All these people making Uber money on the side ... the whole thing was possible in part due to the low friction in (and also complete disregard for) the regulatory environment.
I’m in NYC and honestly can’t figure out how to legally hire a studio assistant for a few hours a week without being at risk for any of a number of lawsuit vectors.
So I just coil my own cables. And I don’t mentor people who want to learn some things about the music industry.
Not a crippling loss for me, but I miss the relationship building, I miss passing on things I’ve learned, I miss the creative back and forth, being turned on to new stuff ... and frankly my studio is a mess.
I’m not sure why we can’t figure out a way to protect workers without making everything a legal minefield. One effect of this sort of legislation is it gets harder and harder to be a small player. The big companies always figure out how to deal with the rules.
The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes. Then there is no risk to hiring a new employee beyond the wages you pay them.
The US public does not want this, though, and the war of words over universal health care has led to incredibly deep entrenchment on the side of those opposed. All this despite the mountain of evidence from other countries, showing the greatly reduced total costs and improved life expectancy as well as a lack of bankruptcy and financial ruin for those caught in an emergency.
In America, you have to work until you die. The major thing the gig economy takes from people is health care. It's insanely expensive, and the Affordable Care Act is a terrible shamble of broken policy. I spent time outside of the US and came back to find health care worse than when I left it:
I have a friend who has been fighting brain cancer for over a year. The small company he was working for let him go (although they wouldn't admit it; it was likely over his condition) and his wife has to constant fight her own company's insurance company/policy to get treatments covered (and she is a lawyer; who literally works for a law firm doing mostly corporate liability cases).
In any EU country, you get a terminal illness, you can take time off and live your life. Will you get the same level of treatment as you would in the US? Who cares. You get treatment, and you can spent time with the people you love and appreciate things until you get better or your friends say goodbye. In America, if you do not have a spouse, you just have to keep working until you can't any more .. and then you die.
This is why I don't understand why people take gig jobs. Think of the opportunity costs. First off, Uber drivers don't make that much. Then you have vehicle depreciation and maintenance costs. You need to carry an insurance rider that covers rideshare driving. You also need to pay for your own health care. When you add up all these expenses, plus the desire for a living wage, there is no way drivers can be making enough with current rates. When people say you're essentially borrowing against the cost of the vehicle, I don't think they're being gratuitous. There may be low friction to entering the rideshare space by being a driver, but there are plenty of hidden costs.
> This is why I don't understand why people take gig jobs.
Sometimes Compared to what? is the most important question.
I've been driving for a few years. Before this I was making minimum wage with no benefits. Before that I had a difficult stretch of unemployment. One of my least favorite questions passengers ask me is What did you do before this? because I don't really like to talk about it. It is a rough job - you take a lot of risk, have a lot of bad days, and you get little reward in return. But at least it's work.
Of course the bottom rungs of the ladder look terrible to people near the top, but for who have fallen off of it the bottom is the most important part. All of these "worker protections" define the bottom of the ladder as exploitation. Let me decide that, my labor is my own to sell for whatever price I can get somebody to pay for it.
A min-wage guarantee implies Uber and Lyft will tell you when and where to drive because it would demolish the fundamental mechanism we drivers use to allocate ourselves. Otherwise we would all clump up in a parking lot somewhere trying to insulate ourselves from the costs of driving people around while collecting $10/hr.
> possibility for unemployment benefits
I haven't had this option in a decade or more. If you increase the cost of firing somebody, which is exactly what this is, you increase the cost of hiring as well. See above: this is a bottom rung job, the most important thing is to be on the ladder. If you make the bottom four rungs of the ladder illegal it doesn't mean people can magically start jumping to the fifth rung, they just get left out.
> health care benefits
Life's rough. Hopefully I solve this problem with a better job in the near future.
Don't get me wrong, I really dislike the Uber/Lyft model, I cringe every time somebody says "Oh but Lyft treats drivers so much better than Uber, right?" and I would love to see a better competitor prove the flaws of the Uber/Lyft model in the marketplace. I just don't think that minimum wage, employee status, and benefits packages are going to be that great for drivers or passengers. It's probably a mixed bag for both, but not a very good mixed bag.
As an aside, there's part of me that wants to figure out what a slide-deck is, make one, and be that competitor. So don't think I've been drinking the company Kool-Aid or anything, because I would love to put both of them out of business largely because I don't like how they treat drivers. But I'm still extremely thankful that I've had this job and I don't want to see it taken away from others who may value it in the way I have.
Ok, here's the rant I really try not to give to my passengers. I apologize for the length.
TL;DR - Do you want to date an emotionally unavailable a-hole, or an emotionally manipulative a-hole? Pick your poison.
Lyft's president once said regarding Uber, "We're not the nice guys. We're a better boyfriend." This statement describes Lyft so much better than I ever could. They don't care about doing the right thing, they probably don't even know what the right thing is anymore, their internal sense of morality is pegged to whether or not they can keep people away from Uber.
As a driver, they have the same business model so the fundamentals of the job are exactly the same. Most of the differences are either window dressing, support quality, or bonus-related.
Uber's just kind of cold. Dealing with support is something you try not to do. It feels like they're cutting costs in their support department and they're not interested in convincing you otherwise. It's kind of like they sent you a picture of a middle finger on your third day of work and from that point on you've known the deal.
Lyft is very touchy-feely, they have events so you can eat donuts and they send a lot of emails talking about how you're a member of a community, etc. They also shame you for doing things detrimental to the community, like if you don't accept a ride. Long-term you start to realize it's all very manipulative, to the extent I've started thinking of their logo as a pink snake.
They kind of move and shift things so it's hard to tell what's going on. Especially with their bonuses, look at this, where do these numbers come from? 165 rides a week? That's probably 7 12 hour days. But nobody's hitting that, the middle tier might be doable, but not while driving for Uber, too, so you turn off your Uber app for the week and do 7 10's for Lyft. Next week you'll get different numbers, different goals. It's always shifting, always making you think "well, I might make an extra $50 if I don't drive for Uber this week..." Then after a few months you realize you're driving 30% more and making 20% less. And it just kind of happened while you weren't looking, while you were trying to hit these bonuses.
It also used to be that everybody got the same bonuses, but now they personalize them just for you. Because they care. I have no idea what bonuses other drivers are getting at this point, but for many or most drivers the job doesn't work without them (rental program is $1,000/month) so it ends up being an effective lever for controlling drivers.
Or the treatment of XL drivers, Uber lets the driver turn off regular rides but Lyft says that's just not possible and instead tries to "keep [the driver] busy." The notion of keeping independent contractors busy is a strange one. This seems so clearly anti-competitive I don't know how it's even legal. They don't come out and say they'd rather you didn't drive for UberXL, they just want to keep you busy and if that keeps you off Uber then it's a coincidence that never crossed their mind. Why Uber isn't filing a lawsuit over this is beyond me.
Eventually you get sick of Lyft's games and decide to just drive for Uber full-time and within a day you're shaking your head wondering if Uber is even trying at all. Like, at all. So you drive for both. Then you realize if you just turn off Uber for the rest of the week you can hit this bonus on Lyft....
> The notion of keeping independent contractors busy is a strange one. This seems so clearly anti-competitive I don't know how it's even legal.
If my company is paying contractors, they generally want them to be busy; I'm not sure what you mean by that
WRT the anti-competitive statement, are you suggesting that lyft is intentionally making it harder to drive XL for both uber and lyft? TBH, I'm not sure that'd hit on any competition laws but I'm willing to be convinced
Thank you for your post, it lets me see a lot of things I would have never put together. It's impressive how much thought lyft put into their platform to monetize guilt, and ensure "stickiness" of their platform / drivers
I think keeping contractors busy is only productive and worth it if you are getting their money's worth. You are paying them per hour worked, so if we don't have work and they aren't doing anything, we don't have to pay them. Keeping these people "busy" seems to me (and possibly OP) like a way to keep them from driving for Uber since getting paid for specifically XL (I assume) is much better than getting paid for a regular ride. The whole thing is weird because it forces people to choose between possibly getting Uber XL rides (more $$) OR staying busy with normal rides through Lyft where at least they are getting paid!
That is just what I got from the original post, I do not work for either company so it really is hard for me to relate to the pressure OP is feeling.
The gig jobs are already not profitable without those things in place. With those in place the gig jobs will be destroyed. People already complain about high prices and those prices don't even cover the costs of trips unless you live in a dense city.
This is the conclusion people come to naturally when one assumes all the other variables don't change in response to the wage. but they all change
The number of rides change as the price of the ride goes up, which happens when you raise the underlying cost to the rider. (aka supply and demand)
The number of drivers change with the overhead cost-per-driver. If each driver has a fixed healthcare overhead, it makes sense to hire only full time drivers as you can pay the overhead once and get the most hours driven from that sunk cost.
The number of drivers that get hired if you bump the salary also declines for all the reasons above.
It doesn't have to imply a decline in service availability. For example, the spread between Uber Pool and X could grow (since wanting your own vehicle, without sharing it, places more stress on the overall system). So, the popularity of pool could grow.
What if the choice isn't between "driving with a guaranteed minimum wage + benefits" and "driving with no protections" but between "driving with no protections" and "doing nothing"? That's the fear here.
Some benefits, like retirement and health care, can be provided by the government. We already pay FICA taxes -- they could be expanded to include Medicare (for all) and perhaps a more generous retirement package.
I drive Lyft and Uber in the SF Bay Area. I'm a retired computer programmer and I need to supplement my income to have spending money. I'm on MediCal which is a great health insurance program and easy to get on if you are low income. I'm actually making really good money driving. When I am smart about knowing when and where to be I can make a too much money even working part time, by which I mean I will disqualify myself for MediCal. After all expenses including auto depreciation (I paid 6000 for a nice little transport car) I make a profit. Now I doubt Lyft or Uber would hire me because of my age. So it goes.
Hah, that's an interesting trap to be in. It's not dissimilar to pushing wages down in order to qualify for high ACA subsidies. The way the system is set up, there's quite a tax cliff...especially for older people (the difference between $0/month and $1200ish for an individual).
If you have wealth, you can essentially create an income, on paper, to look like whatever you want, to meet ACA subsidy qualifications. Here's an example of a practical application: You could rent, or buy a home with your wealth. If you buy a home outright, you won't have the monthly mortgage or rental payment (you'll have property taxes, but let's assume those are far lower than an ongoing monthly rent check).
Withdrawing from pre-tax retirement accounts counts as income for ACA purposes. You've now lowered your annual expenses (and thus, your income) and can qualify for subsidies, but all you've really done is shift some of your net worth from investment accounts to housing, in order to reduce annual expenses. This example is likely more applicable to a person in retirement, as well.
Another take is to put money in investments with no taxable event (I think that Berkshire Hathaway is one) and live off of savings in the meanwhile. Outright home ownership (as you mention) is another one. Regular and tax deferred savings get treated even more differently than normal.
I don't doubt that for people with some money, it'll be common to countdown using similar strategies for 5-10 years until you hit the magic 65 age. Given the difficulties in staying employed until full retirement age for programmers, it's quite a gift.
In another couple of decades, a lot of people get to do the pay-down fandango where couples split their assets so that one doesn't pauperize the other (via annuities).
All brought to you by the market warping body called government.
My prior comment may be dated, or regionally-contextual. I assume then you have a personal policy, that covers when you are driving just you, and Uber's takes over when you have rideshare passengers. When I was looking for personal auto policies recently, I recall being asked (in the US) if you plan to do any rideshare driving.
Many of the costs you list are invisible or avoidable if you don't care about consequences: Vehicle depreciation is invisible. Maintenance costs will hit later. If you haven't heard (or don't care) about the insurance thing, you just don't do it, so zero expense (until you're in an accident).
Once you ignore these costs, and only do "income - fuel", Uber pays "really well". And you can do it at any time, as you wish! Little effort! Own boss!
It's not surprising that Uber finds people to drive for them. Not everyone realizes the hidden costs.
Although there are apparently some who seem to understand them, know how to play the optimization game, and (think that they) make enough that it's worth it. I have no way of checking, of course.
Everyone who I've personally known do these jobs only do it temporarily just to make ends meet between real jobs. It doesn't matter how shitty the benefits are if you're going to get kicked out on the street because you missed the rent/mortgage payment. Maybe some people do it "for a living" but I bet most are between real opportunities or making some money for Christmas/vacation/etc
The reason they don't have a choice is because the system is designed to provide the lowest quality of living possible because we haven't done basic things like raised minimum wage with inflation or institute universal health care.
Instead we've subsidized all these gig corporations so frequently that one of the biggest ones pays 0 in federal taxes. Something I don't even get the choice to do.
It's about time we stop capitulating to desperation.
I'm actually sitting on a wooden chair at a wobbly table in a
space with no air conditioning, but that's beside the point. My original comment does have an air of privilege to it, and for that I apologize. It's my own frustration that we can't do better to people who's best option is something requiring the skill set of a job like rideshare driver. Stated in other (hopefully more fruitful) words, if you can work rideshare you can probably work at In N Out. They start at $13/hour and have none of the external costs of contract ridesharing. That could be more profitable to the worker, but I have not done the math.
People have to eat, nothing is free in the US. People generally do whatever their best option is. If the best option is below minimum wage, that's what they do. Why is that the best option? Zero-to-no tariffs and, consumer goods produced overseas by slave labor. No reason to hire domestic workers. Even McDonalds has touch-screen ordering now.
> This is why I don't understand why people take gig jobs.
That's because those are the available jobs. I'm struggling to understand your question - obviously people will take whatever jobs are available to them so that they can support themselves. I doubt it's the CFA's or AI researches that take these jobs for the fun of it it's likely people who need them to survive.
Single data point checking in, ride share imo was a massive boon to people like me in the self employed lower middle class. Many of us already own cars and pay for our own health insurance. For people like me who make too much to qualify for state benefits but too little to 'climb the ladder' these sorts of jobs have been great because they fit easily into our schedules and the pace of the work is enjoyable to many of us.
From my perspective, and I do realize this is relative, people wonder why the middle class is shrinking while failing to realize that a lot of these pro-worker laws are only good for certain types of workers. I'm not saying people poorer than me don't deserve help because I haven't been helped yet, but the issue is precisely that it seems (again, relative to my experience) that no one except the lowest income bracket actually attract political attention right now.
Last Uber drive that I talked to that did this on the side was in the area for some construction job that required him to be on site some days of the week, others didn't. In those days when they didn't call on him he did Uber for some money. The alternative was to not do anything and not get that money. There are definitely costs (hidden or not, really depends on how deep you are going to look for them) but I can also see how given the alternative of not doing anything they can still help. It's not like the Uber driver doesn't have to pay for insurance, registration and other fixed car costs (food, rent) anyway, whether they Uber or not.
I mean those are all costs you should factor in but don't have to pay or are somewhat opaque (eg: depreciation). Drivers can go without health care and gamble on the insurance rider. Then the only paid costs are vehicle maintenance.
By "gamble on the insurance rider" you mean further externalize the cost that Uber already externalized onto the drivers? Because the people that end up paying when you "gamble on the insurance" are the people that you injure in an accident, or systemically through the need to carry "uninsured coverage" to cover yourself against those gamblers.
I can make very good money driving for Uber up to 25 hours per week in my city. This is after maintenance, gas, and depreciation costs. Lots of breweries here and people who like to have a good time and tip well.
Rideshare insurance is an extra $10/month. Basically nothing.
I have to pay for my own healthcare when I have a regular job too. Buying on the exchange is pretty much the same thing with more choice.
You can't use the 0.1% cases to justify the 90% who will get wrecked financially because of major surgery, cancer treatment, etc because it's so expensive. Medical treatment shouldn't be a for profit business, there has to be a better way, and other countries have a better system (in the sense of doing the greatest good for the most people, and not just the 0.1%) than we do and we can copy the best of them as we will be doing it from scratch.
What was the NRE on that pill or the hundreds (thousands?) that didn't work at all?
OTOH (or the other other hand), I'll bet that you could make a strong argument for stopping new drug development entirely. Simply sell existing drugs for as little as possible. It wouldn't surprise me if most of that research has insanely high marginal cost with little benefit at this point.
I'll bet you'd have a healthier public, on average, if this happened.
The cost of medication is not strongly correlated to research costs. In the US most drug prices are set via a single factor: how much will people pay for it?
Under this rubric, "cheap" lifesaving drugs are viewed as an arbitrage opportunity. If a lifesaving cancer drug costs $20k per month, then why should a comparable MS treatment be "given away" at $15 per pill?
Also a huge percentage of new drug research is not geared toward creating new and interesting treatments: it's based on making small changes to existing molecules to preserve efficacy while making something "new" enough to be patentable.
It's really not that simple, even if some political talking heads would like you to think so. People travel to the US for some treatments, and people travel from the US for others. It's not even clear if there is a net inflow or net outflow.
All this really shows you is that people with the resources to do so are willing to travel for care, which shouldn't surprise anyone. Either for "the best treatment" (which depending on disease and treatment could be many places in Europe, US, Canada, etc.) or for more affordable treatment (cf US residents traveling to Canada for drug renewals).
That's far from clear. Polling fairly consistently shows that the US public favors at least some degree of it (particularly shifting the healthcare burden from employers to government, other benefits have less political salience), though any particular plan for the detailed mechanism may have trouble gaining majority support.
Honestly, I really wish people would stop basing so many decisions on Polls. There are so many problems with accurately polling people's opinions because generating a truly random dataset is really hard. Unless people have some sort of financial stake in the outcome you're only going to hear what they want to happen instead of what they think will happen.
> generating a truly random dataset is really hard
IMO it's not just hard but impossible for polls to be unbiased, because people that don't like answering polls are never represented. If the subset of people that don't answer polls isn't itself following the same distribution over all possible opinions as the rest of the population the results are biased, and by definition we can't test for these correlations.
US public would yell an enthusiastic "hell yes!" if you ask them do they want free healthcare forever but then when you ask - ok, so how we pay for all that actually, that's where "hmmmm" comes in. "Government" means taxes, and US public is not super hot on paying more taxes, and not on US government (BTW, which one? there's federal government, state government, local governments... US has literally thousands of governments, which one you go to?), which is not exactly known by its efficiency and friendliness to the hoi polloi, to run their healthcare. If there was magic solution that allowed to keep those nice doctors and hospitals exactly as they are but somehow it would all be paid for by something, it's be super nice and the US public would love it. And some unicorns too. Unfortunately, neither seems to exist - to rebuild US healthcare system to look like Canadian or any of the European ones would not be as easy as just public agreeing on something - something most of them don't even understand how it actually works.
I think the segment on late night TV that I watched used to be called "street walking with jay lenno", or something along those lines.
The premise was pretty much: take a question that might sensibly appear on a GED test (highschool graduation equivalency, without the class credits), that probably at least 50% of the viewers (so adults that could afford a TV and stay awake until midnight / had just finished watching the news) would probably, if not know, have a good enough idea to say if an answer was obviously wrong. Then go out and film until you got enough bad answers to fill the segment.
I'm under no illusions that the bad examples were cherry picked, but I am also strongly inclined to believe that a "large percent" of the population isn't informed, and doesn't want to be informed, and literally just isn't fit to actually vote.
The US believes everyone should have the right to vote; and I agree with that. However I believe that every voter should be an informed voter that can at least understand the basic impact of their actions and should at least be able to pass an ECON101 test. I would really prefer a local, national, geo-political, basic law, and economics (including some light math) test as a pre-requisite for being able to vote; BUT if the test isn't passed that person would qualify for employment (lit paid) as a student, where attendance in class and academic progress would be part of the pay. If there are medical issues/etc impeding learning that should already be covered by universal health coverage (in a non-broken country).
> every voter should be an informed voter that can at least understand the basic impact of their actions
I get a feeling you think you are one of these voters. But are you, indeed? Are you really sure you can predict the impact of the actions in a system as complex as 300 million people inside trillion dollar economy? Before you answer that, remember that many people with advanced degrees tried and failed to predict things about economy, and even more people with advanced degrees are in constant and complete disagreement about what would be effect of that or this policy and what should be done to achieve this or that effect. And "unintended consequences" appears in virtually every article describing the aftermath of any serious government decision. If all those people aren't really able to figure out how things work, are you confident you are?
