as a straight-up cut in revenue. The only sensible conclusion is that Uber either a) thinks like a small player or b) thinks like a monopolist. Both are worrying, though for different reasons (reason A makes me doubt their competence, reason B makes me think they should be squashed sooner rather than later).
jkoudys 12y ago
This right here is one of the driving forces behind American corporatism. While these cases are always launched claiming to be on the side of the angels, they ultimately ignore that all that extra legal overhead is not free, and only the currently large companies will be able to manage it, essentially barring any smaller competitors from entering the market. If a court rules that Uber drivers must be employees, then Uber can easily sue any competitors that try to enter the market unless they do the same. Uber will be able to prevent competitors from receiving the same advantages they did. Also, look at: > Deep-pocketed companies like Uber, which has raised nearly $5 billion in venture capital since launching, could surely afford the additional expense of putting drivers on its payroll. The implications of this are decidedly harmful to both consumers and drivers. Once you set this precedent, it will only be the deep-pocketed companies that can afford to put drivers on their payroll. This is especially problematic in the States, where in spite of a substantial amount of their federal budget being for healthcare, lacks a comprehensive public healthcare system, so employee benefits can be quite expensive. I've recently incorporated in Ontario, and working as/hiring people on contract is very easy. A big part of that is because, apart from issues relating to workplace safety, we're not responsible for paying for healthcare services for people who do work for us. It was also very easy to leave my cushy corporate job for a startup, because I didn't have to worry I'd be made destitute if I had to pay for a few nights in a hospital were I to contract a really bad flu or get hit crossing the street. More and more I see the US turning into a country where you _must_ work for a large, established corporation. Lawyers like this are just helping those already on top stay there, at the expense of those in the middle or bottom.
- rayiner 12y ago
  That's kind of an entitled attitude. Society puts certain obligations on businesses, and providing certain benefits to employees is one of them. If you're too small to meet those obligations, then you shouldn't get a free pass on them. That just leaves the workers out in the cold.[1] I'm certainly willing to entertain the notion that we should pay for those benefits with taxes instead of pushing the burden on employers, but that's a separate argument. [1] Although I'm actually not convinced the premise of Uber drivers being employees is correct.
jingo 12y ago
"Just because your services are dispatched through a smartphone doesn't make you a technology company."
xanadohnt 12y ago
The thing is Uber drivers are independent contractors. The ability to work whenever the hell you want or to drop into any city and make money, at will, are fundamental motivators to driving for Uber. Regular benefits means minimum regular work hours. When that's it play it completely changes Uber's marketplace and value-add.
- zyxley 12y ago
  The most straightforward argument I can see against Uber drivers being "employees" legally are the ones who simultaneously do work for Uber and Lyft, picking and choosing whatever fares they they want to chain together from both.
- tashoecraft 12y ago
  In the article it states that drivers have been fired for not taking a certain percentage of passengers. While it isn't a strict hours, it is firing someone for not meeting their determined amount of work. As she says these companies are square pegs that are trying to be forced into round holes. Uber drivers are not normal independent contractors, but nor are they full employees. I really like Uber, but forcing employees to pay for gas, maintenance, insurance, etc is abusing their position. There needs to be a reclassification that can work for the on demand companies. Place these employees somewhere in between and require certain things be met, maybe pay for gas whilst they are driving passengers, or a stipend for maintenance costs.
  - fancyketchup 12y ago
    > In the article it states that drivers have been fired for not taking a certain percentage of passengers. While it isn't a strict hours, it is firing someone for not meeting their determined amount of work. Drivers are only fired for not taking a certain percentage of rides offered while the driver is logged in and active. That's an enormous distinction. Drivers don't have be active, and they can go inactive at any time. In fact, over half of the drivers with whom I've ridden are logged into both Uber and Lyft while waiting for a fare, and then log out of the other app when they accept a fare from one. (Yes, I quiz my drivers on the particulars of driving for these services and keep track of what they tell me). The whole point of threatening to fire (and actually firing) drivers for not meeting acceptance rates seems to be to incentivize them to log out during the times they aren't actually willing to take a fare.
greggyb 12y ago
An analog that sprang to my mind early in the article, and briefly raised with the comparison to Craigslist, but which I feel is more apt than Craigslist: eBay. Some points: * eBay can ban a seller for not following the rules. * eBay absolutely requires its sellers to earn revenue. * eBay can set expectations and incentivize behavior with its various seller-partner programs at different levels. * An eBay seller may depend on eBay for their livelihood. I am not proposing this as a slam-dunk against the case, but I'd love to see some discussion on these points. I will state clearly and unambiguously, though, that I do not believe Uber should have to treat all of its drivers as employees. This does not imply that I am opposed to discussion or hearing opposing viewpoints. Ninja Edit: Typoes (grammar-oes?).
