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The Courts Businesses Transportation

Last-Minute California Ruling Means Uber and Lyft Won't Shut Down Today (arstechnica.com) 63

Posted by BeauHD from the change-of-plans dept.
An anonymous reader quotes a report from Ars Technica: A California judge has granted Uber and Lyft an emergency reprieve from an order requiring them to treat their drivers as employees. The companies were facing a Thursday deadline to comply with the order. Earlier today, Lyft announced that it would be forced to shut down in the state at midnight tonight. Lyft said it was being forced to shut down its California operations by a 2019 California law, AB 5, that forces ride-hailing companies to treat their drivers as employees rather than independent contractors. Uber had warned that it was likely to do the same if the courts didn't delay enforcement of the law.

"This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips," Lyft wrote. However, the company said, the new law would "necessitate an overhaul of the entire business model -- it's not a switch that can be flipped overnight." The judge's emergency stay means that Lyft and Uber will be able to keep operating under their current model while they continue litigating whether the new law applies to them. Yesterday, in a podcast interview Uber CEO Dara Khosrowshahi rejected the notion his company is capable of employing all of its drivers in California.

"We can't go out and hire 50,000 people overnight," Khosrowshahi said on the Pivot School podcast hosted by Kara Swisher and Scott Galloway. "Everything that we have built is based on this platform that... brings people who want transportation or delivery together. You can't flip that overnight."
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Last-Minute California Ruling Means Uber and Lyft Won't Shut Down Today More

Last-Minute California Ruling Means Uber and Lyft Won't Shut Down Today

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  • Fifteen seconds (Score:3, Informative)

    by Presence Eternal ( 56763 ) on Thursday August 20, 2020 @05:21PM (#60424039)

    Here is an article that put in the ten seconds of work needed to offer the reader a link to the case.
    https://www.theverge.com/2020/... [theverge.com]

    Here is me taking five seconds to copy their link to the case.
    https://appellatecases.courtin... [ca.gov]

    • We can't go out and hire 50,000 people overnight.

      Well sure, perhaps they should have spent the last 10 years hiring them, rather than deliberately flouting the law the entire time and finally having 50,000 chickens come home to roost.

      I can't believe that people buy into the idea that somehow Uber is a victim here, rather than the literal criminal enterprise it is.

  • Guess we know one more bought "public" servant.

    • Judge Schulman is of questionable integrity [industrywired.com]:

      In another previous ruling, Judge Ethan Schulman appointed a Temporary Judge to provide him with recommendations on a Motion to Compel against Devesa and MedWhat. The temporary Judge, Jeff Wohl, turned out to be a full-time lawyer at private equity firm Paul Hastings, a law firm with numerous business relationships with Stanford University and in Stanford-StartX Fund LLC’s venture capital and artificial intelligence space. When Devesa asked Judge Ethan Schulman to recuse Judge Wohl, Schulman refused.

      The Tax Fraud and Money Laundering counts against Stanford University’s Robert Wallace and Debra Zumwalt are based on evidence that the venture capital fund Stanford-StartX Fund LLC. never wired any money to Devesa’s MedWhat as a member of startup accelerator StartX. Instead, Stanford University wired money to MedWhat as part of investments of separate entity Stanford-StartX Fund LLC. from Stanford University’s own tax-exempt bank accounts. This was while Stanford-StartX Fund LLC according to Devesa gave detailed instructions to MedWhat, and all 250 companies at StartX startup accelerator, to never use Stanford University’s name or logo as investor, and only use the Fund’s official name.

    • Re: (Score:2)

      by Kohath ( 38547 )

      Guess we know one more bought "public" servant.

      Do you think the public is served by denying the public access to a transportation method they've been using? Or by denying drivers the opportunity to get paid? How does disrupting that serve the public?

      • Re:Welp (Score:4, Insightful)

        by lessSockMorePuppet ( 6778792 ) on Thursday August 20, 2020 @05:50PM (#60424217) Homepage

        "Ermagerds, the world will collapse if wage slaves don't drive a chariot for me--and think of all those small businesses that might be able to compete if Uber and Lyft didn't operate at a loss!"

        • Re: (Score:2)

          by Kohath ( 38547 )

          "Ermagerds, the world will collapse if wage slaves don't drive a chariot for me--and think of all those small businesses that might be able to compete if Uber and Lyft didn't operate at a loss!"

          The question was about what serves the public. Not your dumb strawman apocalypse.

          Clearly you don't care about what serves the public.

