Uber and Lyft Face Worker Misclassification Lawsuit From CA Attorney General and City Attorneys (techcrunch.com) 67
California Attorney General Xavier Becerra along with city attorneys from Los Angeles, San Diego and San Francisco filed a lawsuit asserting Uber and Lyft gain an unfair and unlawful competitive advantage by misclassifying workers as independent contractors. From a report: The suit argues Uber and Lyft are depriving workers of the right to minimum wage, overtime, access to paid sick leave, disability insurance and unemployment insurance. The lawsuit, filed in the Superior Court of San Francisco, seeks $2,500 in penalties for each violation under the California Unfair Competition Law, and another $2,500 for violations against senior citizens or people with disabilities. "The companies, we believe and argue are shirking their obligation to their workforce," Becerra said in a call today. By shirking those obligations, Becerra said, Uber and Lyft are shifting those costs to California taxpayers. "American taxpayers end up having to help carry the load that Uber and Lyft don't want to accept," Becerra said. "These companies will take the workers' labor, but they won't accept the worker protections." This lawsuit comes after Uber and Lyft have spent millions of dollars to try to combat California law AB 5, which makes it harder for tech companies to classify workers as independent contractors.
How is this any different than other businesses? (Score:3, Insightful)
There are a whole slew of tech and other companies employing independent contractors either individually or institutionally to do exactly this same bullshit for exactly the same reasons. How many of you here have friends on one or two year contracts as developers, IT, or CSR? California should clarify its position on this larger issue instead of singling out Uber because it's popular and/or they are treating their "contractors" slightly worse than the other businesses doing it.
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It is literally no different. Big tech businesses in California have been abusing this law for decades, and they won't stop unless tech employees wise up, organize, and start demanding the enforcement of the law.
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(The only reason these two particular companies are under a brighter spotlight on this issue in California right now is because it also negatively impacts public transportation. Traffic here is already a bitch, and that's one of the few things about which we're in nearly universal agreement. Any companies caught profiting on making it worse should expect eventual justice. Not swift justice, but justice nonetheless.)
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You are confusing punishment with justice... they are not even remotely the same thing.
Justice may be in the name of ours and many other legal systems but they are not about "justice" they are about punishment and enrichment. Justice must include also fixing the things that facilitated the problem at hand not just "punishing" the one bad actor on display. Same as when a parent disciplines a child... it's not about justice... it's about punishment for not acting how they want.
Justice is a process where a d
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Justice must include also fixing the things that facilitated the problem at hand not just "punishing" the one bad actor on display.
It seems like a fair number of such attempts end up making the underlying problems worse or causing a litany of side-effects or unintended consequences that are just as bad as they original problem.
If we were any good at fixing underlying problems we'd do it before they cause downstream problems. However, humans aren't very good at that as a collective, and it's pretty obvious that if you examine most people they aren't terribly good at it on a personal level either.
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Well that is not about to happen here.
The CXO's of these companies will already be explaining to their lawyers that this is a clear cut case of "not guilty by reason of corporate insanity". Hell, not one can argue against that!
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(The only reason these two particular companies are under a brighter spotlight on this issue in California right now is because it also negatively impacts public transportation. Traffic here is already a bitch, and that's one of the few things about which we're in nearly universal agreement...)
You know another thing we tech workers have been in universal agreement on for the last decade or two?
Our ability to work remotely.
For California and every other tech hub, either start really supporting a remote workforce, or kindly shut the fuck up about the traffic you obviously want and love. I do not want to see overcrowded cities return to pre-COVID traffic for a long damn time. There's no need to, and everyone knows that now.
You'd also be wise to keep gas demand down in California too. Might have
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I have no disagreements about this. The only difference is that's not actually already illegal, just stupid. The abuse of contractor status as a tax dodge isn't a subjective matter in any way though.
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You DO know that is it the contractor that pays the employment taxes, right?
I mean, they GET paid...hence the reasons contractors negotiate for much higher bill rates than the normal W2 employee.
