Uber Drivers Are Employees, Not Contractors, Says California Labor Commission 346
siddesu writes: The California Labor Commission has ruled Uber drivers are employees and not independent contractors. The ruling has serious implications for Uber's business model, since it will now be required to offer its drivers benefits that meet the requirements of the Californian labor laws. "Uber had argued that its drivers are independent contractors, not employees, and that it is "nothing more than a neutral technology platform." But the commission said Uber controls the tools driver use, monitors their approval ratings and terminates their access to the system if their ratings fall below 4.6 stars." Uber has previously suspended drivers for registering their cars as commercial vehicles.
California (Score:2, Funny)
That's the place where they use water on almonds instead of people, right?
Re:California (Score:4, Informative)
Re:California (Score:5, Funny)
Almonds should be grown somewhere else where water is available.
Which is why Uber drivers are considered employees instead of contractors.
Re:California (Score:4, Insightful)
Well, except you're not allowed to eat these particular fish - California claims them as an endangered species.
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It's rather difficult to fallow an orchard...
Note that those orchards took years to grow, and were grown in the first place because annual crops, like tomatoes and melons, weren't nearly as profitable. If you had worked as a responsible citizen to prop up legislation meant to curtail orchard growth in favor more flexible annuals, perhaps almonds wouldn't present a noticeable draw on water today. Or maybe if you had agreed to pay higher prices for annuals, farmers wouldn't have been incentivized to grow a
Re:California (Score:5, Insightful)
Dear Californians,
Please stay in California. Do not listen to parent.
Signed,
Concerned in Oregon
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I mean, can you really blame farmers for planting more profitable crops when nobody raised any objections?
If farmers were paying for metered water, they wouldn't be growing almonds as it would be too expensive during a drought. Most water in the Central Valley are pumped from wells. The water table in some areas are collapsing because too much water is being pumped out..
By the way, another way to end the California water crisis would be for people like you to leave.
I have no problems with people leaving and returning the Central Valley to the desert. If weather patterns are changing permanently (i.e., west gets less water, east gets too much water), farmers should farm where water is more abundant.
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According to the headlines, Mother Nature disagrees with you.
http://www.bloomberg.com/news/articles/2015-04-17/california-plagued-by-dry-wells-as-drought-makes-water-elusive [bloomberg.com]
http://www.motherjones.com/environment/2015/03/california-pumping-water-fell-earth-20000-years-ago [motherjones.com]
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Err, you may wish to get some education as well, because it ain't just almonds like you assert it is: http://www.npr.org/sections/th... [npr.org]
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But it's not relevant that 1 gallon of water goes into 1 almond.
1) The water used for almond trees comes from the land the almonds are grown on.
2) It takes 6 gallons of water for every walnut; no one is going after walnut growers for some reason.
3) It takes more than a gallon of water to make a gallon of beer. You have to water the grain to make the beer, of course. Why not target the huge amount of brewers in the state instead of going after almonds? Clearly almonds are better for you than beer.
When we
Re:California (Score:4, Informative)
My lawn is turning brown. A lot of grass is grown for the beef industry which is one of the biggest wastes of water in the state. It takes something like 6,000 gallons of water for each pound of beef. Almonds don't really grow anywhere else in the country and California produces a majority of the world's supply and 99% of the almonds grown in the US. Almonds are native to the Mediterranean climate of the Middle East. The funny thing is that wild almonds are highly toxic and contain an enzyme which creates cyanide. Each wild almond can contain 4-9mg of cyanide. Sweet almonds contain a small fraction of that since they lack the enzyme. Almonds are considered a cash crop due to the high prices they demand. With the drought, though, a lot of farmers are cutting back on their water usage, though last weekend when I drove along highway 120 I saw at least one orchard running their sprinklers in the middle of the day with pools of water around the trees.
99% of the walnuts grown in the US are grown in California. The Persian and English walnuts are the most common for eating and like almonds like a Mediterranean climate. The black walnut is much less popular and there are varieties native to both the eastern North America and California and some other places.
Before the major drought, growing these was not a major issue in California. Unlike other crops, though, it takes years until a tree can produce and they don't do well in other areas of the country.
Hops, barley, wheat, etc. needed for beer can be grown just about anywhere and don't necessarily have to be grown in the state for the brewers.
Wikipedia [wikipedia.org].
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Business model? (Score:5, Insightful)
Be a cab company and claim not to be.
Violate the law about cabs and pretend they don't apply to you.
Generally be a bunch of self-entitled assholes who think they magically get to decide what laws apply to them.
Act like whiny fucking spoiled children when the world doesn't see it your way.
Fuck Uber. The assholes who own it are just delusional dicks.
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Fuck Uber. The assholes who own it are just delusional dicks.
They are......but they're also the most convenient way to get a ride.
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Re:Business model? (Score:4, Interesting)
Please explain how implementing the medallion system was a bad law.
Because it artificially limits the number of taxis available. Furthermore those things can be super expensive.