          • Re:Welp (Score:5, Insightful)

            by lessSockMorePuppet ( 6778792 ) on Thursday August 20, 2020 @05:58PM (#60424257) Homepage

            Your definition of the public is foreign to me. It seems to mean, "me, but not anyone else."

            I'd wager that drivers have a vested interest in improved wages. This is a one-time cost with continuing returns, year after year, in being recognized as formal employees and being able to make a living wage.

            Unless you'd rather pay more taxes to support them.

            People eat, or SHTF. Someone pays for it. I'd rather it be Uber and Uber's customers, instead of the public's tax money--my money, your money, and so on for everyone else in the tax base.

            • Someone pays for it. I'd rather it be Uber and Uber's customers, instead of the public's tax money

              So.... it's better for the drivers to extort the company than to be forced to conclude that they might need to get a real job that pays more than peanuts? They're completely free to, you know... not do that job that they say pays too little.

              • They're functionally employees, without freedom to choose their jobs (free of reprisals) or how they perform them.

                They deserve a minimum wage, at least.

                • How aren't they free to choose their jobs? Now you're just a liar.

                  • Uber is the one violating the law, allegedly. Ergo, the employees have standing to claim damages and loss of wages, because of Uber's failure to follow the law, not because of the courts.

                    The employees of Uber should receive just compensation for Uber's failure to offer them continued employment, because Uber broke the law. Unemployment would be a good place to start.

                    • The law that was invented solely for Uber and Lyft? The law that was effectively stayed by this judges order because of the harm it will cause Uber and Lyft?

                      Are you familiar with Prop 22 on CA's ballot this November?

                      I'm starting to think you want as many people destitute and homeless as possible in the hopes it will hasten your Communist revolution. Hint: it won't.

                    • Did the employees pay their tribute to the Taxi and Limousine Commission for a hack license? It would seem they went, "Hurr durr, I have a driver's license and a car. I'm a Uber driver!"

                    • The only communist here is you, wanting to tax me to pay for food stamps and welfare programs that would be unnecessary if Uber competed fairly and equitably in the market.

                    • Uber/Lyft were going to leave the market entirely - tomorrow - because of this law that was written to specifically target them. ALL of their drivers would've been unemployed, this being the only source of income for many. And that would've made you happy for some reason.

                      We should all be so thankful to have folks like deciding which jobs we're allowed to take.

                • They pick their own hours, and they are given instructions for what work to do when they're working. Sounds a lot like my life when I was a contractor. They can even choose which fares they want to take.

                  It would be better if there was a bidding system rather than Uber/Lyft controlling the pricing... However, that would lead to price gouging and much slower response time, too.

                  At any rate, it's never right for people to start working a "job" and then demand higher payment when other people are willing to do t

              • And what about the taxi drivers that were making a living for years, legally? I guess they now have the pleasure of needing to "get a real job" too right?

            • I'd wager that drivers have a vested interest in improved wages. This is a one-time cost with continuing returns, year after year, in being recognized as formal employees and being able to make a living wage.

              A one-time cost for who? Uber and Lyft would have to dramatically increase their prices to be able to meet these new costs. Assuming taxis will also comply, they won't be forced out of business, but there will be upward price pressure on all ridesharing/taxi services. That usually results in a drop in demand, which means the service will experience a market contraction, which means fewer "employees" will be allowed to work fewer hours.

              So no, I don't think you should assume an automatic net benefit for the d

            • These companies are nefarious in a bunch of sneaky ways. It's well past time that they got smacked down.

              First, they only cover insurance when a rider is actually in the vehicle. So on the way to get a fare they don't cover insurance, and once the fare is out they don't. Most insurance companies require a commercial insurance product to cover a vehicle doing commercial work, even part-time. So if you get into an accident while working ride-share, even if you're not actively working, there's a good chance tha

        • More like, "Ermagerds, the world will collapse if people are allowed to make the voluntary decision to drive for ridesharing companies."

          You don't care about the workers, except to the extent that they have to check with you before being allowed to work.

          • Re:Welp (Score:5, Insightful)

            by Richard_at_work ( 517087 ) on Thursday August 20, 2020 @07:19PM (#60424621)

            I'm curious - do you have a wish list of labour law that you want to throw out at the same time as this?

            How about the laws which allow an employee to be safe during their employment? To not have to breathe toxic chemicals during their employment? To have access to safety equipment? To not have to work ridiculously long shifts? To not have their wages docked for no legal reasons? To have pay withheld on political grounds? How about bringing back kids to the workplace - there are lots of dangerous jobs they can do!

