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The Courts Transportation

California Judge Orders Uber and Lyft To Classify Drivers As Employees (theverge.com) 149

A California judge ruled that Uber and Lyft must classify their drivers as employees in a stunning preliminary injunction issued Monday afternoon. The Verge reports: The injunction is stayed for 10 days, however, giving Uber and Lyft an opportunity to appeal the decision. Uber said it planned to file an immediate emergency appeal to block the ruling from going into effect. [...] Drivers' groups hailed the ruling as forward progress in their fight to upend Uber and Lyft. "Today's ruling affirms what California drivers have long known to be true: workers like me have rights and Uber and Lyft must respect those rights," Mike Robinson, a Lyft driver and member of the Mobile Workers Alliance, a group of Southern California drivers, said in a statement.

But Uber maintains this ruling will result in fewer jobs during a global pandemic that is putting strain on the state's economic conditions. "The vast majority of drivers want to work independently, and we've already made significant changes to our app to ensure that remains the case under California law," an Uber spokesperson said. "When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression." A Lyft spokesperson agreed. "Drivers do not want to be employees, full stop," the spokesperson said. "We'll immediately appeal this ruling and continue to fight for their independence. Ultimately, we believe this issue will be decided by California voters and that they will side with drivers."
Earlier today in an op-ed via The New York Times, Uber CEO Dara Khosrowshahi said lawmakers should require gig economy companies to create benefits funds, which would "give workers cash that they can use for the benefits they want, like health insurance or paid time off."
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California Judge Orders Uber and Lyft To Classify Drivers As Employees

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  • That would probably be best for all. Their goals and the state's goals are simply too far apart. It is certain that somebody will step up and fill any void left when they leave.

    • by PPH ( 736903 ) on Monday August 10, 2020 @06:25PM (#60387527)

      somebody will step up and fill any void left

      Taxi cab companies have placed a rush order for fleets of yellow Crown Vics, pre-scented with B.O. and cigarettes.

  • Cute (Score:5, Insightful)

    by Sebby ( 238625 ) on Monday August 10, 2020 @05:49PM (#60387379)

    "When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression." A Lyft spokesperson agreed. "Drivers do not want to be employees, full stop,"

    " Yes, people should be employed, but not directly by us, and should have their worker rights..... but not by us" - Uber

  • by ghoul ( 157158 ) on Monday August 10, 2020 @05:55PM (#60387413)

    UBI means people dont need a full time job. They can drive Uber for a few hours and spend the rest of the time writing poetry. The pandemic has shown that UBI works. Full time jobs are not needed.

    • Re:UBI (Score:5, Interesting)

      by Solandri ( 704621 ) on Monday August 10, 2020 @06:27PM (#60387537)
      The problem with a UBI is that productivity is conserved. Everything that's consumed, must first be produced. If everyone just sits at home writing poetry, then nobody is producing the things you need to live like food, clothing, and electricity. Nobody is producing the things you want, like computers and video games.

      When there's a disparity between production and (desired) consumption, the economy corrects it by increasing prices. If 10 people want to buy burgers, but there are only 5 burgers which were made, the price of burgers increases until there are only 5 people remaining who are willing to buy the burgers at the higher price. Consumption has been reduced until it's equal to production.

      That's what will happen with any UBI which results in a drop in productivity. Prices will increase, dropping the net effectiveness of the UBI (the $1000/mo or whatever you receive won't be able to buy as much). If you try to compensate for this by increasing the UBI further, that exacerbates the effect and prices increase even faster. This is basically what happened to Venezuela. They get most of their government revenue from oil exports. When the price of oil tanked, the government tried to keep government assistance programs (consumption) the same. But the amount of money coming in (production) wasn't enough to pay for all that consumption. So prices increased to keep the two equal. When the government doubled-down by increasing the value (in Bolivars) of those assistance programs, prices simply increased again to maintain conservation of productivity. And Venezuela ended up with hyperinflation.