> should at least be able to pass an ECON101 test
Why ECON101? That course probably provides very basic knowledge (depending on the curriculum) which is next to useless when dealing with enormous and complex systems because it ignores myriad of details. It's ok for a 101 course, but if after taking this course you think that you know enough to make informed decisions about the whole US economy, then this course actually decreased the amount of your actionable knowledge. And yes, voting is making decisions about the whole US economy, ultimately.
> I would really prefer a local, national, geo-political, basic law, and economics (including some light math) test as a pre-requisite for being able to vote
Are you sure you would pass? What if I will be writing the test and make every effort to make you not pass (you don't think politicians would ignore an opportunity as juicy as disenfranchasing a huge number of their opponents' base?)?
You understand also that making decisions for people that can not vote is the reverse of what representative democracy is, and a just cause for rebellion? If any situation justifies violent overthrowing of a government, it is a situation where the government denies participation in vote to a class of citizens which committed no crime, did nothing wrong but failed to satisfy an arbitrary criteria somebody instituted to not let them vote because they didn't like what they might choose. Who would consider such a government a legitimate one? You probably wouldn't, if you were one of the disenfranchised people. But somehow nobody thinks they will fail the test.
The part of ECON101 that I remember most distinctly is that we kept doing supply and demand curves. We kept doing that until the professor was absolutely sure that everyone knew what happened when supply was infinite, or when demand was inelastic, or when supply was a hard fixed quantity but the needs of the market kept growing.
It's really basic stuff, that's why it's a 101 course. However the realities of that kind of course should be remembered and applied to things like "rent control" that acts as an outside influence on where the curves meet, but doesn't actually change the supply or demand directly. Knowledge that would help with assessing the possible intended and unintended results of different laws.
Your criticism of minimal knowledge is correct. Your analysis that its insufficient to decide complex issues is correct. Your thoughts that its insufficient even to choose among 2 candidates positions on the matter is probably correct.
However you miss a points. It's not always or not even often about picking from 2 complex alternatives. It's often a matter of eliminating options that are stupid, illogical, or inconsistent. Doing so often requires basic literacy in the topic involved.
Unfortunately you are right in that disenfranchising a large number of idiots would upend social order even if it was only eliminating those who literally have no idea what is going on.
> It's often a matter of eliminating options that are stupid, illogical, or inconsistent.
But how do you know which options are stupid? Because they sound stupid to you? Are you confident enough in your powers of detecting stupid that you would base denying people basic rights on it? What gives you that enormous confidence?
> if it was only eliminating those who literally have no idea what is going on.
The number of people who have an idea what is going on, when we're talking about things like whole US economy, might be surprisingly small. In fact, sometimes I am tempted to think that number is zero. Of course, for me it makes me think maybe we need less government involvement, since a blind giant with a sledgehammer is worse than a blind giant without one, but some people think that means we need to abandon democracy. OK, but unless you are an anarchist, how do you propose to choose the government then? By instituting a series of exams? Chinese tried that, actually. Not sure it worked that spectacularly well. Check it out.
While I understand your sentiment, these voter requirements would completely disenfranchise those who literally don't have access to quality education, especially POC who have been subject to systemic oppression (See redlining).
The solution should be to level the playing field (Access to education), not to change the rules of the game from under them.
Yeah that's right - nobody knows which healthcare programs work. Neither literal idiots, nor uneducated hillbillies, nor ECON101 graduates, nor PHD-bearing professors, nor politicians, nor NYT journalists, nobody has any good information. On a topic as important as which healthcare policies actually work. So what's the point on insisting on ECON101? There's just no information about it, and nobody cares about getting one.
But it seems like an apathetic kind of want. There are degrees imo; if the people truly wanted something they would exert more effort than this showing. As it stands people may say they want it in polls but won't even vote for politicians that will make it a reality.
you have stories in the US of people dying from lack of access to insulin or rationing insulin.I wouldn't question that they "truly wanted" to live. but political organizing in the US around healthcare and other social benefits seems to pale in comparison to European countries. to say nothing of how low voter participation is.
The strange thing here is that United States uses more public money to health care than European welfare states. So Americans already now pay more taxes for health than Europeans. Some aspects of the U.S. health care system are incredibly ineffective use of money.
There are reasons for this; some of them good (the best care in the U.S. is very high quality and leading-edge technology, and consumer protection through litigation tries to minimize errors); some are bad (e.g. because of litigation, legal costs are very high, and the system seems to carry a lot of overheads, and many people still lack coverage).
It seems the so-called Obamacare wasn't a very good approach, because so many people felt it was ripping them off. Clearly it is easier to build an efficient public health care system from nothing (like e.g. my country Finland did in 20th century) than transform an existing system (which the U.S. has and where there are lots of incumbent operators that have "assets" that they protect.
There are lots of confounding factors, so predicting outcomes is a dodgy business.
One thing that is easier to evaluate is the cost of delivering equivalent care - the US system turns out to be quite inefficient that way, which implies the potential for significant cost savings at least.
Actually a majority of Americans support the idea of single payer healthcare , and the number goes up depending on how the question is asked. The problem is the political obstacles, which are enormous given the power of the health insurance, pharma, and hospital industries.
Could you share some data that supports this? Polls I have seen show that a majority of Americans support expanded health care coverage. There is some division howwever on whether that is best done via Medicare For All or a regular single payer system.
It makes me sick that so many Americans are willing to keep their taxes lower and pay their own healthcare insurance (which are absurdly high, and you still have premiums to pay, etc) instead of having the peace of mind that if they become seriously sick, that it won't ruin them and their close relatives.
Sure, you might be healthy now but do you really want to take a gamble like this and keep more money in your wallet now, and potentially lose everything due to bad luck later? I guess it's the American way?
I don't think this is true. I think what the US public doesn't want is the higher taxes to pay for it. We are already swimming in debt and wages haven't kept up with inflation. My daughter is making exactly the same wages now that I made when I was her age 25 years ago, in comparable jobs.
I pay $421/month for health insurance that has a 20% deductible, meaning that I could still be bankrupted by a major surgery or a couple of weeks in the hospital. I would much rather put that $421/month into taxes and have Medicaid or something similar A) keep costs down, and B) ensure an acceptable quality of treatment.
You're likely paying something similar whether you realize it or not. When I quit my job the COBRA cost of the insurance was like $600 or $700/month. It's just that your employer is hiding that cost from you and giving you "free" medical insurance. And when you quit your job, you lose your medical insurance after 6 months. That means you lose access to your doctor and you may have to change who you see. Sometimes the new doctor is way worse, and there is a very real cost to you in terms of their standard of care.
So it's pretty disingenuous to argue that this would be a new tax. And making it illegal for employers to offer health insurance while also expanding Medicaid to all Americans would actually remove a major barrier to quitting your job and EG starting a company or working for a small company.
I think the US public doesn't want to lose more of their money to healthcare than it currently is - and this is the attack that's most commonly leveraged against universal healthcare... "Your taxes will go up!" well yes, they will, but my out of pocket will go down as I'll no longer be shoveling so much money from my salary (either pre- or post- collection) to health insurance.
I honestly would like to see the military eliminated. It's not like Canada or Mexico are going to invade us. We could keep the missile defense to protect from anyone trying to attack us over the oceans. As for protecting commerce, let shipping companies weaponize their boats and pass on the cost to consumers. I'm sure the defense contractors not selling to the US military anymore would be happy to design systems for the shipping companies.
> Then there is no risk to hiring a new employee beyond the wages you pay them.
This is a gross oversimplification. Two risks that immediately come to mind, increases to the Employer’s Disability Insurance and Unemployment Insurance either through fraud(speaking from experience), or, in the scenario mentioned by gp, when you lay the worker off at the end of the need.
And I think a lot of the people who don't support it also don't fully understand it, or have a misconception about how it will negatively impact them based on a few anecdotes they've heard from countries that do have universal healthcare (some of which are true, and many of which are false).
> Then there is no risk to hiring a new employee beyond the wages you pay them.
but you must not forget the additional administrative/accounting overhead, the risk from the wide variety of lawsuits one is vulnerable to as an employer, the risks of employee injury on the job, and costs associated with the possibility of laying off employees in the future. surely there are more costs than just wages.
> The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes. Then there is no risk to hiring a new employee beyond the wages you pay them.
That's still the same problem. If the taxes that fund the health care are paid by employees then a living wage would have to be higher to account for having to pay the taxes. If they're paid by the employer, there goes the money they were going to use to hire the employee, or they have to raise prices and we're back to causing a higher cost of living.
Taxes aren't magic. The money still has to come from somewhere. The actual problem is that housing and health care cost too much. It's necessary to solve that regardless of who is paying for them, at which point there is no longer a pressing need to try to shift the burden somewhere else, because the burden is no longer so onerous.
> The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes. Then there is no risk to hiring a new employee beyond the wages you pay them.
All that is needed is to undo employers providing health-care. The government could provide it, but it could also work akin to auto or home insurance where you the individual choose the company yourself. (I do think we need other reforms, principally price transparency, in order to manage the current cost problems w/ health care. There is no sane way for any person to evaluate anything about any insurance setup if they cannot gauge what it will cost them!)
Tax-based universal healthcare would accomplish this, but I do not think it is necessarily the only option. It does need to stop being attached to the employer. Losing my job should not cost me my healthcare, too.
> The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes.
Or just disconnect this stuff from the employer. It seems strange that employers are involved in something like health insurance. It creates friction changing jobs, and much of the population isn't employed.
If they want it why do they keep voting in representatives who actively fight it the whole way?
This is kind of a pointless question, because the answer is complex and includes things like 'gerrymandering' and 'vote suppression', but it's still a fact that many elected representatives from both parties actively fight public health care.
It depends on how you phrase the question. "Do you want the US government to pay your health care bills" is a yes for most people. "Do you want to only have the choice of Veterans Affairs medical care" isn't quite as popular, and IMO that's what we'd end up with. (And considering the number of people who commit suicide by self-immolation to protest the VA's care... I really don't want that)
> The way to protect workers is to shift the burden of health care and other costly benefits onto the government, supported by taxes
Yes, it's clear that our prosperity hinges on how quickly we decouple health care from our employers.
Employers don't want to be in the business of providing healthcare to their employees and its painfully obvious.
I just don't understand why smart people think it's a good idea for anyone other than me decide what my healthcare needs are!
I would like to have a separate discussion whether the government is the best party to handle this. If you look for my writing here and on Quora, you will see that I have for over a decade being campaigning the government was the best party, but after having really worked on it (thanks to people getting in touch with me from my writing), I no longer believe the government is the best partner.
Instead, I think the government managed marketplace where people choose private insurance is actually a brilliant solution and ACA already provides that, so we already have that in place.
The value the government brings here is extreme negotiating ability with the private insurance providers that individual citizens lack.
> The US public does not want this
I strongly disagree.
I have spoken with far too many (thousands) of people to know that majority of the U.S. hate their employer provided insurance and are worse off for it. I can give you specific instances where an employee was worse off due to the employer provided insurance and had to declare bankruptcy due to medical bills than if they were unemployed to begin with and were on welfare instead!
I seriously believe:
1. the tax incentives to provide employer provided insurance should be abolished. They made sense at a time that's past us now.
2. employers instead should be required to pay a premium for choosing to provide primary insurance to employees instead of letting employees continue with the coverage they have or get one from the marketplace
3. Employers are free to provide secondary and supplementary care insurance if they chose to, not due to regulation.
This leaves behind only those employers who genuinely care about their employees instead of pretending to do something because someone forces them to.
I support the individual mandate in the ACA because it ensures negative self selection in the marketplace.
This will allow people to gain control of their own healthcare, get a benefit package that's more transparent and gain better control of their own lives.
As software engineers, we are in the top tier of employment. We earn in the top tier of the population and handle levels of complexity in the top tier of the population.
Our personal experiences don't reflect that of the general population.
Even then, the engineer making $180k/yr at Microsoft might have a very different healthcare experience compared to the engineer making $180k/yr at Google depending on the choices that the benefits administrators at Microsoft and Google have made!
That's just insane and a level of complexity that's just unnecessary.
> The value the government brings here is extreme negotiating ability with the private insurance providers that individual citizens lack.
This is not good, it distorts the market too much. Look at the negotiating power Spotify and Pandora have over musicians. Pandora negotiates rock-bottom prices with musicians on behalf of its consumers and the consumers think it's great because low prices. Long-term you've decreased compensation for becoming a musician, sound engineer, etc. and harmed the entire music ecosystem.
It's a trade-off between clear short-term gains and diffuse long-term costs.
> If the government has "extreme negotiating ability" that citizens lack, then why does it continue to allow price gouging on drugs?
Because regulations have been put in place to disallow the U.S. government from negotiating with pharma companies on drug pricing.
The regulations were put in with good intentions (and some healthy doses of lobbying) in ensuring pharma companies would have financial incentives to carry out R&D but hindsight is, as they say, 20/20.
Even in the face of these drug price regulations, though, the government still has a much higher negotiating ability than you or I do.
Check the drug prices one pays with Medicare Part D vs. the prices on "free market" Amazon or eBay.
If the regs were put in place due to "good intentions", and a "healthy[sic] dose of lobbying", then functionally this "negotiating ability" does not exist, because the government is not acting in the best interest of consumers, nor does it currently have the capability: its hands are tied.
I can see you are getting too tied up in the existing perspective you have, so I recommend you step back and revisit our discussion with a third person's perspective.
If you have a point to make instead, say it.
I don't know what you're thinking but it feels like you seem to believe that only direct actions have effect.
That's not true. Indirect actions have effect too.
Just because the government's hands are tied in drug pricing does not mean the drug companies can charge the government whatever they want (like they can charge you or I).
For one, it has sheer size and it's pretty powerful overall.
It will take an extremely risk seeking drug company to try and exploit the government and drug companies are extremely risk averse.
Let me give another example - if you interviewed for a front end job this week at either of the coasts and refused to negotiate or name a number, most companies, if not all, would still offer a six figure number because that's the market. I WOULD be surprised if anyone offered you a minimum wage even if you were actually willing to take it!
Another example - say you are driving properly on the freeway following all rules like a perfect citizen and a cop car drives by - in general you're likely to take notice of that and be more careful in the way you drive even if the cop car in no way signalled to you or otherwise expressed any interest. Even if you knew this cop was not allowed to pull you over, you still would modify your behavior. In general for the better.
Compare your change in response to all other cars driving by you - one even might have flashed its lights at you and you showed them your middle finger. You probably wont do that to this specific car though.
Or if you went to an fancy event where the organizers explicitly asked you not to bring any gifts because they knew you were going through a tough time but you saw everyone else bring in expensive gifts, you would probably go out and try and get something reasonable, despite being explicity directed otherwise.
Just because one does not actively signal, or might even be obstructed from signalling, does not mean there is a complete lack of signal.
Drug companies have more to gain from keeping the government happy than making it unhappy.
To that end, they are willing to forgo some profit.
They dont have any reason to do so for you or I.
We are at a natural disadvantage: If you needed drug "GiveLife" to not die tomorrow, you would probably give up a significant amount of your worth or even go into debt to pay for GiveLife.
Ad hominems really don't help any arguments you have to make. Nor do a handful of tenuous analogies.
The government is not a singular entity, but it does exercise some semblance of self-consistent control. The drug/insurance companies have no interest in minimizing their profits aside from following regulations so as to limit potential liability. If the drug companies can successfully lobby for less control then the government's bargaining power is impaired de facto.
I repeat: if you have a point to make, prioritize it over pointing out my grammar or qualifying the way I present my comment.
Really, say it because I have no idea what your position is and we have been communicating a bit at this point.
You have repeated twice now that the government's bargaining power, is impaired. Yes, that's what I said in my parent comment 2 days ago. Why are you repeating what I said, to me?
No, my previous comment was not ad hominem because I didn't know the position you were taking and I still dont know what position you have on the matter. I noticed tunnel vision on your part that was imparing the quality of the conversation and I suggested a technique I often follow myself. If you want to argue the semantics of an ad hominem, I am out of time.
Is your point that the government's bargaining power, which is impaired, less than the bargaining power citizens like you and I possess?
To clarify: My point, with the tenuous analogies included, is: the government's bargaining power, even after being severly impaired, is still superior to the bargaining power citizens like you and I possess when it comes to negotiating the prices of drugs that we need to get and be better.
Other developed countries recognize this and exploit it to the benefit of their citizens. Perhaps we should think of something similar but outside government.
Neither of us have the need to get further bogged down on this. My point of course is that functionally the government only has this bargaining power if 1: the majority of the people in the government see a change in the status quo as desirable, and 2: The will of those same people can't be subverted through means such as excessive lobbying. If both of those conditions aren't met, then saying that this bargaining power exists is essentially meaningless. If that wasn't clear from context, well maybe no amount of clarification can help.
On a side note, questioning someone's motivation and/or ability to comprehend the relevant information and form opinions based on it is definitely a form of ad hominem, and definitely not the right way to start an attempt to clarify.
When an individual creates an enterprise it's expected to fail in 2 years. It does not mean death of the individual, but often it makes 'em go broke. Only one company in a hundred is successful. Other are doomed. Government-run projects do not live in alternative dimension. It is affected by the same things any private organization is affected.
It is expected that a country would exist longer than an individual company.
But want to bind the whole country to some huge bureaucratic organizations. Say, the one managing healthcare and the one managing pension founds. You won't stop at that, of course, but let's simplify to just that.
There would be only two ways for them to survive in a long run. Bloating their budget, eating all other parts of the gov budget. After there is no where to "expand" (keeping the same quality of services), they would had to cut out some of their "clients". For a pension fund it would be to increase the age when people would be able to retire. For healthcare it would be to limit free services reject people who would be able to have certain services for free in certain cases, decrease quality of services.
Then it would be inevitable death. As people are not immortal, organizations are not as well. If you had several private companies, the death of one of them would make others stronger. It would get rid of the weakest companies, keeping the strongest alive and in addition they would have opportunity to learn on errors of others. But you have one single company for each sector that manage the whole country. It results in country's collapse.
There is no "mountain of evidence from other countries, showing the greatly reduced total costs and improved life expectancy as well as a lack of bankruptcy and financial ruin for those caught in an emergency". The idea of universal health care hasn't been tested by time yet (and in principal it will fail due to things I described above), so it's very reasonable that the US public rejects it.
Your already-flawed logic leaves out the fact that single-payer and other universal healthcare systems run by governments around the world work far better than the US system and don’t make the choice of who gets what care when to who has the most money like the US does but rather who has the most need given the resources available.
- sovereign governments (which fund many government projects) can literally create money; individuals cannot
- government projects often have multi-year funding commitments legally bound by legislation; virtually no private enterprises have such guaranteed runways
- goals of government projects are often not "survive then maximize profit at all costs"; in fact, the idea behind infrastructure projects is for extreme long term payoffs, virtually impossible for from-scratch private projects due to lack of capital whereas .gov projects don't have the survival component
- because of things like infrastructure and overhead, there is evidence that public utilities with monopoly-like properties make more sense than rampant theoretical capitalism (imagine 100 sewer companies with 100 sets of pipes, ...)
>sovereign governments (which fund many government projects) can literally create money; individuals cannot
The only government that can "literally create money" is the American one.
>government projects often have multi-year funding commitments legally bound by legislation
That was my point. When it breaks, everyone would pay for it, and not in money.
>goals of government projects are often not "survive then maximize profit at all costs"; in fact, the idea behind infrastructure projects is for extreme long term payoffs, virtually impossible for from-scratch private projects due to lack of capital whereas .gov projects don't have the survival component
That what I meant when I said that governments don't live in alternative dimensions where they have unlimited resources. It just looks for an individual that omnipotent governments can do anything, but they have the same limitations as anyone of us. If there are X of something and government would print X*3 equivalent of paper to pay for it, it would denominate the value of the paper the government call money, but won't make more of X. What they can do (the same goes with corporations) is to expand their spending at expensive of individuals and business, present and future. You don't see it in static. But that what helps most government projects to survive. I already described what happens when they have no space to expand.
>(imagine 100 sewer companies with 100 sets of pipes, ...)
Sewers, pipes, wires and similar entities are physically bound. Pension funds and healthcare organizations do not provide anything that are bound to specific place.