Now, if you want to talk about licensing drivers or something like that, it's reasonable. But that's not what the medallion system does.
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Whoosh!
There was a reason why the part about referencing how it was before the medallion system was included in the post you replied to.
The medallion system was EXPLICITLY DESIGNED to reduce the number of taxis in New York City. That was the MAIN FEATURE of it. Licenses were introduced to regulate the drivers, but that was separate from the medallion effort.
Go back and do your homework.
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The medallion system was EXPLICITLY DESIGNED to reduce the number of taxis in New York City. That was the MAIN FEATURE of it.
Then the medallion system was a mistake entirely.
Re:Business model? (Score:5, Insightful)
Well, road capacity isn't an unlimited resource, and it'd be difficult for the city to set a price for road access in such a way that made sure taxi operators were paying for the congestion they were causing while at the same time protected the incumbent homeowner's rights to street access for free. If we're just going to say up front that if you want streets that are passable you'd better pay up the nose for it, that'd make Manhattan effectively unlivable except for the very, very rich, even worse than now.
You can't let "natural" forces limit how may taxis are on the road, it'd be constant deadlock because the road is a commons. If you only want so many taxis passing in and out of the city at any one time you either have to set up medallions, or a congestion charge, or a per mile charge or any number of complicated solutions that have to take into account incumbent stakeholder's proprietary interests.
And yeah the medallion system is a "mistake" in the sense that it's inefficient, it might not be a Pareto-optimal economic solution, and it definitely encourages rentierism, but it was a practical solution that was the most politically feasible at the time. If we're saying we value democratic institutions, a strong city government, the rule of law, and stable consensus among powerful interests, medallions are the perfect solution. On the one side you've got guys who want to run taxis, who think it's their right to run a taxi wherever they please whenever, charge whatever they want and run their cab in whatever way they please, and on the other you've got people who live in a city that don't want their roads clogged with taxis picking up fares, who want the taxis all to follow the same rules, charge predictable prices and be safe. Both of these people have to share a city, they resolve these disputes with politics.
I don't know about this general line of argument as it pertains to NY taxis, since NY taxis are pretty good and Uber doesn't have much on them. It makes a lot more sense in places like, say, Los Angeles or the midwest where taxi service is terrible, but then again taxis in many of these parts of the country don't implement hack medallions.
Re:Business model? (Score:5, Informative)
If you give people something for free they'll strip it to the bone. In a market for something like taxi fares there are also weird paradoxical effects: when there are fewer fares taxi drivers actually work longer because they have to spend to looking for street hails.
Historically NY in the 1930s had three times the number of taxis on the road as they do now, I can't even imagine. Price competition drove rates below the cost of the ride, the drivers were a public hazard and in the late depression, even after the medallion ordinance, a lot of cabbies just let their hack licenses expire due to lack of fares. The NY pre-medallion taxi business was a classic market failure. The medallion system was actually a significant mitigation from the original plan of just monopolizing the taxi system in NY as had been done, with a great deal of success, to the subway system. Fewer fares can actually increase the number of cabs on the street and their overall threat to traffic and public order.
I personally think, on a strictly laissez-faire basis, taxis probably aren't economically sustainable (nor are Ubers), but the city keeps them alive because New Yorkers place cultural value in not owning a car and living on Manhattan island, so as long as the citizens of that city value these things, the rules will persist, and they'll gladly live with the persisting levels of inefficiency, the costs and the corruption.
A somewhat deeper problem is regarding something like the market for taxis as a "natural" phenomenon when in fact it's completely man-made, technological, and determined by various fiats and cultural constructs. And even then we're left with the problem that just because something is natural this does not mean that it is good or desirable...
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If so, please exercise your free market right to start up a taxi service in unregulated Phuket and see how far you get.
Telling someone to go to Somalia or Phuket because it's a 'free market' is essentially the economic version of your sig.
Re:Business model? (Score:5, Insightful)
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Before limits, drivers couldn't earn a living. Not legally at any rate. And once some people started to cut corners and break laws, everyone had to or they would go out of business.
Some scarcity meant that the cab drivers could comfortable follow the law, comply with regulations and have a reasonable expectation that they would earn a living income. Net result: safer streets, safer passengers, safer drivers.
You might plausibly have an argument that cabs are too scarce, but I think that anyone who understand
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Because medallions create an artificial scarcity of taxis. And in any market, artificial scarcity creates cartels, which reduce competition and benefit no one but a tiny, well-connected minority of owners (and their paid-off politicians) at the expense of pretty much everyone else, including the consumers as well as the labor. NY and Chicago taxi companies are doing the same thing that DeBeers does mining diamonds, or that OPEC does with oil -- and like DeBeers et al, they've protected their cartel and kept it perfectly legal by buying off elected officials. I have no problem with common-sense taxi regulation related to safety and insurance -- but medallions are the biggest scam on the planet.