- Bahamut 12y ago
  The article points out some aspects that make this a not so great analogy - in particular, companies like Uber set the rates, and put the burden of costs on the workers for stuff like gas, wear and tear, etc. Uber in particular is taking half of the tips according to the article, which sounds unethical. My only opinion on this is that the balance should probably be tilted a little more in the workers' favor for these arrangements, although I am not sure full categorization as an employee would be the correct approach.
  - greggyb 12y ago
    >The article points out some aspects that make this a not so great analogy - in particular, companies like Uber set the rates, and put the burden of costs on the workers for stuff like gas, wear and tear, etc. Uber in particular is taking half of the tips according to the article, which sounds unethical. These are very good points and I am glad you brought them up. I think the rates and tips are very valid concerns here, but categorically different from one another. I think that offloading costs to drivers still fits the eBay analogy, though it is certainly weaker. A seller must store goods, prepare them for shipping, and in many cases add value to the product in some way (e.g. refurbishing is common, which includes cost for all related equipment). Again, not a perfect analogy, but offloading costs to the seller/driver seems to bear some resemblance between the two. Setting the rates is a strong argument in favor of a relationship more toward the traditional employee end of the spectrum. I think I need to think about this more. As to the tips, I glossed over that section so I am glad you've raised it here. I do not know the exact details of the agreement between Uber and drivers as regards tips, but this seems at first glance to be a pretty severe violation of any relationship between driver and Uber. I agree this needs to be addressed, and a class-action suit does seem appropriate here. I think this can and should be viewed independently from any classification as partner/employee. >My only opinion on this is that the balance should probably be tilted a little more in the workers' favor for these arrangements, although I am not sure full categorization as an employee would be the correct approach. I think you're right on this point. I am still unsure as to what I think is best to achieve this. My initial reaction is to ensure that there is an environment where competitors are likely; I believe a strict requirement on the type of relationship between company and driver will only hamper this (limit the type of relationships => limit the viable business models => limit the possible solution space).
ahallock 12y ago
I love how lawyers and the gov assume what my preferences are and what's best for me. I work as an independent contractor and I don't want any benefits from the company I'm providing services. I want to provide my services and get paid. That's the only benefit I want. And this: "..but the company also gave them strict guidelines for participation which made them look like employees according to the IRS’s 20-prong test. Uber screened and trained its drivers, and drivers could get deactivated by Uber for having their rating dip below what local managers set as a cut-off, for not accepting a certain percentage of trip requests, or for customer complaints." How are those strict guidelines? So now contractors are exempt from any scrutiny in the services they provide? Makes no sense. Then Uber would be getting sued for putting passengers at risk by having zero QA.
eykanal 12y ago
> Fiona Ramsey, the director of communications for Peers... added: “We worry the share economy will cease to exist if these cases are successful.” > That worry may be exaggerated, however. Deep-pocketed companies like Uber, which has raised nearly $5 billion in venture capital since launching, could surely afford the additional expense of putting drivers on its payroll. What a silly argument! Raising a ton of money in venture capital doesn't mean that the business model itself is profitable, and in the long run that's what matters. If the profitability of the entire business model is built on illegal classification of workers, then the model is a failure (within this legal framework, at least) and won't work. Either change the law or change the model, but something will have to change.
oh_sigh 12y ago
The opening lines are crazy. The moment she heard about the app, before she knew anything about it, she had the idea "to put them out of business"? That doesn't seem like the behavior of an altruistic person. Shouldn't she have, you know, researched the structure of uber before deciding that she wants to destroy them? How would she know that the employment status of the drivers from her friend saying "You have to see this"?
s54b32dd 12y ago
I actually like this lawsuit, as if I'm honest, I don't think Uber/Lyft, etc. should have gone the contract-service offering route. I think they might have been just as well off as a middleware provider, connecting customers with existing cab services, and offering their tools as a SaaS. It's interesting to think about how different the world would be right now if Uber had gone into software sales as opposed to attempting to be a cab competitor. I realize the inventors largely created the service as an alternative/competitor to cabs, which they disliked for various reasons. It's still interesting to think about what could have been, if only they'd been more interested in fixing the logistics of cab companies than "inventing an industry". If this attorney is ultimately successful, I can easily see Uber/Lyft's business model morphing as a result. I don't think there's enough profit in their business if they have make all their contractors W-2 workers.
davidgerard 12y ago
> If Uber had indeed misclassified its drivers, the company’s entire business model was built on a legal mistake. Uber's business model is based on violating regulations.