I am not preaching "rampant theoretical capitalism". I am telling that these things, "alternatives" are doomed from their start as governments exist in the same world as individuals and companies. There is no magic behind it. They are fine now and here, but that won't last forever.
That "flexibility" means precarity as the majority of gig employees do this full-time:
>In California, the legislation will affect at least one million workers who have been on the receiving end of a decades-long trend of outsourcing and franchising work, making employer-worker relationships more arm’s-length. Many people have been pushed into contractor status with no access to basic protections like a minimum wage and unemployment insurance. Ride-hailing drivers, food-delivery couriers, janitors, nail salon workers, construction workers and franchise owners could now all be reclassified as employees.
Also, classifying them as employees doesn't mean that flexibility is gone:
>Uber and Lyft have repeatedly warned that they will have to start scheduling drivers in advance if they are employees, reducing drivers’ ability to work when and where they want.
>Experts said that there is nothing in the bill that requires employees to work set shifts, and that Uber and Lyft are legally entitled to continue allowing drivers to make their own scheduling decisions.
>In practice, Uber and Lyft might choose to limit the number of drivers who can work during slow hours or in less busy markets, where drivers may not generate enough in fares to justify their payroll costs as employees. That could lead to a reduced need for drivers over all.
>But Veena Dubal, a professor at the University of California Hastings College of the Law, said it would still generally be advantageous for Uber and Lyft to rely on incentives like bonus pay to ensure they had enough drivers on the road to adjust to customer demand much more nimbly than if they scheduled drivers in advance.
>Experts said that there is nothing in the bill that requires employees to work set shifts, and that Uber and Lyft are legally entitled to continue allowing drivers to make their own scheduling decisions.
Well yeah, it doesn't force them to. Who are these "experts"? If Uber takes on 100,000 new employees and all of the costs that go along with them, why wouldn't they also manage them like... employees? You can't have it both ways.
There are plenty of companies who have successfully figured out the whole part-time flexible employee thing. I quit my last company, but they didn't want to lose me, so they wanted to keep me on as a flexible-part-timer and I didn't even have a set amount of hours I needed to work every week. As long as I was working less then something like 30 hours a week then they didn't need to provide me additional benefits like insurance and what not. This isn't rocket science. If Uber and Lyft are using public utilities/infrastructure for profit(like roads), then they should be obligated to pay the government to use that infrastructure to get their jobs done. If you don't work for Uber or are a shareholder, do you want to subsidize their business with tax payer money?
>If Uber and Lyft are using public utilities/infrastructure for profit(like roads), then they should be obligated to pay the government to use that infrastructure to get their jobs done. If you don't work for Uber or are a shareholder, do you want to subsidize their business with tax payer money?
Can you quantify (ballpark) the amount of money we're losing out on currently as far as roads and associated infrastructure goes? I imagine it's near zero as payroll taxes don't fund those, and the contractors are still paying taxes.
But for the fact that those dollars literally do not pay for roads and, when roads need to be built, those dollars will not be appropriated to do so. Other than that you're right of course, totally silly, what was I thinking.
This is like if I portion out my income and say "money from gig A goes to bills, money from gig B goes to savings"
At the end of the day if bills get bigger I can always pull money from gig B because I own the income stream. Just because I can currently accurately apply these arbitrary labels doesn't mean those labels aren't arbitrary, and it doesn't dictate what I will do with that money in the future.
It would be a bad idea for the owner of the income streams to actually make spending decisions based on the size of each income stream. You should always choose the expenditure with the highest expected value.
If they're doing it because it makes them more efficient or profitable, it makes sense. If they're just doing it to punish the state for changing the rules... well, that's their prerogative, but if it makes them less efficient they will lose ground to competitors.
They're doing it because their current business model will no longer be legal and they now have to optimize to a new set of laws. They aren't doing this to be more efficient, this will be less efficient than their existing system. But it very well may be the most efficient way to handle it under the new regulations.
It's not out of spite. Healthcare is a fixed cost for employees.
Overtime costs more per hour in pay. Undertime costs more per hour because the same fixed costs are divided over fewer hours. If Uber has to pay fixed costs, they have a greater incentive to minimize undertime.
It's not 'weird' at all; if Uber is employing you you will need to maintain a certain number of hours / week. They will likely reduce the number of drivers that they have, but now they also need to ensure that the schedule is covered. Seems like common sense really, has nothing to do with spite, not sure where you came up with that.
It wont be possible for any taxi company to provide minimum hourly wages without enforcing peoples schedules. I mean, a group of drivers could choose to drive only between 22-06 during weekdays and thus get paid minimum wage for basically sleeping in their car.
Absent that flexibility many people wouldn't be working at all. Both because their life situations don't allow them to take another job as employees, and because the companies' labor needs do not justify the cost of adding additional employees.
> Uber and Lyft have repeatedly warned that they will have to start scheduling drivers in advance if they are employees, reducing drivers’ ability to work when and where they want.
>Experts said that there is nothing in the bill that requires employees to work set shifts, and that Uber and Lyft are legally entitled to continue allowing drivers to make their own scheduling decisions.
>In practice, Uber and Lyft might choose to limit the number of drivers who can work during slow hours or in less busy markets, where drivers may not generate enough in fares to justify their payroll costs as employees. That could lead to a reduced need for drivers over all.
>But Veena Dubal, a professor at the University of California Hastings College of the Law, said it would still generally be advantageous for Uber and Lyft to rely on incentives like bonus pay to ensure they had enough drivers on the road to adjust to customer demand much more nimbly than if they scheduled drivers in advance.
I think the experts cited in this article are not getting at the crux of the problem. Offering employee benefits means that each driver has an overhead cost to the rideshare company. Drivers need to generate a minimum amount of revenue for rideshare company, otherwise the driver is a net loss for the company. So Uber and Lyft are going to have to start scheduling drivers to generate a certain threshold of revenue, and if drivers don't meet that they'll be let go.
> Setup incentives (e.g. bonuses) so that drivers get paid better after they have offset the overhead costs for a month.
A bonus increases cost, meaning the drivers need to work even more hours.
> Reward (but do not mandate) drivers for scheduling certain times/dates in advance (e.g. to optimize driver supply)
Again, offering rewards to drivers for driving in certain scheduled times means that drivers need to bring in even more revenue to break even to offset the price of these rewards. Either that, or the overall average pay is reduced during non-peak hours to offset the cost of rewards.
I think it's more likely is that this takes the form of Uber and Lyft giving drivers blocks of time during which they need to drive, and quotas to meet. Paying drivers during non-peak hours, and giving benefits to drivers that are not bringing in much money are things that ride share companies are going to have to take steps to avoid. If drivers start getting employee benefits, then it's a largely inevitable consequence that they'll lose the flexibility provided by contract work.
I'm struck by how many times you refer to rather blunt instruments (e.g. "scheduling drivers in advance" / "blocks of time in which they need to drive" / "quotas to meet"). There is a much wider canvas of tools available to guide and shape behavior, as I would guess you understand. (You seem to use language like an economist or business analyst, so you likely know about various incentive structures.)
Given how cutting-edge and innovative the ride-sharing companies claim to be, I don't think they can also authentically claim that they cannot find smart, incentive-based ways to work within slight adjustments to the business and regulatory environment. Market-making and matching algorithms are powerful, interesting, and applicable here, in a wide variety of regulatory configurations. In my view, the "ride-sharing" companies (after all, the driver is "sharing" her car with the passenger... right!) should leverage their people and infrastructure as a competitive advantage and, well, innovate.
Well, that's one (unnecessarily rigid) way to structure it, one that (in the language of economics), is inefficient, meaning that it misses out on possibilities for gains for both sides.
To be clear, I don't necessarily advocate for classical libertarian views of economics.  I also think in terms of balancing economic power (i.e. leverage) with goals of promoting human prosperity. Just because a company finds market success (temporarily ) in no way gives them moral or political authority to define ethical concerns. They exist in a broader context of social expectations, which must include norms around how people are treated.
 I like the quote by Ralph Waldo Emerson: "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines." To put a point on it, don't blindly follow the tenants of an overly simplistic theory of economics (libertarianism) when it clearly doesn't ring true to your own conscience.
 I say "temporarily" because let's remember that most businesses only last a small number of years relative to the length of written history.
Of course they don't have to schedule them. But if Uber has to take them on as employees, then Uber might reasonably want to take advantage of their right as an employer to force them to work certain shifts.
What do you expect from your studio assistant that you think might put you at risk of a number of lawsuits?
Honestly, if you want to hire someone to do some work a few hours a week then you are basically hiring a part time employee. There's nothing dangerous around doing this and it's certainly not a minefield if you treat them with the respect that any employee deserves.
Well, other than the minor hassle that they need to know how to issue a W2 and get enrolled for workers comp insurance and pay their estimated taxes for them. None are super hard, but they are barriers for people who aren't used to hiring people, which is the case for I think a lot of self-employed people.
I only finally bothered to learn how to do it all last year when I needed some extra help with projects for my consulting company. Prior to that I just paid a contract CFO to deal with it because it's what you don't know you don't know that gets you sued. So either it's expensive to hire a CFO just for that, or expensive in your time to learn it all when your main goal is to actually get work done that produces revenue.
I'm not complaining, it's just a barrier. I support regulation of things like this and am aware of ADP and Gusto. I am also glad that Uber and Lyft drivers will be compensated as employees if they are treated like employees.
But it's a mental leap to move from "just need to find enough clients to pay my bills" to "need to make sure the paperwork is right so I can pay someone to help me out".
I don't personally find it intimidating, but I've also done it before.
These (incredibly small) requirements you list for having a small number of part time employees have been legal obligations for more than 50 years.
So yes, you have to fill out 5 forms, and write 4 checks, every year for withheld taxes.
But none of this qualifies for “it’s sad, it’s getting hard to be a small business”. They’re just things everyone in the US has been legally obligated to do for part time employees for an exceedingly long time.
People with business degrees get a ton of crap in tech circles (god knows I've sent my share of snark their way over the years ;) ) ... but at the end of the day, there is value to someone learning those things, and people have been successfully thriving for decades as you mention under the exact same obligations. I think tech generally seeks to reduce friction as much as possible, even to its detriment ... like someone removing some log from a worksite while cleaning up, only to realize it was holding up something else. The original intent of the thing is lost over time
I could be wrong, but I don't think my friends who got business degrees were learning how to fill out W-4s. They were learning things like "strategy" and "organisational behaviour" and apparently doing presentations every other week.
And yet, somehow hundreds of thousands of small businesses, most of them in non technical fields whose owners I would surmise don't have nearly the average educational and/or technical skills that HN readership does, somehow managed to navigate it.
This isn't terrifyingly complex. You can work it out yourself, or pay a reasonable fee to someone to set you up. It's a business expense that any actually viable small business should be able to easily justify.
...and completing all of those forms flawlessly, as a layperson, lest you open yourself to any number of lawsuits. Just the thought of it makes me nervous. It's why large companies have dedicated staff to dealing with such issues.
Most of them never solved it they just did "good enough" and haven't had any issues. Most people are open to solving things without involving the government or just drop the issue and walk away. Everything will be fine for until they get someone who's not ok with it then they get raked over the coals for what they thought was "good enough".
All of the (objectively) stupid people I know who successfully own and run businesses with employees, and the people on this site clutching their pearls at the thought of having to fill out ~5 forms.
If you're unable to grow your business because you are scared about a step required to grow your business you aren't going to grow your business. Nobody owes you this. Risk aversion isn't anyone else's fault.
My partner entered into head of operations at a small company and had to learn all of this stuff on the fly [in Canada].
She's managed just fine as well. I've managed a department previously and had to deal with worker's comp matters and same thing. It's not very difficult to learn. It's a bit of overhead, sure. It's just part of the job of overseeing others.
Well, I’m super libertarian and generally opposed to any and all government regulation, but… if labor laws are stifling small businesses, why have labor laws in the first place? The reason for this law is explicitly, specifically, stop businesses (small and large alike) from doing business this way; it’s not an unintended consequence, it’s entirely the point.
Well, yeah, because if we don't have these rules, part time employers won't pay taxes, their employees will have to pay tax penalties if they try, and they won't get insurance for workplace injuries. And these are bad things, so we make rules about them.
Now, maybe you'll argue that these are all steps that the government should be doing instead of the employer. And I agree, but they're done this way because there's a whole political aisle in this country dedicated to the proposition that the government shouldn't ever do anything. So someone has to do it, and in our scheme it's the employer.
> So either it's expensive to hire a CFO just for that, or expensive in your time to learn it all when your main goal is to actually get work done that produces revenue.
This attitute is exactly why those laws are needed. As a business owner if you want to hire some other human being to work for your company then it should be your natural instinct that wants you to learn everything that makes the life of that other human being easy to work for you, but because you have no intrinsic interest in actually educating yourself what someone might need if they work for you, that is why you have to be forced into learning that by law.
It's sad that all you care about is someone getting your work done, because it's still a human being and that legislation is there for a reason.
Wow! He just spoke of how what he actually misses is the relationships and th mentoring. He clearly is thinkin of the potential employees as people first. Your attacks seem emotionally motivated. Not all jobs are slave and master relationships. I cant imagine anyone is motivated to learn and keep up to date on the current labor laws regardless of their level of compassion for those they employ. At the small end of the business spectrum hiring events are much more often "my sister knows a guy who could do this for you and he needs a job right now, wouldn't you like to work 50hrs a week instead of 70?"
> As a business owner if you want to hire some other human being to work for your company then it should be your natural instinct that wants you to learn everything that makes the life of that other human being easy to work for you
Everything? That'd be thousands of pages of regulations to sift through and understand. So, no, there's no "natural instinct" to do that.
Kind of going overboard on the rest of it. They just want to hire some part time help, not staff a coal mine.
And that attitude is the reason we have so much overhead and useless garbage being produced instead of valuable labor. Just because I don't want to learn the intricacies of labor and tax law doesn't mean I won't pay my employees well and do right by them.
Just because you say you will pay your employees and do right by them, doesn't mean someone else will do the same ... for every one of you, there's someone who will happily exploit someone else, and whether it can be attributed to malice, or ignorance is irrelevant.
New York State just overhauled farm labor in a similar manner that will prevent most small farms from hiring by season... and in agriculture seasons can be 2 weeks to 2 months... but now you have to cover FT, benefits, plus unemployment insurance.
So in theory you can hire someone... they can work for 2 months and then collect unemployment after you run out of work for them because the earth's position changed and it's now winter.
New York State already pays about 4% above the national average for farm labor. All costs will just be passed on to consumers. Industry groups estimate that consumers will need to eat $300m in additional food costs per year.
The State Senator (from Queens) that authored the bill visited approximately 14 farms in NYS prior to writing the bill... and signed it in Manhattan... where farm labor money is now set to flow in the form of union fees being managed by hedge funds and banks.
"employee protection" lawmaking is popular and makes lawmakers seem caring and thus reelectable. Did uber drivers in the past leave uber to flock to taxi companies who do hire them? AFAIK no, and they know that legislation like this will probably cause them to lose their chances at a job/gig. Different people different motives
It doesn't have to be black or white. Why don't regulators make a third category of worker between employee and contractor? Such a policy could reflect what people are already doing and give them some protection against abuse.
I feel as though that ire ought to be directed at the companies who knowingly walk in the gray areas to make profits where simpler laws might suffice for common sense. It's the same arms race that plays out in many other instances, if abuses didn't happen then we wouldn't need to codify into the law that those things are indeed abuses.
With every round of this game we play, it gets harder for smaller businesses to step around the collateral damage, but it's not as though the right answer is to give up on worker protections. The worst part of it all in my opinion is that after a gray area is ruled on after years of extracting profits, there's literally no consequences for a business forcing that gray area to get codified into law. Of course these vague in-between areas will be exploited and eventually refined into more and more meticulous law, there's a bounty on every one of these areas. The system we have will trend towards this unless we give up on worker protections (obviously not good) or reorganize this system so the winning move isn't to force more legislation
Even though it does not look this way now, I think this is a seminal legislation that in time will move small startup scene out of California for good, due to what you have described. I have the same experience, bootstrapping a software company that initially could not afford an employee payroll and administrative/legal burden. Where do we go next to start non-VC companies? Oregon? Texas?
Also, part of the purpose of incorporation is to provide a personal liability shield as a catch-all.
Any policy has benefits and drawbacks. Yes, somebody is losing out on beneficial employment with you. But somebody else is being saved from being paid $5/hr under dangerous conditions without workers comp.
> I’m in NYC and honestly can’t figure out how to legally hire a studio assistant for a few hours a week without being at risk for any of a number of lawsuit vectors.
To my understanding (not a lawyer / accountant) if you hire someone part time like that you're not obligated to pay for their insurance or anything like that.
You just write off what you paid them as a business expense and send them a 1099 at the end of the year (this is the official document stating how much money you gave them during the year -- your accountant will generate the form for you).
Then it's up to them to file their taxes for that income, but this is out of scope for you. As long as you've sent them their 1099 you've done your job.
Also not an accountant or lawyer, but I think that if you're paying someone by the hour, and directing them as to how they should do they job, they need to be classified as an employee, not a contractor.
This means a W2 instead of a 1099, plus you need to pay them on a fixed schedule, pay social security and medicare taxes (and likely other taxes depending on jurisdiction) on their wages, deduct income taxes, do an I-9 verification at the beginning of employment, change your own liability insurance, etc.
There is software as a service companies that help out with setting this up correctly, but I do see many ways you could do this incorrectly, and land yourself in trouble.
> Also not an accountant or lawyer, but I think that if you're paying someone by the hour, and directing them as to how they should do they job, they need to be classified as an employee, not a contractor.
> This means a W2 instead of a 1099 [...]
I'm a freelance developer in NY and this isn't the case. When someone requests me to do work for them they tell me what they want done, we scope out the project and then I either bill them by the hour or by the project depending on what's going on. Sometimes I work 50 hours a week on that project, sometimes 5.
But in all cases, they send me a 1099 at the end of the year. I might be considered some type of contractor in their software since most of the companies I work for auto-bill me through some software but in no case have I ever been declared as a W2 employee. Everything you wrote is true if they were a W2 employee, but that means being officially hired and defined as a full time employee.
Also I've paid out a lot of people for contract work as a freelancer and my accountant said it's no problem. I just give the numbers and he provides me the 1099 to send out. It's been working like this without issues for years.
This is partly why freelance or contract workers need to and can get away with charging more per hour. They get no perks of being an employee. Health care is super expensive and we essentially pay double the social security taxes since we're both our own employer and employee. There's also no free lunches or other employee status perks like matching retirement funds, etc..
But on the flip side, getting hired as a freelancer is a huge win for business owners because now they don't mind paying higher rates for a freelancer since they are off the hook to provide all of those W2 benefits and also avoid paying a consistent salary even if there's not much work to do (typical scenario where you're clocking 8 hours a day but only 2 of those hours are productive things). A freelancer might get 5 productive hours in for that day, charge for 5 hours and after a week they clocked 25 hours but a salary worker would have clocked 40 and was productive for less than half (not due to laziness but there's just not enough "real" work to do).
After factoring in everything, if the freelancer is technically 4x or even 5x the salary worker's hourly rate the business still comes out ahead.
It will probably come as a surprise to you (it did me several years ago), that it’s not simply up to you and the company hiring you if you are considered a freelancer.
This is not a matter of billable vs guaranteed hours. It’s a classification based on employee control over the person in question.
In fact, if you were micro directing the people you paid 1099, you may have had what the state of NY would consider an employee. Yes you’ll probably never get found out, but that doesn’t negate the fact.
> It will probably come as a surprise to you (it did me several years ago), that it’s not simply up to you and the company hiring you if you are considered a freelancer.
Where do you draw the line?
Let's say you hire someone for 3 hours to help you out for a specific task. A "I would like X done with Y" type of scenario. Are they now considered an employee?
What if you asked someone to do a code review for 5 hours where you precisely told them what to do, but it's on them to determine the state of the code? Also an employee? Does your answer change if you asked them to do this 1 hour a week for a year?