      The most important thing to getting a UBI to work is figuring out how to maintain the average level of people's productivity. Telling people that a UBI will allow them to just write poetry does the opposite, and ensures that a UBI will fail. This is why figuring out how to pay for a UBI is so important. As long as you're paying for it with regular tax revenue (productivity from people or companies sent to the government as taxes), the consumption you're giving out (UBI payments) equals stuff that was produced in the economy. And there's no inflationary effect. But if your proposal is to pay for a UBI by going into debt, that will just result in inflation. Hyperinflation if you insist on maintaining the UBI despite the price increases, as Venezuela did.
      • There has been no UBI study ever that saw a drop in productivity after introducing UBI. It's a non issue, it doesn't happen.
      • by ghoul ( 157158 )

        I think you need to read the Mythical Man Month. There is a thing called negative productivity. When people do what they like they are productive. When they are doing a job because they have no choice they generally are time sucks for their colleagues who DO like what they are doing. Not everyone's "poetry" is poetry. Some people's poetry is writing "software", some people's "poetry" is construction and for the truly horrible jobs UBI is the push needed to make automation cost effective.

      • I agree, the most likely outcome of UBI is an increase in inflation until the UBI payment is basically worthless. If you try to inflation adjust it, you will create a hyperinflation loop.

      • When there's a disparity between production and (desired) consumption, the economy corrects it by increasing prices. If 10 people want to buy burgers, but there are only 5 burgers which were made, the price of burgers increases until there are only 5 people remaining who are willing to buy the burgers at the higher price. Consumption has been reduced until it's equal to production.

        Why do so many people understand market forces when it comes to pricing physical goods, but are completely unable to apply the same rules to labor?

        "If 10 companies want to employ people, but there are only 5 people which were willing to work at that rate, the price of salary increases until 5 more people are willing to work for the higher rate. Demand has been increased until it's equal to supply."

        If there were a UBI sufficient to survive, then companies would only have to offer the differential amount requ

    • UBI = placate the masses while making the rich even richer and ensure the masses never become rich

      How long before UBI is entirely consumed by increased housing costs?

      I'm not sure that I'd like to press the launch button on the inflation rocket.

      • by ghoul ( 157158 )

        Inflation is the only way to reduce economic inequality. If you dont have inflation the rich always stay rich. The only way for poorer folks to catch up is inflation.

        • Maybe in the short term it helps you pay the rent. But unless you work hard and are super frugal it doesn't help you buy property. You landlord is going to notice your UBI income and raise the rent. This helps your landlord but it doesn't really help you in the long run. Even if UBI increases over time your landlord still wins more than you and the price of that property keeps going up and up and up. Hopefully, that last UBI check is enough to pay your funeral expenses, you're going to need it.

          The way

          • by ghoul ( 157158 )

            You are falling for the fallacy of thinking that the landlord is holding your rent down because you dont have UBI. He is charging what the market will bear. He wont raise it if you get UBI as he is already charging the maximum he can. Its not like he will reduce the rent if your income goes down

            • The market will bear higher prices, at least initially, as universally there will be more cash available to pay rent. Its called universal basic income after all. On one hand you say that inflation is a way to reduce income inequality on the other you say that the inflation won't be in rent. If not in rent where exactly do you think we will have inflation with ubi? Yes, a larger money supply will drive inflation and will drive up the rent.

              I suppose you could argue that UBI helps poorer folks more than r

              • by ghoul ( 157158 )

                UBI primarily drives inflation in salaries. If 2000 dollars is something a person gets for being a human than any job that pays less than 2000 will be automated and the only jobs will be those which pay more than 2000 a month so salaries will rise. The cost of automation will come out of the profits of the corporation which is basically the passive income of the rich who own stocks. Thats how inflation will reduce income inequalities.

              • Yes, increase taxes on investment income. That'll make the economy better by encouraging more investment in borderline risks.