The central theme of your complaint is that medallions are expensive, not that they're unnecessary.
The thing is, in places with no regulations you have the problem of oversupply which either means you have hundreds of taxis sitting out of work as there is only so much demand or the oversupply problem is solved through other means. Usually this means that taxi operators set themselves up into gangs, fight over turf and if they become powerful enough, destroy public transport systems.
Taxi licensing syst
Re:Business model? (Score:4, Informative)
what evidence do you have that the politicians have been bought off?
I'm glad you asked, as that gives me a great reason to post a link to Simon Garber [wikipedia.org]. As Wikipedia says, "While in Russia in 2001, Garber became friends with Patrick Daley, the son of long-time Chicago mayor Richard M. Daley. City officials tightly regulate all aspects of medallions ownership, granting permission to purchase medallions on an individual basis. Within a year of meeting Patrick, Garber quickly acquired over 300 Chicago taxi medallions. Garber also hired Mayor Daley's former chief of staff Gery Chico as a City Hall lobbyist. In 2003, Garber used this political capital to start the Chicago Carriage Cab Company and was granted permission to operate the taxi business in Chicago. Within six years, the Chicago Carriage Cab Company had amassed over 800 medallions, making it the largest taxi company in the city."
This is but one example, from one city. A little Googling will easily reveal many more examples.
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When it gridlocks, unprofitable drivers will quit until it un-gridlocks, and the supply will correct itself. Works much better than government officials deciding what the proportion should, which is really what the taxi lobby that donates to the politicians want it to be.
I live in a city where Uber, Lyft, etc. have been approved to operate as many vehicles as they want as long as they buy commercial insurance, which they are now doing. The sky hasn't fallen. I see no discernible change in traffic. You c
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The first part of your question is reasonable, but the second sentence is not. Pre medallion-licensed taxi systems may have been fundamentally flawed, but that does not preclude the medallion system from also being fundamentally flawed.
Ruling Appears More Limited Than Headline Suggests (Score:5, Informative)
Here is an update to this ruling found in another article [gizmodo.com]:
Update: Uber pointed out that the ruling only applies to one driver. “Reuters’ original headline was not accurate. The California Labor Commission’s ruling is non-binding and applies to a single driver,” a spokesperson said. “Indeed it is contrary to a previous ruling by the same commission, which concluded in 2012 that the driver ‘performed services as an independent contractor, and not as a bona fide employee.’ Five other states have also come to the same conclusion. It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.”
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Uber pointed out that the ruling only applies to one driver.
Translation, "We're getting what we want as cheaply as possible, screw everyone else."
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FexEx drivers are not [forbes.com] independent contractors.
So let me get this straight.... (Score:5, Funny)
Does this mean by extension that the "bloggers" who contribute to the Huffington Post are employees?
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If that is your only income, then yes, you're an employee.
No, a sole source of income is not, in itself, enough to make you an employee. That is just one of many criteria considered.
Why is that difficult for people to understand?
Because it is no where near as simplistic as you claim. The difference between an employee and a contractor is complicated and subjective. Tax attorneys make a lot of money off this stuff.
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I'd post one, but... (Score:3)
I don't understand this analogy.
Car analogy anyone?
I'd post one, but... most small shop car mechanics are independent contractors. They own their own tools (like Uber drivers own their own cars), they carry their own insurance (like Uber drivers carry their own insurance), they set their own hours (like Uber drivers set their own hours), they can decline a specific job (like Uber drivers can decline a specific job), they can work for other shops (like Uber drivers can work for other car services or elsewhere), and they have a written contract (like Uber dr
Re:I'd post one, but... (Score:4, Interesting)
And contractors need to take special precautions as well. Uber basically needs to work out a fixed term contract, then kick the driver off Uber for some time - it must be clearly obvious they are contractors and not employees, and are completely free to pursue other jobs in the meantime.
It's on a per-driver basis, yes, so Uber needs to make sure drivers know they cannot work for Uber for more than X months without taking time off, or finding alternate work (e.g., for Lyft) because they need to show independence from Uber.
This can mean that an Uber driver will sign in to both Uber and Lyft and choose jobs from either - while they are logged into Uber, they cannot be exclusively on "uber-only time" (since Uber doesn't consider them to be working for Uber yet).
As for taxis - remember that taxis often have limitations. E.g., you must be able to offer accessible service - if you don't, then you must arrange for accessible service. So if you're a taxi and a handicapped person hails you, and you're not accessible-equipped, the legislation often says said driver must not only hail an appropriate cab, but ALSO STAY WITH THE FARE until picked up. No "oh I didn't know you were handicapped, see ya sucker" - the driver is forced to stay with the fare until an appropriate ride is available. Plus a whole pile of other anti-discrimination and other laws.
WTF???? (Score:5, Insightful)
What delusional, drunken moneys could possibly claim Uber is worth $40 freaking billion dollars? What's that, like 4 centuries worth of projected income?
Who the hell makes up these stupid valuations?