83 points by ph0rque 12y ago

Proponents of on-demand startups argue the Craigslist side of the analogy. In their view, these workers do have more independent agency than a typical employee, and therefore are properly classified as contractors. After all, Uber drivers and Homejoy cleaners aren’t required to work a certain number of hours per week, and they set their own schedules, even though some companies try to steer them to busy times by incentivizing them with “surge pricing.” I have been an employee without being required to work a set amount of hours per week, is called a zero hours contract and didn't make me any less of an employee, it just meant it was really difficult to plan anything.

SeanDav 12y ago
Zero hours contracts are just another method that companies use to avoid paying employee benefits. This is precisely the type of behaviour that is being targeted by this lawyer. You have the responsibilities of being an employee but the company does not have a corresponding duty to you as an employer.
- lotsofmangos 12y ago
  I had a funny conversation when I left after they repeatedly failed to provide working equipment while still wanting the job done. I told them I wouldn't be coming back and they told me that my contract required me to give notice and that I would have to turn up to work for two more weeks on whichever shifts they wanted. I pointed out that the contract also stated that I had zero hours contracted and that shifts had to be agreed on a week by week basis, so if they really wanted I could give them 2 weeks notice but for that 2 weeks I would not be agreeing to do any more than the hours they had written on the contract. I also asked if they could go and count them for me.
joopxiv 12y ago
I've had zero hours contracts as well. My working hours were still scheduled in. All it did for me was when I was sick for a few weeks, they just stopped scheduling me in so I would receive sick pay. Uber drives can at any given point in time get in their car, log in and start accepting rides.
antihero 12y ago
Thing is, the difference between this and zero-hours contracts is that with zero-hours, it tends to be the employer setting the hours, whereas with Uber, the driver sets their own hours. If you wanted to work a standard 9-6, you could. If you wanted to work longer, then you get paid for that too (unless there are zero passengers). All of the Uber drivers I've talked too seemed really happy about it as it gave them the flexibility to do what they wanted.

Tloewald 12y ago

Actually it seems to me like she is utterly correct and Uber is fucked if there's any justice in our legal system.

michaelt 12y ago

If cases like Liss-Riordan’s are successful, on-demand companies would have to pay overtime, deductions from wages, and, in California, the expenses incurred by their service providers. Those costs would mount into the millions, and proponents of the on-demand economy worry that they could force successful companies out of business. Surely taxes and expenses still have to be paid, and the "independent contractors" set their prices accordingly? I mean, either Uber pays an independent contractor $10, they pay $2 in tax and $3 in expenses and end up with $5 in their pocket; or Uber pays out $2 for tax, $3 for expenses, and pays the employee $5. In both cases, Uber pays $10 total and the driver takes home $5. I assume Uber's business model doesn't rely on contractors tax-dodging or skimping on vehicle maintenance! So why should they worry about the reclassification putting them out of business?

pyrois 12y ago
Well, it sounds like they maybe shouldn't be: > “Uber and Lyft can survive classifying drivers as employees,” she says. “It might cost them a little more, but it’s a successful concept. It’s not going to go away because we are trying to enforce the rules > And several on-demand companies, such as the house cleaning start-up MyClean and the food delivery service Munchery, already treat their workers as W-2 employees. These companies’ labor costs are higher than their 1099-dependent rivals, but they get additional benefits, such as being able to train their workers and hold them to consistent schedules. I wonder if Uber is fighting this because it will cut into profit margins and raise overhead costs, rather than because it is an existential threat. There seems to be two different opinions presented in the article (though I'm not educated enough in this area to be able to tell which one is closer to being right).
- amyjess 12y ago
  > I wonder if Uber is fighting this because it will cut into profit margins and raise overhead costs, rather than because it is an existential threat. Uber is a young company, and they have yet to learn what most mature companies have learned. Big businesses like regulations. They don't mind jumping through whatever hoops are imposed by regulations, because they can afford to drop the money on it, they can treat the cost of compliance as part of the cost of doing business and pass it on to the consumer, while their smaller competitors can't afford to pay for compliance. The competition gets priced out of the market, and big businesses sweep up all the customers who would've gone with the smaller competition, making regulation a net financial gain for them. The only big businesses you'll see who don't like regulation are monopolists and near-monopolists, like ISPs. Look at the hissy fit the big ISPs are throwing over Net Neutrality. Why are they so upset? Because there's no real competition, no smaller players who will be priced out of the market by NN, so the established players just see it as a straight-up cut in revenue. The only sensible conclusion is that Uber either a) thinks like a small player or b) thinks like a monopolist. Both are worrying, though for different reasons (reason A makes me doubt their competence, reason B makes me think they should be squashed sooner rather than later).