You get that higher bill rate precisely because you pay the employment taxes (both employer and employee) for SS and medicare. You have to pay unemployment taxes...and since you cover your own health insurance, you need that
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In most cases you are not paying workers for their skills... you are paying them to do what you told them to do. This simple concept is glossed over often or ignored because well... you usually do not want people you want to fix printers off fixing a door knob because they have the skill. It's about perceived value vs actual value, and right now that perception is for asses to bee in seats AT the office for that perception to be effective.
On a side note the #1 cause of traffic is not this, it is zoning an
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In most cases you are not paying workers for their skills... you are paying them to do what you told them to do. This simple concept is glossed over often or ignored because well... you usually do not want people you want to fix printers off fixing a door knob because they have the skill...
Not paying workers for their skills? I work with and manage people who are skilled in IT. I'm sure as hell not paying them for their looks. Yes, I want to use my skilled resources effectively, but I'm paying skilled workers to do the technical work I hired them to do. Skills are not a mere "concept" to worry about; it's usually a requirement. And employees will do what they're told regardless of the task, as long as it's a reasonable request. We've all had to do those "doorknob" cable-running jobs befo
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You know, there ARE a lot of us out there that have been working 1099 contracting in IT (and all sorts of fields) for a long time, and enjoy the model and the advantages it can offer.
It's not for everyone, but everyone should have the choice in how they want to work and earn a living, no?
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You know, there ARE a lot of us out there that have been working 1099 contracting in IT (and all sorts of fields) for a long time, and enjoy the model and the advantages it can offer.
It's not for everyone, but everyone should have the choice in how they want to work and earn a living, no?
Are you *really* an independent contractor? I remember when the IRS cracked down on this years ago. Everyone was on a 1099, but they worked for one client, in their office, on their equipment, under their management, often for years. The IRS cracked down hard on these relationships
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Yep, for real.
And just FYI....in the past I"ve done some government contracting...and they do precisely what you said you're "not supposed to do"...they provided the office space, computers, access...etc...on premise for the wor
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Yep, for real.
And just FYI....in the past I"ve done some government contracting...and they do precisely what you said you're "not supposed to do"...they provided the office space, computers, access...etc...on premise for the work....and yes, one client.
Of course you're free to do another work too, but those contracts are pretty much 40+ hours a work for about.3 years at a time and if you're a sub, you just often get hired on at some job as a sub to a new prime contractor.
One thing that helps to protect you from the IRS, is to incorporate yourself...that way you are in a corp-to-corp relationship which the IRS generally won't fuck with....it's hard because some companies got screwed by just what you described, so they often won't contract with corp-to-individual, but if you incorporate then it is a different. relationship.
I chose a S-Corp, which has more paperwork but allows you to save money on the amount of employment taxes you have to pay annually.
I remember when they issued guidance with like 10 things that if you couldn't answer no to all your independent status was denied. Lots of companies got fined and hit with back taxes. They started hiring contractors only through external firms where the contractors were faux-employees on w-2's. I was contracting for years but I maintained multiple clients. So I'm surprised they let you skate by.
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Hopefully, but these businesses have been working the system for a long time. Since the owners will not be going to jail for these violations there is little chance of them really fixing anything.
It is literally profitable to break the law, and the law does not care that it is profitable because the law gets to profit from the law breaking as well in the form of fees and fines.
People need to remember that government is a legalized racket and to act upon and judge the power you give them accordingly.
Re:How is this any different than other businesses (Score:5, Insightful)
California did that [jdsupra.com], twice. First in Dynamex Operations West, Inc. v. Superior Court of Los Angeles County [justia.com] in 2018 and, second, in passing AB5 in 2019.
Uber and Lyft said "nuh uh." Name any other companies that are likely to have a greater number of violations, that are likely to be paying their employee-contractors less, or that are likely to have even clearer instances of employee-contractors performing "work that is [not] outside the usual course of the hiring entityâ(TM)s business" (element B of the ABC test).