They have an app, and a staunch belief they're exempt form laws.
But $40 billions dollars? That's complete fantasy that is. Real corporations with real assets and real income might be worth that.
Holy .com level of overvalued companies.
Re:WTF???? (Score:5, Interesting)
The venture capitalists and others trying to prop up the current tech bubble. They haven't yet had enough time to cash out while leaving everyone else holding the bag of shit.
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The venture capitalists and others trying to prop up the current tech bubble.
Only Mark Cuban from "Shark Tank" is doing the "The sky is falling! The sky is falling!" Chicken Little dance, and he's basically a media company guy, and really has dick to do with tech, so his opinion isn't worth a hell of a lot when it comes to tech.
To make it clear: just because a small number of companies have very large valuations, and all the tech blogs are screaming about unicorns farting rainbows, doesn't mean we are in a tech bubble.
For example, why was WhatsApp worth $18B?
If you base it on revenu
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Maybe it's Zimbabwean dollars [cryptocoinsnews.com], in which case it means Uber isn't even worth one U.S.A. dollar. I'd be okay with that.
Re: WTF???? (Score:4, Interesting)
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It's not really that crazy when you consider their gross revenue of 10 billion, absurd profit margin (all they do I run an app, right?) and massive potential to expand into new markets.
Uber doesn't make $10 billion in revenue. You must have read a story from last year where it was projected that they may have $10 billion in revenue in 2015. No one actually knows what their revenue is but an investor stated just a few months ago that they were briefed it would be in the $2 billion range:
Part of that confidence stems from Uber’s impressive sales growth, which the company sees accelerating this year. Uber recently told some investors that it forecasts net revenue, or the amount it keeps after paying out drivers, of more than $2 billion this year, according to a person who was briefed on the matter
http://blogs.wsj.com/digits/20... [wsj.com]
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Net Revenue is what we usually term "Profit" or "Income". We usually reserve the term "Revenue" to mean Gross Revenue.
It's very contextual. Net Revenue and Gross Revenue are valid terms. In financial accounting, "Income" is your revenue, less your "Expenses"; in transactional accounting, it's "Credit" and "Debit". The IRS calls your net income "Adjusted Gross Income", which is what we call business "Profits".
Mess.
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What delusional, drunken moneys could possibly claim Uber is worth $40 freaking billion dollars?
The same people that made billions by investing in Amazon, Google, and Facebook. The Slashdot consensus was that all of those where ridiculously overvalued as well.
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See also everything from Cisco to Pets.Com. Just because a very few companies were not overvalued - or at least have not yet crashed - doesn't mean that the vast majority weren't.
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Next step: You sell your company to another company for a "reasonable" $1 billion and leave before the purchasing company realizes that your company wasn't worth anywhere near that amount.
Repeat the above steps as many times as possible.
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What delusional, drunken moneys could possibly claim Uber is worth $40 freaking billion dollars? What's that, like 4 centuries worth of projected income?
Uber's net revenue is $2billion (after paying drivers), and growing fast. So it's probably more like 10 years of projected income.
I know you have a staunch belief that we are in another tech bubble, but you should at least look at valuations before raging. (And hey, as a programmer, if it is a bubble enjoy the cash while it flows).
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All stocks are complete fantasy. You trade based on perceived value.
Oral argument, anyone? (Score:2)
Can someone point me to the relevant oral argument in this case? There's something, when one listens to an oral argument, that you'll never get from anything written. Thanks.
New requirement: Must drive for more than one. (Score:2)
In order to totally eliminate this as a concern, going forward Uber may require drivers to belong to more than one service - as a programming consultant I face the same issue with some clients were they demand to know I have other recent clients also so I cannot claim to be an employee, and there are often hard limits on length of work.
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clients were they demand to know I have other recent clients also so I cannot claim to be an employee.
A far better solution is for you to incorporate. Then they can sign a contract with your corporation, rather than directly with you. There are websites where you can form a simple S-corp for a few hundred bucks. This will also make it easier to deduct expeneses, and reduce your chance of an audit.
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What? (Score:2)
FTA:
"But the commission said Uber controls the tools driver use,"
You mean the Uber app? That's what Uber is, isn't it? If you hire contractors to staff a phone bank, the contractors don't get to bring in their own phones to use, you can make them use your own phone system.
monitors their approval ratings and terminates their access to the system if their ratings fall below 4.6 stars.
So - performance reviews are forbidden when you are a contractor?
Last I checked, if you work for Uber you can work whenever and wherever you want, which is, pretty much, a textbook contractor arrangement.
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If you hire contractors to staff a phone bank, the contractors don't get to bring in their own phones to use, you can make them use your own phone system.
And if you hire a 3rd party corporation to do that, you're in the clear. Of course those people are often W2 employees of that corporation.
If you bring in a bunch of individuals and tell them what to do, how to do it, and even when to do it (Uber, for example, doesn't compensate you the same way if you won't work during their required hours) then that starts to look a whole lot like you have employees and are trying to dodge the tax consequences thereof.