                • Any tax scheme that allows the wealthy to keep a larger portion of income very year, year after year, creates a flow of money toward rich people. I guess you believe in trickle-down economics, its been proven that it does not work. I'm advocating for a fair tax structure - where everyone is taxed at a similar rate, not necessarily simply increasing taxes on investment income. Can you even name one example where someone decided not to make money because of taxes? What are the choices, invest and pay taxe

          • And if you get better wages, why wouldn't the landlord notice that as well and raise the rent? It seems pretty unlikely that landlords give a toss about where their tenants get their money from.
            • by ghoul ( 157158 )

              Because with UBI people dont have to cluster into a few cities where all the jobs are. This means the demand for rentals goes down. Supply and demand - rents will fall as vacancies rise.

            • Printing money creates rapid inflation in a way that wage growth does not. How does living in Venezuela look to you?

              UBI requires us to create dollars from nothing, which we will need to keep doing in larger amounts to keep UBI working, which devalues the dollar and will eventually make it worthless.

              • Printing money creates rapid inflation in a way that wage growth does not. How does living in Venezuela look to you?

                Don't change the subject. We're talking about UBI here, not printing money.

                UBI requires us to create dollars from nothing, which we will need to keep doing in larger amounts to keep UBI working, which devalues the dollar and will eventually make it worthless.

                If introduced as a replacement for existing tax breaks and social security benefits, the amount of extra money would be minimal. The point of UBI isn't so much that it's free money, the point is that it's stable and secure.

                • > If introduced as a replacement for existing tax breaks and social security benefits, the amount of extra money would be minimal.

                  Good luck with that. I don't want to live like those in Venezuela. Hyperinflation is not a solution.

                  • Well, I'm sorry, but waving a straw bogeyman around is not a convincing argument.
                    • What 'straw bogeyman'? The money has to come from somewhere. I'd argue that the radical change you are talking about is not practical and will never have the idealized form you claim - which makes your argument the actual strawman. And 'existing tax breaks' are mostly for the wealthy and very poor, which doesn't help most people. What happens in your scenario when we've spent all of the Social Security money (that presumably we stop collecting under your scenario)?

                      At some point UBI requires printing mon

        • I don't think so, because the rich get the money from inflation too, rents everything you buy, the rich have assets not dollars, and if they don't they would quickly move it into assets that inflation does not effect.

          I don't know what we can do to reduce economic equality, and if we ever came up with an idea that would actually work I think it would never pass into law because the rich control the politicians.

          • by ghoul ( 157158 )

            Salary income rises much faster than passive income in a high inflation environment. In low inflation environment people can take loans and buy assets so assets rise faster than salary income.

    • by c-A-d ( 77980 )

      If I had UBI, I wouldn't work another day of my life. I'd live in a van down by the river or up in the woods.

      • by ghoul ( 157158 )

        And Maybe thats your poetry. If you dont like doing anything then removing you from the workplace is probably a net efficiency gain for your current colleagues.

    • The pandemic has shown that UBI works.

      It has increased the debt by nearly $3 trillion dollars in less than one year. Explain in detail how that is "working".

  • "Drivers do not want to be employees" say the companies that would see their costs shoot up if they had to reclassify them as such.

    • Re: (Score:3, Insightful)

      by arbiter1 ( 1204146 )
      Being contracted allowed them to work when they want and how much they want. Being an employee means yes they get more benifits but now the company will tell you when to work and how long. If you don't make more money then it costs to keep you on the payrolls then get ready for a pink slip. This ruling is a double edged sword.
  • Uber: “The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law,”

    Lyft: “Drivers do not want to be employees, full stop,” the spokesperson said. “We’ll immediately appeal this ruling and continue to fight for their independence..."

    Both the companies are going to file appeal on behalf of their drivers.

    • by u19925 ( 613350 )

      I put this in xml element "sarcasm" but looks like Slashdot removed those tags..... Hope people know this is a sarcasm....

      • by PPH ( 736903 )

        but looks like Slashdot removed those tags

        <sarcasm>I would NEVER expect Slashdot to stoop to such behavior.</sarcasm>

      • "Hope people know this is a sarcasm...."

        You must be new here.
        Even if your uid suggests otherwise.