Uber and Lyft set themselves up as the poster children for enforcement of the standard. Play stupid games, win stupid prizes.
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Yep - and our brilliant legislature caused 100K job loss at least by using a law that essentially was a shot-gun. Two name two affected jobs - truckers and independent journalists lost jobs through-out the state last year when AB-5 passed.
If the work needs to be done (Score:3, Insightful)
One guy called them a Payday loan where the interest is mileage on your car.
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My ex-wife is one of the casualties of AB5. She's a translator. No companies need a full time translator in her language, so contracting jobs is the only feasible way it works. But that no longer happens in California. No business needing a contract translated even bothers to talk to California based translators. There are plenty of translators in other states hungry for work.
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(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
This is true for both Uber and Lyft. They don't provide "control and direction" to the driver and rely on performance of work as reported by the rider.
(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
Uber and Lyft maintan their companies are, effectively, brokers providing a means of connecting riders with drivers. Their business isn't providing taxi services, it is providing a mean for one to get a ride with another.
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
Taxi driving has long been an independently established trade that works as an independent contractor.
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Fiction. Where does their advertising say that? Where does their app say that? Where can either the passenger or the driver say "you know what, let's do this for a different pr
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Where does their app say that? Where can either the passenger or the driver say "you know what, let's do this for a different price"
I only used Uber/Lyft when traveling and it's been a few years, but at one time that definitely was right there obviously in the app.
I specifically remember on one occasion that I chose to wait an hour before calling an Uber because the app told me "the price is X now, it may be lower later" and sure enough the price was lower later. And it's my understanding that Uber drivers see the price before each and every ride before they agree to it. A driver who doesn't want to drive much can choose to only drive
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And the driver had to wait an hour. And the only one who could propose a price was Uber.
Only if you're claiming that Uber's load management algorithm is broken. Maybe it is, but that would make less money for them as well as their drivers so I tend to believe they probably follow the money.
Assuming their algorithm is tuned to maximize profit, the driver was not waiting, (s)he was driving somebody who was in more of a hurry. If they had drivers sitting around in empty cars then their algorithm, if not broken, would drop the price so that people (who Uber knows have check prices but not summoned
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No, not only if that. You keep attempting to change the question: "Where can either the passenger or the driver say 'you know what, let's do this for a different price?'" You had to wait an hour. And the driver had to wait an hour. And the only one who could propose a price was Uber. You've rebutted none of it.
Xavier Becerra for President (Score:2)
This is the guy who stopped ICANN, and now this? Dude, where do I cast my vote for him as President?
He's doing more useful good than the rest of the swamp put together.
It's an interesting premise (Score:2)
My local car servic
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Hmm...I've been a contractor
Your work has a beginning, middle & end (Score:2)
If not then yes, I'm going to force you to become an employees. There are several reasons for this:
1. Taxes. Companies often miscategorize workers to avoid paying state taxes.
2. Healthcare. Our system is built on employer based healthcare. Contractors "extra" pay is often because they have little or no healthcare services. The problem is your driving up the cost of healthcare for everyone else.
3. Unemployment insurance. Companies use
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Why is this a problem...as a 1099 contractor with my own company (it is smart to incorporate yourself so that you have a true corp-to-corp relationship with your customer) "I" pay the taxes....so, they get paid don't worry about it.
I pay all employment taxes, local, st
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2. The problem isn't the taxes YOU pay, it's the taxes your employer pays, or in this case doesn't.
3. You can't find those high deductible plans because they didn't cover anything. You are a lucky man that you never needed them for anything serious.
4. In your state you might be right about unemployment taxes.
It's not in most cases (Score:1)
There's a little bit of wiggle room there. My company rents a building so the cleaning and security is done by the building owner. But then they're supposed to be employees of the building owner.
If you've been working as a perma-temp then your boss is breaking the law. By and large they will get away with it. For a lot of young guys some of the saving
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ICs can set their own hours and work days, they provide their own tools and equipment, they dress as they wish within reason, they often do piece work (they are paid piece, not the hour, etc), they are exempt from most labor laws and are not provided any benefits.