As a tech contractor myself, I won't sub out to anyon
Comment removed (Score:4, Interesting)
Re:This can't be good for Silicon Valley (Score:4, Insightful)
The average Uber driver probably makes less than minimum wage, - especially once their expenses are factored in. Uber pays a premium for working certain hours, accepting 90% of rides, taking at least one ride per hour in that time frame, etc. It's hard to qualify for the premium all the time.
So really what it amounts to is that Uber is dancing around labor laws so that they can offer a cheaper and more convenient service. There may or may not be evil intentions, but that's the end result.
I guess the question is when does an arrangement for services cross the line into exploitation? It's not always obvious. I may be perfectly happy to do something for a few bucks on the side or even for free just for the experience or the kicks. But what if someone else is trying to earn a living doing the same thing?
For example, let's say you'd think it be great to sail across the Atlantic on a 70 foot keel boat but you lack experience and a boat. You run across someone advertising the need for crew on a two month sailing tour, - no experience necessary. You have to help pay for food and supplies, plus you have to help sail and maintain the boat along the way. But otherwise there's no charge AND no pay. Sounds like quite an adventure right? Well, a week into it you discover that there's a whole lot of work to do and the "captain" isn't doing much of it. In fact, he's got paying guests that aren't doing anything at all. You want off but the best he'll do is drop you at the next island and you've got pay for your own way home.
Well, there are laws that govern this kind of thing because it is very easy to exploit people.
Another nail in the Coffin... (Score:2)
Uber is on it's way to the grave yard...
Services like Uber have a serious problem. They want to not be taxi services because of the regulations, but they want to do business as if they where a taxi service. So on one hand, they want to claim to be a means of arranging a private deal between two private citizens and claiming their commission in the process, but on the other hand they don't want to run a taxi service or have any of their "drivers" running a taxi service.
I don't think we've seen the last o
What about Airbnb? (Score:3)
Coming Soon..... (Score:3)
Uber replaces all their drivers with H1-B visa workers.
The Internet, dodging the law since the beginning! (Score:2)
Paypal: We're not a bank either. (Dodges many laws about banks everywhere).
Uber: Hey we're just doing what everyone else has in terms of dodging laws.
Re:Uber doesn't own the vehicles, correct? (Score:4, Insightful)
Maybe if they were not exclusive to Uber, they might be considered non-employees. Otherwise, they are just like a pizza delivery guy, working for a pizza shop.
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When I worked as a contractor, I worked exclusively for one organization. I had to use their systems to track my time--Deltek only, controlled by them--and their computer equipment. They retained the option to fire me if I violated the terms of my contract, failing to deliver as agreed.
I've seen contractors fire clients, too. A client hired a second contractor to work on the same work for comparison? That's your work. If he finishes, they may terminate your contract early. Contractor fires client,
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If a pizza delivery driver doesn't show up at their job as scheduled or decides they won't deliver a particular pizza, they can expect to lose their job.
If a Uber driver decides not to work at any point in time or decides not to take a particular fare I don't think they are at any risk of their relationship with Uber being terminated for those actions.
Quite a difference.
Re:Uber doesn't own the vehicles, correct? (Score:5, Informative)
This dispute is happening in the context of a bunch of shenanigans happening in California, Uber's only on facet of it.
A few months ago there was a big strike between truckers and the trucking companies [latimes.com] at the port in Long Beach. the companies insist that the truck drivers are independent contractors because they are paid by the load, not by the hour, and the truckers are "independent operators" because they own the trucks on paper. The problem is the truckers are only allowed to use trucks they lease from the trucking companies, the trucking companies add on various "fees" from the lease bill, they have to make deliveries when they're told (while still not having official hours or a schedule). Critically, the drivers cannot avail themselves of workers comp, overtime or any of the other things an employee would be entitled to. They're employees but the employers have used paper technicalities to reclassify the relationship, strictly for the purposes of evading labor law.
The kinds of disputes are inevitable in a piecework economy, and they were the norm prior to the progressive era in the US. 80 hour weeks with no overtime, paid by the unit, no workplace safety regulations, random fees and wage dockings, and if you complain, maybe we don't need your services anymore.
Re:Uber doesn't own the vehicles, correct? (Score:5, Insightful)
How are they wrong exactly? You disliking their decision does not make it wrong.
Re:Uber doesn't own the vehicles, correct? (Score:5, Insightful)
When you do a construction project, you contract several roles out usually.
When you do you often:
1) Dictate the materials they must use
2) In some way the tools they must use
3) You can get rid of them if they fail to meet your quality standard
How does construction work in California?
Also under the definition that they appear to have given, people who sell on Amazon and Ebay are employees.
1) You have to use their tool (ebay or amazon)
2) Payment goes to amazon and they pass on their cut
3) You have to follow their terms and rules
4) They monitor their approval rating
This appears to be exactly the way Uber operates.