Here's another example. A company hired me to do X. This ended up being a ~100 hour project. They gave me a checklist of deliverables and a pretty decent break down on how to implement everything. They let me choose the tech (but had suggestions on what to use) and how the application functioned was defined by them. Am I an employee and if so, what if I worked 20 hours a week until it was done vs 50 hours a week -- does that change anything?
Scenarios like the above are really common in the freelance world. You get a super wide range of work thrown at you (as you know).
I've talked with a number of accountants over the years and always told them everything I've been up to. I was never once recommended to classify myself as a W2 employee, or be on the hook for hiring a W2 employee for short term contract work that I provided someone. It's always been 1099s in and 1099s out.
Usually in your situation you will have your own computer, your own workspace (except for meetings with the client), and deliver things based on a predefined scope (or predefined set of expectations). That's good enough to make you a freelancer.
On the other hand, if the company told you to use their laptop, show up in their office, work using their methods—effectively manage how you work... that becomes W2 territory.
Taking a step back, you're respecting the spirit of things. The company has a need, you have a solution, y'all have a transaction. On the other hand, if they were to integrate you as part of a team, within their processes, that's a W2.
Of course in practice there's a third way that is common: large company A makes use of an intermediary contracting company B that they can pay as needed, and the contractors are W2 salaried of B, while A maintains all their flexibility.
 Generally for all the crappy work that they don't want to do themselves. If you find yourself working for B, make it a learning experience and a personal goal to move beyond it.
Using company equipment gets complicated pretty fast. Some 'contractors' have to use company equipment because the company won't allow proprietary or regulated data on machines they don't own. Is that enough to make someone an employee?
Yeah and it gets even more grey because what if you're using your own computer but you have to connect to hardware that the company owns such as a server, or even servers on the cloud that the company is renting and paying for.
Technically you're using something that belongs to them. Then there's the case of connecting through their VPN too.
Then it's like, why would using a company laptop to SSH into a company owned server be any different than using your own laptop to connect to a company SSH server.
And of course, what if you did great work for that company as a contract worker and they decided to give you a laptop as a bonus / gift. Or more realistically the thing you're developing requires a lot more hardware than your current machine so as part of the contract you signed, they will provide you an extra $1,500 up front to purchase a computer upgrade. Technically you bought the computer so it's not the company's. The greyness never ends haha.
>> it’s not simply up to you and the company hiring you if you are considered a freelancer.
> Where do you draw the line?
From the IRS:
> The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done. Small businesses should consider all evidence of the degree of control and independence in the employer/worker relationship. Whether a worker is an independent contractor or employee depends on the facts in each situation.
> 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.
> The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done
Using this IRS logic then I wonder if most employees are really contractors.
If you're hired as an employee to work on project X, a manager would likely not even know how it will be done. They aren't going to write out the programming code logic for you (that's your job as the employee). They might give you business rules such as "it needs to do XYZ", but that's much different than "how it will be done".
That's the ting, there is no exact science here. It's an interpretation by the relevant state agency (like most taxes really).
For example, CA has been cracking down hard lately, dunno about NYS. Obviously enforcement is selective - better for the state to go after someone big like Lyft/Uber rather than you. Does not mean that you're in the right just because you didn't get your election scrutinized.
And FWIW - your accountants are right in that it's beneficial and probably totally fine to 1099. But ask them to guarantee that the state won't go after you for it and watch them squirm :D
the federal govt as well (the irs has a 20 point checklist to help make the determination)
every contract i've ever gotten in the last 10 years has required that i indemnify the company against being classified as a worker, and then given instructions that violate that checklist, and been upset when i pushed back
It's not really that complicated. If it's a short term engagement (3 hours literally once), then 1099. If you need them for 3 hours every week, then consider hiring them as a part time employee ... it's a long term relationship at that point. If you need 3 hours every week and engage a temp agency, then chances are you'll get a different person (even if they send the same person a few times in a row). If you engage a "temp agency" that's literally just a front for one person ... that's an employee and should be treated as such.
The difference is that the company that contracted you isn't managing your day-to-day work.
Company hires you and says "we need a website that does X" and leaves you to do it. You might be a contractor/free-lancer.
Company hires you and says "we need a website that does X, you need to work in the office and/or use our hardware, and we want it written in React, and you'll be working closely with JimBob the Manager." You are probably not a contractor/freelancer.
Yes, there's some grey area in there. It's a combination of the three factors in the ABC test that determines employee vs contractor.
I'm still confused how you can avoid tell someone how to do their job. A SW contractor can't be told which language to use or be connected to company source control or use existing company software libraries? A carpenter can't be directed in some fashion beyond: 'YOU, GO BUILD HOUSE FRAME'.
I did software contracting for a while. It’s certainly appropriate to define parameters like “use language x, code these features, by this deadline and keep a synchronized copy of the code in this repo.”
You can’t set hours and direct particular tasks day to day.
Having personally been through the employee vs contractor maelstrom when, for some unknown reason, the state government got a bug up it's ass, I'd have to say that the state requirements become quite arbitrary.
What you might think is appropriate is sort of besides the point.
I too have been through the maelstrom. What I think is appropriate for me as it all boils down to interpreting the IRS regs and hiring a good lawyer who successfully avoids and navigates lawsuits for me. Just because I navigated it successfully doesn’t mean I’m right or my interpretation is appropriate for all.
But I think it’s pretty useful and certainly disproves that it’s not possible to hire software contractors.
This gets into a big grey area and I’m not sure there’s an absolute rule. If I were writing the contract I would say “must pair program with employees” and let the contractor figure iut how to meet the req.
You can tell someone to "do this work". You can only tell an employee to "do this work, at this desk, using this computer, for 8 hours between 8 AM and 6 PM every weekday".
You can tell someone to "get it done by the first of the month or suffer a penalty". You can only tell an employee to "get 5% of it done every workday and send me your status metrics by 10AM every morning or you're fired".
You can tell the carpenter what the work is that must be done, and provide detailed specifications, but if there are multiple ways to get that work done, you can only mandate those details for an employee. To some extent, building codes establish a minimum standard that everyone should be satisfied with, and you could tell an employee to do the minimum amount of work required by the building codes to get the job done, but you can't stop a contractor from carving Mayan-inspired engravings into every stud if they feel like that's what the job requires, or from using glue and joinery where most people would just put framing nails. As long as the work meets the specs, the contractor can get there by any route they please, no matter how much or how little actual effort is required.
Uber can tell its driver to "to collect this fare, get this passenger to this location". When they start saying what kind of vehicle they have to use to do that, they are starting to move into employee territory. Clearly, a passenger can be moved from A to B by a restored and retrofitted tie-dye-painted 1970 VW minibus as effectively as a nearly-new factory-stock black 2018 Toyota Corolla, so when Uber is making requirements that speak more to their company's brand identity than to the reasonable requirements of the job, those are employee-like requirements.
It isn't always clear whether a requirement is directed more towards the means or the ends, because specifying an end result precisely enough may dictate that the only practical means to that end be used. So California has decided to resolve this exploitable ambiguity in favor of assuming certain types of worker are employees unless a minimum degree of autonomy can be demonstrated.
>To determine whether an individual is an employee or an independent contractor under the common-law, the relationship of the worker and the business must be examined. In any employee-independent contractor determination, all information that provides evidence of the degree of control and the degree of independence must be considered.
>Facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. These facts are discussed next.
>Facts that show whether the business has a right to direct and control how the worker does the task for which the worker is hired include the type and degree of:
>Instructions that the business gives to the worker.
>An employee is generally subject to the business' instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work.
> - When and where to do the work.
> - What tools or equipment to use.
> - What workers to hire or to assist with the work.
> - Where to purchase supplies and services.
> - What work must be performed by a specified individual.
> - What order or sequence to follow.
>The amount of instruction needed varies among different jobs. Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. The key consideration is whether the business has retained the right to control the details of a worker's performance or instead has given up that right.
>Training that the business gives to the worker.
>An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods.
>Facts that show whether the business has a right to control the business aspects of the worker's job include:
>The extent to which the worker has unreimbursed business expenses.
>Independent contractors are more likely to have unreimbursed expenses than are employees. Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. However, employees may also incur unreimbursed expenses in connection with the services that they perform for their employer.
>The extent of the worker's investment.
>An independent contractor often has a significant investment in the facilities or tools he or she uses in performing services for someone else. However, a significant investment isn't necessary for independent contractor status.
>The extent to which the worker makes his or her services available to the relevant market.
>An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market.
>How the business pays the worker.
>An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. An independent contractor is often paid a flat fee or on a time and materials basis for the job. However, it is common in some professions, such as law, to pay independent contractors hourly.
>The extent to which the worker can realize a profit or loss.
>An independent contractor can make a profit or loss.
>Type of relationship.
>Facts that show the parties' type of relationship include:
> - Written contracts describing the relationship the parties intended to create.
> - Whether or not the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay.
> - The permanency of the relationship. If you engage a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that your intent was to create an employer-employee relationship.
> - The extent to which services performed by the worker are a key aspect of the regular business of the company. If a worker provides services that are a key aspect of your regular business activity, it is more likely that you’ll have the right to direct and control his or her activities. For example, if a law firm hires an attorney, it is likely that it will present the attorney's work as its own and would have the right to control or direct that work. This would indicate an employer-employee relationship.
>If you want the IRS to determine whether or not a worker is an employee, file Form SS-8 with the IRS.
But it's too bad that so many of those points are ambiguous due to lack of information.
For example, the "Computer Industry" example (CTRL + F for it). It's pretty clear cut that a huge amount of software freelance work falls under this example.
But then this sentence ruins everything: "Steve works at home and isn't expected or allowed to attend meetings of the software development group".
What if you have to goto 1 or more meetings to get a clarification on the specifications because part of what you're developing is related to 3 other people who are employees of that company.
It seems ridiculous to me that if you sit in on a 30 minute remote meeting, suddenly you're a W2 employee instead of a contract worker. Likewise it's ridiculous if you happen to go on site once or twice for whatever reasons. The examples are also left up in the air. If a single condition fails, is it an automatic W2 employee, or are you still able to be a 1099 employee and it just so happens the example didn't go into enough detail.
Then it's like, well, if you try to follow the rules but the rules aren't clear then how are you supposed to follow them. Surely you can't get in trouble (read: pay fines) due to the rules being incomplete?
Life goes in a cycle. A new tech, invention ( e.g. Bitcoin ) comes and blooms until it starting to affect government revenue, from that point onwards people in power find a way to regulate it for greater good. The tech becomes boring, intelligence search for more novel solutions. History repeats itself.
People need to stop treating “gigs” as full time employment and find a real job. No one asked any of the people being “exploited” to quit their job and work as Uber drivers. They knew the associated costs going in, and they could’ve stopped anytime they wanted. Sorry about the rant. I just smell a lot of entitlement within this situation.
You could 1099 them but considering the likelihood of someone who's taking an entry level music job claiming the income on their taxes seems like a recipe for an audit for both parties.
Realistically you should probably do what everyone else does in this situations and pay under the table. Think of the lost taxes as billing the government for making stupid laws that can't reasonably be followed even when you want to follow them.
The fact is, there's a lot of people paying under the table, for these very reasons. One estimate from 2012 of the underground economy in the U.S., i.e. transactions of goods and services other than illegal drug trade, was around $2 trillion. That was during a severe recession; it's not clear whether the subsequent recovery has exacerbated the situation or encouraged more people to work "above ground".
One thing is certain: as long as there is friction & obstacles to hiring part time help, there will be people trying to work/hire under the table.
Or instead, if you're really not willing to learn something you'll do with every future hire, you could just use a small business payroll service provider that specializes in this sort of stuff to do it for you so that you don't risk prison time.
Payroll might be complicated to learn the first time. But it's like riding a bike, once you learn it's trivial to do.
It's not about the complexity, it's the cost and risk exposure. Employees come with costs (workers comp being the big one) and risk exposure that 1099 workers do not have (and what the employer gets in the trade-off is more direct control). For someone doing menial work and getting industry experience on the side (most trades have entry level jobs like this) that additional cost/risk could be the difference between their position existing and just tacking the responsibility onto some other existing employee.
1. An employee working, in your words, "a few hours a week" has literally nothing to do with an Uber driver working full time.
2. As a society, do we need more cable-coiling jobs? I don't think we do. With respect to your experience, there are a lot of people in the music industry (and most industries) willing to mentor people without also expecting them to do menial labor for minimum wage. You're not being benevolent or providing some integral service to the community.
3. There are a large variety of services which make it easy to hire an employee, which cost a small fraction of what the employee is going to cost. If you actually wanted to do what you say you want to do, I'm sure you could figure out how to do it.
Is there any reason to believe the ride sharing companies won't reorganize their drivers using a similar model to what Amazon uses for their delivery drivers: contract to external firms that employ drivers so the parent entity is absolved of responsibility?
I think the answer may be "yes" effectively if it leads to establishing companies of contractors but not without side effects in themselves - like most regulations really.
If gig economies lead to working with companies instead of individuals that would lead to two distinct branches.
* A self established one would give more regulatory surface for things like training and background check requirements. Not as easy to sign up before any added regulations. Constituents would get more of a pure cut. The barriers to entry would make their labor slightly more valuable.
* A traditional company which hires employees. They would have a middleman to make signing up easier but likely less flexibility - which doesn't matter as much to fulltimers anyway.
It likely result in a less flexible market with more barriers to entry but it would solve some problems and act as a framework to add more solutions and problems for better or worse. It could be abused to create cartels again or responsibly handle externalities without unduly privileging - it depends on how the tool is used.
Second order effects are likely a labor pool that cannot rise and fall as quickly which would stabilize prices for the labor supply and turn instability into a company liability as they may be left with a choice of paying for idle labor for availability and meeting demand for sure or risking being unable to fulfill demand.
That said I wouldn't be surprised if widespread roll out of these sorts of laws caused a gig economy bubble to burst - especially given how many are doing a VC dumping strategy of losing money on transactions.
I don't really have strong feelings as to what would be the best nor consider myself above an amateur commentator.
Uber agrees to pay X rate currently to drivers. A law is passed that makes X rate even more unprofitable.
Uber then engages the services of an external company which provides labor at a lower rate, fires all of the current Uber drivers, and encourages them to work for the new external company.
The external company, if sued, does not have the resources that Uber has, and simply goes bankrupt. The drivers are encouraged to work for yet another new company.
This process continues for a while as ride quality and driver satisfaction all suffers. Uber gets to lengthen the runway a bit longer, and either a miracle happens and the company continues operations or some other competitor swallows the market.
Interesting, in Brazil all the companies in the chain are liable in a labor-related law suit. Before the 2017 Labor Reform, frivolous law suits by former employees were a billionaire market because it used to be a risk-free gamble - after the reform the litigant is liable for exaggerated claims and there was a 46% drop in labor cases.
When I look at any market where the labor code is excessively protective, I see high unemployment rates specially among the young - Brazil, Spain, France... I don't know about causation but clearly there is a correlation between employee over-protection and unemployment rates. I think it is the law of unintended consequences in action: the legislator intention was good (protecting employee) but the net result is negative.
There is definitely a causation for high unemployment by such laws. But it actually goes even deeper.
In France for example, it is difficult for a company to fire an employee once they are legally hired.
Oracle, for example, has a policy of initiating an "intra-country transfer" where the employee is mandated to relocate from Paris to Montpellier. Not everyone wants to uproot their family like that. And then if they do accept the move, next year Oracle will relocate them to Bordeaux...
As I understood, once you hire someone in France the labor code makes it virtually impossible to terminate the contract.
In Brazil employers have to pay a fine if they fire a worker without a "fair cause" (~ 3.2% over the sum of all compensation paid to the employee while they worked for you), so the longer someone worked for you the more expensive it gets to fire them.
The law allows for veil piercing in situations like that, meaning they could skip the temporary intermediaries and just treat Uber as the employer.
Believe it or not, they did think of issues like this when drafting the law. Especially since almost all of these other issues brought up in the comments are decades old and already addressed by existing labor laws.
That was not immediately known to me, because in New York where my family member is a lawyer, something like the following will happen:
Company X owns Company Y. Company Y builds an apartment building of low quality and hides the defects. They sell the apartments to individual buyers.
The individual buyers sue Company X years later upon finding the defects. The judge throws out the lawsuit and says "you can only sue Company Y, because that is the legal entity who built the building."
The only issue is that Company Y is several million dollars in debt to Company X and has absolutely no way of repaying anyone who sues Company Y.
Others are pointing out the problem with staffing companies too, but this reminds me of my experience (different countries, so YMMV). This means that even though "The law allows for veil piercing" there's a huge maybe there, companies unloading their liability know this and have great lawyers. So IF a lawsuit gets to the real employer it's only after a LONG legal process, so not worth as much.
There is also another reason: If Uber employs the driver and he/she acts unprofessionally, then it's a lot of work to fire him/her before they can hire someone else. (Uber does not want to drag passengers into any type of litigation)
If Uber deals with many companies, they can just reduce demand at the company with the bad driver and increase demand at another one. The company with the bad driver can then retrench him, saying they need to cut someone.
(Disclaimer, I know very little about Uber and the US and it may not work for them specifically. But the idea certainly applies to other companies)
yup it does, just like contractor employees at amazon/google/tech company of choice don't get any of the nice benefits or perks of working at the client company, these guys won't get anything.
Those employees can't sue the client company, they can only sue contractor company - that suddenly goes poof and doesn't pay out anything when a dispute happens. Good luck forming a union coz then the company will go poof too
It basically just moves the onus onto the employee willing to sign up for a shit job with no perks and absolves the govt/client company.
> Good luck forming a union coz then the company will go poof too
The answer to this is to form a bigger union so that only the bigger contracting companies can survive, and then have high-paid union executives who can negotiate large industry-wide contracts between employer and labor provider that provide some minimal level of protections but largely protect the status quo.
Then, those in the employer camp can donate to conservative causes complaining about unions and regulation, and those in the labor provider camp can donate to progressive causes complaining about evil corporations and lack of worker rights.
From here, the leaders in the two factions will variously ping pong and vacillate and make various and sundry unfruitful negotiations while taking the advice from various lobbyists about how they might improve the state of affairs and generally enrich themselves through back channel dealings with their benefactors from either camp.
That’s partially true. The contract company can’t fully go poof every time there is a minor lawsuit and the company needs to still pay the state all the fees for unemployment and insurance that all companies have to pay. In the end the employees get workman’s comp, min wage and unemployment insurance but the state gets to collect a bunch of fees that they are owed.
Uber has no USP except the network effect. They are just a taxi company with an app essentially (givent that their self driving efforts havn't fruited at all yet). If they outsource the competency of drivers to an external provider then they are just a taxi company with an app and not even their own driver network, making them even more vulnerable to someone else coming with a better app and using the same driver provider. Customers are the fastest to migrate when price is the main factor and the barrier to switch to a different app is literally just a few clicks in the app store.
He's just talking about a legal reorganization. "Uber Drivers LLC" contracts the employees which is wholly owned by Uber. I don't see how this would actually help them though. Under the new law, Amazon Flex drivers are also categorized as full time employees and the child company would still bear the costs of that
Somebody like WorkforceLogic, ManPower or other temp agency would just handle employment, background verification, compliance and 1099s, they're unlikely to start building apps around their own networks.
Uber doesn't want drivers classified as employees so they don't have to pay minimum wage, provide employee benefits, pay payroll taxes, or otherwise comply with the law vis-a-vis employees.
Yet, it is one thing for Uber to hire drivers as contractors individually where Uber has full control over the terms, in other words no driver is in a position to negotiate their contract with Uber...it is an entirely different thing for the drivers to be organized and those organized drivers now be in a position to negotiate (almost like a union).
I think the last thing Uber would do is assist the drivers in organizing...its not just the ability for them to negotiate with Uber collectively either, at that point said driver contracting firm(s) would then be in a position to launch their own ride-share app to compete, unlike say these Amazon driver firms would can't just launch an Amazon competitor.
According to one analysis , working for Uber pays $8.80-$11 per hour (after subtracting car related expenses).
The federal minimum wage is $7.25/hr. But certain cities are much higher, for example New York City is $15.00. In San Francisco, it’s $15.59.
Also worth mentioning that most of these averages are not taken from drivers working full-time (40 hours per week). So while they may be able to make near minimum wage on an hourly basis, they may not be able to achieve that hourly rate for a full 40 hours per week due to fluctuating demand for rides.