Contractors follow a dress code, may be required to wear a uniform and work hours and days set by the contract, are generally provided tools and equipment, generally don't do piece
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You are either a contractor or not....what you wear, has nothing to do with it...it can be piece work or it can be VERY important work central to the company's business, doesn't matter.
I read this as... (Score:1)
Drivers are much more like contractors in key ways (Score:4, Interesting)
Uber and Lyft drivers are clearly contractors, not employees.
They can work when and if they want and for how long they want -- this is a very important distinction. They are not expected to give notice if they decide to stop working for Uber or Lyft. They accept jobs (rides) they want and just don't accept others. They provide and maintain the primary tool of their trade (the vehicle). They are free to work for competitors. Uber/Lyft provide a dispatch service to the drivers rather like a taxi dispatcher does.
The argument that the driver doesn't set the price is not sufficient to make them employees any more than a drywall contractor is an employee of a general contractor who offers a "take it or leave it contract" to hang and finish drywall for $X/square foot to a Level-5 finish using specified materials. The drywall contractor is, of course, free to decline to work at the specified rate and either not work at all or offer their services to another general contractor - just as a Uber driver can decide to use Lyft as their dispatcher instead or drive a taxi or develop and promote their own ride service.
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It isn't that simple - CA has AB-5 which redefines what an employee is. Doesn't care about the IRS definition. Don't forget that CA is a co-equal sovereignty with the Feds. The laws don't have to align.
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(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
This is true for both Uber and Lyft. They don't provide "control and direction" to the driver and rely on performance of work as reported by the rider.
(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
Uber and Lyft maintan their companies are, effectively, brokers providing a means of connecting riders with drivers. Their business isn't providing taxi services, it is providing a mean for one to get a ride with another.
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
Taxi driving has long been an independently established trade that works as an indepe
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True, state and federal laws don't have to align. However, states don't enjoy "co-equal" sovereignty with the federal government. If a valid federal law conflicts with a state law (perhaps by, for example, forbidding states from loosening EPA regulations or forbidding states from loosening or strengthening the requirements that must be met for an "employee" to be treated as one), the federal law overrides the state law.
Of course, there is that keyword "valid" in there -- the states can always argue that the
Uber & Lyft have to meny rules like drivers ca (Score:2)
Uber & Lyft have to meny rules like.
Drivers can't say no to much
Don't get the full trip info up front.
Can't sell or market some things to riders
etc
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Uber and Lyft drivers are clearly contractors, not employees.
There is no way to know that without looking at the details of contract law, which varies by state to state, and is only vaguely rational or related to reality.
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This is specifically about California law (and, of course, Federal law since, to the extent that governs, Federal law is the supreme law of the land).
Except they can't (Score:2)
Uber & Lyft also both have strict requirements about how the work is done (type of car, route driven, etc) and a strict system of ratings which include punishments.
Finally they control how much you charge. They are not just "an app" or a middle man since the contractor
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So, much like a drywall contractor. ...if a general contractor uses three drywall contractors and drywall contractor A busts her tail to fit the general contractor's jobs in during crunch times and drywall contractor B just accepts the convenient jobs, guess who the general contractor will usually call first -- yep, drywall contractor A. ...if a drywall contractor is contracted to do a level 5 finish and leaves the job site having done a level 4 finish or does the drywall in the way that makes life difficul
If you run a dry wall business (Score:1)
So yeah, You're technically right. But you're completely missing the point. You're working backwards from your conclusion.
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Reread my post. I was talking about a general contractor subcontracting to a drywall contractor -- one who might work alone even.
If you argue that it's rare for one individual to do all the labor in their drywall business, substitute "electrician" or "plumber" subcontractor who are more likely to have a one-person business when working in the residential space in some areas - esp. in the renovations/additions sector rather than new construction.