Uber and Amazon both control the platform.
The drivers or sellers must follow their terms and rules.
They both monitor feedback and can in some ways offer economic punishment (suspension of service, etc)
Am I missing something here?
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Am I missing something here?
Yes, you are.
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Am I missing something here?
Yes, you are missing the part where both construction contractors and eBay sellers set the prices for their respective offerings, while Uber drivers do not.
Re:Uber doesn't own the vehicles, correct? (Score:5, Insightful)
Am I missing something here?
http://www.dir.ca.gov/dlse/faq_independentcontractor.htm
"There is no set definition of the term "independent contractor" and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor... DLSE starts with the presumption that the worker is an employee."
Basically they are saying that everyone is an employee unless proven otherwise, but there is no standard for proof. Awesome system ya got there.
Re:Uber doesn't own the vehicles, correct? (Score:5, Informative)
In many cases a subcontractor designation is just a way to avoid paying benefits, half of social security tax, and workmens' comp. The role of "consultant" is often in that category. It's a high-status name for a lackey with no benefits.
As a renovation contractor my subs are very clearly defined in Federal tax law: They must have their own business, with their own tools and vehicle. I'm not allowed to hire someone as a contractor simply because they agree to work without benefits. Uber drivers have their own vehicle, but not their own business. Nor are they in a position to negotiate a contract with Uber, which is what a sub would do.
Re:Uber doesn't own the vehicles, correct? (Score:5, Informative)
Yup.
You;re confusing yourself with details.
The difference between a contractor and an employee is that more of an employee's decisions are made by his boss. Uber controls the vehicles it's drivers use, including specific banning specific makes, insisting of specific models, not allowing older model years, and colors. They have to use a smartphone with a supported app.
OTOH, a contractor could show up at your house with hand tools he'd borrowed from his Amish buddy, a brand-new consumer-grade drill, or a 25-year-old commercial grade Dewalt. Since he's a contractor, and you're smart enough to have put time limits in the written contract, you don't give a shit which of the three options he chose, you just give a shit whether he can finish the damn job. n many cases you're out of the house, so he could work a 24-hour shift and then take two days off if he wanted. He controls how he works, therefore he's a contractor and an independent businessman.
Same with eBay or Amazon. All they require is internet access with a newish web browser. Other then that you can do whatever the fuck you want. Their sellers could work at 3 AM naked. They could work 9-5 in business suits. They could work 4 AM to 5:30 AM in the uniform of the Royal Hussars. They have 100% control of their actual work conditions, thus they are also independent businessmen and contractors.
OTOH, driving at any level for Uber requires a relatively recent (post-2000) car, bans a specific model (the Crown Victoria), and higher levels specify shit like the color of the car and what the seats are made of. Uber will yell at you if you get the more expensive commercial vehicle registration.
So Uber drivers have some pretty significant control over their jobs (for example: there's dress code), but a lot less control then actual contractors or the folks who sell on eBay.
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OTOH, a contractor could show up at your house with hand tools he'd borrowed from his Amish buddy, a brand-new consumer-grade drill, or a 25-year-old commercial grade Dewalt.
But it's common to dictate what materials they use. Want a modified bitumen roof? If it's torch-down, then that's going to require the contractor to have certain tools. You could also mandate it's peel-and-stick (say, if the building is occupied and you don't want the fire hazard), which is dictating materials/tools.
Same with eBay or Amazon. All they require is internet access with a newish web browser.
Which means a limited number of possible browsers, which all require newer equipment, not a 25 year old computer.
...rambling about hours and nakedness
A construction contractor is often mandated to work within certain hours, can
Re:Uber doesn't own the vehicles, correct? (Score:5, Informative)
You're really confused here. That';s not surprising. This is a confusing area of law, and unlike every other area of law I have ever studied there are literally no hard and fast rules. There are no tests. there are testish principles, which re frequently combined with common sense, but if you think that there's actually some way to prove 100% beyond a doubt whether anyone anywhere in this country is definitively a contractor or an employee you're wrong.
I strongly suspect, for example, that if you hired a contractor to put in a roof and you specified not only the kind of roof you wanted him to build, but the methods used to build it, he'd be able to sue you and get employee status. He'd certainly have a better shot at winning then a lot of people who everyone thinks "of course they're not contractors," like say a star Doctor on a medical team who gets to write his own schedule and break all the damn rules because he's the only heart specialist willing to work in Akron.
To quote the IRS [irs.gov]:
In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.
Common Law Rules
Facts that provide evidence of the degree of control and independence fall into three categories:
1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
Note that eBay sellers are not controlled in HOW they do their jobs. eBay has no control over their financial lives -- they probably use Paypal, but they could easily set up their own credit card contract, so eBay doesn't actually force them to use it's system. And there are no written provisions involving benefits or future work. It does force them to use a computer with somewhat modern software*, so it does somewhat fulfill the first testish thingamabob.