            Uber and Lyft are trying an end run around laws protecting the work force - yes, enforcing those laws does mean that some individual workers are inconvenienced (as in, they cant do jobs they shouldn't be doing in the first place) but at the time enforcement benefits the workforce overall, and in turn society, as conditions are improved.

        • He's referring to the 50,000 people who are not currently Wage Slaves but would be turned into Wage Slaves by the new law. Well, assuming Uber could actually hire them, which they can't, so they'd just be out of work.

      • Maybe this was a bit too soon, but at some point you have to stop blinking and just force the alternative. The times have changed, even without gig work the taxi market isn't going to return exactly how it was.

        The sooner California stops blinking, the sooner that alternative will take shape.

      • Yeah just like slavery, how dare the North take away the labor market the South depended upon. Moron.

  • ... was not at risk of a shutdown. So if you need a ride, just dress appropriately [wordpress.com].

  • Too big to jail (Score:5, Interesting)

    by 140Mandak262Jamuna ( 970587 ) on Thursday August 20, 2020 @06:07PM (#60424301) Journal
    The judge cited important legal precedents set in 2008. He said, " Too big to fail and too big to jail are not mere punch lines of late night comics. They are binding legal principles".

    He further clarified, "Government can not legislate nor enforce onerous and burdensome regulations that will prevent a company from reaching this coveted state".

    Court watchers are noting that there are several law suits winding their way through the lower courts arguing, "corporations are people, bankruptcy is death, so court mandated bankruptcy is illegal in the states where death penalty is illegal". They say it is the natural next step after recognizing corporations are people, money is speech and corporations can have religious beliefs.

    Some radical MBAs are creating political action committees fighting for the voting rights for the corporation people on par with flesh and blood people, and to include corporations into the class of entities protected against discrimination, along with race, gender, age, religion and sexual orientation.

    • Re: (Score:2, Informative)

      by AmazingRuss ( 555076 )
      I can't wait  till I can incorporate as a pan-gendered asexual corporation!

    • Lyft can somehow make a profit. Why can't Uber?

    • Too big to fail and too big to jail are not mere punch lines of late night comics. They are binding legal principles.

      Government can not legislate nor enforce onerous and burdensome regulations that will prevent a company from reaching this coveted state.

      [Citation(s) needed.]

      "Corporations have neither bodies to be punished, nor souls to be condemned, they therefore do as they like."
      -- Lord Chancellor of England, Edward Thurlow

  • This law has been in place since Sept. 18, 2019 (Score:5, Interesting)

    by Macdude ( 23507 ) on Thursday August 20, 2020 @06:42PM (#60424493)

    This law has been in place since Sept. 18, 2019.
    I know Uber can't hire 50,000 people overnight, but they've had 11 months to hire them so far. So how many have then been able to hire?

    • I'm sure some accountants ran the numbers and found fighting the government in court was cheaper than paying employee benefits.

    • Does the law make Taxi drivers employees?

      The taxi licence holders have had a huge win if not.

  • Basically, California is a big fan of parasitic economics and wanted the additional sales tax revenue associated with all the additional "services" Uber and Lyft are going to have to provide whether or not the drivers really wanted them. Back in the day, I was paying through the nose for company-provided health insurance. When I went solo, I bought my own and it was dramatically less expensive for the same or better service. Of course, that's all been borked now thanks to Obamacare.

    • Re: (Score:2)

      by Zak3056 ( 69287 )

      Back in the day, I was paying through the nose for company-provided health insurance. When I went solo, I bought my own and it was dramatically less expensive for the same or better service. Of course, that's all been borked now thanks to Obamacare.

      That has nothing at all to do with California. Your company-provided health insurance is made up of a risk group of "all the employees." This risk group costs X to insure.

      X divided by employees, minus whatever subsidy your employer provides equals cost to you.

      When you went out to the market you were in a different risk pool (likely composed of "young, healthy people") which had a much lower cost to insure. I'm betting that you found the cost would go up some every year, and you would periodically go shop

  • This doesn't helm the more than four million contract workers who are unemployed because of AB5.

    1. 1. make everybody an employee
    2. 2. ???
    3. 3. FREEDOM?
  • CA can simply require that Uber/Lyft shift them at 1K / week over to employee. That would solve the stated issue.

  • ... let the drivers specify their own rates, and if Uber or Lyft doesn't want to pay that much for that time of day, then they don't get any offers for ride hails during those times.

    I mean, ordinarily if an independent contractor wants to charge more than what a would-be customer can get the same service from someone else for, then the customer is going to generally go with the cheaper option.

    Also, allow the riders the option to specify what range of rates they are willing to pay over and above Uber's

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