Note that small contractors will sometimes utilize "lead genera
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What a joke... (Score:1)
CA courts are a joke... they're demonstrably contract workers, as evidenced by the vast majority of drivers actively working for both Lyft and Uber simultaneously. No one is going to tolerate actual "employees" working simultaneously for their primary competitor and the idea that these rideshare companies are somehow forcing their drivers into a situation is absurd. If you don't like it, don't do it... go get a real job.
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Why do you love the taste of corporate dick so much?
Asking for a friend.
The second oldest profession -- holding a club (Score:1)
"Gain an unfair advantage [over other companies]" by providing an open market for work, which is swamped by free people acting on their own.
Well, that's kind of the definition of a disruptive market change. This disrupts what they said, but more importantly it interferes with politicians-as-mafia, who say to the normal business community, "You know, shame if things break. Donate to me. Or 'donate'. " Now this is disrupted and they are enforcing it.
This is literally what's happening, with just a few word
IRS on differing between employee and contractor (Score:3)
To better determine how to properly classify a worker, consider these three categories – Behavioral Control, Financial Control and Relationship of the Parties.
Behavioral Control: 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. Behavioral control categories are:
Type of instructions given, such as when and where to work, what tools to use or where to purchase supplies and services. Receiving the types of instructions in these examples may indicate a worker is an employee.
Degree of instruction, more detailed instructions may indicate that the worker is an employee. Less detailed instructions reflects less control, indicating that the worker is more likely an independent contractor.
Evaluation systems to measure the details of how the work is done points to an employee. Evaluation systems measuring just the end result point to either an independent contractor or an employee.
Training a worker on how to do the job -- or periodic or on-going training about procedures and methods -- is strong evidence that the worker is an employee. Independent contractors ordinarily use their own methods.
Financial Control: Does the business have a right to direct or control the financial and business aspects of the worker's job? Consider:
Significant investment in the equipment the worker uses in working for someone else.
Unreimbursed expenses, independent contractors are more likely to incur unreimbursed expenses than employees.
Opportunity for profit or loss is often an indicator of an independent contractor.
Services available to the market. Independent contractors are generally free to seek out business opportunities.
Method of payment. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time even when supplemented by a commission. However, independent contractors are most often paid for the job by a flat fee.
Relationship: The type of relationship depends upon how the worker and business perceive their interaction with one another. This includes:
Written contracts which describe the relationship the parties intend to create. Although a contract stating the worker is an employee or an independent contractor is not sufficient to determine the worker’s status.
Benefits. Businesses providing employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay have employees. Businesses generally do not grant these benefits to independent contractors.
The permanency of the relationship is important. An expectation that the relationship will continue indefinitely, rather than for a specific project or period, is generally seen as evidence that the intent was to create an employer-employee relationship.
Services provided which are a key activity of the business. The extent to which services performed by the worker are seen as a key aspect of the regular business of the company.
Independent Contractor has a definition (Score:1)
“a person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished."
The companies in question do exactly that, with the sole exception of specifying they must have a newer, safe vehicle. The rule requiring a high rating from riders is the measure of the result accomplished. They provide tools optional tools for doing the work in the form of maps and routing software and only require the use of their app for assigning each piece of work and rating the same.
I think this alone will cost California the case.
TFS is wrong (Score:2)
This lawsuit comes after Uber and Lyft have spent millions of dollars to try to combat California law AB 5, which makes it harder for tech companies to classify workers as independent contractors.
AB5 doesn't do shit, just like Xavier Bacerra doesn't do shit. These companies (and the other "gig economy" appity app companies) commit fraud on top of fraud on top of fraud, but all they care about is tax revenue. This is like when the record companies pretend to care about the artists.
Oh. (Score:2)
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Yep! I recently started driving for Uber when I lost my full-time I.T. job and wanted to bring in a little bit of income while searching for another one.
I don't get how some of these drivers would ever think Uber owes them minimum wage pay or benefits or any of that? You're clearly just volunteering to accept fares on a "job by job" basis, as you feel like doing it.
If there's anything unfair about the whole thing, it's some of Uber's business practices like not letting drivers see where a rider intends to