Also note that WHAT is done in the job is totally irrelevant. If you tell your contractor to fix your roof in a way that can only be done by one method; you have not actually told him to use that method. You did not order him to use a torch down, physics did. In theory he could create a new method to do the same thing and get paid for fulfilling the contract. Since he probably provides his own tools, has his own bank account, etc. then you also do not control his finances, so the second testish thing is also not filled. Since he only works for the duration of the contract the third is also not filled.
OTOH an Uber driver is penalized if he doesn't take a certain number of rides, and he has to accept most of the ones that come on his screen or his future work is jeopardized. This means he fulfills testish thing-a-thing more then either the contractor or the eBay seller, but not as much as most employees. Since Uber handles all the business stuff, Including leasing lots of them their cars, and insisting that they register the cars as personal vehicles (rather then commercial as the law seems to require), Uber is gonna get it's ass kicked on testish thingamabob 2 for a lot of these guys, but not others (ie: the guy who bought his car with a business loan, works for three companies, is using a registered corporation for all his Uber dealings, etc.).
The third test gets interesting. Since further work for Uber is expected there's a continuing relationship. But there's no pension or health benefits.
*I suspect XP, or a LINUX distro, with the most recent possible browser on a high-end Pentium would actually work, but it would probably suck ass, and I don't have such a machine to test with.
Re:Uber doesn't own the vehicles, correct? (Score:4, Informative)
The main differences are as follows;
1. Uber sells a service and Amazon sell items.
2. Uber takes a request and directs that request to a driver chosen by Uber. Amazon connects a specific purchaser to the seller they chose.
3. Uber sets the price for the trip. The price is set by the seller on Amazon.
Re:Uber doesn't own the vehicles, correct? (Score:5, Insightful)
Am I missing something here?
Yes, two things.
The first thing is that you are using your own definitions and not the ones applied by labor law. There are six guidelines by Department of Labor. (Integral to business, permanency of relationship, worker's investment in equipment and facilities, nature and degree of control by principal, worker's opportunity of profit/loss, and skill/training necessary. [dol.gov] While your brief lists are interesting, they don't match what the government actually uses.
The second thing you are missing is the definition of contractors. This is about the legally defined "independent contractor" or 1099'er, that are one type of contractor who is effectively a person operating as a business. There are other types of jobs that people refer to as contractors, such as short term employment (w2 with a time limit), or cases where employees of one company are brought in to work with another company's employees. Their decision is only about the 1099 style of contracting, which Uber uses.
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Going through each of the government requirements as they apply to Uber and your Ebay seller example:
Integral test. Uber's core business is connecting people for rides and moving funds between accounts. Drivers provide rides using the service, but they aren't integral to the business of connecting people (although they are necessary to implement the task). Ebay sellers similarly use the service, but aren't integral in providing the service. MOSTLY NEUTRAL, slight bias toward employee.
Permanency test. Some Uber drivers meet this, others don't. Those who infrequently pick up riders, those who are on for an hour or two during the day, they're not really permanent. The ones who have used Uber to replace their income, or drive for many hours each day, they're much more permanent. Most ebay sellers are extremely transitory, having items up for under a week, or using it as a store front for goods that are constantly rotated. WEAK FAIL, some people biased towards employee, others biased toward 1099'er, so maybe some people should be reclassified.
Investment test. Uber has some investment through insurance and their guarantees, but leaves most of the cost to the individual. They've got a weak investment. Ebay has nothing invested in the sellers. WEAK FAIL, the long list of guarantees and insurance they offer to their drivers pushes toward employee.
Nature and degree of control test. Uber has a high amount of control, coordinating all the details of rides,establishing fares, and causing the drivers to be redistributed based on their algorithms, and requirements about the cleanliness and maintenance of the vehicle, but they also have weak control in other areas by not dictating work hours and a few other details. Ebay has zero control. STRONG FAIL, Uber's heavy control over what drivers do pushes strongly toward employee.
Opportunity of P/L test. Uber sets the fare cost, and takes a cut, the driver gets no options. There is no opportunity for additional profit or loss. Nothing they do personally can modify their results, get more business, get better rates, or otherwise modify the opportunity of profit and loss. For the ebay example, Ebay sellers can operate under whatever terms they choose, including running full brick-and-mortar stores, which many sellers start and operate as. STRONG FAIL, these "independent contractor" Uber drivers cannot operate as a business independently.
Level of skill/business acumen test. Uber drivers are hired for being able to drive. They cannot really market themselves independently, take good advantage of business insights, leverage their own personal strengths, modify their business based on any personal skills or talents. Nothing they do personally can modify their products or results. Strong contrast with Ebay where sellers have a large degree of control over what they do and how they do it, what they sell
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Does Uber (just to use one example) set the schedule, or do drivers come and go as they please? An employer-employee relationship gives a lot more power to the employer. Any drivers fighting to be an employee might end up regretting it later.