  • reelection. If he wins the 7-2 majority Supreme Court will shut this down and Uber lives. If he loses a more moderate 5-4 or 6-3 court will uphold the decision and Uber will have to behave like an employer.
    • It might not make it past November. Uber and Lyft have sponsored a proposition in California to overrule the law. Voters will get a chance to vote on it, and Uber and Lyft are spending a LOT of money on advertising to make sure it passes. Scroll down to the funding section [ballotpedia.org], it's $100million spent in favor vs $800thousand spent opposing. The cash opposing the proposition is a rounding error.

      Notably, the California NAACP is on Lyft's side.
  • The gap between "employee" and "contractor" is perhaps too wide when hours are partially flexible. An in-between category could be created. The tricky part is not leaving loop-holes in the rules for co's to take advantage of.

    • There is no law that says an employee can't have flexible hours. There is only a law saying a contractor has to.
      • a contractor is paid certain amount. Employee's get benefits like health coverage etc where contractors gotta get their own. Sure people think its a good thing that uber will have to give them health care now but they also forget they can FIRE people that aren't making company money and that is 1 of the 2 outcomes if ruling stands. Other outcome is uber and Lyft say "we outta here" effectively ending all drivers jobs in the state.
    • The tricky part is not leaving loop-holes in the rules for co's to take advantage of.

      Which is exactly why the companies are emailing drivers to sign on to their own custom legislation that surely has no loop-holes.

  • Comment removed based on user account deletion
    • Yep. I've never seen such a pack of incompetents driving such piles of shit. Every time I drive through SF, some fuckface in a Taxi tries to hit me. And I used to live there, and had the same experience.

  • I understand why the government likes this ruling. Their tax collection is much easier and more certain when workers are employees and not contractors. But the workers are being just as greedy here. Nobody is forcing them to drive for these companies and a lot of people are unemployed now. They should be happy to be making money.

    • But the workers are being just as greedy here. Nobody is forcing them to drive for these companies and a lot of people are unemployed now. They should be happy to be making money.

      They are not being greedy, they are being mistreated, misrepresented, and misinformed. So many parties fucking with them. It's sad. They are being ripped off by the companies algorithms. They are definitely being mistreated. Benefits has nothing to do with it. Absolutely tax collection is the only reason the government cares.

  • Bet that in a few short months (if it is not there already) there will be on Craigslist a tab for "car and driver for rent" with most of those having no affiliation with Lyft, Uber or cab companies and those cars with drivers will work mostly for un-taxable and un-traceable pay.
  • by swillden ( 191260 ) <shawn-ds@willden.org> on Monday August 10, 2020 @06:38PM (#60387573) Journal

    Though it's a bit late now, Uber should have turned their app into a real-time auction. Let riders put in their destination, desired arrival time and a bid, and have the app show the bid to drivers in the area who are able to make the journey, and let drivers decide whether to accept it. Drivers should also be able to put in a minimum price, in terms of $/mile and $/min waiting, etc., in the standard taxi structure, and Uber should show riders a typical price for their destination, based on recent accepted offers. Riders who aren't in a hurry could lowball a bit and accept a later arrival time. Riders in a hurry could offer a premium.

    At a stroke, this would solve two problems. First, it would erase the accusation that drivers are not employees. If drivers are negotiating price with riders, then Uber is clearly only a platform to connect the two and process payment (for which it would take a cut). It's the same as eBay; buyers and sellers negotiate price through an online auction, and no one tries to claim the sellers are eBay employees. Second, it would eliminate the artificiality of surge pricing; prices would rise and fall naturally in response to supply and demand, and Uber couldn't be blamed for putting its thumb on the scale.

    • Yes, it's the obvious thing. There is a reason they don't do it.

      Second, it would eliminate the artificiality of surge pricing;

      One of the many reasons, this is a feature, not a bug. Hint: they don't even pass surge pricing to the driver.

      If drivers are negotiating price with riders, then Uber is clearly only a platform to connect the two and process payment (for which it would take a cut).