The crux of the interpretation is what constitutes an hour of work.
Once the ride starts with a paying client in the car, the hourly earnings are easily above minimum wage.
But what about the time spent logged into the app waiting for a ride? If you take a standpoint that's friendly to Uber, that is not billable time - the driver could potentially be working in other capacity (including doing gigs for direct and indirect competitors, like Lyft, Postmates, TaskRabbit, etc.) If you take a standpoint that's employee-friendly, this is similar to a store register clerk being by the register with no customers in the store - they're still present to perform their duties when necessary and therefore must be compensated.
Where I live the gig works make about or a little less than the minimum wage after expenses for vehicles. This doesn't include saving for retirement, healthcare, workmans comp, disability insurance, or a bunch of other things.
Basically, even if healthcare were taken care of the amount they make would not be a living wage.
I would argue that every job designed to be ones full time job while they are at a life phase where they have to be roughly self sufficient should have a wage that enables them to do so. Or, they need to go do something else.
This is not every job. It is the situation for many in the gig economy.
The reason people don't go do something else more often is something I would love to see studied.
Why shouldn't every job supply a living wage? You realize what your proposing is a net societal negative, right?
If a person has X amount in their savings and their job is not a living wage, then by definition they are likely going to have to rely on their savings to make up the wage differences. This is kind of a bad thing for capitalistic-based societies because you need people to consume, and if you have a large amount of people unable to consume then that negatively impacts the free market.
It's also bad because it places stress on other parts of society. No healthcare means when you eventually get sick or injured the hospital has to take on those costs, which means people pay more while destroying the lives of said injured or sick person.
People will have to make up the wage differential somehow, which also means that underclass of workers is more easily exploitable and/or pushed into illegal behaviors in order to survive.
Because if I need someone to mow my lawn why do I need to support their entire way of life. Not all work is equal and not all work is worth that much. What you're espousing is participation trophy logic.
So perhaps each Uber Driver could be given the tools to form their own LLC, where they are an employee of that LLC, and that LLC contracts with Uber and potentially other gig services. It could be completely automated for them.
Even if it is automated, that is an $800 out of pocket expense every year for LLC fees, and more complex accounting requirements. It's not worth the effort unless you are making significant money or are serious about your business
This is an extremely heavy handed law which would be destructive to large parts of the economy by making many people’s livelihoods illegal.
The drafters of the law knew this, which is why 90% of the text of the law is carve-outs for various professions. But forcing people to live their lives through loopholes never works well.
For example, they have this carve out for high skilled professions:
> (3) An individual who holds an active license from the State of California and is practicing one of the following recognized professions: lawyer, architect, engineer, private investigator, or accountant.
Sorry, software engineers. An accountant or an architect might be allowed to take on lucrative contracts, but since the state of California doesn’t have a special piece of paper for your job, they’re not going to allow you to work in the way you choose.
Edit: I myself am a software developer who has enjoyed working contracts in the past and would like the option to do so again.
They're not carving out high-skill professions. You'll notice that doctors aren't on that list. They're carving out professions that are already under special regulatory regimes that affect how they're able to sell their work. In part because people/businesses are required by law to contract with people who hold these licenses. Like you cannot build a building without a licensed architect and civil engineer.
There would be an uproar if you couldn't renovate your office without hiring an architect an an employee.
Edit: Looks like the final version is way different than this quote. The final list of exemptions are:
- physicians and surgeons
- insurance brokers
- securities brokers
- direct sales under specific (previously existing) conditions.
So looks like they didn't really care about professional services after all but carved out industries where you look like an employee but operate a tiny little business inside another one.
It is actually pretty difficult to find the final text of the bill, and the list of exemptions seems to change a lot between versions, so let's look at a quote from one of the authors:
> Lorena González, the San Diego Assembly member who authored AB 5, says she’s working to make sure that is not the case. The point, she says, is to protect workers from exploitation and to classify them as real employees with the power to unionize, not to stifle their independence. “We don’t want to deny somebody the opportunity to, say, submit a story to The New York Times,” she says. “So we are looking at freelancers and working with some of the associations and unions to come up with a definition for what a ‘real’ freelancer is.”
She acknowledges the fact that this will cause a lot of problems for a lot of people who have nothing to do with the gig economy, and that they are working on a lot of carve-outs because of this. But I guess the software dev's union didn't make it in time to do the proper lobbying, so we're out of luck.
Some laws lay out elegant general principles that can be applied in many scenarios, and some laws fail at this and require people to contort themselves into the limited categories thought of by the politicians and their lobbyists at the time they wrote the law.
It's not that simple. For a company, a contractor is much different than an employee, and it is much more regulated and costly to terminate an employee.
For example, if you terminate an employee you have to have proper documentation to justify the termination. Even then, you are still vulnerable to a wrongful termination lawsuit...unless you offer them severance in exchange for signing away the right to sue.
Sure, maybe you can replicate an arrangement you had before, but due to the multiple new layers of bureaucracy you’re going to get paid less. Like I said, they knew this was an issue which is why 90% of the law is carve-outs. Unfortunately software engineers (and many other professions, I’m sure) have slipped through the cracks and now will be subject to the harms that they were trying to avoid for doctors, accountants, fishermen, etc etc etc
2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Of course, there's a bunch of exceptions for various professions toward the end.
As a software contractor... (A) and (B) are terrifying. I think (A) means you really can't do contract work while working under the direction of a manager, or PGM. So you essentially have to be doing work for hire rather than filling in a specialist role for a defined period of time. (B)... Wow... So if the company is a software development company, they can't hire contractors???
I really hope I'm reading that wrong. I might want to do work for a California company one day ;-)
You might be reading it wrong... everything in law is in a grey area until further defined in court, but legal documents should typically be read with full boolean logic applied to all the words:
"control and direction" - sure, they give you direction. But do they control what tools you use, when and how you do it?
"connection with the performance of the work" - Are they controlling the final deliverable, or the performance, again, as in when and how the work is done?
I suspect that software consultants have a reasonable argument that they control their own work, while their clients have control over the acceptance of the final deliverable, so the above points are not fulfilled.
Edit: And for B, it just seems like having a 2nd client would fulfill that criteria. Your 2nd client is outside usual course of the 1st clients business.
> I suspect that software consultants have a reasonable argument that they control their own work, while their clients have control over the acceptance of the final deliverable, so the above points are not fulfilled.
What if the consultant is forced to attend every single meeting the client (via PM/other manager) decides to schedule? That seems to violate the spirit of "control over performance" part of it.
That's not really how performance is likely intended to be interpreted here. It's more along the lines of if the client told you "you have to code exactly from X time to Y time using our computer at Z location". At that point you're basically an employee rather than a contractor providing a service/product. Meetings are related to, but not the sole component of performance of work here.
Additionally on (A) this is massively beneficial to contractors. They cannot force you to work in an office or the hours you work which is key for a freelancer/contractor/creator/developer.
The items are already part of California's contract law well before this current gig economy bill.
California classifies 'independent contractor' as :
1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
2. Whether or not the work is a part of the regular business of the principal or alleged employer;
3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
4. The alleged employee's investment in the equipment or materials required by his or her task or his or her employment of helpers;
5. Whether the service rendered requires a special skill;
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
7. The alleged employee's opportunity for profit or loss depending on his or her managerial skill;
8. The length of time for which the services are to be performed;
9. The degree of permanence of the working relationship;
10. The method of payment, whether by time or by the job; and
11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.
The key line for software developers who are independent contractors is "Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;"
Contractors that work in a home office, using their skills to bring to a company for a project, at their own place, time and tools, that is an independent contractor.
It could be argued that drivers that own their cars, that can choose to accept or deny a particular task, without it hurting their competitive rating, could be seen as an 'independent contractor'.
I think the gig economy bill from OP is targeting known companies that are taking advantage of this by wanting 'independent contractors' that they can schedule and dictate their day and use metrics against them when they aren't available at the time. They should pay people as employees if they need people available then have contractors fill in when needed. This will probably lead to some fulltime Uber/Lyft and the rest floaters that can be like the current gig setup.
If you really are a consultant and not just a skilled worker with enough pull to negotiate your own terms, B should not apply, you'll be doing something unique that is not normally part of their business. Also, A would not apply because the manager should not have the expertise to actually directly manage you and instead should be setting objectives out in a statement of work.
In 2019, it's probably not too out of scope for nearly any business to argue software is a core part of their daily activities. The digital transformation is basically done, if in the last 10 years you didn't turn your company into a quasi-tech company your competitors did and you died.
I'd make the guess that one could go into finer detail on what specific type of software development falls in-line with the daily activities, but software development in general might be too broad. An ecommerce company probably could argue php development is part of its daily development, but if it hired a contractor to modify their build system, that might be outside the scope of their core business.
I'm just not convinced that's a straightforward question to answer. I once worked for a hardware company that outsourced new hardware development to a contractor. We had a guy in house for maintenance, and the occasional hardware bug that propped up, but we only designed a new box once every 5 years or so... it just didn't make sense to have the team in house. We did manufacturing in house, and we had a huge software team... but though our money came from selling the hardware, we didn't do that in house.
As the company grew much larger, we did eventually expand our product line, and did build a team. But for several years, we just had 1 dedicated hardware guy.
Most of the software contractors I know easily meet (A) and (B). In these cases, they bid on the job based on its requirements, have multiple customers, define how they will implement the software, and sometimes even have employees.
When I personally worked as a contractor, the other contractors I worked with mostly bounced from short gig to short gig. That would probably meet (B). (A) was a bit more subjective.
If you're a long-time contractor for a single customer, and that single customer has a high level of direction over your day-to-day work, you are at risk of being defined a W2 employee by a legal entity like the IRS. (Or the state of CA.) In such a case, it's important that you clearly understand the legal difference between a contractor and an employee; and have some frank discussions with your "customer." It's important to point out that your "customer" bears the risk of you being redefined as an employee, so it's in their best interest to make sure that your contractor relationship follows the law as best as possible.
>When I personally worked as a contractor, the other contractors I worked with mostly bounced from short gig to short gig. That would probably meet (B). (A) was a bit more subjective.
I'm confused. You seem to be applying (B) to the contractor somehow, where my reading is that it applies to the company doing the contracting. It doesn't matter what the contractor is doing; if a company makes widgets, they can't hire a contractor to make widgets. It doesn't matter if the widgets are a different color or if the contractor only ever makes widgets for any given company for a few months at a time.
In those specific examples they meet (B), irrespective of the contractor's work habits. If you make a website for another web developer, the web developer who hired you might not meet (B), regardless of who else you've made websites for. I admit the analogy is a bit tortured, but the point is that (B) depends entirely on the contractee's business and what they're hiring the contractor to do.
>I really hope I'm reading that wrong. I might want to do work for a California company one day ;-)
In theory this should be really good for software contractors, because in this should rip out the middlemen (i.e. the firms who get the contract to do the work and turn around and subcontract the work to you for pennys on the dollar). Now in theory these middlemen are gone and you as the software developer should be able to obtain the contract directly directly from the company.
Huh? The sorts of company-to-company contracts where the individual "contractors" are W2 employees of a contracted company are totally unaffected by this legislation. If anything, this legislation is likely to introduce that relationship where it didn't exist before (e.g. Uber might contract with local companies formed solely to employ Uber drivers in that locality, so that Uber doesn't have to deal with all of the complexity of treating all of its drivers as employees.)
>The sorts of company-to-company contracts where the individual "contractors" are W2 employees of a contracted company are totally unaffected by this legislation.
You must have missed the part of my comment that specifies:
"the firms who get the contract to do the work and *turn around and subcontract the work to you for pennys on the dollar"
>(e.g. Uber might contract with local companies formed solely to employ Uber drivers in that locality, so that Uber doesn't have to deal with all of the complexity of treating all of its drivers as employees.)
Then what is to stop this new employment firm Uber has to contract with to obtain drivers from deciding after they have the infrastructure of drivers in place from cutting Uber out and launching their own ride-share app?
At the end of the day Uber isn't claiming drivers as contractors because of complexity, they are doing it to lower their costs.
I would imagine most software "contractors" that work for a major company are not 1099 - that carries a bunch of risks. Most "Contractors" are W2 employees of a labor for hire company. That still seems perfectly legal. "Hiring entity" would be Big Staffing Company, your customer would be Big Internet Company.
To paraphrase, they're both software companies who happen to do rentals and cars. There's also nothing in that law which talks about core business. It's to do with work in the normal line of business, in other words - work which is regularly performed by the company, rather than specialist work for which a contractor is required.
Well, it's a different law, but IR35 often hinges on whether you're part of the chain of command in the business, and whether you could substitute another qualified person without the agreement of the client.
HMRC provide this tool to determine employment status:
If what you do as a software consultant is outside of the usual activities of the company you work for I suspect you should be fine.
Uber however is a taxi company and the brunt of their primary activities are done (atm) by contractors. Driving people around is their core business - even if they will probably give the defense that they're only a middle man with an app that links independent drivers up with people looking for a ride.
I think they would argue they are an app company that connects drivers to people that need driving. Or food to people that need food. Etc. What about power sellers on ebay? Since they generate all their income from selling stuff on ebay should they be classified as employees of ebay?
Could uber work around this by having everyone form their own LLC to be an uber driver, and making that process painless for people? (or making it painful and not caring about the long term ramifications)
The bill makes an exception for engineers, among other professions:
> An individual who holds an active license from the State of California and is practicing one of the following recognized professions: lawyer, architect, engineer, private investigator, or accountant.
I doubt such a certification would have any correlation with ability. Maybe the platonic ideal of training and testing that you're thinking of, but not a certification written by the US government. Even competent parts of the government like NIST take forever to update their standards. It would be worse for a licensing bureau with practically no in-house software expertise.
You can get a computer engineering PE, which would probably be appropriate for the vast majority of embedded software developers. There was a software PE for a few years, but my understanding is that it was dropped for lack of interest.
The burden of proof would be on Uber and Lyft to show: (B) The person performs work that is outside the usual course of the hiring entity’s business.
This would be a hard sell because Uber and Lyft are in the business of providing transportation to people. They may argue that they're only providing the platform that enables drivers to provide rides, but considering the amount of evidence that says otherwise, I'd like to see their lawyer making that argument with a straight face.
I’d have to side with Uber and I don’t think their lawyers will have a hard time arguing it. Uber doesn’t own, lease or maintain the vehicles. If the argument is that Uber is a transportation company than how can a transportation company operate if they don’t have any vehicles?
They don't own, lease or maintain the vehicles because they're trying to claim that the drivers aren't employees.
It's like saying that the drivers aren't employees because Uber doesn't provide health benefits.
Companies routinely get in trouble for forcing their employees to buy their own equipment. But it still happens all the time because of the power imbalance even when they're employees.
This is one of the many thing which makes all this such an existential threat to Lyft/Uber. Even just when it comes to minimum wage there will be a huge fight because so many drivers make less than that when the equipment is taken into account
The employees have to buy and maintain the vehicles themselves, doesn't really absolve Uber from being a transportation company, after all, they make transportation happen on their platform as their main business effort.
There is a crucial difference; ebay Sellers can pick their customers. They can perform the same sale outside ebay. Customers can pick who to buy an item from. Ebay doesn't take a cut of the sale either, they take a charge for displaying the item on their store page, which the vendor also has to advertise and design on their own.
Have you even used eBay? It is against the TOS to solicit or conduct a sale on eBay offline, to bypass eBay, and eBay absolutely takes a 10%+ cut off sales called the Final Value Fee. eBay also enforces how sellers use their platform including using incentives, rules, and feedback scores to show or not show listings or even kick them off. Similarly, Uber riders can reject a driver as can drivers reject a rider for any reason so they choose. Try again.
Atleast where i live, ebay offers the option to complete the sale of a product offline, and you're free to contact the seller and make a different deal on the product whichever way you like. Well, and sellers on ebay can still run their own store and advertise it on the product page (for which they are still fully responsible).
If Uber riders were able to pick the driver they wanted and drivers were able to design their own advertisement page the riders see as well as being able to negotiate with the rider directly without loosing the Uber's platform protection, I would agree.
The relationship between customer-seller is just much different than rider-ridee.
eBay is marketplace where sellers and buyers transact on their own terms - sellers set their own prices and buyers choose from multiple options to purchase things. Uber is not a marketplace - drivers do not set their own prices and riders cannot choose from multiple options when selecting a driver.
If Uber wants to be treated as a marketplace and sidestep this new law, it needs to make significant changes - if drivers are truly independent contractors they should be able to set their own prices at a minimum.
Then this won't cover them as people seem to think it does, because the actual driving is not uber's business. They run a market-place in which others operate; the actual driving is indeed outside of the hiring entity's usual business. Regardless, there seems to be an obvious loop-hole for uber lawyers to chase.
I guess they just fired 450 people so it'll be hard to find the programmers to implement something that even superficially gives them the argument that it's a two-sided market. e.g. let drivers set their prices (but make it really hard to change their settings) and give passengers "the best deal" (but make it relatively difficult to search for other deals).
> They run a market-place in which others operate;
A marketplace generally allows those who operate in it to set their own pricing. The fact that Uber exclusively determines both cost and pay for the drivers would run counter to your 'marketplace' argument.
Also (A) would probably be a big issue, since Uber, Lyft etc. actually do interfere fairly directly with exactly how a driver provides service, even giving them a constantly-updating rating from detailed feedback collected from riders, and manipulating rides sent to drivers to influence what time of day / parts of town they end up working in to satisfy macro level shifts in demand that the larger organization observes.
It takes serious mental gymnastics to say a driver is not simply an employee of the company, in terms of operational workflow. Drivers aren’t going off and figuring out everything (or even hardly anything) about giving rides at their own discretion, or even just with minor intervention from a central dispatch. The whole thing is constantly controlled in lock step by the central dispatch, and Uber, Lyft, etc., employ data scientists and other experts specifically to make it more centrally coordinated based on data.
Frankly the only thing the driver controls is the financial risk of the car itself and clocking in / clocking out overall (though this is also manipulated with incentives).
You seem to imagine what you want to see. Drivers choose whether to work, when to work, where to work, whether to accept jobs, whether to complete a job or cancel it, whether to take the route suggested or not, whether to take jobs from other gig companies at the same time, whether to run personal errands in between, whether to take breaks, whether to heed feedback given by their own customers, whether to be in areas where demand will be high and jobs are likely, whether to be influenced by incentives or other payments dictated by market conditions, etc. What is the interference?
Au contraire, it is the various governments over the years that have re-regulated drivers (cannot drive in certain areas at certain times, must display decal, must carry license, must pay ransom fees, cannot stop in places, etc.) in ways that have taken away their control over work. We're headed back to capped and regulated taxis, unfortunately. New York City already has a black market trading TNC plates, just like medallions, and prices are back to taxi levels. Hope you like that.
Drivers do choose whether to work, just like employees do. They also choose when to be on the clock, which is the single item from your comment that can even loosely be used to argue they could be contractors. Drivers definitely don’t choose where to work, that’s dictated by the apps’ central scheduling algorithms, and only might be related to the driver’s current location, and not in any way chosen by the driver.
Choosing the route, for example, is a service the ride hailing companies rely on the driver to perform. Like an employee.
Choosing to run an errand, give me a break? You can’t be serious? Employees do that stuff all the time. That type of thing is not related to the distinction between contractor or employee.
My sister who works as a waitress in a restaurant routinely checks in with her boss to leave for brief periods related to child care, usually around pickup/dropoff from the bus at the end of the school day. This type of arrangement is very common, even in chain stores or big retailers.
One thing that I find disappointing in this legislation is that I wish it did essentially the reverse: instead of forcing the drivers to be employees, I wish it loosened the control Uber/Lyft had to bring it down to the level of what should be expected for independent contractors.
The biggest issue for me is pricing - the fact that drivers have 0 input to rates always made the IC designation fiction. But if the apps worked eventually like a reverse auction, where drivers got to set their own rates and you could then choose based on distance and cost, that would be much more of a true marketplace model with independent sellers.
> But if the apps worked eventually like a reverse auction, where drivers got to set their own rates and you could then choose based on distance and cost, that would be much more of a true marketplace model with independent sellers.