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*There's obviously no guarantee of demand, just as there's no guarantee there'll be a car nearby when you request one...
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Anyone can have multiple jobs...
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By that logic anyone who has more than one job is a contractor. Whether or not benefits are required is based on the number of hours one works for a company not the number of companies one works for.
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I've seen plenty of drivers who subscribed to Uber, Lyft and Sidecar. The labor commission is simply wrong, and I hope Uber litigates this all the way to the supreme court if necessary.
-jcr
Ha ha ha ha ha ha. The labor comission is spot on.
Poor Uber, it's hard to game the system eh ? Employees that are not employees, taxis that are not taxis, commercial drivers that are not commercial drivers. You get the drift. Uber like many other new enterprises wants to privatise the profits and externalize the costs. And the poor drivers are left out in the cold. For once good job California. Hope that other States will follow in smacking down Uber.
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I've seen plenty of drivers who subscribed to Uber, Lyft and Sidecar. The labor commission is simply wrong, and I hope Uber litigates this all the way to the supreme court if necessary
Sounds like multiple part time employers.
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The problem with that argument is that Uber has a lot of control over how it's drivers look/act, and work. And the way you determine whether somebody is a part-time employee or a contractor is how much control the person paying them has over how, precisely, the job is done. Given that Uber is insisting that it has the right to tell it's drivers how their vehicles are registered, it's very hard for me to see how they can seriously argue they don't have boss-like control. Independent contractors would be resp
Re:Uber doesn't own the vehicles, correct? (Score:5, Insightful)
Whether or not an employee owns the vehicle has no bearing on being a contractor or not. That's as silly as saying "Sales people for [company x] own their own vehicles so they should be contractors".
What determines the difference between an employee and contractor is how much control the company asserts over the person.
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Whether or not an employee owns the vehicle has no bearing on being a contractor or not.
Should be amended to say "has no bearing in and of itself" because whether or not you own your vehicle can be a factor but is not a sole factor.
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None of those "facts" can be used to determine who is a contractor and whom is an part-time or full-time employee.
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None of those "facts" can be used to determine who is a contractor and whom is an part-time or full-time employee.
Sure they can. I suggest you read up on California law because the factors stated in the summary are very much what are used to determine if someone is an employee or a contractor.
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With that reasoning, if I drive for multiple services, who is responsible for providing benefits? All 6 different applications, er. companies? A combination of all?
Depends on which companies you'd be classified as an employee of them and what the terms of the benefits are in your resulting employment contract. Possibly none if you aren't considered an employee.
Unfortunately, this is not as cut and dry as you believe.
I never said anything was cut-and-dry. I in fact stated the opposite as opposed to the AC GP which tried to claim the situation was cut-and-dry just because they owned their own cars. It's an entirely subjective decision based on many factors.
The majority of uber drivers also drive for different services.
Which doesn't mean you can't be classified as an employee of one or al
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It doesn't work that way. And the IRS would like to have an expensive discussion with you about that.
Re:Uber doesn't own the vehicles, correct? (Score:5, Insightful)
If each employee owns their own vehicle then they should be contractors.
Owning your own equipment is just one of many criteria, and is not enough by itself to make you a contractor. Other considerations:
- Is there a written contract?
- Do you set your own hours?
- Do you also work for other contractees?
- Do you set your own prices?
- Do you have leeway to decide how and in what order you complete tasks?
- Are expenses reimbursed?
- Does the contractee/employer provide training?
- Can you quit at any time without liability? Contractors ususally have a legal obligation to complete their contract.
There are just some of the criteria, and there is no magic number that have to be met. It is subjective. But the more the better. The bottom line is if you want to treat someone as a contractor for tax purposes, you also have to treat them as a contractor for work purposes as well.
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When I was a contractor, my hours were fixed. I worked for one client. The price was negotiated, but I negotiate my salary the same way. Project management may require and review your work breakdown structure, adjusting how you'll schedule the work, to maximize stakeholder engagement and minimize expensive mistakes and rework. Contracts may be Fixed Fee, Cost plus Fixed Fee, Time and Materials, or Fixed Fee Plus Awards: a Time and Materials reimburses your costs and pays for your time, while a Cost pl
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You choose to take the fair at the offered rate. You don't like it, then don't take it
And does uber take note of things like that and react if it occurs "too often"?
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That doesn't necessarily follow, however, the drivers may be entitled to mileage.
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This decision doesn't outlaw a single thing.
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Hmmm ... is there any evidence of this "Illumitaxi" conspiracy? Or are you simply off your meds?
Where I live, the taxi companies were forced to install security camera, over their objections, when a passenger was assaulted by a cab driver.
They quickly changed their tune when one of their own drivers was violently robbed. Since then it has been used to solve several crimes.
They're also forced to conduct regular inspections, and have cars no older than a certain age.
So, if municipalities are passing laws, o
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Hmmm ... is there any evidence of this "Illumitaxi" conspiracy?
Yes. $1,000,000 taxi medallions.
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