jkoudys 12y ago

This right here is one of the driving forces behind American corporatism. While these cases are always launched claiming to be on the side of the angels, they ultimately ignore that all that extra legal overhead is not free, and only the currently large companies will be able to manage it, essentially barring any smaller competitors from entering the market. If a court rules that Uber drivers must be employees, then Uber can easily sue any competitors that try to enter the market unless they do the same. Uber will be able to prevent competitors from receiving the same advantages they did. Also, look at: > Deep-pocketed companies like Uber, which has raised nearly $5 billion in venture capital since launching, could surely afford the additional expense of putting drivers on its payroll. The implications of this are decidedly harmful to both consumers and drivers. Once you set this precedent, it will only be the deep-pocketed companies that can afford to put drivers on their payroll. This is especially problematic in the States, where in spite of a substantial amount of their federal budget being for healthcare, lacks a comprehensive public healthcare system, so employee benefits can be quite expensive. I've recently incorporated in Ontario, and working as/hiring people on contract is very easy. A big part of that is because, apart from issues relating to workplace safety, we're not responsible for paying for healthcare services for people who do work for us. It was also very easy to leave my cushy corporate job for a startup, because I didn't have to worry I'd be made destitute if I had to pay for a few nights in a hospital were I to contract a really bad flu or get hit crossing the street. More and more I see the US turning into a country where you _must_ work for a large, established corporation. Lawyers like this are just helping those already on top stay there, at the expense of those in the middle or bottom.

rayiner 12y ago
That's kind of an entitled attitude. Society puts certain obligations on businesses, and providing certain benefits to employees is one of them. If you're too small to meet those obligations, then you shouldn't get a free pass on them. That just leaves the workers out in the cold.[1] I'm certainly willing to entertain the notion that we should pay for those benefits with taxes instead of pushing the burden on employers, but that's a separate argument. [1] Although I'm actually not convinced the premise of Uber drivers being employees is correct.

jingo 12y ago

"Just because your services are dispatched through a smartphone doesn't make you a technology company."

xanadohnt 12y ago

The thing is Uber drivers are independent contractors. The ability to work whenever the hell you want or to drop into any city and make money, at will, are fundamental motivators to driving for Uber. Regular benefits means minimum regular work hours. When that's it play it completely changes Uber's marketplace and value-add.

zyxley 12y ago
The most straightforward argument I can see against Uber drivers being "employees" legally are the ones who simultaneously do work for Uber and Lyft, picking and choosing whatever fares they they want to chain together from both.
tashoecraft 12y ago
In the article it states that drivers have been fired for not taking a certain percentage of passengers. While it isn't a strict hours, it is firing someone for not meeting their determined amount of work. As she says these companies are square pegs that are trying to be forced into round holes. Uber drivers are not normal independent contractors, but nor are they full employees. I really like Uber, but forcing employees to pay for gas, maintenance, insurance, etc is abusing their position. There needs to be a reclassification that can work for the on demand companies. Place these employees somewhere in between and require certain things be met, maybe pay for gas whilst they are driving passengers, or a stipend for maintenance costs.
- fancyketchup 12y ago
  > In the article it states that drivers have been fired for not taking a certain percentage of passengers. While it isn't a strict hours, it is firing someone for not meeting their determined amount of work. Drivers are only fired for not taking a certain percentage of rides offered while the driver is logged in and active. That's an enormous distinction. Drivers don't have be active, and they can go inactive at any time. In fact, over half of the drivers with whom I've ridden are logged into both Uber and Lyft while waiting for a fare, and then log out of the other app when they accept a fare from one. (Yes, I quiz my drivers on the particulars of driving for these services and keep track of what they tell me). The whole point of threatening to fire (and actually firing) drivers for not meeting acceptance rates seems to be to incentivize them to log out during the times they aren't actually willing to take a fare.

greggyb 12y ago

An analog that sprang to my mind early in the article, and briefly raised with the comparison to Craigslist, but which I feel is more apt than Craigslist: eBay. Some points: * eBay can ban a seller for not following the rules. * eBay absolutely requires its sellers to earn revenue. * eBay can set expectations and incentivize behavior with its various seller-partner programs at different levels. * An eBay seller may depend on eBay for their livelihood. I am not proposing this as a slam-dunk against the case, but I'd love to see some discussion on these points. I will state clearly and unambiguously, though, that I do not believe Uber should have to treat all of its drivers as employees. This does not imply that I am opposed to discussion or hearing opposing viewpoints. Ninja Edit: Typoes (grammar-oes?).