It's interesting to think what kind of efficiencies could be unlocked with a more versatile and robust driver-client interaction. Could clients order a ride at X time to Y location and have drivers bid down to fulfill the ride? Could the bid-down process be performed automatically based on the driver's personal settings on pricing and location?
Ultimately these efficiencies would make the driver's life better. The UI for the rider may be similar and the price may be similar (or higher!) as well.
Uber and Lyft had their chance to show leadership and empower their drivers if they truly believed their drivers were contractors, rather than leaving them in some gray zone of partially contractor and partially employee.
To me, this is a lot like someone a hundred years ago asking, "what other job on the planet allows children to work around heavy machinery for half an adult wage?".
No one here is saying that people shouldn't be able to drive for a rideshare company. We're saying that people who choose to do that should at least be paid a minimum wage for their time and given basic worker protections. If you oppose this kind of thing, you should probably also oppose minimum wage laws in general (which is a valid opinion).
Even if it means that fewer people get the opportunity to to do it at all? I know people who drive for a little extra money while they work other jobs. This kind of flexibility is what might be at risk, excluding many people who need that extra income from ever getting the opportunity.
People wouldn't take $5 per jobs if someone else was offering them $6 or $7... so better to have 15 people learning skills that hopefully let them move up in their profession & career to higher earning occupations.
There's a lot of assumptions here, biggest among them being
>>People wouldn't take $5 per jobs if someone else was offering them $6 or $7
Sure they would. Because a job isn't only wages, there's always some other factors involved in employment decisions. Someone might have med-school and limited free time. There's a ton of reasons why "job with lower pay and factor X" seems more appealing to someone than "job with higher pay only".
Look at game developers. They work horrible hours and often get paid less than similarly skilled devs in other fields. Why? Because demand for these jobs are extremely high relative to supply which provides management with greater bargaining positioning to lower wages.
Some of these people aren't trying to move to a career with higher earning, and see this as their end goal or "a tangential job I'm doing today". This allows them to drive down market rates on the job for people who are in a different circumstance and have higher financial needs.
We can get into a whole discussion about labor vs management and labor rights and best practices and all that. TL;dr- That's an opinion, and it's a lot more nuanced than you're making it out to be.
>>No, the trade off is being employed vs being unemployed.
For some people, yes. But we're looking at the laborers as a whole, not the individuals (and my specific example was more from the perspective of the managers at a company with a limited budget for employees).
Some people will go from "contractor job" to no job. Other people will go from "contractor job" to "employee job".
Uber still needs drivers. They're not going to not have drivers because of this. Some people currently working for Uber will keep doing that. Some people currently working for Uber will not keep doing that. In the future, some people will apply to work for Uber and be both rejected and accepted as employees.
> A company can hire 10 people at 10 dollars an hour or 20 people at 5 dollars an hour.
No, it will probably exclude people who just want to work 2 hours some evenings whenever they have time to make some extra money, who'd make the full 10 dollars an hour like other drivers do in the time that they do work.
There are more considerations than just "number of jobs" vs "quality of jobs" in evaluating what is better.
Consumers should also be considered. If casual drivers are excluded, the smaller pool of drivers will cause prices to rise. Some consumers who previously used ride sharing will go back to driving their own cars.
There's also the removal of a smooth transition driving as a career. If you can do it casually for a few hours you can discover if you enjoy it and want to quit your job and do it full time. If the only option is to be a full time employee, you have to go through the hiring process and take a risk of quitting your current job just to see if it's for you.
>>There are more considerations than just "number of jobs" vs "quality of jobs" in evaluating what is better.
And this is why I'm specifically and repeatedly not getting into the discussion of "which is better". Because that's a whole other discussion.
I'm just pointing out that when it comes to job creation, there's 2 axis. Both have pros, both have cons. You say X is better, I say Y is better, objectively there's data on either side, subjectively there's opinions on both sides, frankly I'm not interested in all that. Just pointing out that there's a rational opponent to your points. Not trying to be him.
No one in hacker news is a senior or retirée knowing how uber changed their austere lives, for the better.
Or riders for that matter. To my 80yr old mother, using uber has been a godsend. Its the only app she uses in her mobile. I dont even have uber on my phone. Somehow she figured out how to instal it and run it.
She does not drive due to her age and she cant wait outside due to the cold at bus stops.
Now thanks to this, either pricing will skyrocket, or availability will fall.
No one in HN is a senior, so they are oblivious to it all.
And this is 1 example. I'm sure there are others of families not having to do transportation juggling to move kids around, all of which is helped by ubers.
But to the wage justice warriors of HN, it matters little that less people are earning, and less customers benefit. Or that elderly people that qualify for Medicaid like my mother , can free themselves from the chain of lack of transport... What matters to the wage warrior is that they can show "liveable wages" for the limited few.
Everyone here's talking about Uber, I would guess most of the unintended consequences will be less visible. Smaller companies, freelancers, independent contractors, consultants, that whole ecosystem might undergo a chilling effect.
That seems exceedingly unlikely to occur, regardless of ad spend, in a state as progressive politically as California (similar to AirBnB’s tone deaf failed ad campaign in San Francisco).
This assumes gig companies haven’t exhausted their runway by then. Humorously, Uber and Lyft thought they might extinguish taxis if they waited them out long enough, and then the California government did the same to them.
California voted against gay marriage AND legalization of marijuana. So it's not nearly as progressive as you think. It took a court case to bring gay marriage to California and a second attempt for pot.
California was once the stronghold of conservativism, recall GOP God-head
Reagan had his political epicenter of Orange County. Now, California is majority minority and much more liberal. Could the same happen to Texas, Georgia, Arizona?
Where? I don't see any mention of profitability in CA in your link or in their actual report . You might be referring to the "Results by Offering and Segment" where they report growth in the US and $1.8B in revenue, but they go pretty far to hide where their losses are actually coming from in relation to rideshare. It's not at all clear to me that they are profitable in any rideshare market.
Being profoundly unqualified to evaluate legislation, the electorate is highly susceptible to well-crafted advertising on ballot measures and can easily end up voting for something that they don't philosophically agree with.
This is why direct democracy is generally considered a failed concept and why California's state administration is generally considered a failure, propped up only by the nearly incomprehensible amount of wealth generated in the state.
When I lived in San Francisco, there were several ballot propositions roughly along these lines: various corporations or special interests advocating for some measure that was designed to sound reasonable, but whose explicit purpose was to benefit whoever wrote it and was paying to promote it.
At least while I was there, these never passed.
I remember that the San Francisco Bay Guardian (then an alt-weekly newspaper) used to absolutely howl about these propositions. My memory is that the SFBG hated them even more than, say, the anti-gay marriage proposition which passed in 2008. They were quite unequivocal in labeling them as crony capitalism.
Unfortunately, the SFBG has ceased publication; although they still have a website, they appear to basically be dead.
This seems like terrible legislation. Yes, part time gig workers are exposed to harms that employees don’t face (i.e. lack of health insurance). But the ability to work flexibly and between lots of companies has huge upside for them and for firms. Why not tax companies who use these workers and put the tax revenue toward a special health insurance / social safety net specifically for gig workers? Mitigates many of the downsides and preserves flexibility.
Sure—that seems like it can in certain instances be a great system. In general I think a fair/free labor market means individuals should have as many options as possible, including a government backstop, to leverage when negotiating with firms who want to buy their time.
> only effect is that drivers are going to be scheduled in advance
That’s a claim the ride-sharing companies are making but the law doesn’t require that. They could do that, but they could also let drivers take a shift at a moment’s notice. In that scenario, though, there may not be a shift available when a driver wants one. The ride sharing company will have to pay at least minimum wage so they probably won’t offer a shift when demand is low. Perhaps that won’t be a huge difference in effect in terms of a driver getting work since the limiting factor is demand, regardless.
There are significant effects besides scheduling, though. Drivers will have to get basic benefits like minimum wage, unemployment benefits, etc. there are a lot of labor laws that make a distinction, so there will be a lot of changes from that perspective.
In terms of vehicles, I would think drivers would be able to continue using their own vehicles, but would need to be paid for that somehow. The typical way to do that is a per mile amount which covers everything, fuel, wear, depreciation, etc.
It seems to me that an evolution of the current Uber/Lyft model would allow for the gig-economy to continue. Today Uber/Lyft being the exclusive determinants of both cost of rides and pay for drivers, which leads to 'prividing rides' being their core business.
If NewCo were to build an app/platform that allowed drivers to bid on rides in real time (perhaps with driver determined presets for price floors, distance, etc), while skimming a percentage off for NewCo, then drivers would clearly be NewCo's customers and not employees.
Under this model, NewCo could also sell insurance to their customers (the drivers), lease them vehicles, etc. all without 'directing' them, or running any risk of them being classed as employees.
Perhaps this will be an unintended consequence to this legislation, but the ultimate outcome of this would likely be worse for many drivers, as open & competitive bidding for rides would likely drive down prices. Look at eBay and Amazon - lowest seller sells most.
This would be terrible for a large number of Uber riders. Want to go across the Bay Bridge? $100. Airport? $100. Want to get picked up after a night of drinking? $100. Want to get picked up in a poor neighborhood? Not happening.
All the problems associated with taxis: poor service, scams, racism, extortive pricing, will return.
I don't see how this follows. A marketplace Uber would basically have drivers setting price per mile or price per distance rates within their acceptable geography and probably a rider score variable. Riders would enter a destination and either be presented with driver options (including ratings) or be paired with the lowest bidding driver. Payments, ratings, dispatch, etc. would all still be handled by Uber, as would disputes.
You'd end up pretty close to today's Uber experience, just with more expensive rides (not subsidized, so likely pretty close to current taxi rates in most places) and probably an extra step in the hailing process for riders.
This is an Atlas Shrugged moment, if I’ve ever seen one. I know Uber and Lyft would not do it because they are public companies and other reasons. Yet, it is my opinion, that they should. They should fire everyone in CA.
Because this is preposterous.
These companies started with the premise that people could sign-up to monetize free time by driving others using their vehicles. That was the deal, the contract, if you will.
Nobody forced drivers or passengers to participate in any way.
The system was the very embodiment of freedom: You do as you want, when you want, if you want to. And you can also stop and not do it if it does not deliver value. This applied both to driver and passenger.
This move represents the use of force on the part of government to unjustly interfere with the free market. It’s the continuation of a slippery slope in CA that will eventually cause this State’s politics to become indistinguishable from that of a third world country.
This is also wrong because, as far as I know, it is the first time government uses force (because that’s what laws are) to materially change the business model of public companies.
Uber and Lyft should fire everyone in CA immediately. That’s the only power they have. If they don’t move to force a repeal these politicians are going to mess with them until the end of time. If you have ever had the “pleasure” of dealing with the State Board of Equalization you know precisely what I mean. It’s hard to believe, but, yes, they are worse than the DMV.
This might also mean that, by extension, it will be dicey to hire anyone in CA for gigs. Be it a graphic designer or coder, if the potential exists for trouble people will simply hire out of state out of the country.
As Ross Perot famously said, paraphrasing...that huge sucking sound you hear are jobs leaving CA, if not the country.
For Uber and Lyft it might mean accelerating their transition to robot cars in order to get rid of people as soon as possible.
Quite to the contrary my friend. I have been running businesses my entire life.
You must have missed the part where I said they won’t do it.
In business there’s often a huge gap between what you should do for a higher cause and the reality of staying in business. A simple example of this are car companies. I guarantee you all of them want to go electric. I also guarantee you they know they would go out of business if they rushed into it right now.
In the Uber/Lyft case the greater good is to take a stance that favors free markets. However, as you correctly point out, this would come with potentially severe consequences.
My guess is they might take it to the courts. Long term, they’ll move to self-driving cars. In the end the outcome for drivers will be worse. Which is what often happens when government sticks it’s paws into a market.
Can anybody here with proper experience break down the "ABC" test for me? It seems to me like the "C" part (that the work is "part of a company’s regular business") applies to literally any company who would hire a freelancer to work on their product or service.
There are exceptions for certain "professional services" providers if certain factors are satisfied. Curiously enough, software developer isn't one of the exceptions.
(c) (1) Subdivision (a) and the holding in Dynamex do not apply to a contract for “professional services” as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:
(A) The individual maintains a business location, which may include the individual’s residence, that is separate from the hiring entity. Nothing in this subdivision prohibits an individual from choosing to perform services at the location of the hiring entity.
(B) If work is performed more than six months after the effective date of this section, the individual has a business license, in addition to any required professional licenses or permits for the individual to practice in their profession.
(C) The individual has the ability to set or negotiate their own rates for the services performed.
(D) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individual’s own hours.
(E) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.
(F) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.
"Professional services" include:
(ii) Administrator of human resources
(iii) Travel agent services
(iv) Graphic design
(v) Grant writer
(vi) Fine artist
(vii) [IRS enrolled agent]
(viii) Payment processing agent
(ix) [Certain still photographer or photojournalist ... ]
(x) [Certain freelance writer, editor, or newspaper cartoonist ... ]
I can think of many different ways to interpret your first sentence, so I'm not clear what you're saying, but this does make me wonder if it's going to lead to any sort of licensing or certification for general industry programmers.
If workers in this field want to call themselves "software engineers" and gain the benefits of a professional title, like lawyers and architects, they're going to have to start following the other practices of professional fields. Just because a college dropout makes a popular webpage that sells a lot of advertising, that does not necessarily make him an "engineer".
For software engineers? None at all right now. Theoretically, we could get to a point where working on certain safety-critical systems (think self-driving cars, regular vehicle firmware, medical equipment, etc) required that a software PE sign off on all of the work, in the same way that a civil PE has to sign off on a bridge design before it's built.
The NSPE used to have a software engineering PE, but my understanding is that they dropped it for lack of interest. Until we see some legislation somewhere that mandates the kind of sign-offs mentioned above, I don't think we're going to see PE's in the software world.
In CA you can be a professional engineer which gives you the power to sign off on a bridge design or other similarly high-stakes projects. There's designations for all kinds of engineers (Civil, Mech, Electrical, etc).
You get a nice little salary bump or something usually, but you also get the risk associated with the bridge falling down. You sign off on the design and can be liable for negligence and malpractice.
You have to take a little test when you graduate college, then work under another professional engineer for 5 years, then take another test.
CA basically has no professional software engineering license yet.
If it works remotely similar to how fake self-employment works in germany then as a freelancer it's sufficient to show that you work for more than 1 company. If you exclusively work for 1 company, AND ONLY THAT COMPANY, as a freelancer in germany, you and the company you work for are at risk.
> applies to literally any company who would hire a freelancer to work on their product or service.
IANAL but I imagine that's exactly the point. There are always incidentals, like let's say you're a restaurant and you need to hire a plumber to fix your toilet or if you're a real estate agent and you need to hire a programmer to do your website.
>The problem becomes if you need to hire a freelance programmer to do some work for your software development company.
In that case, C is irrelevant because you've already failed B AFAICT. This law makes it so that it's simply not possible for a software company to contract out software jobs to individuals. It has to either contract the software to another company, or do the job in house with W2 employees.
C, if my reading is correct, means that (ignoring licensing issues) you can't contract a carpenter to fix your plumbing.
"Ride-hailing drivers hailed the bill’s passage." - I wonder how happy they will be when their job simply goes away because of that bill.
It's terribly misguided and anti-freedom.
I think it is a problem if companies like Uber are not honest with their employees, like neglecting to mention that their cars may break down and require maintenance, which should be factored into the income. But that is about honest information sharing, not forced employment.
Nevertheless, people should be free to do contract work and negotiate contracts on their own terms.
> "It doesn't matter how you call it - they will be unable to earn extra money by driving, that is the issue. If they relied on that money to make ends meet, they may not be happy anymore."
Your post makes zero sense, so I'll keep it short for you. Uber was the middleman, and without it - both individual drivers as-well as taxi companies have significantly more leverage over the consumers, and can now start charging higher prices.
My post makes zero sense? Are you sure you have thought things through?
So how does a driver get clients without Uber? If they can get clients without Uber, why did they use Uber?
How do clients know they can trust a driver? Taxi, OK - a taxi driver has to shell out serious money to get a license. Sometimes they must show proof of training. That makes them somewhat trustworthy, especially since their license can be revoked after a transgression.
For Uber, I suppose they tried to replace that with a rating system.
Without Uber, how do you propose making it work? I suspect simply becoming taxi drivers is not a viable option for many Uber drivers - because of the time and money commitment.
I am also enthusiastic about robots and doubtful about "the market surviving this".
But what happens to people when the robots have all of the jobs?
People think it's not going to affect them because their job is special. It's just a matter of a few years difference, everyone's job will be affected. Even computer programming.
Why am I so sure about this? Because there is a very large research effort going on aimed at AGI and they _are_ making progress. And the potential rewards are enormous. And the hardware capability is available now.
An understanding of rocketry didn't grant us the immediate route to land on the moon without also overcoming substantial obstacles. Given that we don't really understand cognition I would suspect that we don't have enough info to even estimate when we might achieve AGI.
Gig economy workers are neither contractors nor employees. They're something in-between. They are neither a square peg nor a round peg. They're a triangle. Forcing a triangular peg through either a round hole or a square hole is wrong.
I have to agree. The rideshare companies have given a lot of self-serving commentary, but they made one very good point: if the legislature believes on principle that everyone deserves the benefits and protections of being an employee, how come they wrote so many carveouts? It really seems like an implicit admission that the ABC test isn't quite right.
The Uber layoffs announced yesterday now seem to be strategically timed. If we assume the standard 3 month severance offered by big companies, the layoffs would free up cash at the end of 2019 - right when they’d need it for the increase in CA drivers benefits.
“Today, our state’s political leadership missed an important opportunity to support the overwhelming majority of rideshare drivers who want a thoughtful solution that balances flexibility with an earnings standard and benefits,”
Full statement: Today, our state’s political leadership missed an important opportunity to support the overwhelming majority of rideshare drivers who want a thoughtful solution that balances flexibility with an earnings standard and benefits. The fact that there were more than 50 industries carved out of AB5 is very telling. We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need.
So basically they want to carve out an exception for their industry as well, wait 10 years until competing taxi services are dead, and then pass some token legislation based on the outcome of AB5 in other industries. Standard corporate-speak.
I read this as Uber/Lyft will no longer operate out of CA. And many other companies that would be required to take on this burden will leave CA as well. I'm don't see how this will benefit the citizens of CA.
CA is one of their few profit centers. It's also 10% of the population of the USA. No business would choose to exclude CA, and CA knows this. That is why they can get away with these heavy handed regulations.
For most legal purposes, a SMLLC isn't considered different than an independent contractor. For example, unless you file a Form 2553 to be taxed as an S Corporation or a Form 8832 to be taxed as a C Corporation, you just file a Schedule C on your 1040, the same as if you didn't have an LLC.
I have spent 6 months building a gig econ app that now is around 5 million valuation. I can assure you it is not easy. If the government doesn't want 1099 workers because technology has made them viable at scale then we need to throw gig econ apps some help with W2 workers. Even changing I9 documentation would be a massive improvement.
> Even changing I9 documentation would be a massive improvement.
Is there something difficult about completing Form I-9? In my experience, it's one of the easiest steps of the hiring process to complete. Even if the employee is remote, you could have them send you a picture of their driver's license + passport which isn't too hard to do. What would you want changed about it?
These "gig" companies are all unprofitable. Their current business models are consumer-friendly as they try to capture market share, so people mostly love them. But they are not sustainable, the prices will eventually have to go up or become a worse deal in some other way. They are just hoping to use all that cash to stumble into some kind of monopoly or lock-in that eventually removes customer choice. They are not good for society overall, we might get a lot of cheap convenient transportation in the short term but eventually we'll all be worse off as they kill off competition. It's basically price dumping, and the sooner they are stopped the better.
Killing Uber and Lyft outright means bringing back the taxi industry, which isn't better for anyone except the cab companies. The biggest benefit of ride sharing for me isn't that it's cheap: it's that I don't have to awkwardly assert my legal right to use a credit card every single time I ride. I'm fine with paying more to ensure drivers are earning a living wage.
I'm not saying that they are not convenient, I'm saying they're unsustainable. Eventually they either will be more expensive or less convenient. The question is how much they can reconfigure society to their advantage in the meantime. For example, their price dumping is causing some governments to cut mass transit funding which will have long term consequences.