      Another reason, they take a cut, AND decide which drivers get which rides, AND use their algorithm to cheat, and make sure they can skim even more and more off the top with multiple scams.

      • they don't even pass surge pricing to the driver.

        Cite? I've read articles quoting drivers who prefer only to work during surge times, because they make more money. Your claim also contradicts the claims on Uber's web site, which say that Uber's percentage doesn't change during surge pricing. https://www.uber.com/us/en/dri... [uber.com]. Note that I'm not saying that Uber is above lying for any moral reasons, but publicly-traded companies get hammered by the SEC for making provably false statements that could affect the share price, which this is.

    • Uber doesn't want that. They want to use the humans until they can replace them with robots (self-driving cars) and then kick the humans to the curb. And they want to set the fares at that point, not have people bidding.

      • Uber doesn't want that. They want to use the humans until they can replace them with robots (self-driving cars) and then kick the humans to the curb. And they want to set the fares at that point, not have people bidding.

        It would be trivial for them to make that transition. If they had the auction system running, with human drivers, they could just introduce their own automated vehicles and have them bid against the humans. Not having to pay a human, they could easily underbid the humans and quickly drive them out.

    • That's how actual ride sharing services do it. Uber/Lyft, etc are not ride sharing. They are taxi replacements.

      I am not too familiar with the ride sharing space, but here is one that runs in Europe- blablacar [blablacar.co.uk]

  • So long ride sharing. People simply wont pay 100$ a trip to cover benefits, wages (even when waiting for work), and fees.
  • In most sane places the rule for employee vs contractor is degree of control. Do you bring your own tools and equipment, do you set your own hours, can you choose your tasks, do you work at the employers site. Almost all office contractors before covid-19 would be easily classified as employees on the first hour they worked. Uber drivers are contractors and the ones I've driven with like it that way. Uber drivers if, they are smart, and keep their costs down and take advantage of peak pricing can make
    • and was making almost 6K (Canadian) a month

      Do you mean his net profit was $6k a month, or his gross income was $6k a month? Living in one of the UK's biggest taxi capitals (and therefore speaking to plenty of drivers about their incomes and costs) I'd be astounded if a 7-hour driving shift left £3.5k after costs.

      - How much a month goes on petrol?
      - How much a month on insurance?
      - How much on car maintenance?
      - How much for a spare car when this one is in the garage?
      - What's the depreciation on a reliable car that drives 7 hours a day?

      7 hours a d

  • by drew_kime ( 303965 ) on Monday August 10, 2020 @10:25PM (#60388103) Journal

    Drivers do not want to be employees, full stop.

    Which obviously explains why the Mobile Workers Alliance is so supportive of this ruling. /s

  • by stikves ( 127823 ) on Tuesday August 11, 2020 @12:23AM (#60388213) Homepage

    Yes, there are really some people who might benefit from this. At least some sort of health insurance and unemployment coverage.

    That being said, many Uber drivers I personally know cannot actually be employees:

    - They have incorporated their own companies, and some lucky ones actually upgraded to multi-vehicle limousine services
    - They work for both Uber and Lyft at the same time (or maybe more, like Doordash, etc) depending on time of day, location, etc

    I understand California needs Uber drivers chip into their local employment funds, and whatnot. However there should be a third category between fully bound employees, and fully independent contractors.

    • by ledow ( 319597 )

      You don't need to be a full-time employee to be an employee.

      In fact, I imagine MOST of their employees won't be full-time employees. They'll be flexibly part-time employed.

      Hence using two services makes no difference, and having companies doesn't make much difference - either they are just contracting those companies and it's up to that "subcontractor" to arrange employee benefits, or they are employing the individual and can't have a company playing middle-man.

  • I mean, the Microsoft lawsuit was almost 20 years ago ("contractor" sued for benefits in federal court, got them).

    Contractors, my butt.

    Oh, and about cabs: I drove for Yellow in Philly in the mid-seventies. I was "part time"... so I drove 42 hours a week. "Full time was 6 days a week, 48 hours". I got to pick my days.

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