Bahamut 12y ago
The article points out some aspects that make this a not so great analogy - in particular, companies like Uber set the rates, and put the burden of costs on the workers for stuff like gas, wear and tear, etc. Uber in particular is taking half of the tips according to the article, which sounds unethical. My only opinion on this is that the balance should probably be tilted a little more in the workers' favor for these arrangements, although I am not sure full categorization as an employee would be the correct approach.
- greggyb 12y ago
  >The article points out some aspects that make this a not so great analogy - in particular, companies like Uber set the rates, and put the burden of costs on the workers for stuff like gas, wear and tear, etc. Uber in particular is taking half of the tips according to the article, which sounds unethical. These are very good points and I am glad you brought them up. I think the rates and tips are very valid concerns here, but categorically different from one another. I think that offloading costs to drivers still fits the eBay analogy, though it is certainly weaker. A seller must store goods, prepare them for shipping, and in many cases add value to the product in some way (e.g. refurbishing is common, which includes cost for all related equipment). Again, not a perfect analogy, but offloading costs to the seller/driver seems to bear some resemblance between the two. Setting the rates is a strong argument in favor of a relationship more toward the traditional employee end of the spectrum. I think I need to think about this more. As to the tips, I glossed over that section so I am glad you've raised it here. I do not know the exact details of the agreement between Uber and drivers as regards tips, but this seems at first glance to be a pretty severe violation of any relationship between driver and Uber. I agree this needs to be addressed, and a class-action suit does seem appropriate here. I think this can and should be viewed independently from any classification as partner/employee. >My only opinion on this is that the balance should probably be tilted a little more in the workers' favor for these arrangements, although I am not sure full categorization as an employee would be the correct approach. I think you're right on this point. I am still unsure as to what I think is best to achieve this. My initial reaction is to ensure that there is an environment where competitors are likely; I believe a strict requirement on the type of relationship between company and driver will only hamper this (limit the type of relationships => limit the viable business models => limit the possible solution space).

ahallock 12y ago

I love how lawyers and the gov assume what my preferences are and what's best for me. I work as an independent contractor and I don't want any benefits from the company I'm providing services. I want to provide my services and get paid. That's the only benefit I want. And this: "..but the company also gave them strict guidelines for participation which made them look like employees according to the IRS’s 20-prong test. Uber screened and trained its drivers, and drivers could get deactivated by Uber for having their rating dip below what local managers set as a cut-off, for not accepting a certain percentage of trip requests, or for customer complaints." How are those strict guidelines? So now contractors are exempt from any scrutiny in the services they provide? Makes no sense. Then Uber would be getting sued for putting passengers at risk by having zero QA.

eykanal 12y ago

> Fiona Ramsey, the director of communications for Peers... added: “We worry the share economy will cease to exist if these cases are successful.” > That worry may be exaggerated, however. Deep-pocketed companies like Uber, which has raised nearly $5 billion in venture capital since launching, could surely afford the additional expense of putting drivers on its payroll. What a silly argument! Raising a ton of money in venture capital doesn't mean that the business model itself is profitable, and in the long run that's what matters. If the profitability of the entire business model is built on illegal classification of workers, then the model is a failure (within this legal framework, at least) and won't work. Either change the law or change the model, but something will have to change.

oh_sigh 12y ago

The opening lines are crazy. The moment she heard about the app, before she knew anything about it, she had the idea "to put them out of business"? That doesn't seem like the behavior of an altruistic person. Shouldn't she have, you know, researched the structure of uber before deciding that she wants to destroy them? How would she know that the employment status of the drivers from her friend saying "You have to see this"?

s54b32dd 12y ago

I actually like this lawsuit, as if I'm honest, I don't think Uber/Lyft, etc. should have gone the contract-service offering route. I think they might have been just as well off as a middleware provider, connecting customers with existing cab services, and offering their tools as a SaaS. It's interesting to think about how different the world would be right now if Uber had gone into software sales as opposed to attempting to be a cab competitor. I realize the inventors largely created the service as an alternative/competitor to cabs, which they disliked for various reasons. It's still interesting to think about what could have been, if only they'd been more interested in fixing the logistics of cab companies than "inventing an industry". If this attorney is ultimately successful, I can easily see Uber/Lyft's business model morphing as a result. I don't think there's enough profit in their business if they have make all their contractors W-2 workers.

davidgerard 12y ago

> If Uber had indeed misclassified its drivers, the company’s entire business model was built on a legal mistake. Uber's business model is based on violating regulations.