The funny thing is that the incumbents have largely enjoyed the monopoly and “lock-in” you described because their position was legislated. Services like Lyft and Uber were just so much better they couldn’t be stopped. Now this is just an attempt to legislate back the status quo.
One unintended outcome of this is probably going to be age discrimination. If companies are now required to provide health care they is an incentive to hire younger workers with cheaper healthcare expenses than older people who cost more.
In broad strokes, I support this because it's helping the driver who used to get great money but then has been getting the squeeze lately.
While it seems like "big corporations complaining", I admit this does threaten certain companies, especially the ones that are not profitable. Charging more per ride or gig doesn't pan out well as ridership and usage drop in step. So far all our Uber rides have been subsidized by Softbank and other investors. Similar story for lots of other gig based apps.
I'm not sure what the real answer is here, but overly simplifying the problem, better pay/benefits for the individual person is better.
It will be an interesting case study for sure. I think we can expect fewer drivers, mandatory time slots, and capped 40 hour weeks. Prices should go up to cover all of it, and both Uber/Lyft are cheeky enough to separate that line item as a “CA Tax Recovery Fee” or some such.
Probably will be better off for those making it their living, worse for those looking for extra income.
It’s going to be harder on all the other businesses getting hit suddenly with this, newspapers threw a fit and got a 1 year reprieve but the rest didn’t have a bully pulpit.
30 hours is the threshold for “full time” worker if you’re determining eligibility for health insurance. No way Uber will offer health insurance to drivers, so guessing hours would be capped at 30 max per week.
I would think the exact opposite...in this scenario drivers who do this part time anyway are fine but anyone driving more than 30 hours a week will be hosed.
not only will they cap it as you have said, but generally you aren't allowed to be employed by multiple employers. almost every driver drives for both companies. the drivers are going to get shafted here in total earnings. they will work fewer hours and make more per hour, but won't be able to drive crazy hours on both apps any more.
> but generally you aren't allowed to be employed by multiple employers
This is a standard condition of many employment contracts that the employee not also work for a competitor. Uber and Lyft previously had no such condition because drivers driving for both companies helped their case that drivers should be considered independent contractors. But now that drivers are employees by fiat, Uber will obviously ban driving for Lyft (or anyone else) and Lyft will obviously ban driving for Uber (or anyone else).
You can bet your bottom dollar that as employees drivers will be afforded no freedom to double dip. The only reason they are able to at the moment is because companies held back on initiatives that they feared would classify drivers into employees. Now they will have no such fear and gig work will be strictly controlled. Prices will go up simply due to the loss of efficiency from multiplexing gain that gig work provided the economy. California never fails to take every opportunity to reduce market efficiency.
If they have to be paid minimum wage I think uber will be playing a much more direct role in setting their work hours, not just whenever the app is turned on. They probably can't prevent them from taking a second job but they can prevent them from doing their second job when they're on the clock of the first. This actually solves a common complaint lately of drivers cancelling one ride while they pick up someone on another service.
> Another interesting consequence is potential to introduce stricter employment contracts that might say you can’t drive for a competitor...
This aspect is good for uber, there are many ride sharing apps now and drivers will flick between them and uber has zero competitive advantage. As private contractors they're free to recommend others to clients and this will go away. Bootstrapping competitors will be much harder.
Perhaps this will encourage tech companies to recognize access to health services as a basic human right.
I look forward to day when corporations support universal health care from purely selfish grounds: if government takes care of employee's health, companies won't have to deal with it, or worry whether driver crosses the threshold of working over 30 hours a week.
You have a right to health (as in nobody can stop you from being healthy). Healthcare is a service that others provide and can't really be a human right.
A better healthcare system requires the government to do something rather than an individual corporation. In fact it's the tight coupling of healthcare to employment that makes it such a nightmare already, and companies are not against a more universal system because it would greatly reduce costs and overhead.
I haven’t closely followed this but it definitely seems like something that could have serious second order effects that (surprise, surprise) politicians who optimize for optics never think about.
For example I think the bar will immediately be higher for drivers who want to remain drivers, meaning less tolerance for drivers that have below median ratings. Maybe that’s a good thing for riders but it could make driving more stressful than it already is.
This is why it's good to have states be the test beds for policy experiments.
It's not all bad for everyone. If this turns out to be a giant net negative, the rest of the world can learn from California's experience. Worst case it will be a boon for other states who will be able to offer better taxi availability for all the business people they are trying to attract away from California, putting pressure on CA to update it's laws (although let’s be honest this is pretty rare even in the face of changing marketplaces).
This could also accelerate the adoption of AI and the subsequent loss of the driver's jobs in favour of automation as the human capital costs increases and/or driver availability issues could help tilt the cost efficiency scales.
Plus a lot of people are predicting truck drivers are going first and I wouldn’t be surprised if there will be an influx of people looking for urban Taxi jobs soon.
1. Although it's not always the case other states actually look at data and studies first before copying other state's policy.
I'm generally a fan of this bill I think - but I don't like bills with so many carve-outs and special exceptions - usually a sign of bad drafting or special interest influence. And can make things hard to admin. Now you have to parse whether someone is or is not part of a carevout (ie, did they exercise sufficient creativity to be in group A or not).
That's just litigation heaven. Make some rules - any rules really - that can be reasonably followed by non-attorney's. This bills has pages of if's, and's and but's.
They're calling that "Remaking the Gig Economy"? Making Uber and Lyft drivers into employees? What a sham.
For 10 years I ran my own consultancy. Every new engagement was a new "job" where I could negotiate the rules of engagement however I deemed fit. Usually lasting no more than 5 days each. Every new month for 10 years I'd think: "this is it, it's over; I have no work scheduled for next month, I'm going to have to give up and get a real job." But somehow the work always rolled in, and I did really well. By the end I was billing over $300/hr, and I worked when and where I saw fit. As far as "gig workers" go, I was about as successful as you can possibly be.
And yet my wife had to work a Real Job at a Real Company because I couldn't buy reasonable health insurance for any price. Any price at all. So I spun down my company and got a real job. The Gig Economy is an utter poopshow; not even at the very top is it sustainable.
Making Uber's bottom-of-the-barrel jobs slightly less abysmal doesn't do crap for the Gig Economy. Driving for Uber isn't a Gig. You're not negotiating your rate on each pickup. It's a carefully managed relationship with the same company each time, who pays for your service on a recurring and predictable fee-for-work basis. It's a job.
Fixing the Gig Economy means making it possible for people to make a living without the shelter of an employer. And making Uber and Lift into real employers doesn't fix it. It's not even related.
As an American living in Ontario, Canada for a time, I literally COULD NOT BELIEVE the gig economy there. It is what the US aspires to: a guy owns a snow plow business, employs 30 other gig workers 6mos a year. A woman does city/house hunting tours. Contractors are consistently self-employed. On and on. These folks, earning enough to live, and (to another commentor’s point) without fear of medical bills/issues. That really is it: that’s the difference. And it makes all the difference.
I often wonder about this cost to the US economy due to a lack of universal health care: how much productivity is lost due to people staying in jobs just for health care, how many businesses not started, etc.
Here in the US I'm personally forgoing health insurance to pursue my craft while developing software on the side for extra income. One medical emergency will end it all. I've often wondered myself if, in a country with universal healthcare, people would be more willing to take risks and start businesses, pursue their art, develop inventions, etc. Would love to see an analysis of the economic cost of not having universal healthcare in terms of startups not pursued, inventions not made, etc.
One medical emergency and your credit will be ruined. Wait a seven years without contracting the debt collector and the debt becomes uncollectible. After three years roughly three quarters of the effect on your credit will evaporate. That's what actually happens beyond the hyperbolic political grandstanding.
Remember kids, if you get a bill that you can't possibly pay. Don't pay it. Let it go to collections and pay it for pennies on the dollar (another trick, tell them the most you can pay is $10 a month or something else low. Pay off that debt in 2075) or just wait for it to become uncollectible.
This advice is extremely glib and more of a headache than you're is making it out to be. Sure, there's techniques for deal with this shit. It doesn't change the fact that that it's still a giant pile of shit to deal with, and it would just be much better if we as a collective society didn't allow one medical emergency to cause problems for you of this magnitude.
Also, if you're trying to be your own business and your credit is ruined, what do you think happens to that business? My guess? OP was right, and he has to end it all.
Generally nothing, the hospitals don't actually expect you to pay the bill they just want the tax write off they get when they send it to collections. Jeff Bezos might have to pay but if you are just some guy with a business that doesn't even generate enough money to pay for your own health insurance you will most likely be fine.
Don't the debt collectors start with taking everything you own (money in bank, house, car etc.) first? And after that, they'll take most of your salary, leaving you only enough to physically survive. That's how it works in Poland, by law. The only available loophole is to work illegally till the end your life, so that the collectors can't get their hands on that money.
That depends on who you owe the debt too, do you owe the debt to the IRS or another government agency? Yes, they can take your stuff and garnish your wages.
Do you owe the debt to American Express? It depends on the state in the US, they can sue you, and try to garnish wages and take assets that way. But some states have laws against things like wage garnishing, it also costs money to sue some one. So if $costToSue > $expectedDebtRecovery they aren't going to sue. They usually just sell the debt to a collections agency who just calls you relentlessly trying to get you to pay, and since the collection agency bought the debt so cheap, they aren't going to throw more costs to collect the money by suing. If they can get any money out of you just by calling, it's a win for them.
It would totally depend on where you live. In Canada after 7 years the debt goes away on most debt. But you have to not pay it for 7 years. If you make one payment in that time it starts over. And they will try and beg you even to make a very small payment. Because it starts the clock again. Once you reach the 7 year mark the debt is wiped from your credit and can not be used against you.
Source: Canadian, walked away from my student loan debt after injury, provincial loan was wiped clean federal loan had to be paid off. Student Visa wiped clean. To be clear I could not work and the bills kept getting harder and harder to pay. I was dying with stress and anxiety about bills. So I stopped paying them and bought food instead. I was young and not prepared for emergencies but it was clear I was sinking. I would like to also add this is NOT a great solution if you can avoid it. Responsible spending is. With the debt, for 7 years I could not get a credit card or take out a loan. If my car died I had to buy a new one right now out of pocket for work. It is not good. So though I had about 20000$ in provincial loans wiped it took me over a decade to pay off the rest of my debt. Today I am 100% debt free and even have a few dollars. The difference in stress levels I live day to day are huge I can not understate how much responsible spending with in your means can do for a person.
Are you serious? You know that hospitals have taken people to court and gotten their wages garnished over not paying? You can't just let it "go to collections" because you don't feel like paying a $100k bill for having your appendix removed.
I doubt you are thinking of that “cost” properly … no one seems to accurately as far as I have been able to tell over several decades now. The whole debate over healthcare is dominated by one of two different mindsets; either based in utter ignorance and wishful thinking, or nefarious and malicious manipulation and conning.
The people lauding the wonderful beautified “universal healthcare” (which, btw, they lied to you about never wanting to implement during pre-Obama care con job that made the Health sector rich and the middle class poorer) do t ever actually account all the costs when discussing it, and I will just assume you are doing the same from a point of ignorance, and not intentional deception.
Here is a representative example of a wonderful splendrous worker with universal healthcare in Europe.
1), as surveys here too show, for the same job, you’ll be making about 50-75% the salary of an American equivalent (see following points).
2) Your tax burden on that immensely lower income will be approaching 30% effective income tax (FYI, e.g., the 42% tax rat starts applying at €55,000, just for a reference point … and no, that is not a typo)
3) on that lower income and higher taxes amount, you then get to pay huge retirement taxes too, on the order of effectively approaching 20%, with heart wrenching and soul sucking outcomes when you see the “pension” people are given after a life of paying into an utterly incompetent and failed retirement system. For reference, think of paying into a retirement system at going on 20% of your income and then getting about 1/4 of your salary to live off in “retirement”. It’s sad and sick and immoral. If people had been able to simply invest their own money in a global fund, they would probably be swimming in money in retirement, but instead they were pillaged and plundered in order to give them a pittance in “retirement”. It’s really a morally bankrupted and depraved system.
4) so now that we’ve reduced your already lower income by around 50% from taxes and a con job retirement system, let’s talk about the health care system cost that will run you about €300 per month in employee costs every month just for a single person, not counting the employer contribution of another ~€900; again, for a single individual. And on top of that, you are also going to have copays to see the doctor (albeit about 1/2 to 1/3 of the cost in the USA, so you get to save $5-15), but you also get to go to a doctor for a prescription and a pharmacy to buy things like basic over the counter medications like ibuprofen .… that comes in blister packs of 20 you get “for free”(see tax burden and health insurance costs above for reference of level of “freeness”). Again, no, those are not typos or errors, they are very much representative examples.
4) gasoline is taxed at 100%, in most European countries or more, with talk of increasing it. And no, again, that is not a typo. For reference, in the USA gasoline is taxed at around the 20-25% range. The reason I mention that, is because it’s not only a taxation on mobility, it again sucks the disposable income of the lower income people dry.
And none of that even goes into the fact that medical care is determined by the insurance that pulls typical insurance things where when it’s time to pay out all the sudden the medical care is deemed not necessary.
The saddest thing about the health care cost debate is that it seems to be driven by a con job to trick people into a trap that will enslave them to authoritarian control even more without any benefits from it, if not only more detrimental effects like Obamacare that only served to drive up costs and then peg them at new levels that made health insurance companies and the medical sector richer, while Medicare fraud and pull pushing has run amok.
I actually find it curious that especially this community would not realize that the ideal system is not a centralized monolith running on a con job and no backups, but a highly competitive decentralized system forced to be transparent and accountable. But I guess whatever is driving the centralization of power and control among the tech tyrant FAANGs, seems to have also latched onto people’s minds here maybe.
Please excuse any errors because English is not my first language
Australia has a comparable tax burden to the USA and also has universal public healthcare with the option to purchase additional private coverage. The public system guarantees that all conditions will be treated, but you may have to wait. The private system gives you considerable flexibility and, because patients who would normally cause adverse selection fall more heavily onto the public system, is much cheaper than equivalent insurance in the USA.
Since we're ticking off items, Australia has both a public pension scheme and compulsory private retirement savings (superannuation). Taxes on petrol are higher than the US but lower than Europe.
I think you've been sucked in by the talking points, mate.
Thanks for the reply, even if you are seemingly being snarky about it. Yes, Australia has a similar tax burden overall, even though it is still higher, especially since it is way more heavily weighted towards the middle class with $37,001 AUD already breaking into the 32.5% tax bracket (for reference; in the USA you move from 12% to 22% tax bracket at $39,000 USD/ $57,000 AUD ... which would add up to a massive difference in take home pay difference ... and that on lower AUS salaries)
You may claim "is much cheaper", but reality is that you just don't know and are not being told the full cost of what you are being forced to pay for.
I don't know what you think you are explaining to me, the USA also has a public and private retirement planning system, and again, AUS is not exactly as bad off as Europe; but reality is that you don't see the freight train that is barreling down on you. The thing that makes the USA, AUS, and EU very very difficult to compare for even the supposed experts, is that there are so many modulating variables. Not only are they variables, but they qualitatively modulate things. For an example, you think your system works great in AUS and you have lower taxes and a public health care system that works ... what you don't consider, intentionally ignore, or are propagandized not to even be able to take in; are things like the fact that you don't have huge populations that drain the life, energy, focus, and money out of the USA by the billions. For example an estimate of the cost of various existing welfare programs in the USA ... not ones where you even get something at overpriced and inefficient rates like universal healthcare ... costs the American tax payer approaching the amount of the whole GDP of all of Australia. Think about that, the money equivalent of work, energy, and focus of the whole Australian economy, what every single man, woman, and child does in the economy; goes towards welfare programs to support people that are drains on society. They are even largely not only not contributors to society, spending a whole life of being a net overwhelming negative contributor, but increasingly they are not even American citizens that are draining the country.
The point is, you can sit there and chide big mean America for not providing health care, while also not having any idea what you pay for that, nor the overwhelming cost it would be to take care of everyone in the USA, in addition to the fact that you take for granted that the US tax payer funds the protection that keeps China from a full on invasion and even allows you to engage in free trade at the American tax payer's expense. And all that while you spit in American's face. Reality is that none of this math makes any sense or adds up in any manner when all the full accounting is done. Do you want to pay for the health care pampering of someone that chose to get morbidly obese while you lives healthy and saved your money instead of buying food with it? Reality is that if the USA were to adopt some universal healthcare system, it would bankrupt the USA and trigger a global economic collapse as all the fools don't realize just how dependent they are on the USA, and then they would also find themselves without the massive military that keeps them safe from others more than willing to conquer them when given the chance. Choices have consequences, my friend, and I do not think you have the ability to recognize the precarious situation the world is in as types like you keep sawing at the branch you are sitting on.
Why is the US the only developed country where private vs public healthcare has been a consistent point of debate? Why are the brainwashed masses of the other developed nations (of which I am a citizen) not outraged by this 'con job' that we have fallen victim to?
Of course this exact same thought process can be applied to other american 'quirks'. e.g. mass shootings and gun control.
It is misleading to lump people billing at $100s/hr with drivers, shoppers, dog walkers, etc. But what's the median billing rate for the "gig economy"? Given my experience with consulting, it seems odd to use the "gig" label.
But whatever, it did suck to pay ~$1K per month for health insurance.
My thought too. I also did not get the sense that someone who “ended up billing at $300/hr and was still struggling with month to month work is someone who really realized the full cost of self-employment, because that is what he was really doing, employing himself … not “just like you guys” gigs.
If you’re billing at $300/hr and working when and how you want, it actually seems immensely disingenuous to try to associate with the sympathies for people stuck in the gig economy con job the tech tyrants have been imposing on society as a kind of excuse why you couldn’t manage to fill your consultancy pipeline.
I also guarantee he could have gotten health insurance, he just did not feel comfortable paying the roughly $1,000 to $2,000 per month it would have cost because his business pipeline was not full of work consistently.
People don’t realize just how much health care costs, regardless of whether it’s American employees who don’t realize the employers contribution is about 4-5 time what they pay monthly, or the worshiped and beatified “universal healthcare” that is “free” in Europe where massive taxes are paid to augment the also massive individual monthly cost taken out of people’s paychecks.
> People don’t realize just how much health care costs
The American system costs way more for comparable care, precisely because of our insane system. Every single dollar or hour spent on medical billing issues and dealing with insurance and arguing over who pays is total deadweight loss.
> I also guarantee he could have gotten health insurance, he just did not feel comfortable paying the roughly $1,000 to $2,000 per month it would have cost because his business pipeline was not full of work consistently.
I don't think it's abnormal not to want to pay those rates.
$1,000+ a month is absolutely insane for health insurance and at $2,000 a month you're now beyond the cost of most rent for something that you'll hopefully never need to use for decades, but more importantly you have no options. It's either pay massive fees (+ copays, etc.) due to no real competition or go without insurance. For the last few years no insurance also came with paying thousands upon thousands of dollars a year in fines too.
I am an uninsured freelance worker too for reference. But that plan definitely wouldn't work out if I had a family to insure, and then the costs are astronomical to the point where you would be in debt and have no savings unless you were absolutely crushing it.
Aye. I said by the end I was charging that much. I started out at $65/hr billing maybe 20hrs per wk. 10 years is a long time.
Before Obamacare and without the ability to bargain as a large scale employer, my insurance options were limited to "defined benefit" plans where the maximum they'd pay out in an emergency was limited to about what you paid in in about a year or so. Effectively no emergency coverage, just incidental stuff.
Another fun feature: preexisting conditions. For which insurers will pay $0. It's pretty horrible, and one state where I lived passed a law so the pregnancy could not be considered a preexisting condition for insurance purposes. Which meant that if you were pregnant you were denied coverage at all. By everyone. Without exception.
I don't think so; my point was that regardless of your billing rate and even in the extreme, the absence of an employer is always a crippling factor. Telling people they can make their way to the top by working harder is a fantasy. There's no freedom at the top.
Perhaps your state had a $1k/mo option for insurance, mine did not. Even at $5k/mo (if I had it) plans would not cover an emergency. None of the plans available to the self-employed would.
Sorry that I wasn't clear about that. And I should have noted that my experience dates from the 00s.
I do agree without reservation that linking healthcare to employment is crippling for independent contractors. As I understand it, the setup allows employers to deduct substantial costs from taxable income. So basically governments are subsidizing the obscene profitability of health insurers, the pharmaceutical industry, and some provider sectors.
Back in the late 90s, I was able to get ~affordable health insurance through AFL-CIO SBWA Local 125. But that service went down in flames, so I ended up paying ~$1K per person. As I recall, I could deduct 50% of medical expenses, but it was still the largest expense after mortgage and taxes.
And if it had been $5K per month, I couldn't have managed it.
> I couldn't buy reasonable health insurance for any price. Any price at all.
Can't you buy personal health insurance with decent coverage for on the order of $500/month? And that's for plans with low deductables. $6000/yr for personal health insurance for an individual seems perfectly reasonable.
I'm concerned because I'm planning on eventually pursuing my own startup. If I can't get health insurance, this becomes extremely risky and untenable. If your post is correct, how does self-employment even work?
My understanding is that individuals can buy affordable personal health insurance. Am I wrong?
> For those of us lucky enough to be in good health
It's a common refrain that only people with health problems need health care, but that's just not true. Risk has a price. That's why health care and life insurance for healthy people is not free. Good health just makes it easier to pretend that risk isn't there.
Tying health care to employment is a historical accident long overdue for change.
Also adverse selection. Healthy people are tempted to only pay for catastrophic or no coverage, so a lot of individual policy buyers are sicker than the average employee in a group policy (because large companies cover everyone).
And good drivers can save lots of cash and worries by simply not getting car insurance.
Health insurance’s main alleged draw is that shit happens when you least expect it, and you can avoid the massive costs when the unexpected happens (accidents, cancer, botulism, whatever). Unfortunately, someone in America found out you can charge monthly fees for health insurance while still making the person pay massive amounts themselves. Just promise they’ll pay a slightly less massive amount.
Your post makes it sound like the gig economy is actually unworkable right now, so the right solution, at least in the short term while we don't have an answer to problem of how to make it workable, would be to make those 'jobs' actual jobs with real benefits.
California loves making bandaid state fixes to federal problems, I think this is the wrong way to go.
Problem: You need a full-time job at a company to get benefits such as healthcare.
Californian solution: Reclassify as many as possible as full-time workers.
Problem: USA immigration laws are horribly inflexible.
Californian solution: Make it illegal to go after illegal immigrants.
I don't think that these passive-aggressive fixes are good for USA's democracy. Either we need to split up the country into more manageable chunks and make moving between states as hard as moving between EU countries or we need to accept the intent of federal laws. Otherwise we will just end up in an ever escalating war of dumb bills to counteract the other sides dumb bills.
> moving between states as hard as moving between EU countries
It depends on the country of origin, but for many, moving between EU countries is about as moving between states is now. There's some bureaucracy to deal with, but it's not like moving between states in the US is hassle free. Most US states require immigrants from other states get a local drivers license and local car registration, which requires multiple proofs of residence. Don't forget the nightmare of having to deal with two states' taxes (where applicable).
Can you move to another EU country without a job and receive benefits? If I recall correctly you need a job to be allowed to stay in another country even in EU. I think free movement even without employment is the main reason states can't enact too many benefits in US.
> Can you move to another EU country without a job and receive benefits?
Europeans generally refer to "being on benefits" as unemployment allowance, and no, you cannot move from a poor European country to a rich one to get a higher standard of living unless you can work, or can be supported by someone who works. Certain kinds of social programs in the US have this property as well.
Americans often refer to medical care/insurance as a "benefit", which might be confusing here, but yes you absolutely can (as a European) move to another country without a job and still get medical care in the area you have just moved to.
I disagree with your assertions as healthcare is not the sole motivation, since massive Medicaid expansion has already taken care of that problem. The bigger issue really is that companies are not paying into unemployment, medicare, SSN and skirting around minimum wage by claiming everyone is a contractor.
As for immigration, the main issue that is that many California families are a mix of American citizens and illegal aliens that have lived here for decades
The government gets the exact same amount of payrolls taxes regardless of classification. The only difference is that employees split the cost 50/50 with their employer while contractors pay the whole amount out of their own pocket.
Contractors don't pay into unemployment, but they're also not eligible to receive unemployment benefits.
Making laws is very similar to writing code - you can't just jump straight to the final, feature-complete, scalable solution (and, just like code, that probably isn't even a thing anyway). It's an iterative process. This is very much the v0.1.1 of the law around gig economy jobs.
We'll, I'd say v.1.99. There is ample law out there that could make gig workers full employees in certain circumstances. What the gig platforms did was not new, it was simply big enough, bold enough, and arguably legally reckless enough that law enforcement either lost the will or ability to enforce existing laws to force gig platforms to act like mature, adult, law-abiding enterprises. California isn't legislating in an absence of law, it's clarifying that no one really likes guttersnipe employment practices, never did, and the fact that they have become prevalent in large, well-funded enterprises is a public policy problem that needs to be solved.
> California loves making bandaid state fixes to federal problems, I think this is the wrong way to go.
You just hit the nail on the head. The real problem is that California is grossly under-represented in government, thanks to the founding fathers and gerrymandering. We have to slap together these hacks because otherwise we would wait centuries to get any real change out of the Fed.
As for "USA's democracy", screw the USA and its' democracy. As a Californian, I care about California's democracy, not the GOP's federalist plutocracy.
Republikans look at California as a rich man to mug who won't fight back. These laws are how we fight back. The USA needs us, we don't need them.
Forgive my wording, gerrymandering is the primary tool used by the GOP to control the USA. It's their strongest tool to cheat their way into elections, we've seen that clearly in North Carolina, Ohio, Pennsylvania, and Georgia.
If we actually followed the spirit and intentions of the founding fathers, then California would already be grossly under-represented. Add to that the way the GOP rigs the elections via gerry-mandering and . voter suppression, and Californians are treated like slaves, not citizens.
They have all forgotten the battle cry of the republic, "NO TAXATION WITHOUT REPRESENTATION".
Because Gerrymandering is how the GOP maintains control of the country. Republican, Democrat, Libertarian, or other, we should see that as the biggest attack on our democracy.
When the GOP owns the senate, as they do, they attack California's sovereignty at every opportunity. We are net-givers to the federal budget, whereas moscow mitch is a welfare queen whose state is the biggest net-begger.
Our wealth, our culture, our environment are all under attack by a nation of right-wing christian terrorists who resent that us Californian libtards have created the wealthiest, most successful and productive society the world has ever known .. while all they do is shoot guns.
As well as laws like this that recognize the reality of the employment relationship, making these jobs decent requires:
- unionization and industry bargaining to get decent wages and conditions
- quality social welfare systems (including universal healthcare) so that people aren't afraid of poverty if they get fired/quit/change jobs
I've always wondered why there isn't more of an appetite for Medicare for All and universal healthcare on this site. How many people would like to do a startup but don't because they'd have no health insurance?
The USA did such a startup. It’s called healthcare.gov, AKA Obamacare. It allows you to get health insurance, without consideration for pre-existing conditions and provides you with significant tax credits to offset the premiums, based on your income.
Most of the policies are high-deductible, which means you’ll end up paying for the “scratches and sniffles” yourself but have a per-year maximum-out-of-pocket that can be planned for.
It’s not perfect but it at least provides an option whereas before if you had any non-trivial pre-existing condition you couldn’t find any insurance at all.
Maybe it is wrong to ask insurances to insure people with pre-existing conditions. Perhaps such cases should be considered charity or social help, and convered by the state? Just wondering if reframing the problem as such could help. I'm not from the US, so not sure what exactly the issues are.
It seems healthcare.gov is not good enough yet? I don't think classifying government institutions as startups is really correct, though. They have infinite money supply and no requirement to be profitable.
As if Uber or Lyft even care. They almost certainly foresaw this (who couldn't), which is why they have taken the typical response to government over-regulation -- automation. The end goal is a self driving car, and the resulting concentration of wealth. Once again, we can blame so-called 'progressive' policies for furthering the enriching of the rich and the continued subjugation of the poor and middle classes who are denied yet another income stream.
>The end goal is a self driving car, and the resulting concentration of wealth.
That was the end goal no matter what regulations were put in place. You are really trying to argue the only reason for automation is because they might have to, I don't know, provide healthcare to employees and give them some time off?
> which is why they have taken the typical response to government over-regulation -- automation
I just cannot believe you are trying to relate the two. Automation is simply the most efficient model for everyone involved. It has virtually nothing to do with regulations. Could the fear of regulations push them a bit faster toward automation? Maybe- but your trying to argue that progressive policies are pushing the jobs out of workers is basically Trump level psycho.
> Maybe- but your trying to argue that progressive policies are pushing the jobs out of workers is basically Trump level psycho.
The policies increase the incentive to automate. Automation is unavoidable, but by raising the cost of human power, these policies speed up time to adoption (the time at which the cost to hire humans -- now higher -- meets the cost of automation -- still the same as before). Moreover, the policy requires governmental enforcement and thus money that could be better spent helping the workers themselves.
For example, a better use of money would be to take the money spent on enforcing this law and instead investing it into programs to train gig economy workers for the new careers that will be opened up via automation.
I'm not sure what 'Trump level psycho' means, but given the current administration's record on employment (very good), I'll take it as a compliment.
They are trying to put the fast growing market of freelancers under control. I don't see it as a bad move. The market is becoming bigger every year. Eventually everybody will be freelancers. You like this videos of Yegor, he is constantly speaking about this: https://www.youtube.com/watch?v=0gnDmr_H2Ks
I want to be empathetic to both sides of the argument. Don’t 1099 workers have preferential tax treatments? Why would you give that up and become W2? On the other hand, health insurance is a safety net. I feel like we need a new system where one can be an entrepreneur and still be able to afford healthcare.
> Don’t 1099 workers have preferential tax treatments?
It's complicated but the short answer is no. A 1099 contractor can write off a bunch of expenses. But importantly an employer can also write off a bunch of expenses. (like your health insurance) On top of that an employer pays half the FICA withholding where a self employed person pays the whole thing. And also you don't get unemployment as a contractor. And you don't get paid vacation either.
> I feel like we need a new system where one can be an entrepreneur and still be able to afford healthcare.
A saw someone claim about 10 years ago that there are more small businesses and self employed people in Europe than the US and government funded health insurance is likely the reason.
So that just means Uber won’t allow people to sign up to drive directly. Uber will contract with companies, who allow people to signup. Those companies will “employ” people at the same terrible rates Google contractors get with no medical or benefit of any kind.
It's the same at Microsoft and Amazon. In order to work as a contractor, we need to be represented by a managed service, or a preferred vendor. Some vendors offer benefits, others will give you more money for less of their "service". There is some benefit to having it run like this (E&O insurance, quarterly taxes, group health care).
If you are a contractor, make sure you shop around for managed services. There are transparent vendors out there and some willing to show you their cut (although not many).
For Uber, drivers are not employed and treated as contractors.
For Google, chefs are employed by another company (food services), which has contracts with Google. And also treated as contractors.
I think these two types of contractors are different. Let's say if contractors are already employed and offered insurance and minimum wage, is it ok for them to work as contractors for other companies like Uber or Google?
“Some of the companies are not done fighting the bill. Uber, Lyft and DoorDash have pledged to spend $90 million to support a ballot initiative that would essentially exempt them from the legislation.”
And how may people who drive for these companies are not citizens and cannot vote?
One thing that worries me with this is the effects on the otherwise jobless, especially those on government assistance that are effectively otherwise unemployable. Lyft/Uber is a godsend for this demographic.
Some people want to do these types of gigs for extra income, but now if your an employee then probably companies will want you to be on a schedule and a minimum number of hours.
I forget where but seen a story where someone was told by one of their clients that they were letting them go because of this new law. Happened to be their biggest client too, but they were doing remote work and lived in California...
So now I guess some companies might want to let go of people from California and contract with residents of Texas or any other state instead.
Kinda reminds me of when states started changing their sales tax nexus laws, I was doing affiliate marketing but didn't have any success as still starting out.
But my state changed their law to try to collect from remote sellers and changed it to count affiliate sales too. So I got a notice kicking me out of the program on a short notice... If I had built up landing pages and traffic, I'd be left holding the bag... or adjust them to aim at another company but would have been a huge setback.
You could go from making a comfy living online to making zero. I know gurus tell people to build up multiple streams of income, but in this case, all companies could do the same. Look at affiliate sales from the state, look at compliance costs... If making enough sales to justify then comply or just ban residents of the said state from the program and move on. So by trying to tax companies, they could have ended up hurting their residents instead. So by trying to get sales tax, they ended up with neither, losing out on both sales tax along with the income tax on the commissions since companies just decided to pull out completely from letting those residents be affiliates, so they were longer eligible to earned any commissions.
"We regret to inform you that Nexus state tax regulations in Ohio were just passed July 1st of this year. Unfortunately, we are unable to work with any Ohio based affiliates, due to the Nexus Tax Laws currently under enforcement in the state."
This was back in 2015. I think more than a few states changed their laws on this, I believe they are referred to as a cookie nexus. and some programs have a minimum threshold to cash out too. So I guess they can kick you out and keep your money... Lucky I didn't have any in my account as was recently dabbling in this area.
So kinda sad that you could lose out on income just because of the state you are domiciled in. Wouldn't surprise me if other companies outside of California is going to end contracts with people just because they live in California. Kinda feels like discrimination in a way.
However maybe setting up a corporation instead of being a sole proprietorship that could be a workaround. Don't deal with California individuals, deal with California companies instead even if it's just only a company size of 1. So ride sharing apps could require drivers to set up an LLC and pay that instead of paying them directly maybe. But then California has high taxes and franchise fees already, so maybe it's just not worth it. There's already a mass exodus from California, so wouldn't surprise me if this makes even more people question if they should leave the state also. Move somewhere cheaper and get to keep your clients too if you are a freelancer.
Workers have no choice but to get W2 status to get health care insurance, retirement compensation, etc.
And they fix it by simply moving them as FT employees, because to the State of California that's the easiest thing they can do. Single-payer free healthcare for all - which is the right thing to do is too much for the State.
This is just how bad the State of California is being run.
California already has among the most generous state-level medical benefits in the country. Here, it's hard to be in a situation in which one simultaneously can't afford insurance and doesn't qualify for Medicare or Medi-Cal (California Medicaid).
Singling out California for not taking the unprecedented step of rolling out single-payer alone--which is a difficult proposition to say the least in a country that guarantees freedom of movement--is bizarre.
Honestly, I can't see why California is unable to roll out a single-payer plan. It's certainly larger than many of the countries that have one. In a single-party state, it should be a relatively straightforward thing to do.
My guess is that no one is serious about healthcare and that it's simply a get-out-the-vote scheme like abortion and gun rights.
"a difficult proposition to say the least in a country that guarantees freedom of movement"
Levels of benefits already differ considerably, no? If freedom of movement is a deal killer, than it seems to me that strict, highly enforced immigration laws would also be a precondition.
Med-cal is basically poverty level coverage (138% FPL - $29k for a family of 3)
The main issues with can't afford (or more honestly can afford but it is very painful) healthcare are at the higher numbers as subsidies fade out. $83k for a family of 3 has no subsidies, but even high deductible insurance is going to go for $10k/year (meaning expected costs are realistically hitting above $13k). That's over 20% of take-home income.
First of all, many more EU/EEA countries have comprehensive healthcare if not single-payer healthcare, so there is less of a divergence in policy in most places.
Secondly, EU freedom of movement isn't as strong. See Directive 2004/38/EC, such as the points reproduced below which AFAIK some countries already take advantage of:
"Union citizens should have the right of residence in the host Member State for a period not exceeding three months without being subject to any conditions or any formalities other than the requirement to hold a valid identity card or passport, without prejudice to a more favourable treatment applicable to job-seekers as recognised by the case-law of the Court of Justice."
"Persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions."
I agree with you, but I have to correct myself as well. I mean compare US to other countries where national free health care is available. These are basic human rights which simply ignord by the government in the US.
Workers need benefits which is understandable because they can't even go to doctors when they are sick.
Well, I would assume they offer healthcare to people who are working or are disabled and not able to work. It's not like you get healthcare in Europe for not putting anything back in the system. Freedom of movement is not a problem in this case.
> Singling out California for not taking the unprecedented step of rolling out single-payer alone--which is a difficult proposition to say the least in a country that guarantees freedom of movement--is bizarre.
Given their political support of illegal immigration, I don't think it's bizarre at all.
They're among the richest, left-wing states in the country. Relative to other states, there's absolutely no shortage of political support or money. If they can't handle implementing their own utopian health care system, I don't know why any of us should trust that it can be done well at a federal level.
It will cost California $400bn to run a Universal Healthcare system, which is double the entire general fund budget. You have to essentially declare private insurance void, and corral that employee and employer contribution to the healthcare system. It is a huge risk. And best be done at the Federal level
A car service app that the public uses has a large surface for regulatory enforcement. When NYC wants to catch illegal car service activity they have police or the taxi commission post people at the airport.
Incorporation somewhere without rules only works if the space your enterprise operates in is outside the reach of the gov't as well.
Would Airbnb even be under scrutiny with regards to this bill? Airbnb is a marketplace, where the hosts can set their own rates, with minimal intervention from the platform. This is not the case with Uber/Lyft though.
I want to be an independent contractor without getting tied to a company. At least, this was the best part for me in the gig economy where I can drive Uber and rent on Airbnb and make money doing multiple gigs. I don't want to be an employee of either Uber or AirBnb.
This is more about the state collecting more taxes than actually helping workers, especially with ride-sharing drivers used as bait.
People can already be full-time drivers if they wanted. Those jobs have existed for a century. In reality, the vast majority of Uber/lyft drivers already have a FT job and drive for secondary income with the time and location of their choosing. Retirees, students, fixed income, disabled, and many others who are just supporting their families.
Shifting them to employee status will cut many supporting incomes while adding a few more driving jobs with strict conditions, basic benefits and bare minimum hours. Many more will suffer than gain (if any). Another case of California having some of the worst politics in the nation.
For those downvoting, I would like to know what exactly you disagree with here.
There is no state payroll tax, so California has literally nothing to gain in terms of taxation whether drivers are employees or contractors.
Even at the Federal level, the taxes net out the same. For employees, your employer pays half of your social security contribution, but as a contractor, you have to pay the employers half on your taxes.
The only thing I can come up with is unemployment insurance, which contractors don’t pay, but they also can’t collect unemployment.
Like other states with income taxes, California deducts state income taxes from employee wages just as the Federal government does. Yes, as a contractor, you are supposed to do that yourself, but enforcement is an issue and I assume at least some Uber drivers (like some taxi drivers, bartenders, and others) have been underreporting, so this should bring in more tax revenue to both the state and federal governments. Not sure the drivers are going to benefit from that, but it's a real thing.
There are also immigration issues -- Uber will need to collect documentation so that workers can set their W2, and even though CA bans requiring businesses to use e-verify, Uber does business in many states and this would fall under interstate commerce concerns, and the federal government requires it for some border states and also for any business that sells to the federal government, so there is gonna be a whole host of immigration issues around e-verify, right in time for the election season. (E-verify is one of those things that is wildly popular, supported by both a majority of Democrats and Independents as well as the GOP, but hated by CA legislators and some in the business community, so expect this to set the stage for an e-verify showdown and battles over executive orders in 2020).
Then there are all the issues about whether Uber is going to limit hours, require working hours, or otherwise regulate their workforce a lot more than they currently are. Here by Uber, I mean all the taxi driving apps/companies, of course. Will Uber just "fire" drivers that don't generate enough fares to justify a set minimum wage? Will it no longer be allowed for drivers to come down from Sacramento and work in SF? Will Uber limit lunch breaks to a certain length, and force the app to be turned on during pre-arranged hours? A lot depends on how Uber responds.
>>But these types of controls are often not the right tool for the problem.
1- Do you believe Uber/Lyft/etc exploit any part their labor for corporate gain?
2-What do you believe is the correct control to prevent labor exploitation by Uber/Lyft/ect, assuming your answer to 1 is true?